Donald Trump Jr. – Pentagon Loan Conflict of Interest

Vulcan Elements, a small rare-earth magnet startup with roughly 30 employees, received a $620 million conditional loan from the U.S. Department of Defense to expand domestic production of military-grade magnets. The company is backed by 1789 Capital, an investment firm where Donald Trump Jr. is a partner.

The Pentagon loan supports Vulcan Elements’ participation in a larger $1.4 billion project in partnership with ReElement Technologies, dramatically expanding the scope of the company’s operations despite its limited size and operational history.

This deal fits into a broader pattern involving 1789 Capital’s portfolio companies. Since Donald Trump returned to office, multiple firms connected to the investment firm have secured federal contracts and agreements totaling more than $735 million in 2025 alone.

Earlier in the year, another company linked to Donald Trump Jr., Unusual Machines, received an Army contract to produce drone motors. Trump Jr. joined the company as an advisor only weeks after his father’s 2024 election victory, despite having no prior experience in military contracting, defense manufacturing, or drone technology. He reportedly holds a personal investment of approximately $4 million in the firm.

While there is no public evidence showing direct intervention by Donald Trump Jr. or the president in the approval of these contracts and loans, ethics experts argue that the arrangements create a clear appearance of favoritism. The president’s son is financially connected to firms receiving substantial defense-industry support from the administration.

The speed and scale of the Pentagon loan — a small startup backed by a firm whose partner is the president’s son receiving hundreds of millions of dollars in federal financing — raises serious concerns about conflicts of interest. What would ordinarily be expected to involve rigorous, merit-based procurement and capacity review instead appears unusually accelerated, reinforcing perceptions of impropriety.

Sources

https://www.ft.com/content/952f37ba-78b4-42a4-8d1b-2258de65f2c0

https://www.commondreams.org/news/donald-trump-jr-pentagon

https://www.moneycontrol.com/world/how-trump-jr-backed-vulcan-elements-landed-a-620-million-pentagon-loan-and-why-it-s-raising-conflict-of-interest-questions-article-13710161.html