# Office of Strategic Capital The **Office of Strategic Capital (OSC)** is the Pentagon's bank. Created administratively in December 2022 and written into statute by the FY2024 National Defense Authorization Act, it makes direct loans, loan guarantees and — since 2025 — takes equity in private companies in critical-technology and critical-minerals supply chains, on the theory that the Defense Department can crowd private capital into sectors (rare-earth magnets, refining, advanced manufacturing) where China's dominance is a military problem. It is the newest and least-scrutinised of the instruments the vault's Deals folder tracks, and in the second Trump administration it became the place where industrial policy, family business and the [[Power of the Purse]] meet. ## Authority and scale Under Biden the office ran a conventional process: public calls for applications, a credit-subsidy appropriation of a few hundred million dollars, and a first loan of $150M to [[MP Materials]] for rare-earth separation in California. The second Trump administration changed the model in three ways. The credit-subsidy allocation stayed small — under $1.5B for FY2026 — but the office's *lending capacity* was described by the *Washington Post* in July 2025 as up to roughly $200B, with the FY2027 request jumping to **$20.2B** (DefenseScoop, April 2026). The open-application process was replaced by leadership "going into the market" through personal networks. And the office was staffed from Wall Street; its director as of mid-2026 is David A. Lorch. By January 2026 it had committed more than **$4.5B** across its deal book (Schiff/Warren/Blumenthal letter, July 30, 2026). ## The deal book The vault's Deals pages carry the transactions; this page carries the pattern. - **[[Vulcan Elements OSC $620M Pentagon Loan]]** (November 2025) — the largest loan the office had made, to a two-year-old North Carolina magnet startup with fewer than 50 employees, plus a $50M government equity stake and an ~$80M conditional loan to refining partner [[ReElement Technologies]] ([[ReElement Technologies OSC $80M Conditional Loan]]). ProPublica reported that the deal was initiated by White House senior counselor [[Peter Navarro]] — the only one of dozens under review initiated by a presidential aide — and expedited in weeks; [[1789 Capital]], where [[Donald Trump Jr.]] is a partner, had taken a stake in Vulcan's $65M round three months earlier ([[1789 Capital Stake in Vulcan Elements]]). Vulcan's valuation rose by as much as 90% after the loan; the Vulcan deal was roughly 13% of everything OSC had committed. The July 2026 Senate letter asks for the Navarro communications and for the names of OSC personnel recommended by Trump Jr. - **[[MP Materials DoD Rare Earth Partnership]]** — the Biden-era loan became, in 2025, a package with a DoD equity position and price floor. - **[[Venezuela Oil Government Equity Stake]]** — the office's mandate stretched from minerals to petroleum as the vehicle for the government's stake in Venezuelan production. - Smaller loans and equity to [[Unusual Machines]], [[North American Blue Energy Partners]], [[J2 Ventures]] and others; Korea Zinc among the foreign counterparties. ## Why it matters Three vault through-lines cross here. **[[Defense Tech Conflicts of Interest]]**: the Vulcan loan is the first documented case of a federal award initiated from the White House for a company in which the president's family holds a stake. **[[Power of the Purse]]**: loan and equity authority lets the executive direct billions with a credit-subsidy line a fraction of the size, outside the appropriations scrutiny that a grant of the same magnitude would attract — the same structure that makes [[Golden Dome]]'s mandatory funding hard for appropriators to assess. And **[[Critical Minerals]]**: whatever the conflicts, the office is the main instrument of the U.S. attempt to build a non-Chinese rare-earth chain, which is why its deals recur on [[Tech Decoupling]]. ## See Also - [[Department of Defense]] · [[Critical Minerals]] · [[Defense Tech Conflicts of Interest]] · [[Power of the Purse]] - [[Vulcan Elements OSC $620M Pentagon Loan]] · [[ReElement Technologies OSC $80M Conditional Loan]] · [[MP Materials DoD Rare Earth Partnership]] · [[Venezuela Oil Government Equity Stake]] · [[1789 Capital Stake in Vulcan Elements]] - [[Peter Navarro]] · [[Donald Trump Jr.]] · [[1789 Capital]] · [[Elizabeth Warren]]