Nominee for Deputy Secretary of Defense Stephen A. Feinberg listens to the opening remarks of a Senate Armed Services Committee in Washington, D.C., Feb. 25, 2025. (DoD photo by U.S. Air Force Senior Airman Madelyn Keech)
WASHINGTON — Democratic Sen. Elizabeth Warren is raising concerns with deputy defense secretary nominee Stephen Feinberg’s ties to Ligado Networks, arguing that Feinberg’s family or the private equity firm he founded could financially benefit from the ongoing lawsuit between the communications company and the US government.
Feinberg’s Cerberus Capital Management owns about 14 percent of the communications company’s debt and 24 percent of its preferred stock, according to court documents cited by Warren in a March 9 letter to Feinberg, exclusively obtained by Breaking Defense.
Ligado, now going through bankruptcy proceedings, is engaged in a $39 billion lawsuit against the US government over claims that officials at the Departments of Defense and Commerce took “unlawful actions” to, in effect, improperly seize without compensation the firm’s L-band spectrum.
That situation could create a “huge conflict of interest” should Feinberg become the department’s No. 2 official, wrote Warren, a member of the Senate Armed Services Committee.
“As the second-in-command at the Pentagon, you would have the power to influence the DoD’s posture towards the Ligado lawsuit. If the government loses or settles the case, Cerberus could profit as it ‘would most likely receive some portion of the settlement proceeds,’ according to your responses to my questions for the record,” she stated.
Feinberg’s family could also potentially make money from the outcome of the Ligado lawsuit, Warren said, as Feinberg has indicated he could divest his interest in Cerberus through a gift to one or more irrevocable trusts established for his adult children.
“This is a clear conflict of interest, as you could deal your former company — and your adult children — a multi-billion-dollar windfall at the expense of American taxpayers,” she wrote.
Warren states that Feinberg can address this issue by amending his ethics agreement to recuse himself from matters related to Ligado and its lawsuit with the Defense Department. She also requests that Feinberg answer a series of questions by March 24 about his financial interests in Ligado, including whether he will divest any holdings in the company and how big a settlement is required for Cerberus to break even on its investment in Ligado.
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Feinberg’s nomination could be confirmed by the Senate as early as this week, following a Feb. 25 confirmation hearing where SASC Democrats pressed him on the Trump administration’s planned cuts to the Pentagon’s civilian workforce.
He was also asked about ongoing debate over whether the Defense Department be forced to vacate or share the lower 3 GigaHertz band and the 7-8 GHz band with commercial communications companies, responding that the Defense Department’s spectrum position must be protected.
“We need spectrum to defend our country. We also need commercial use of it to develop the technologies that will defend our country,” he said. “The best solution is sharing, but we have to get it right and make sure sharing can be done without risk.”
In an earlier Feb. 17 letter, Warren laid out concerns about Feinberg’s financial interests, stating that his holdings in Cerberus — which owns and invests in a number of defense-related companies, such as Stratolaunch and Navistar Defense — could pose a conflict of interest if not properly divested.
In ethics documents submitted on Feb. 18, Feinberg said he would “divest all of my interests in Cerberus including, but not limited to, my equity interest, carried interest, incentive fees/allocations, and capital commitments” prior to assuming the role of the deputy secretary of defense.
He also said “neither my wife nor I have any financial interest” in the trusts of his adult children and that he would not be the trustee for any of those trusts.
