Cerberus Capital Management, the private equity giant founded by Stephen Feinberg, made a name for itself two decades ago when it spent $15 billion buying majority stakes in General Motors and Chrysler, only to watch the auto manufacturers fall deep into bankruptcy during the financial crisis and get massive bailouts from the federal government. It’s a tried-and-true strategy that has worked for Cerberus over the years: staging aggressive takeovers of distressed companies in key industries and tapping a faucet of federal money to keep them going.
About a decade ago, the firm turned its attention to military contracts, a steady and highly lucrative business if you know the right people, but one that can turn on a dime if the feds decide they like another contractor better. Cerberus learned that the hard way in 2016 when one of its companies, DynCorp, lost its bid for a $10 billion aviation contract with the State Department, turned around and sued the government, and got beaten back by the courts.
Another Cerberus-owned company is trying that approach again with a whopping $40 billion lawsuit against the government, one of the largest in American history. But this time, there’s a twist. Feinberg’s no longer in charge of Cerberus. He’s the deputy secretary of defense, the second civilian in command at the Pentagon, at the commanding heights of precisely the agency the company is suing. And if DOD settles the case, as has been rumored, Feinberg’s continued stake in Cerberus could balloon.
FEINBERG HAS LONG SHOWN through his actions a belief that a deep relationship with the federal government would pay dividends for his firm, if not directly for himself. He courted the first Trump administration for a senior role auditing intelligence agencies. He was blocked from getting that job by former Director of National Intelligence Dan Coats, but Feinberg wound up chairing the president’s Intelligence Advisory Board from 2018 to 2021, while still leading Cerberus. That consolation prize clearly wasn’t enough. Now Feinberg has a Senate-confirmed appointment in the upper echelons of the Pentagon, and he’s brought along three former Cerberus partners and managing directors to help him out.
The potential for conflicts of interests in the new arrangement has been obvious, according to a source familiar with Cerberus’s federal influence campaign over the years. Cerberus has not been shy about flexing its political muscle and getting high-profile decision-makers to prioritize its interests, the source said. That sentiment has been shared by Sen. Elizabeth Warren (D-MA), who wrote in a letter to Feinberg in April that his presence at the Pentagon left the door wide open for major ethics breaches. “Your continuing financial relationships with Cerberus, and that of your immediate family, as well as the fact that you have hired multiple key DoD staff with Cerberus ties, raises concerns about whether these actions are consistent with your ethics agreement,” Warren wrote.
Since 2023, Ligado Networks, a Cerberus-backed satellite and telecom company, has been suing Feinberg’s Department of Defense for $40 billion.
After taking office, Feinberg, instead of divesting fully from the firm, stowed his Cerberus holdings in irrevocable trusts controlled by his adult children and managed by a senior managing director at Cerberus and Cerberus’s top outside counsel. Meanwhile, two of the three former Cerberus higher-ups who have followed Feinberg to the Department of War have not filed ethics reports with the Office of Government Ethics, according to the agency’s website. Tomas Rakusan, a former head of the CIA’s clandestine service and until recently a managing director at Cerberus, has reported divestments of modest stock holdings, according to filings reviewed by the Prospect.
Cerberus-backed companies have been winning defense contracts tied to the Trump administration’s Golden Dome project, a new missile defense program that budget experts have projected will cost more than $1 trillion over the next two decades and which falls under Feinberg’s purview at the Pentagon. Just this week, the Missile Defense Agency awarded a contract worth undisclosed millions to Cerberus-backed Eos Energy Enterprises to build battery storage units for the Golden Dome. Earlier this year, Cerberus acquired aerospace manufacturer Vivace International, in order to “support a growing portfolio of national security and space programs.”
A less-scrutinized Cerberus venture, though, may offer the firm the biggest payday.
Since 2023, Ligado Networks, a Cerberus-backed satellite and telecom company roiled by bankruptcies, saddled with an enormous amount of debt, and deemed a national security threat, has been suing Feinberg’s Department of Defense for $40 billion. The case revolves around a wireless connectivity license specially modified for Ligado in 2020. Those licenses are precious commodities.
SINCE THE 1930s, THE FCC has treated radio frequencies commonly used for Wi-Fi, cell service, and GPS like finite natural resources and regulated them tightly, licensing them through periodic “spectrum auctions” to companies for a hefty fee. Those auctions only come around once in a while, which makes the licenses a good investment for firms looking to hoard and sell them to telecom incumbents. The FCC is supposed to police that practice, but it’s had a decidedly mixed track record over the years.
“The skeptic’s view has always been that this company [Ligado] is just basically a hedge fund, and it’s a spectrum-flipping enterprise,” said another source familiar with the discussions surrounding the saga. “A lot of people don’t think there was ever really any scenario where Ligado itself would build a 5G network. The idea was once they got that authorization, they could go lease their spectrum or sell it to Verizon or AT&T or somebody.”
Cerberus’s lobbying effort at the time didn’t help with appearances. When Ligado was trying to convince the FCC to modify its license to allow it to build out cell towers with 5G, “Cerberus would meet with the FCC,” the source said. “Cerberus would go in to the FCC and talk about this.” The private equity firm wanted one thing in particular: Instead of using Ligado’s existing license for wireless connectivity beamed down from satellites in low earth orbit, it wanted to take that frequency and transmit it from cell towers on the ground. Seeing huge upside from that conversion, debtors and creditors were both willing to make the case forcefully. Over four years, Ligado threw close to $8 million at lobbying policymakers to get the request across the finish line, hiring “inside-the-Beltway figures close to President Donald Trump’s White House,” Bloomberg reported at the time.
The Department of Defense, the Department of Transportation, and the Department of Commerce, meanwhile, pushed back on the request, arguing it would single-handedly bring down the country’s GPS infrastructure, compromising all military operations and civilian travel. The radio frequency Ligado wanted to use on the ground, typically reserved for satellites, sat right next to the frequency beamed down weakly from orbit to all GPS-based navigation systems. Having that frequency streaming out from towers on the ground, the agencies argued, would drown out the radio waves coming from space.
The FCC approved the request anyway, which, according to the source, was partly thanks to brewing frustration at the commission that the military was crying wolf. “There’s just this notion in telecom policy among the industries, whether it’s cable, wireless industries that don’t necessarily agree, but they all are like ‘DOD doesn’t play ball on spectrum, they’re obstructionists,’” the source told the Prospect.
Cerberus has not been shy about flexing its political muscle and getting high-profile decision-makers to prioritize its interests.
When Congress later ordered the National Academies of Sciences to study the issue, it turned out the agencies were within their right to be alarmed. Military satellite services and GPS would have been substantially affected had Ligado implemented its plan, though most civilian GPS applications would have been spared. Civil aviation groups and the country’s biggest union of pilots, even with those findings, supported the military’s effort to block the deal on the grounds that Ligado’s plan “would be detrimental to satellite communications and GPS services that are critical components of national security, civil aviation safety, and disaster recovery.”
When it approved Ligado’s bid for a modified license, the FCC ordered the company to take steps to mitigate the interference its new terrestrial network might cause. But the military wasn’t willing to accept that mitigation plan, which it believed was “impractical, cost prohibitive, and possibly ineffective,” and could risk taking down its satellite infrastructure overnight. In response, DOD went to Congress, asking lawmakers to add provisions into the must-pass defense authorization bill that effectively quarantined the company from ever interacting with the federal government.
Ligado plunged into bankruptcy and shortly thereafter sued the feds. The company argued that DOD, beyond just ruining its business, had covertly stolen “Ligado’s spectrum for the agency’s own purposes, operating previously undisclosed systems that use or depend on Ligado’s spectrum without compensating Ligado.” The feds, in turn, argued that wireless connectivity operated under different laws than normal property and tried to get the federal circuit appeals court to toss the case on technical grounds. The court didn’t buy that argument, however, and remanded the dispute, allowing the property claims at the core to proceed and leaving open the possibility of compensation for Ligado, which the company has asserted should be a “multi-billion-dollar” payday.
NOW THE FEDS MAY BE LOSING their appetite for mounting a defense. Recent court filings suggest the parties may be closing in on a settlement instead that could help wash away the company’s losses and clear it for future business. The Capitol Forum last week reported that the case may be heading in that direction, citing anonymous sources with knowledge of the legal proceedings. This week, Ligado Networks and the feds received their third monthlong extension on updating the court about where “discussions … regarding potential next steps” stand, according to public filings reviewed by the Prospect. The Department of Defense declined to comment, citing active litigation. The Department of Justice, Ligado, and Cerberus did not respond to requests for comment. (See below for an update.)
In a March 2025 letter to Feinberg, Sen. Warren highlighted the Ligado lawsuit and demanded the deputy secretary update his ethics agreement to “specifically commit to recusing yourself from matters or interests related to Ligado and its lawsuit with the DOD.”
At the time, Warren said that Feinberg “would have the power to influence the DoD’s posture towards the Ligado lawsuit.” If the government loses or settles the case, Cerberus could profit as it “would most likely receive some portion of the settlement proceeds,” quoting the deputy secretary’s own response to the senator’s questions. That could go into the pockets of Feinberg’s children, she said, since they control the trust housing his Cerberus assets.
Feinberg updated his ethics agreement in January 2026. The document has received intense scrutiny for explicitly acknowledging the deputy secretary’s intention to continue contracting with Cerberus for “administrative services,” including tax compliance and accounting. The amended agreement includes general commitments to avoid conflicts of interest should they arise with the private sector. It lists specific resignations from family funds and trusts and from the board of the grocery chain Albertsons, which Cerberus owns. It lists LLCs tied to real estate properties, farms, and land holdings, each by name. It does not mention the Ligado lawsuit.
UPDATE: After declining comment for this story, DoD spokesperson Sean Parnell took to social media after publication to assert that Feinberg “will make zero money from any potential Ligado settlement” because any profit “will go to a charity to support America’s veterans.” Parnell added that Feinberg “also has no operational involvement in the Ligado Networks lawsuit against the federal government… and has fully recused himself consistent with ethics protocols,” despite that recusal not being memorialized in his ethics agreement.
