US Domestic — 2026-11-14

Pentagon Building Investment Apparatus With Equity Stakes in Defense Corporations From Oil to Rare Earths

BLUFPentagon announcement of at least one new direct equity investment in a company outside Office of Strategic Capital funding by December 14 is likely, given four such deals since the committee vote and no enacted authority to stop the next one.

The Pentagon's Economic Defense Unit, created by a memo from Deputy Secretary Stephen Feinberg and led by George Kollitides, has functioned without congressional authorization for months, according to The American Prospect 1. The Senate Armed Services Committee's draft NDAA would remove the unit of equity-investment authority and grant that power only to the Office of Strategic Capital, which would be barred from board seats and required to report company ownership to Congress before closing a deal 1. Democratic senators blocked the package on the Senate floor in July 1. Since the committee approved the draft, the Pentagon has made four direct equity investments outside OSC funding, totaling $775 million, all in critical minerals companies, the Prospect reported 1. The administration's request would increase OSC funding from $300 million to more than $20 billion and industrial base programs from $2 billion to $70 billion 1.

Analysis
The Economic Defense Unit's memo-based authority remains untested because the Senate floor impasse leaves no binding congressional limit, so Feinberg faces no legal constraint on pace. Four critical-minerals deals since the committee vote, plus rare earth offtake vehicles like USA Rare Earth, show the department treats minerals equity as a standing business line. The Pentagon will likely announce at least one new direct equity investment outside Office of Strategic Capital funding by December 14, 2026. Any enacted limit would arrive after stakes and unreviewed term sheets are in place, weakening later oversight. Confidence is high, based on the four completed deals and the absence of any binding congressional action. Sourcing is thinner than three outlets suggest, since only one article was available for detailed reading. The department may instead pause new deals to avoid provoking senators and route investments through the Office of Strategic Capital. If it does not pause, Armed Services staff should expect more completed deals before any NDAA limit takes effect and may press for earlier term-sheet disclosure. If it does, negotiators can bargain over OSC's authority.

3 sources

As Lawmakers Scrutinize Pentagon Equity Deals, Pentagon Keeps Making Them - The American Prospect
Pentagon, Inc. - The Intercept
Meet the wealthy new investor taking equity stakes in defense companies: The Pentagon - The Washington Times