Pete Hegseth took a sledgehammer to the Pentagon's DEI programs.
The War Secretary said he'd hunt down fraud in federal contracting where billions vanish into Beltway Bandit pockets.
And Alaska's Inupiat people needed that sledgehammer decades ago.
How Alaska Native Corporations Got $45 Billion In Pentagon Contracts
The Pentagon awarded $45 billion in contracts to "Alaska Native" companies over five years.
Those billions were supposed to help indigenous people in remote Arctic villages escape poverty.
Most of the work happened 3,400 miles away in Virginia – where white Democrat executives built $4 million estates.
The Inupiat shareholders who actually own these companies still live in poverty, with 17% collecting food stamps.
ASRC Federal brought in more federal dollars than any other Alaska Native company and lists zero native executives.
CEO Jennifer Felix lives in Loudoun County, Virginia – in a 14,000-square-foot mansion with a guest home and private movie theater that cost $4.3 million.
The North Slope's largest Inupiat village doesn't have a functioning movie theater – just a rusted hut.
How Democrats And Beltway Bandits Turned 8(a) Program Into Personal ATM
Felix has funneled tens of thousands to liberal politicians since 2022: Pro-Choice Majority 2024, Elect Dems Now, Virginia senators Tim Kaine and Mark Warner.
Before the Alaska Native contracting gig, Felix worked the Beltway circuit – General Dynamics, Sotera Defense Solutions, Deloitte.
She's what investigators call a typical Beltway Bandit.
Chief Financial Officer Joseph Winthrop lives in a $2 million Loudoun County home with a wine cellar.
Executive Scott Altman pulls $1.1 million a year and lives in Georgetown.
The Inupiat people make up nearly all welfare recipients in the North Slope.
The 1971 Law Behind Sole-Source Contracts Worth Billions
Congress passed a 1971 law saying companies could skip competitive bidding if Alaska Natives own at least 51% of the business.
Other minority contractors lose their no-bid privileges after nine years or when they outgrow small business size.
Alaska Native corporations keep the "disadvantaged" status forever – even when pulling billions in revenue.
ASRC Federal announced contracts last month worth up to $2.3 billion from the Defense Logistics Agency.
The Department of War awarded nearly one million contracts totaling $45 billion to Alaska Native companies since fiscal year 2021.
Virginia was the most common location where work actually happened.
Less than 12% was spent in Alaska.
The Pass-Through Fraud Scheme Pete Hegseth Is Hunting
An ASRC Federal spokeswoman refused to say how many employees are Alaska Native or what dividends reached native people.
She claimed ASRC operates for its Iñupiaq shareholders' benefit, with a 100% Iñupiaq Board of Directors.
Hard to believe when executives live in multi-million-dollar Virginia estates while shareholders collect food stamps.
This is exactly the fraud Hegseth warned about when he ordered reviews of all 8(a) contracts over $20 million.
These firms take 10% to 50% off the top, then hand the work to giant consulting firms.
Alaska Native corporations become middlemen collecting fees while Beltway insiders do the work and keep the money.
Lisa Murkowski And Dan Sullivan Secretly Blocked 8(a) Contract Reform
Democrat Senator Claire McCaskill tried ending this in 2010.
She found a Bethesda man got paid $15 million over three years to run an Alaska Native contractor while native owners received $305 each in dividends.
That company won a contract to make military uniforms – then manufactured them in Puerto Rico.
Alaska Republican senators blocked every reform attempt for years.
The late Ted Stevens, who chaired Appropriations, killed reforms.
Now Lisa Murkowski and Dan Sullivan secretly urged agencies to ignore Joni Ernst's recent request to pause sole-source contracts.
Their letter said Pentagon officials like the Alaska loophole because competitive bidding is a "bureaucratic slog."
Defense officials keep sending billions to Alaska Native corporations operating in Virginia – because paperwork is hard.
Murkowski is a contender to chair either the Senate Appropriations Committee or its defense subcommittee next Congress.
Trump's War On DEI Contracting Finally Targets Alaska Native Fraud
The Trump administration targeted the 8(a) minority contracting program after Walter Barnes pleaded guilty to getting $500 million in USAID contracts by bribing a USAID official $1 million.
That scheme worked because 8(a) lets government officials steer contracts to specific companies without competition.
Treasury Secretary Bessent found a quarter-billion in fraud.
Attorney General Pam Bondi exposed half a billion in 8(a) fraud.
Small Business Administrator Loeffler is actively investigating 8(a) contracts.
Hegseth's review creates the most pressure yet on Alaska's senators who defended these corporations for decades.
Now they defend DEI contracting while Trump tears it down – or admit they protected a fraud scheme that made Democrat donors rich.
Sullivan told reporters Alaska Native corporations do "mission-critical work for the federal government" with "efficiency and speed."
His secret letter admitted the real appeal was avoiding competitive bidding paperwork.
A law designed to compensate Alaska Natives for an oil pipeline through their land now enriches Virginia Democrats in Loudoun County McMansions while natives freeze in poverty.
Sources:
- Luke Rosiak, "How A Top Pentagon Contractor Enriches DC Insiders Using Law Intended To Help Eskimos," Daily Wire, Feb. 19, 2026.
- American Accountability Foundation Report, provided to The Daily Wire.
- Pete Hegseth social media video, Department of War, Jan. 16, 2026.
