Pentagon headhunting Goldman, JPMorgan bankers for ‘Economic Defense Unit’

President Trump has long harbored aspirations of directing a massive sovereign wealth fund akin to Gulf and Asian countries, using private capital to wield political power. Through its brass-knuckled trade negotiations and military budget increases, the administration now has hundreds of billions of dollars to invest in critical industries. The bottleneck is finding deals.

Enter Wall Street, which employs thousands of “coverage bankers” who stay close to companies in specific industries. Forming its own “Sponsor Coverage” unit inside the Pentagon would allow the defense department to have a team of its own bankers that service private-equity firms and pitch deals critical to national security, provide advice, and arrange loans.

The team will report to former Cerebrus alums David Lorch and George K. Kollitides II, the former Remington CEO who is now a partner at private equity firm Alvarez & Marsal Capital, the document outlines. (Alvarez didn’t immediately respond to a request for comment).

They join Deputy Secretary of Defense Stephen Feinberg, the billionaire co-founder of Cerberus, who has been reshaping the way the Pentagon operates and wielding the agency’s influence over defense primes that critics argue grew too complacent.

Feinberg has been “driving the whole ship,” a well-placed industry official told Semafor’s Ben Smith last November. “All roads lead to the deputy secretary.”

Many of the Trump administration’s investments in private companies have been overseen by the Pentagon, including the agency’s recent $1 billion stake in an L3Harris spinoff.

As part of the agency’s pitch to lure more heavy hitters from Wall Street, it’s deriding the “peak neoliberalism” of the 1990s that invited China into the global economic order, prioritized outsourcing, and, in the Pentagon’s view, left the US vulnerable to shortages of goods crucial to national security, according to the document. “The mission: helping deter our largest adversary from gaining military superiority.”

And lest bankers take a role without at least some personal upside, the head-hunting brief also promises “unmatched access to top-level government officials and privileged information flow — whatever you need, you can get.”