The Dawn Of The Self-Funding Pentagon

Edited by Sam Thielman

THE CONSTITUTION ONLY outlines one way for the government to receive funding: Congress must vote to authorize and provide it. But Pete Hegseth's Pentagon is nothing if not innovative. 

In January, the U.S. military decapitated the Venezuelan government, seized Nicolas Maduro, and functionally made Secretary of State Marco Rubio the viceroy of Caracas. [Maduro, by contrast, now lives down the street from me at the Metropolitan Detention Center, where he is an inmate. It’s a strange world—Sam.] Despite the pretextual rhetoric of combating narcotrafficker cartels, the most important concern for the Trump administration was seizing Venezuela's considerable oil resources. The infrastructure necessary for exporting all that oil, it quickly found, had fallen into disrepair. That infrastructure needs substantial capital for rejuvenation.

Enter the Pentagon. 

A "deal"—that is, between the administration and Venezuelan "interim authorities" controlled by Rubio—announced in late August outlined the terms of the resource seizure. An obscure Biden-era investment arm of the Pentagon, the Office of Strategic Capital, will receive a 35 percent equity stake in the corporate parent of the company receiving a 100-year concession for 17 Venezuelan oil fields, "representing up to hundreds of billions in value and dividends for the United States," the White House announced. That company is North American Blue Energy Partners (NABEP), a multinational oil concern headed by notoriously corrupt Venezuelan billionaire Alejandro Betancourt. The U.S. will get to purchase 20 percent of Venezuelan oil exports at cost, and preferential access to the remainder.

The original idea behind the Office of Strategic Capital was to loan money for the development or acquisition of militarily-crucial materials and resources that private markets don't prioritize. Now, though, the Office's Venezuelan oil equity will come "without a significant capital investment," according to the Wall Street Journal. Its stake in the Venezuelan oil concession comes through a financial instrument called a penny warrant—maybe Sam is familiar with this; I wasn't—which can be traded for shares in the company. [A penny warrant allows the holder to buy shares of a company for a nominal fee, such as a penny, regardless of their price on the open market.—Sam.] This seems to mean that the U.S. will be able to purchase quite a bit of equity in NABEP for literally pennies on the dollar. 

Similarly, that 20 percent of Venezuelan oil will "likely be sold at market rate to a third party, yielding a profit," Gregory Brew, an energy analyst at the Eurasia Group, told FOREVER WARS. "The way it's being framed, it sure sounds like OSC is going to be generating revenue, at some point if perhaps not immediately." 

Yet the OSC, which is run by Cerberus Capital Management veterans, isn't supposed to collect revenue. That would provide the Pentagon with an unaccountable source of funding not generated from Congressional authorization. So what will the Pentagon do with its Venezuelan oil money? 

I asked the Pentagon that question beginning on Sept. 5. First its press office asked me to extend my deadline, which was no problem. Then, after three follow-up attempts, I got bupkis. (And this all happened when I was doing nonstop 9/11-commemoration appearances and then New York Comic Con, which is why this edition is coming out more than a month after the deal. Hey, I tried.) So I can't answer this question definitively. 

With some analytic caution and due humility, I can only point to the implications of the Pentagon reaping dividends from Venezuelan oil exports. This is a step in the direction of the U.S. military holding a revenue-generating stake in sectors of another country’s civilian economy. And maybe, one day, its own, as with Pakistan's army, which Ayesha Siddiqua famously called "Military Inc." That said, we don't yet know how large a step in that direction it represents. 

With the Pentagon declining to explain further, we're wading through the Rubicon in darkness. The military is anything but starved for funding. As you likely know, Trump is seeking a $1.5 trillion Pentagon authorization, a historically gigantic sum. And while I don't want to overstate the accountability of a department that cannot pass an audit, once a security agency steps outside of authorized funding, that's a recipe for a slush fund—think Iran-Contra; or the CIA's Operation Gladio—where the agency decides for itself what operations to undertake, not what the constitutional process permits or instructs it to undertake. 

THE RAID ON REP. ILHAN OMAR'S home by the Department of Homeland Security is a travesty. If there were genuine probable cause to believe Omar had committed a crime, the FBI would have investigated her, and well before an election. This is an unambiguous effort at intimidation and revenge against an elected official who represents a union of communities—black, Muslim, immigrant—that the administration believes cannot be permitted to wield political power. It is yet another reminder that the Department of Homeland Security enforces the political prerogatives of a far-right faction.  

SPEAKING OF, last week, ICE shot seven times through the windshield of Oscar Belgal, hitting him in the neck, while his five-year old son sat in the back seat, in a part of the Bronx that's administratively part of Manhattan. ICE took little time asserting that Belgal is a dangerous criminal, pointing to a prior conviction and what it suggested was a pending charge. Mayor Zohran Mamdani, however, revealed that there is no active warrant for Belgal's arrest—not that one would have justified shooting through his windshield with a child in the car. 

On Friday, I left a signing at New York Comic Con—thanks to everyone who came out—and joined what seemed to me like several thousand New Yorkers on a protest march from Foley Square to 201 Varick Street, site of an immigration court where ICE kidnaps and detains people who are following the rules of their immigration check-ins.

While a judge has for now blocked Belgal's deportation, ICE is holding him at the Metropolitan Detention Center in Sunset Park [Same place as Maduro!—Sam.]. His attorneys said Sunday that Belgal still has a bullet lodged in his neck and that he's in solitary at MDC. 

IRAN IS AGGRESSIVELY targeting oil tankers as a highly predictable means of reasserting its control over the Strait of Hormuz after U.S. naval escorts got a substantial number out of the Gulf in September. "Shipowners that had been willing to take risks because of high freight rates in the region have started to avoid the area," reports the Financial Times' Alice Hancock, who calls this "the most intense period of missile and drone attacks by Iran since the start of the US-Israeli strikes against the Islamic republic seven months ago."

VIA TRITA PARSI, Tamir Hayman of the Institute for National Security Studies at Tel Aviv University examines the emergence of a new Israeli "national-security concept" and concludes that it may herald "a potentially more fundamental shift [than one limited to national security]: a change in Israel’s national identity." Hayman is explicit that his examination is inferential, so it's difficult for me to compare his statements against declaratory documents or similar primary sources. And some of what he finds, like the prioritization of a Jewish national character over democracy, have been part of Israel since before its founding.

But Hayman's analysis is deeply disturbing. Hayman identifies a "rejection of the independent existence of Arab states" and "war as a foundational state" for Israel, with peace reconceived as a "means rather than an end." All that—and, you know, the ongoing genocide in Gaza, the ethnic cleansing of the West Bank and Southern Lebanon, to say nothing of these actions following a historical pattern—really ought to crystallize understanding of Israel's status as an aggressor in the Middle East.

Then there's this:

Self-Reliance and Severing Dependence on the United States: Israel’s national security rests solely on its own capabilities and does not require the backing of a specific great-power. Although important, the relationship with the United States is driven purely by interests. Furthermore, excessive adherence to restrictions imposed on Israel by a US administration is dangerous: The United States is a “declining power” and, given its ongoing social and political shifts, will soon abandon Israel in any event. Excessive dependence on the United States exposes Israel to the influence of a progressive American value system that is incompatible with Israel's Jewish character. Severing ties with the United States is therefore not only inevitable, but essential to Israel’s independence and the resilience of its Jewish national identity.

"Excessive dependence on the United States exposes Israel to the influence of a progressive American value system that is incompatible with Israel's Jewish character" is an incredible sentence, since it both overstates the progressiveness of American values and acknowledges even though euphemism that Israeli apartheid is incompatible with those values. And I have no doubt that autarky is a growing desire of Israelis, Prime Minister Benjamin Netanyahu among them, who observe the rising American popular antipathy for Israel. But Israel simply cannot survive without great-power sponsorship. It's dependent on imports; its neighbors have reason to fear and hate it (see above); and it sure won't get a better deal from Russia or China. If its genocidal political imperatives lead Israel to sever ties with the United States, so be it. 

THE TALIBAN ARE using Bagram Airfield as a detention center, much as the United States did. Reports Drop Site's Emran Feroz:

Bagram’s legacy as a prison facility has generated a second set of rumors about its current role. Reports across Afghanistan suggest that the Taliban are utilizing the facility to hold criminal suspects, alleged members of Islamic State Khorasan Province (ISKP), and political dissidents.

[Taliban official Mufti Abdul Ahad] Hakimi acknowledged that parts of the facility remain operational under the Ministry of Defense, though he declined to specify the number of detainees, their identities, or the legal standards governing their detention.

According to Fermoz, Hakimi himself was once detained and abused at Bagram.