I. Introduction

House Democrats are preparing to investigate Secretary of Defense Pete Hegseth amid mounting allegations of corruption and war crimes if they retake the chamber in November. Hegseth’s extremism has put the Pentagon under renewed scrutiny, and ahead of the 2028 presidential cycle, Democrats must embrace an ambitious Pentagon reform agenda. This agenda must include tangible policy changes to curb contractors’ ability to profit from militarism and exploit loopholes to secure public money.

When Trump tapped Hegseth as Secretary of Defense, the nomination of a Fox commentator to lead the Pentagon was treated as an absurdity. Hegseth’s nomination battle was dominated by reports of misconduct in private life, and he appeared to be a standard case of an unqualified Trump loyalist getting a senior post. But two years later, Hegseth has become perhaps the single most influential member of Trump’s cabinet, using his position to advance Trump’s authoritarianism at home and abroad. Gone is neoconservative-era rhetoric about promoting democracy abroad or feigning reluctance about intervention. Hegseth’s “Department of War” has embraced militarism and violence as righteous, even glorious, announcing plans to livestream a firing-squad execution. He has also carried out Army leadership purges and reportedly blocked Black and female officers from advancing in leadership roles.

Hegseth’s conduct has prompted explicit war crimes allegations from otherwise timid congressional Democrats. The double tap killings of suspected drug traffickers in the Caribbean, alongside the killing of over a hundred children in Minab, Iran, have made his DOD a deserving target for oversight. House Democrats are preparing investigations should Hakeem Jeffries become speaker. This includes re-establishing the House Armed Services Committee’s (HASC) Subcommittee on Oversight and Investigations, abolished after the 2018 midterms.

A broader defense agenda must prioritize curbing the influence of private firms that profit off of militarism. As it stands, defense lobbyists are preparing to navigate Democratic scrutiny while anticipating that prospective Armed Services chair Adam Smith (D-WA) will be amenable to industry interests. The Bush-to-Obama transition offers a cautionary precedent: investigations documented rampant wartime contracting fraud and waste without breaking the Pentagon’s dependence on private industry.

II. Pentagon Accountability Beyond Trump

UNFINISHED REFORMS OF THE LATE 2000s

Through the FY 2008 National Defense Authorization Act, Congress created the Commission on Wartime Contracting in Iraq and Afghanistan (CWC), conceived as a 21st century answer to the Truman Committee. In August 2011, during the Obama administration, the commission issued a final report estimating that between $31 billion and $60 billion in taxpayer money was lost to waste or fraud. The commission put the loss at roughly $12 million a day. It warned that federal agencies’ reliance on contractors undermined their ability to hold them accountable.

In August 2012, the Government Accountability Office (GAO) found that the follow-through remained limited. DOD reported action taken or planned on only about half of the recommendations applicable to it. The Department of State and the U.S. Agency for International Development (USAID) only reported action taken or planned on about one-third. Indeed, neither State nor USAID had dedicated processes to track implementation in place. The next Democratic administration must ensure that contractors’ abuse of public funds is met with more than just documentation.

Instead of curtailing agencies' dependence on contractors, Washington has only expanded private firms’ access to public money. Less restrictive agreements, known as Other Transaction Agreements (OTAs), have become considerably more common. Per GAO, Pentagon prototype and production obligations under OTAs rose from $1.8 billion in FY 2016 to more than $18 billion in FY 2024. These agreements replace standard acquisition terms with customized provisions, ones that can reduce scrutiny of contractor costs. The Project on Government Oversight noted that OTAs are not covered by “many of the federal laws and regulations governing procurement contracts that protect the government and taxpayers”.

PRIVATE EQUITY AND TECH INFLUENCE

Tech companies are increasingly embedded in the defense industry, putting executives in uniform and building military products. As we noted on September 29, Hegseth’s reshuffle of the Defense Policy Board brought tech investors Marc Andreessen and Blake Masters, alongside Palantir’s Theo Wold, into a body long used as a pipeline for contractor influence. The following day, Hegseth announced Project Meridian, tapping Elon Musk and Anduril co-founder Palmer Luckey to study AI and the future of warfare. In addition to Musk and Luckey’s own extremist politics, it’s concerning that two individuals whose companies sell technologies the future supposedly requires are able to exert this level of influence. Despite the obvious conflict of interest this poses, the Pentagon has not disclosed whether Musk and Luckey will have government employee or contractor status.

Private equity executives are also gaining power over Pentagon spending. In October, a ProPublica investigation documented businessman George Kollitides’ relationship with Stephen Feinberg, the current Deputy Secretary of Defense and co-founder of Cerberus. Kollitides previously worked under Feinberg at Cerberus, overseeing aerospace, defense and government businesses. He now leads the Pentagon’s Business Operators for National Defense (BOND) office. ProPublica reported that the Pentagon awarded Alvarez & Marsal Federal a $281 million no-bid agreement to advise his office while he was still advising its private equity affiliate, A&M Capital. These overlapping roles raise clear conflict-of-interest questions. The Pentagon claims Kollitides complied with ethics rules, and that he recused himself from conflicted matters at A&M Capital. Nevertheless, it did not answer whether the firm paid him, if he participated in the relevant contract decision, or if he received a waiver.

Kollitides, now legally classified as a highly qualified expert (HQE) by the Pentagon, was initially brought into the federal government as a so-called special government employee (SGE). Elon Musk’s initial appointment to the Trump administration brought heightened scrutiny to SGE appointments. While SGE designations relax some federal ethics requirements, HQE financial disclosures generally remain confidential. Kollitides’ classification shows why reform cannot stop with a single designation: changing an official’s employment category should not allow their financial interests to remain hidden. The Trump family’s own investments are already benefiting from Pentagon decisions: lawmakers demanded answers after reports that a White House aide intervened to secure a $620 million conditional loan commitment to Vulcan Elements, which is backed by Donald Trump Jr.’s venture firm.

III. Conclusion

The Trump family’s potential profiteering through DOD contracts has led to scrutiny from Democratic lawmakers. In August, Sens. Elizabeth Warren, Richard Blumenthal and Tammy Duckworth, alongside Rep. Robert Garcia, called for an investigation into awards involving Trump-family investments. As noted in the September analysis of the Defense Policy Board, lawmakers have pushed for reforms to SGE ethics rules following the 2025 controversy over Musk’s appointment. Any real effort to rein in the Pentagon’s revolving door must prevent appointees from using their employment classification to shield their financial interests from public scrutiny. Congress must tighten OTA rules so that contractors cannot use favorable exemptions to secure taxpayer money without competitive bidding or public oversight.

The backlash to Hegseth’s tenure provides a real opening for renewed Pentagon oversight. Alongside investigations of potential war crimes, accountability measures must also include confronting private interests that profit from militarism and use government access to shape military priorities. The need for this is particularly urgent given how the current Pentagon has empowered Trump’s ideological allies. This includes the likes of Anduril’s Palmer Luckey, who has publicly backed Hegseth’s plan for a livestream of Nidal Hasan’s execution, stating it should be “public and brutal.” The next Democratic administration must dismantle the arrangements that facilitate abuse, rather than merely replace the officials exploiting them. Otherwise, another change in leadership will leave the war machine’s private beneficiaries firmly in place.