Vulcan Elements, a rare earth startup supported by Donald Trump Jr. that was established only three months ago, has secured a historic $620 million loan from the US Department of Defense, raising numerous questions. The company, along with several firms invested in by 1789 Capital, has collectively won over $700 million in government contracts, fueling concerns about the Trump family leveraging political influence for economic gain.
A startup backed by a venture capital firm led by former President Trump's son, Donald Trump Jr., received substantial financial support from the Pentagon just three months after its investment.
At the center of the controversy is Vulcan Elements, a rare earth startup with approximately 30 employees. Last month, the company secured a $620 million loan commitment from the US Department of Defense to collaborate with its partner ReElement Technologies in expanding the supply of industrial magnets. This move positions Vulcan Elements as yet another business case tied to Trump’s son that has benefited from contracts or regulatory easing under this administration.
This loan represents the largest ever issued by the Pentagon's Strategic Capital Office. The entire financing agreement, valued at $140 million, also includes more than $550 million in private funding and other federal incentives. The deal immediately sparked concerns about conflicts of interest. Kedric Payne, General Counsel for the ethics watchdog group Campaign Legal Center, stated:
"The public expects the president to avoid even the appearance of using their position for personal or familial economic benefit."
He added, "While we are uncertain whether or how the president influenced this loan, it is shrouded in the persistent cloud of conflict-of-interest concerns surrounding this administration."
Government Contracts and Investment Landscape
Vulcan Elements is not an isolated case. According to an analysis by the Financial Times, since Donald Trump Jr. joined the venture capital firm 1789 Capital in 2024, at least four companies in the fund's portfolio have secured government contracts totaling over $735 million this year. Established in 2023 by donors supporting Trump, 1789 Capital now counts Trump’s son as a partner in the eight-person firm.
According to PitchBook data, since Trump’s son joined, 1789 Capital has invested in 22 companies. Sources familiar with the matter indicate that the fund’s assets under management have exceeded $1 billion. Its investment scope has expanded from an initial focus on anti-"woke culture" enterprises, such as Tucker Carlson’s media company, to industries regulated under the Trump administration where potential profits could be realized. The fund’s portfolio also includes major government contractors like Anduril and Elon Musk’s SpaceX.
Other companies backed by 1789 Capital that have received government contracts include rocket propulsion startup Firehawk Aerospace and quantum computing firm PsiQuantum, both of which secured contracts exceeding $10 million from the US Air Force; artificial intelligence group Cerebras Systems signed a $45 million agreement with the Pentagon.
All parties denied the presence of political influence.
Despite the sensitive timing of the deal, all relevant parties denied any political interference. John Maslin, CEO of Vulcan Elements, told the Financial Times that he had “zero contact” with the president’s son and emphasized that his company holds only a “small” stake without board seats or observer rights. Maslin insisted:
“This is not about political favors; it is purely a value-based process.”
A Pentagon spokesperson stated that neither Trump’s son nor 1789 Capital was involved in “any part of the discussions regarding the conditional loan commitment between Vulcan and the government.” A spokesperson for Trump’s son also confirmed that he did not participate in any negotiations with the government on behalf of portfolio companies of 1789 Capital.
However, in February this year, Trump’s son told the media that he was “deeply involved in strategic decisions about where we allocate our resources” at 1789 Capital.
Decoding the $620 Million Financing
The financing structure for Vulcan Elements is both complex and strategic. If conditions are met, this $620 million loan will be the largest disbursed by the Pentagon’s Strategic Capital Office since its establishment during the Biden administration. The funds aim to support Vulcan Elements in producing critical materials—rare earth magnets—used in various defense equipment such as drones and nuclear submarines.
He stated that his company would help strengthen the domestic magnet supply chain in the United States, benefiting the U.S. military.
As part of this intricate transaction, the U.S. Department of Commerce will receive $50 million worth of equity in Vulcan, while the Pentagon will obtain warrants for both Vulcan Elements and its partner, ReElement Technologies. A Commerce Department official described the structure, which offers potential returns to taxpayers, as “entirely reasonable.” According to a Vulcan spokesperson, the company expects its workforce to grow to 50 employees by the end of this year.
Editor/Liam