Peter Navarro Accused of Ramming $600 Million Pentagon Loan to Startup Tied to Donald Trump Jr

A White House adviser personally intervened to push the largest loan in Pentagon history to a start-up backed by Donald Trump Jr., just weeks after Trump Jr.'s venture capital firm had quietly taken a stake in the very same company. What began as an obscure financing decision has now become a test case for how far political influence can reach into the Defence Department's balance sheet.

That is the finding of a ProPublica investigation published on 28 May 2026, based on Defence Department records and interviews with multiple officials involved in the deal. Peter Navarro, President Donald Trump's senior counsellor for trade and manufacturing, is identified as the source of the directive. Of the dozens of companies the Pentagon was considering for funding at the time, Vulcan Elements was the only firm whose loan was initiated by a direct aide to the president, according to a Pentagon official who spoke to ProPublica on condition of anonymity. The story raises the most direct conflict-of-interest allegation yet against the current administration, one where a senior White House figure personally accelerated a financial windfall for a company linked to the president's own family.

A Two-Year-Old Start-Up, A Record-Breaking Loan

Vulcan Elements is a North Carolina rare-earth magnet company founded in 2023 by a student at Harvard Business School. When its first manufacturing facility opened in March 2025, the company's total funding stood at less than £7.9 million ($10 million), according to an interview published by Poets & Quants that month.

By August 2025, Vulcan had secured a £51 million ($65 million) investment round that included 1789 Capital, the venture capital firm that Donald Trump Jr. joined as a partner following his father's re-election. Neither 1789 Capital nor Vulcan has publicly disclosed the size of 1789's stake. Approximately three months after that investment was completed, the Pentagon's Office of Strategic Capital announced a conditional loan commitment of £489 million ($620 million) to the company, the largest in the office's history and nearly a hundredfold increase on what Vulcan had previously raised in total.

'The Call Came From The White House'

Staff inside the Office of Strategic Capital first learnt of the White House's push to fund Vulcan around September or October 2025, according to a Pentagon official involved in the process. The standard vetting period for companies being considered for strategic loans runs to many months. In Vulcan's case, the deal was closed in a matter of weeks.

Pentagon staff worked late nights under compressed timelines, according to a second source involved in the deal who also spoke to ProPublica on condition of anonymity. 'The call came from the White House: We have to get this done,' that source said.

Navarro did not respond to ProPublica's questions. A White House spokesperson issued a statement saying the administration is working 'in the best interest of the American people,' adding that Navarro and Pentagon officials are collaborating to 'secure America's critical mineral supply chain at Trump Speed.' Trump Jr.'s spokesperson denied that the president's son discussed Vulcan with Navarro or played any role in securing the deal, stating that he 'has no knowledge about how this deal came together.' A Pentagon spokesperson stated flatly: 'No company receives preferential treatment. Outside affiliations, investors, or political connections play absolutely no role in the Department's funding decisions.'

A Close Friendship At The Centre Of The Deal

The intervening figure, Navarro, has a documented personal relationship with Trump Jr. that extends well beyond professional courtesy. During Navarro's imprisonment for contempt of Congress, he defied a subpoena from lawmakers investigating the 6 January 2021 Capitol riot, Trump Jr. visited him in prison. Navarro dedicated his most recent book to a small group of people who had supported him during that period, naming Trump Jr. among them.

A week before the Pentagon publicly announced the Vulcan loan, Trump Jr. hosted Navarro on his streaming programme Triggered, encouraging his nearly two million subscribers to purchase Navarro's book. In an October 2025 episode of the same show, the two men spoke at length about the rare-earth mineral supply chain, the precise sector in which Vulcan operates. Trump Jr. called Navarro 'my boy.' Navarro called Trump Jr. 'brother.' Neither man mentioned Vulcan by name.

Congressional Pushback, and a Stonewalled Response

The loan drew immediate scrutiny on Capitol Hill. On 23 January 2026, Senators Elizabeth Warren, Andy Kim and Richard Blumenthal wrote directly to Defence Secretary Pete Hegseth, demanding to know whether a competitive process had been used and requesting a full record of all contacts between Pentagon officials and Trump Jr. since Election Day 2024. 'We are concerned about the conflicts of interest of President Trump, his family, other administration officials, and any potential favoritism resulting in a waste of taxpayer dollars and a threat to national security,' they wrote.

The Pentagon's response, subsequently published by Senator Warren's office, did not address how Vulcan was selected. House Democrats attempted to subpoena Trump Jr. to testify on the deal but were blocked by Republican members. 'Donald Trump Jr. must be made to answer whether the president's son illegally profited from his father's presidency,' said Oregon Representative Maxine Dexter.

Richard Painter, who served as the chief White House ethics lawyer under President George W. Bush, offered the starkest assessment. 'This is our money they're spending,' Painter said. 'This is corruption we pay for.'

The pattern appears to extend beyond Vulcan alone. According to the Financial Times, at least four other companies in 1789 Capital's portfolio have received federal contracts or awards since January 2025, totalling approximately £580 million ($735 million). Among the companies currently under review for an additional Pentagon loan is Unusual Machines, a Florida drone parts manufacturer on whose advisory board Trump Jr. sits and in which he holds shares worth millions of dollars.

Whether Navarro acted alone, whether Trump Jr. was aware, and whether federal procurement law was breached remain open questions, but the paper trail connecting the president's senior adviser, his eldest son and a nine-figure public loan has now been placed on the record.