Senator Elizabeth Warren has raised significant concerns regarding the nomination of Stephen Feinberg as the Deputy Secretary of Defense, particularly focusing on his connections to Ligado Networks. Warren, a prominent member of the Senate Armed Services Committee, argues that Feinberg’s financial ties to Ligado could create substantial conflicts of interest, especially in light of the ongoing $39 billion lawsuit between the communications company and the U.S. government.

Feinberg’s involvement with Ligado Networks comes through his private equity firm, Cerberus Capital Management, which owns approximately 14 percent of Ligado’s debt and 24 percent of its preferred stock, as detailed in court documents referenced by Warren in a March 9 letter, obtained by Breaking Defense. Ligado, currently navigating bankruptcy proceedings, is embroiled in a legal battle with the federal government, asserting that officials from the Departments of Defense and Commerce have engaged in unlawful actions to unjustly seize the firm’s L-band spectrum.

Warren’s letter articulates grave concerns about the potential implications of such financial stakes if Feinberg assumes his role at the Pentagon. She noted that as the department’s second-in-command, Feinberg would hold the power to influence the Department of Defense’s approach to the Ligado lawsuit. If the government were to lose or settle the case, it could lead to a financial windfall for Cerberus, which stands to benefit from any settlement proceeds.

Moreover, the conflict extends beyond Feinberg himself. Warren pointed out that members of his family could also profit from the gang, especially considering Feinberg’s suggestion of divesting his interests in Cerberus through irrevocable trusts established for his adult children. This situation sparked Warren’s assertion that the potential for a multi-billion-dollar gain for Feinberg’s family comes at the expense of American taxpayers, further magnifying the ethical questions surrounding his nomination.

To mitigate these concerns, Warren has suggested that Feinberg amend his ethics agreement to ensure he recuses himself from any matters concerning Ligado and its lawsuit against the Defense Department. Furthermore, she has requested detailed information about his financial interests relating to Ligado by March 24, including whether he plans to divest any holdings and what settlement amount would be necessary for Cerberus to recover its investment.

Feinberg’s confirmation could take place as early as this week, following a February 25 hearing in which Senate Armed Services Committee Democrats scrutinized his responses to questions regarding proposed cuts to the Pentagon’s civilian workforce. Additionally, he addressed ongoing discussions about the Defense Department’s spectrum allocations, emphasizing the necessity of balancing national defense needs with commercial interests.

Prior to his confirmation, Feinberg has committed to divesting all interests in Cerberus, claiming that neither he nor his wife holds any financial interests in the trusts for his children and that he will not serve as the trustee of those trusts. Despite these assurances, the scrutiny surrounding his financial entanglements and the implications for national security remains a critical issue to be examined as his nomination process unfolds.