‘This pushes the boundaries’: White House helped Pentagon explain the legality of its stock deals – Semafor

‘This pushes the boundaries’: White House helped Pentagon explain the legality of its stock deals  Semafor

A legal opinion reviewed by Semafor shows how the Trump administration created the rationale for government stakes in more than a half-dozen companies. One month before the Pentagon announced its first equity stake in a company, its top lawyer asked the White House to explain why the deal wouldn’t break the law. The White House budget office responded with a previously unreported legal opinion, reviewed by Semafor, that provides a crucial look at how the Trump administration justified one of its most controversial deployments of taxpayer money in the private sector. A multibillion-dollar agreement with rare earth firm MP Materials is exempt from the law that bars the executive branch from spending taxpayer money without Congress, Office of Management and Budget General Counsel Mark Paoletta argued in June 2025, because it was “necessary to avoid an imminent threat to human life and government property.” The Pentagon would be relying on authorities provided by the Defense Production Act and annual defense legislation from 2017, Paoletta continued, as well as Article II of the Constitution.

The deal would be the latest in a “venerable tradition of presidential obligations in advance of appropriation,” he concluded, stretching back to 1792. While the Pentagon went on to strike more deals for equity in companies — including its most recent agreement with Venezuelan oil company North