February 18, 2025

Ahead of Confirmation Hearing, Warren Lays Out Concerns with Deputy Defense Secretary Nominee Stephen Feinberg

As former head of private equity firm Cerberus, Feinberg drove Massachusetts’ Steward hospital into the ground, would have significant financial conflicts of interest 

“Your track record at Cerberus includes mismanagement, profiteering, and little relevant government experience. You have put profits at the center of your work when the Deputy Secretary role requires that you put the Department and its people at the center.” 

Text of Letter (PDF)

Washington, D.C. – Ahead of his confirmation hearing before the Senate Armed Services Committee (SASC), U.S. Senator Elizabeth Warren (D-Mass.), Ranking Member of the SASC Subcommittee on Personnel, wrote to Mr. Stephen Feinberg, nominee for Deputy Secretary of the Department of Defense (DoD), pressing him to explain his “serious conflicts of interest” and his track record of mismanagement. 

As Deputy Secretary of Defense, Mr. Feinberg will need to be able to manage the building, support the workforce, and “[e]nsure Department-wide capability and resources across all functions to carry out the strategic plan of the DoD in support of national security objectives.” Upon his nomination, President Trump regarded him as “[a]n extremely successful businessman.” However, as the former head of private equity firm Cerberus Capital Management, Mr. Feinberg reportedly ran several companies, including Chrysler, into the ground. 

“I am concerned that your track record as a private equity executive shows you lack the skills and demonstrated experience needed to manage and execute the scale of reforms necessary at the Department of Defense,” wrote Senator Warren

In Massachusetts, residents have had first-hand experience with the damage caused by Cerberus’ private equity model. Cerberus bought into Massachusetts’ Caritas Christi hospital system, in 2010, investing $246 million, rechristening it as Steward, and leaving Dr. Ralph de la Torre in charge as CEO. In 2020, Cerberus began to exit by transferring its ownership stake and then, over a six-year period, straddled Steward with over a billion dollars in liabilities – while Cerberus executives profited handsomely, receiving $800 million in profits. Unable to handle the massive debt load, Steward went bankrupt last year – resulting in the closure of two hospitals in the Commonwealth. 

Mr. Feinberg is estimated to own about 75% of Cerberus, which holds large investments in companies that do business with DoD. These investments have included everything from a company testing hypersonic missile technology to an open-source internet scrapping company. They have also included companies that have defrauded the U.S. government. DynCorp, a private military contractor Cerberus previously owned, was sued by the Department of Justice for intentionally overcharging the Department of State while doing a contract overseas. The letter finds Cerberus has investments in at least 7 companies that do at least $15.9 billion in business with the DoD.

“These holdings would pose a conflict of interest between your duty as Deputy Secretary to advance the Department’s national security interests and your personal interest in delivering profits for the defense companies in which you or Cerberus have invested,” said Senator Warren

The Deputy Secretary is supposed to help ensure international law is followed, including protecting civilians from harm. However, the New York Timesfound that “[f]our Saudis who participated in the 2018 killing of the Washington Post journalist Jamal Khashoggi received paramilitary training” from a company owned by Cerberus. 

“If the Deputy Secretary has shown disregard for those laws, that will undermine the faith in these laws for the entire organization,” wrote Senator Warren

Senator Warren also questioned Mr. Feinberg’s qualifications to manage the Department. Beyond a lengthy business and political relationship with President Trump, Mr. Feinberg lacks military experience to lead the Department. Mr. Feinberg participated in the Army Reserve Officers’ Training Corps (ROTC) while studying at Princeton University, but left the program before graduating. 

“Without Department of Defense knowledge or experience in government leadership, I have doubts about your qualifications and how your past has prepared you to take on a role such as Deputy Secretary of Defense,” concluded Senator Warren

Given Mr. Feinberg’s severe conflicts of interest, record of mismanagement and profiteering, and lack of relevant government experience, Senator Warren asked Mr. Feinberg to respond to questions about several areas of concern with his record, including his experience with private equity, potential ties to human rights violations, history of defrauding the federal government, and vision for managing a key part of the federal workforce by February 24, 2025. 

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