Warren probes Pentagon program to hire highly paid private sector workers

Sen. Elizabeth Warren is raising concerns about the Defense Department‘s plan to recruit private sector professionals to improve contracting and capital allocation, warning in a letter shared first with CNBC that it could present “significant conflict of interest and revolving door concerns.”

The Pentagon created the Business Operators for National Defense program in February to embed private sector talent within the department’s acquisition process. Reporting from The New York Times and The Wall Street Journal has since revealed that the Office of Strategic Capital is also seeking private-sector help and offering salaries of more than $400,000, along with opportunities for access to capital in the future, to lure employees away from Wall Street.

“I have held longstanding concerns over potential conflicts of interest, revolving door abuse, and national security concerns in DoD’s acquisition process,” Warren, D-Mass., said in the letter sent late Tuesday. “Now I am concerned about the national security implications and the corruption concerns posed by DoD’s BOND initiative and Wall Street investor team and urge DoD to implement the necessary guardrails and oversight to fully address these concerns.”

Warren took particular concern with reporting from The New York Times that said a headhunting firm had prepared slides for Pentagon recruiting that dangled both access to high-level U.S. and international government officials and access to fundraising channels. It’s not clear that the DoD approved the slides.

Warren sent the letter as the Trump administration continues to blend the private sector and government in often unprecedented ways — including by taking equity stakes in companies producing goods essential to the national interest. The administration has also come under intense scrutiny for some of its dealmaking, some of which has muddled the line between typical government work and self-enrichment for the president, his family and cabinet members.

The Pentagon did not immediately respond to a CNBC request for comment.

In the letter, which is addressed to Deputy Defense Secretary Stephen Feinberg and Office of Strategic Capital Director David Lorch, Warren asked nearly three-dozen questions about the Pentagon’s courting of private industry professionals. Before his current role as No. 2 in the Pentagon, Feinberg was co-CEO of Cerberus Capital Management, and Lorch was a managing director.

Feinberg set up the Economic Defense Unit at the Pentagon, which works with the Office of Strategic Capital.

Warren asked the pair to list all industry experts…