MP Materials DoD Deal Draws Ethics Scrutiny Over Pentagon Counsel

Highlights

• Pentagon counsel Alan Waldenberg represented DoD in the MP Materials deal while managing Deputy Defense Secretary Feinberg's trust, raising conflict-of-interest concerns.
• DoD's deal with MP Materials includes a $400M investment, $150M loan, and a $110/kg NdPr price floor, making the government shareholder, financier, and market-maker simultaneously.
• No wrongdoing by MP Materials has been established, but the integrity of the selection process is under scrutiny.
• A government-guaranteed NdPr price floor reshapes capital allocation across the Western rare-earth industry, disadvantaging competitors without equivalent support.
• Cerberus Capital, linked to Feinberg, has invested in rare-earth developer Torngat Metals, though no direct Cerberus connection to MP Materials has been reported.

America’s biggest rare-earth industrial-policy bet now faces a governance test. The liberal think tank American Prospect reports (opens in a new tab) that Alan Waldenberg—longtime counsel to Cerberus Capital Management and manager of Deputy Defense Secretary Stephen Feinberg’s trust—also represented the Pentagon in its landmark 2025 MP Materials transaction. Waldenberg says Pentagon ethics officials reviewed the arrangement; DoD says it complied with federal ethics rules. Importantly, the reporting establishes no wrongdoing by MP Materials.

REEx Insight: Bigger Than Bad Optics

This matters because Washington didn't simply give MP a contract. DoD invested $400 million, received warrants, committed a $150 million loan, established a $110/kg NdPr price floor, and backed 10 years of magnet demand. The structure effectively made government shareholder, financier, market-maker, and customer.

That makes the integrity of the decision-making process unusually important.

If Washington is going to select “national champions,” investors deserve to understand how companies are selected, how terms are negotiated, whether competing projects receive equivalent consideration, and how conflicts are managed.

When Industrial Policy Picks Winners

Waldenberg confirmed representing DoD while retaining longstanding relationships with Feinberg and Cerberus. Former White House ethics lawyer Richard Painter argues Feinberg should not have participated in selecting his personal lawyer. DoD counters that its Office of Strategic Capital operates under a rigorous ethics framework.

The implications extend beyond MP. A government-guaranteed $110/kg NdPr floor can reshape project economics and capital allocation across the Western rare-earth industry. Competitors without equivalent support face a fundamentally different marketplace.

Meanwhile, Cerberus itself has invested in rare-earth developer Torngat Metals, although the Prospect reports no known direct Cerberus connection to MP. REEx is reviewing additional information concerning this broader matter. We are investigating it and will report further where evidence warrants.

For investors, the question is no longer simply whether America can break China's rare-earth dominance. It is whether the emerging public-private system can do so competitively, transparently, and without undermining confidence in the market it is trying to build.

Source: Zachary Groz, The American Prospect, August 21, 2026.