Pentagon Takes $1 Billion L3Harris Stake as Stephen Feinberg Expands Sway Over Defense Investing
Updated
Updated · The Guardian · Jun 18
Pentagon Takes $1 Billion L3Harris Stake as Stephen Feinberg Expands Sway Over Defense Investing
1 articles · Updated · The Guardian · Jun 18
Summary
$1 billion in Pentagon preferred shares went into L3Harris in January to help create a solid-rocket-motor company, making the US a partial equity owner under an arrangement critics say remains opaque.
Stephen Feinberg, the deputy defense secretary and Cerberus founder, is described by officials and industry figures as the Pentagon's real power center, using new investment and loan authorities to reshape the military industrial base.
Cerberus alumni now hold key Pentagon roles, including George Kollitides, who helps oversee the Economic Defense Unit and strategic-capital investments while reportedly serving as a special government employee with outside private-sector ties.
Those powers already extend beyond contracts to direct financing, including a $620 million loan to Vulcan Elements and a $15 million investment in Kopin Corp, both linked to Donald Trump Jr.-associated businesses.
Elizabeth Warren says awards to Cerberus-linked companies raise serious conflict concerns, while the Pentagon says Feinberg divested, follows ethics rules and is driving reforms to strengthen US defense production.
What safeguards prevent the Pentagon's new $200 billion 'Deal Team' from becoming a tool for personal enrichment?
When the Pentagon operates like a Wall Street firm, who ultimately profits from its massive national security investments?
Can a private equity playbook truly fix national security, or does it create more significant, hidden risks for the nation?
Pentagon’s $1 Billion Equity Bet in L3Harris Missile Unit: Launching the Economic Defense Unit and a New Era of Direct Military Investment
Overview
In January 2026, the Pentagon announced a $1 billion investment in L3Harris Technologies' missile unit, using a convertible preferred security that will become a minority equity stake after the unit's planned IPO later in the year. This move aims to strengthen the domestic supply chain for critical defense components, especially solid rocket motors, by giving the Pentagon an ownership position while L3Harris keeps majority control. The investment is designed to address vulnerabilities in the defense industrial base and ensure reliable access to essential missile technology, marking a significant shift in how the government supports and secures national security capabilities.