The defense-industry swamp is eager to engulf the Biden administration

Just days after the presidential election, a new investment firm called Pine Island Acquisition Corporation quietly began trading on the New York Stock Exchange, with the prospect of becoming a notable player in the $2 trillion defense and aerospace industry. The company’s greatest asset was not its relatively modest bankroll goal of $200 million, but its connections — deep ties to policy establishment figures shaping the incoming Biden administration.

In describing itself to potential investors, Pine Island’s prospectus boasted a leadership team with “extensive access, insight, expertise and management skill” in the defense sector.

In the dawning Biden era, that might be an understatement.

Pine Island was established as a “blank-check company” by Pine Island Capital, a small private-equity firm based in Fort Lauderdale. Among that firm’s partners are Michèle Flournoy and Antony Blinken, two of the president-elect’s top foreign-policy advisers. Blinken, who served as Vice President Joe Biden’s national-security adviser and, later, deputy secretary of state, is Biden’s pick to lead the State Department. Gen. Lloyd Austin, Biden’s nominee for defense secretary, is also listed as one of the firm’s “DC Partners.”

Pine Island recently lowered its fundraising goal from an initial target of $300 million, a move that appears to have expedited its listing on the New York Stock Exchange. While that move will reduce its available capital, it appears to position the company’s shareholders to benefit from any positive news stemming from a potential nomination of any of its partners.

According to a pre-IPO filing, Pine Island’s connections are a key part of its selling proposition. It touted its leadership as being “uniquely positioned to capitalize” on an anticipated increase in demand by the defense industry for certain key technologies.

Pine Island Capital boasts a striking mixture of Wall Street expertise and political access. Its investment team includes former Merrill Lynch boss John Thain, who serves as chairman, and former Goldman Sachs private-equity chief Phil Cooper. The company’s “DC Partners” include four former US senators, former House Majority Leader Dick Gephardt and a bipartisan set of foreign-policy hands.

To date, Pine Island Capital has only publicized a handful of investments. In July, the company purchased Meggitt Training Systems, which provides weapons training to the military and law enforcement. Meggitt recently rebranded as InVeris Training Systems and tapped former Sen. Saxby Chambliss (R) as chairman, bolstering Pine Island’s bipartisan reach.

But Pine Island’s ties to the Biden team run particularly deep. Co-founder Clyde Tuggle ran government affairs for Coca-Cola, which hired Biden’s niece, Missy Owens, as an in-house lobbyist in 2012. Its Web site previously listed longtime Hunter Biden associate Rob Walker as an adviser but appears to have removed him after his name appeared in two sets of leaked e-mails purportedly showing controversial deals in which the Biden family was involved.

Members of Biden’s transition team already face scrutiny over their close ties to special-interest groups. In particular, Flournoy has been targeted by progressive groups who see her as unacceptably hawkish. In 2018, she joined the board of Booz Allen Hamilton, one of the country’s largest defense contractors.

That same year, she and Blinken launched WestExec, an advisory firm specializing in geopolitical issues.

A 2018 report from the Project on Government Oversight ID’d more than 380 senior Pentagon officials who began working in the defense industry within two years of leaving government. This revolving door has come under increased scrutiny in recent years, especially from Democrats. Reps. Mark Pocan (D-Wis.) and Barbara Lee (D-Calif.), both vocal opponents of increased defense spending, recently publicly advised Biden against nominating a defense secretary beholden to contractors.

Democratic Sen. Richard Blumenthal raised similar concerns during Mark Esper’s confirmation. “I am simultaneously concerned about the increasingly corporate culture at the Department of Defense,” he said, “and the growing consolidation of the defense industry.”

The sincerity of Democrats who sounded such alarms will be tested soon enough. Companies like Pine Island are betting that Washington’s revolving door will be fully operational in a Biden administration.

Peter Schweizer is president of the Government Accountability Institute; Jacob McLeod is research director.

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