From the Project on Government Oversight (http://www.pogo.org/):
April 6, 2017
Stephen Feinberg (right), Cerberus Capital Management (Photo: Dow Jones Events / Flickr)
With news earlier this week that the White House may name another advisor with vast business holdings that would pose conflicts of interest, the Project On Government Oversight (POGO) sent a letter today to President Trump’s top attorney, Don McGahn II, urging the White House to subject this potential new advisor to government ethics laws if he is appointed.
The potential new advisor is Stephen Feinberg, CEO of Cerberus Capital Management. The role being considered for Feinberg would involve proposing spending reforms at the Defense Department. The problem is Cerberus owns many companies with defense contracts, most notably DynCorp International, and Feinberg would be in a position to benefit himself.
As POGO wrote:
… federal ethics laws and regulations are meant to ensure that public officials act in the public interest, without conflicts that would raise questions about the propriety of their decision-making. The public wants to ensure government decisions are made because they are in the broad interest of the public, not in the narrow interest of an official who has money on the line. With President Trump’s defense spending request for Fiscal Year 2017 north of $640 billion, and Mr. Feinberg’s companies competing for ever bigger slices of the budget pie, a massive amount of our taxpayer dollars is on the line. We cannot waste money on service contracts that provide questionable benefits to the military. This makes government integrity a national security issue.
Given Mr. Feinberg’s significant conflicts of interest, it is crucial that he be subject to federal ethics laws and regulations if he plays any role impacting defense spending…
…Without these actions, any recommendations Mr. Feinberg might make are bound to be controversial, will be easily dismissed, and will undermine the Trump administration’s efforts if he is not considered beyond reproach.
Aside from concerns specifically involving Feinberg, POGO’s letter was also prompted by the questionable arrangement the Trump administration created for Carl Icahn:
…it would be a grave mistake to repeat what the administration did with investor Carl Icahn, who was appointed as the President’s Special Advisor on Regulatory Reform—but who was explicitly not made a special government employee. Mr. Icahn’s actions and comments on the Environmental Protection Agency’s Renewable Fuel Standard and a perception among many in the biofuels industry that he presented himself as acting as a Trump administration official created problems for the White House in late February. The ethical gray zone that Mr. Icahn operates in may continue to be a lightning rod for critics. There will continue to be legitimate questions whenever he—as the President’s Special Advisor—takes actions or participates in decisions that would benefit his business interests.
By: Nick Schwellenbach
Director of Investigations, POGO
Nick Schwellenbach’s areas of expertise include: Government Oversight, Wasteful Contractor Spending, Open Government, Financial Sector, Whistleblower Issues.
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