In the last week of the 2016 Presidential campaign, Stephen Feinberg, the billionaire Manhattan financier, made the largest political donation of his life. On November 3rd, just five days before the election, he gave nearly a million dollars to Rebuild America Now, the Trump-supporting super packnown for its blistering attacks on Hillary Clinton. That Sunday, the pac spent eight hundred thousand dollars on an eleventh-hour blitz of negative TV spots, including one that aired repeatedly during N.F.L. broadcasts, condemning Clinton’s support for changing the name of the Washington Redskins. “Yeah, you thought you were safe, sitting in your recliner in your man cave, cold beer and a bowl of chips,” the ad said. “Wrong. Hillary Clinton wants to mess up your football, too.” Two days later, Trump won the Presidency.
Feinberg is lean, with a runner’s physique and a mild New York accent. His manner is equanimous, and his focus on the task at hand is intense. All who have worked with him speak of his penetrating analytic intelligence, his surpassing desire for privacy, and his steady hand as an investor. To the financial press, he is known as the C.E.O. of Cerberus Capital Management, one of the country’s largest investment firms, with business lines in private equity, distressed debt, hedge funds, and real estate. His holdings have included the once struggling G.M. automotive-financing division, the controversial defense contractor DynCorp, and the Bushmaster assault-rifle brand. For Feinberg, the Trump campaign was a classic investment target: compromised, flailing, politically toxic—but ultimately successful.
This February, it was reported that Feinberg was being considered for a post in the Trump Administration, overseeing a shakeup of the United States intelligence community. Career spies were alarmed at the suggestion; Feinberg has no intelligence experience, and his history at Cerberus suggested the likelihood of a radical restructuring, starting with management. This skepticism of his suitability for the role was shared by a former Cerberus insider with whom I spoke. “He’s a phenomenal manager of an investment fund, but his brilliance is in his trading,” he said. “I don’t think he’d succeed in the bureaucratic environment of Washington.” (Through a spokesperson, Feinberg declined to comment.)
The Trump Administration did not go forward with the appointment, but the rumors have persisted. And, this week, the Times reported that Steve Bannon and Jared Kushner had reached out to Feinberg—as well as to Erik Prince, the founder of Blackwater—for private-sector alternatives to the Department of Defense’s plan to send more troops to Afghanistan.
Through DynCorp, Feinberg already controls one of the largest military contractors in the U.S., one which trains Afghanistan’s police force and assists in their narcotics-trafficking countermeasures. According to the Times, Feinberg proposed an expanded role for such contractors, and also recommended transferring the command of paramilitary operations in the country to the C.I.A., increasing their operating footprint while decreasing both transparency and accountability. He reportedly discussed Afghanistan with President Trump in person.
The proposals raise obvious questions about war profiteering and conflicts of interest. DynCorp has been a bad investment for Feinberg. Buying at the tail end of the military-contracting boom of the two-thousands, Cerberus overpaid for the company, then watched as much of its business evaporated following government-spending cuts and the drawdown of U.S. troops in in Iraq and Afghanistan. In the seven years since Cerberus acquired the company, Feinberg has replaced DynCorp’s C.E.O. four times.
Afghanistan, in particular, has been a problem. In recent years, the country has proved no more hospitable to for-profit military contractors than it has to stumbling empires. DynCorp’s profit margins are thin there; revenues are falling, according to the former Cerberus insider. Several high-level managers from Cerberus portfolio companies have defected to Pacific Architects & Engineers, an upstart competitor that is taking DynCorp’s business. And DynCorp workers are often in peril. Since Cerberus acquired the company, twenty-nine DynCorp employees have been killed on the job. Most of them died in Afghanistan, including a retired U.S. Army colonel whose convoy was hit by a bomb.
A suggestion from Feinberg to expand the role of military contractors would be naked in its self-interest, but his other recommendation—transferring paramilitary operations in Afghanistan to the C.I.A.—deserves equal scrutiny. Here, Feinberg is operating from the heart. Although his personal military experience is limited to a brief stint in the Princeton R.O.T.C., he has, through his investments, developed an unusually close relationship with the U.S. Special Forces community. Of particular interest is Tier 1 Group, a Cerberus-owned private military base outside Memphis, which has, since 2008, served as a training ground for Navy seals and Marine Special Operations. Tier 1 Group’s facilities include a long-distance-shooting range, an ersatz Afghan village for staging commando raids, and an outdoor road course for tactical-driving training. Through his control of the facility, Feinberg has even been provided with after-action reports from Special Operations missions, according to Steve Reichert, the founder of Tier 1, who spoke to me for a story I wrote for New York magazine. (Feinberg has also received training from military instructors, and is said to be a crack shot.)
Whatever their merit, Feinberg’s recommendations to the Trump camp were pushed aside, according to the Times, by Defense Secretary James Mattis, a career military man. But given Trump’s openness to outside counsel—and, in particular, his interest in the ideas of other billionaires—it’s possible that Feinberg’s ideas could resurface. Conflicts of interest notwithstanding, Trump could do worse in selecting an adviser. Indeed, he has done worse: Feinberg’s formidable intellect and concrete managerial experience are more valuable assets than Jared Kushner’s prep-school-and-real-estate background or Steve Bannon’s theories of pseudo-history. For now, Feinberg remains a peripheral figure in the Trump Administration, but sooner or later, one suspects, he’ll see a return on his investment.