A ProPublica investigation has revealed that White House trade adviser Peter Navarro personally initiated a $620 million Pentagon loan to Vulcan Elements, a North Carolina startup with ties to Donald Trump Jr. The deal, announced last year, was the largest of its kind and has drawn scrutiny over potential cronyism.
White House Intervention
According to Defense Department records and interviews, Navarro instructed Pentagon staff to expedite the loan for Vulcan, a rare-earth magnet company founded in 2023. Unlike other applicants who underwent months of vetting, Vulcan's deal was processed in weeks due to White House pressure. A Pentagon official stated, "The call came from the White House: We have to get this done."
Trump Jr.'s Involvement
Donald Trump Jr.'s venture capital firm, 1789 Capital, invested in Vulcan three months before the loan announcement. While Trump Jr. denied discussing the deal with officials, Navarro is a close friend who dedicated his latest book to Trump Jr. for having his "back when it was against the wall." Navarro also appeared on Trump Jr.'s streaming show days before the deal was publicized.
Pentagon's Response
A Pentagon spokesperson denied any preferential treatment, stating, "Outside affiliations, investors, or political connections play absolutely no role in the Department’s funding decisions." However, critics like former White House ethics lawyer Richard Painter argue this is a clear conflict of interest. "This is corruption we pay for," Painter said.
National Security Concerns
The Office of Strategic Capital, which made the loan, aims to reduce U.S. dependence on China for rare-earth minerals critical to military technology. China controls much of the global supply, including samarium used in Tomahawk missiles. The Trump administration expanded the office's lending authority from $1 billion to $200 billion and prioritized deals through personal networks rather than open applications.
Vulcan's Rapid Growth
Vulcan, founded by a Harvard Business School student, had less than $10 million in funding before the loan. After the deal, its valuation surged from $200 million to $2 billion. The company plans to build a facility producing thousands of tons of magnets annually, creating hundreds of jobs.
Ongoing Investigations
Democratic lawmakers have demanded transparency, but a subpoena for Trump Jr. was blocked by Republicans. Meanwhile, other companies like Unusual Machines, where Trump Jr. holds shares, are also under review for Pentagon funding. The controversy highlights broader concerns about influence and access in the administration's industrial policy.
