Warren, Blumenthal, Khanna Presses Hegseth on DoD’s Increasing Reliance on Private Equity Firms

Warren, Blumenthal, Khanna Presses Hegseth on DoD's Increasing Reliance on Private Equity Firms

"Thanks to President Trump's reckless war in Iran and other unnecessary military excursions, private equity's ability to profiteer off the technologies and services needed to maintain our nation's defense system will likely continue to grow."

Private Equity Firms Introduce Profiteering, Foreign Influence, Supply Chain Risks

Text of Letter (PDF)

Washington, D.C. - U.S. Senator Elizabeth Warren (D-Mass.), Ranking Member of the Senate Banking, Housing, and Urban Affairs Committee, U.S. Senator Richard Blumenthal (D-CT), and Congressman Ro Khanna (CA-17), sent a letter to Secretary of Defense, Pete Hegseth, warning that the Department of Defense's (DoD) increased reliance on private equity despite national security threats and risks to taxpayers.

"Private equity investments into the defense industry have grown significantly over the past two decades, reaching record highs in recent years under President Trump," wrote the lawmakers. "And thanks to President Trump's reckless war in Iran and other unnecessary military excursions, private equity's ability to profiteer off the technologies and services needed to maintain our nation's defense system will likely continue to grow."

"Private equity investment in the defense industry presents significant risks to taxpayers. Research shows that private equity-backed defense contractors - because of their aggressive debt-laden acquisition strategies to takeover defense contractors - are more likely to go bankrupt than their peers," wrote the lawmakers."Additionally, the opaque nature of private equity firms - which are not required to file public financial reports - raises national security concerns. Private equity funds are not required to disclose investors or the source of their capital, and may be influenced by foreign investors from nations that are adversarial to the United States or misaligned with our national interests, even as they gain access to sensitive and classified information when they acquire or control defense contractors."

"Given the significant risks posed by the Department's growing reliance on private equity-backed defense contractors and the potential risks to taxpayers and our national security, we request information regarding the Department's engagement with private equity firms and efforts to comprehensively analyze private equity deals involving defense contractors," concluded the lawmakers.

The lawmakers requests responses no later than June 10, 2026.

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