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Tuesday, 8 December 2020

REVEALED: Biden's likely picks for Secretary of Defense, State and a senior defense official have equity in an investment firm that intends to cash in on COVID - as watchdog calls it 'gross'

 Three figures likely to play key roles in Joe Biden's government are linked to an investment firm that looks set to cash in on the COVID pandemic, it has emerged.

Retired four-star Army general Lloyd Austin, likely to be named secretary of defense; Tony Blinken, Biden's pick for Secretary of State; and Michele Flournoy, a senior defense official, all have equity in Pine Island Capital Partners.

Security Exchange Commission filings obtained by The Daily Beast reveal that the investment firm, which touts its expertise from former government officials and well-placed insiders, intends to profit from the pandemic.

Mandy Smithberger, the director of the Straus Military Reform Project at the Project on Government Oversight, said in an email: 'These kinds of conflicts are particularly disappointing given justified criticisms of how the Trump administration has repeatedly used the government to further personal and financial interests.

'While this isn't uncommon, it's still gross.' 

Lloyd Austin, seen in 2015, is considered likely to be named as Secretary of Defense

Lloyd Austin, seen in 2015, is considered likely to be named as Secretary of Defense 

Tony Blinken has already been named as Biden's choice for Secretary of State

Tony Blinken has already been named as Biden's choice for Secretary of State

Michele Flournoy was considered a favorite for the Pentagon, but may still get a role

Michele Flournoy was considered a favorite for the Pentagon, but may still get a role

An updated filing, from November 13, states that the firm expects to make money from the virus.

'We further believe COVID-19 will be a tail wind for the sector in the long-term as federal, state and local governments implement new tools and services that heavily depend on inter-agency connectivity while constrained budgets will benefit from operational efficiency and automation, for which government services are well positioned to deliver,' they state. 


The filing is from a SPAC - an investment vehicle known as a special purpose acquisition company, which essentially serves as a shell company for investments.

The new SPAC was launched on September 23 and the firm raised $218 million for the fund, which is specifically looking to invest in 'defense, government service and aerospace businesses,' according to the prospectus.

Pine Island Capital Partners promotes its high-flying and well-connected partners. 

'Capitalizing on their influential networks and drawing on their deep industry knowledge and experience, Pine Island's Washington, D.C. partners work in tandem with the investment team to source deals, conduct analyses, win bids, close transactions, and directly advise the companies in which we invest,' their company prospectus says.

Austin, Blinken and Flournoy would all divest from the fund if they are appointed to government roles, a spokesman for Pine Island Capital Partners told The Daily Beast.

Blinken (pictured) has said that he, like Austin and Flournoy, will divest from Pine Island

Blinken (pictured) has said that he, like Austin and Flournoy, will divest from Pine Island

In addition to Flournoy and Austin, its 'Washington D.C. partners' also include former U.S. Senators Tom Daschle, Byron Dorgan, Saxby Chambliss, and Don Nickles; former House Democratic Leader Dick Gephardt, and former chairman of the Joint Chiefs of Staff Mike Mullen. 

Blinken has already been announced as Biden's nominee, and on Monday it emerged that Austin would likely be the Secretary of Defense choice. 

If confirmed by the Senate, Austin would be the first Black leader of the Pentagon.

Biden selected Austin over the longtime front-runner candidate, Flournoy, a former senior Pentagon official and Biden supporter who would have been the first woman to serve as defense secretary. 

Biden also had considered Jeh Johnson, a former Pentagon general counsel and former secretary of homeland defense.

Flournoy, pictured with Marines Lt. Gen. John Paxton, was thought likely for the Pentagon

Flournoy, pictured with Marines Lt. Gen. John Paxton, was thought likely for the Pentagon

Biden offered and Austin accepted the post on Sunday, according to a person familiar with the process, who spoke to AP.

As a career military officer, the 67-year-old Austin is likely to face opposition from some in Congress and in the defense establishment who believe in drawing a clear line between civilian and military leadership of the Pentagon. 

Although many previous defense secretaries have served briefly in the military, only two - George C. Marshall and James Mattis - have been career officers. Marshall also served as secretary of state.

Like Mattis, Austin would need to obtain a congressional waiver to serve as defense secretary. 

Biden is pictured with Austin in 2009 at Fort Bragg: they have known each other many years

Biden is pictured with Austin in 2009 at Fort Bragg: they have known each other many years

Congress intended civilian control of the military when it created the position of secretary of defense in 1947 and prohibited a recently retired military officer from holding the position.

One of the people who confirmed the pick said Austin's selection was about choosing the best possible person but acknowledged that pressure had built to name a candidate of color and that Austin's stock had risen in recent days.

Austin is a 1975 graduate of the U.S. Military Academy at West Point and served 41 years in uniform.

Biden has known Austin at least since the general's years leading U.S. and coalition troops in Iraq while Biden was vice president. Austin was commander in Baghdad of the Multinational Corps-Iraq in 2008 when Barack Obama was elected president, and he returned to lead U.S. troops from 2010 through 2011.

Austin also served in 2012 as the first black vice chief of staff of the Army, the service's No. 2-ranking position. 

A year later he assumed command of U.S. Central Command, where he fashioned and began implementing a U.S. military strategy for rolling back the Islamic State militants in Iraq and Syria.

Austin retired from the Army in 2016.

Like many retired generals, Austin has served on corporate boards. He is a member of the board of directors of Raytheon Technologies.

Word of Austin's selection broke a day before a meeting between Biden and Vice President-elect Kamala Harris and civil rights groups, many of whom had pushed the president-elect to pick more black Cabinet members.

The Rev. Al Sharpton, the civil rights activist, said Monday: 'It's a good choice that I think many in the civil rights community would support. 

'It's the first time we have seen a person of color in that position. That means something, in a global view, especially after such an antagonistic relationship we had with the previous administration.'

Sharpton, who is set to be in the meeting with Biden on Tuesday, called the choice 'a step in the right direction but not the end of the walk.'

Politico first reported Biden's selection of Austin.

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