The Defense Policy Board does not award contracts. That is the first thing its defenders say, and it is true. The board advises the secretary of war on strategy, force structure and the future of warfare; it signs nothing and spends nothing. Which is exactly why the question raised this week matters. A seat on the board does not buy a contract. It buys proximity, and in the defense business proximity is the currency that matters.
The board was reconstituted on June 29, after the previous advisory panel was disbanded in a review of Pentagon committees. Pete Hegseth named fifteen members, with former trade representative Robert Lighthizer as chair. Among them were Marc Andreessen, co-founder of the venture firm Andreessen Horowitz, and Blake Masters, a former Senate candidate. The Guardian reported on Monday that Masters holds board seats at three firms linked to 1789 Capital, and that Andreessen’s company has put money into three defense contractors alongside the same fund. 1789 Capital, the fund at the center of the questions, was co-founded by Omeed Malik, and Donald Trump Jr. is among its partners.
The overlapping investments are not marginal. The three contractors in which a16z and 1789 Capital have both put money include Anduril Industries, the autonomous-weapons company that won an Army award worth as much as 20 billion dollars, signed months before the company’s spring funding round, and that has drawn down an estimated 1.25 billion dollars in federal funds in the 500 days since the administration took office, according to reporting cited by the Guardian. Hadrian and SpaceX are also reported to sit in the shared portfolio. Masters’ own directorships run through corporate vehicles tied to Malik, among them entities linked to PublicSquare and the firearms retailer GrabAGun.
No one is alleging that any member has broken a rule, and the reporting is careful to say so. The concern is structural. Scott Amey, the top lawyer at the watchdog group Project on Government Oversight, told the Guardian that advisory panels are a natural home for such concerns: members may seek business from the very agencies they advise, and access to inside thinking can give an employer an edge. Nick Cleveland-Stout, who follows defense policy at the Quincy Institute, has counted that about half the members of the reconstituted board still work in the defense business. Neither claim is exotic. The pattern has precedent: ahead of the 2003 war in Iraq, a review found that at least nine of the thirty board members of the day had ties to contractors doing billions of dollars of Pentagon business, and the panel’s chairman, Richard Perle, stepped down under conflict-of-interest pressure.
The counter-argument is real too. The Pentagon is trying to understand artificial intelligence, drone swarms, space systems and a defense industry that moves at venture speed, and people who have built and funded those industries bring expertise no civil servant has. The board is advisory, its members cannot vote on procurements, and the Pentagon has long leaned on private-sector figures with market knowledge. None of that answers the question the reporting leaves open: whether Andreessen, Masters or any other member has been asked to recuse themselves from discussions touching their own investments, what financial disclosures they filed, and how the department plans to handle matters involving companies tied to its own advisers’ portfolios. The department, a16z and Masters had not responded to the Guardian’s questions when the story was filed.
The point is not that these men are corrupt. It is that they do not need to be. The board shapes how the Pentagon thinks about what to buy, and the men on it are invested in what the Pentagon buys. That is the arrangement, and the arrangement is the story. The defense budget runs to nearly a trillion dollars a year, the board helps decide the direction of the thinking that spends it, and the people doing the advising are, at the same time, positioned to benefit from the decisions their advice supports. The board does not sign the contracts. It draws the map the contracts follow. In Washington, that is a very good seat to hold.