(Bloomberg) — The US Senate confirmed billionaire Stephen Feinberg to be second in charge at the Pentagon, where the private equity investor promised to fix longstanding issues.
The Senate on Friday voted 59-40 to back Feinberg as Deputy Secretary of Defense. The co-founder and chief executive officer of Cerberus Capital Management, who has a net worth of about $5.3 billion according to the Bloomberg Billionaires Index, is seen as providing high-level management experience that Donald Trump’s Defense Secretary Pete Hegseth lacks.
During his confirmation process last month, Feinberg cited “very significant” delays and cost overruns across efforts to build military capabilities and said he had spent a career “attacking these kinds of problems.” He indicated in his written testimony to the Senate Armed Services Committee that the military needs to source and field capabilities from industry more quickly and at greater scale, “because the commercial industry has rapidly adjusted their development timelines to meet a fast-changing market,” while the Pentagon is still “struggling to reframe its acquisition process from a hardware-centric to a software-centric approach.”
Billionaire Feinberg Says Pentagon Needs an Investor’s Savvy
Feinberg, 64, said he’d explore “creative ways” under existing regulations to provide “sole-source, non-competitive opportunities” and motivate large non-defense manufacturing companies to make it possible for them to enter the defense industry. He also expressed support for Pentagon initiatives to tap venture capital.
In his new role, the senior official may also prove instrumental in staking out the Pentagon’s position in the controversial debate over the sale of radio spectrum to commercial telecommunications companies. Senate Republicans are considering a massive sale of radio spectrum intended to generate billions of dollars to help pay for Trump’s agenda and free up airwaves for wireless broadband. Senate Commerce Chairman Ted Cruz (R-Texas) has made a spectrum auction a top legislative priority this year, with Senate Republican aides saying it could generate in the ballpark of $100 billion.
Feinberg, during his confirmation hearing, said he would protect the Defense Department’s radio spectrum—which is crucial for radar operations and missile defense—but endorsed sharing the airwaves with telecommunications providers. “Totally agree we need spectrum to defend our country, but we also need commercial use of it to develop the technology that would defend our country,” Feinberg told the Senate Armed Services Committee. “Best solution is sharing. We have to get it right—make sure sharing can be done without risk.”
Trump Pentagon Pick Feinberg Promotes Radio Spectrum Sharing
Feinberg, who famously hates being in the public eye, co-founded Cerberus—a $65 billion investment firm with about 1,000 staff—in 1992 and has been central in its operations. In an ethics agreement, he vowed to step down from all positions and divest all of his interests in the firm. His wealth disclosure revealed hundreds of holdings in Cerberus funds and other securities and roles in 436 mostly Cerberus-related legal entities.
–With assistance from Loukia Gyftopoulou and Tony Capaccio.
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