President-elect Donald Trump has asked billionaire investor Stephen Feinberg to serve as the deputy secretary of defense, according to the Washington Post. The decision has raised eyebrows because of ethical concerns. Feinberg is the co-founder and co-CEO of private equity firm Cerberus Capital Management, which has significant investments in defense contractors, such as Navistar and Tier 1 Group, and as deputy defense secretary, he would have influence over defense contracts.
But that’s not the only thing about Feinberg that should raise red flags. While he may be known for his investments in the defense sector today, just a few short years ago, he built a firearms empire — one of the largest gun conglomerates in the country — that helped transform the AR-15 into a symbol in America’s culture wars but ultimately closed in bankruptcy.
the freedom group
In 2006, Cerberus acquired its first gun manufacturer, Bushmaster, which specialized in AR-15s. The following year, Cerberus purchased Remington, known for its shotguns and bolt-action rifles, and DPMS, another AR-15 manufacturer that made nearly $100 million in annual sales at the time. Under the umbrella of the Freedom Group, Cerberus eventually acquired 18 firearm, ammunition, and accessory companies. While Feinberg was reportedly inspired to invest in the gun industry because of his passion for elk hunting and a weekend retreat at a training facility belonging to notorious private military contractor Blackwater, he ran the Freedom Group as he did any other investment.
The Freedom Group cut costs by consolidating production for its various brands. However, selling off equipment and laying off skilled workers led to lower-quality products, and gun owners complained about poorly finished and machined parts.
In an effort to boost sales, Freedom Group brands adopted toxic marketing tactics, including a series of ads beginning in 2010 in which Bushmaster AR-15s were shown alongside the words, “Consider Your Man Card Reissued,” linking AR-15 ownership to masculinity. Visitors to Bushmaster’s website could also take a quiz to determine their manliness and receive a temporary “Man Card.” Other examples of ads for Freedom Group brands are shown below, including one Bushmaster ad depicting a soldier holding an AR-15 and another with the tagline “Forces of opposition, bow down. You are single-handedly outnumbered.”
the mass shooting at newtown
On December 14, 2012, a 20-year-old gunman murdered 20 first-graders and six educators with a Bushmaster AR-15 at Sandy Hook Elementary School in Newtown, Connecticut. The mass shooting spurred anger and frustration across the country, and the California teachers’ pension fund, a key Cerberus investor, threatened to pull its money from the firm. In response to the outcry, Cerberus announced plans to sell the Freedom Group.
In 2013, the gun industry earned record profits, and the Freedom Group’s annual sales surpassed $1 billion, but the company failed to attract buyers or lenders. By 2015, the Freedom Group changed its name to Remington Outdoor Company (ROC) and started moving most of its manufacturing operations to Huntsville, Alabama. However, the company reported significant losses due to the move. As sales declined, the company’s debt increased, leading ROC to file for bankruptcy in 2018 and again in 2020.
The company was also forced to confront its reckless marketing campaigns. The tactics became the focus of a lawsuit brought by the families of nine Sandy Hook shooting victims in 2015. Lawyers argued that the company had irresponsibly advertised its assault weapons to young men. While the company settled the case in 2022, paying out $73 million to victims’ families, Cerberus had already sold its stake in the company and managed to walk away from Remington in the black.
As part of the 2020 bankruptcy, several gun makers purchased the various ROC brands at auction — for example, Ruger, Palmetto State Armory, and Franklin Armory bought Marlin Firearms, DPMS, and Bushmaster, respectively — while the Remington brand was spun off as a standalone company.
the man behind the money
Despite his numerous consequential investments, Feinberg has only granted a handful of media interviews since founding Cerberus more than 30 years ago and rarely allows himself to be photographed. What is known is that he regularly donates to Republican candidates and groups, he was an early Trump supporter (donating nearly $1 million for Trump’s election campaign), and he chaired Trump’s Intelligence Oversight Board during his first administration. However, if Feinberg accepts the role of deputy defense secretary, he’ll be subjected to a Senate confirmation hearing, and, if confirmed, he’ll have to make public appearances.
Given the Department of Defense’s buying power as it relates to weapons, Feinberg’s current and past investments — including his prior stake in what was once one of the largest gun industry conglomerates — raises questions about potential conflicts of interest.