President-elect Joe Biden’s pick to lead the State Department co-founded a business advisory firm that helped launch a little-known venture capital fund with a heavy national security portfolio.
Antony Blinken, Biden’s choice to be secretary of State, co-founded WestExec Advisors in 2017 with other former government officials, including Michele Flournoy, a former undersecretary of Defense for policy under President Barack Obama.
The fund, Ridgeline Partners, was co-founded by Blinken’s WestExec and “provides strategic insight on U.S. & allied national security capability needs and emerging opportunities to help grow” the fund’s portfolio, according to the WestExec website.
The fund’s website also says that WestExec acts as a strategic partner of Ridgeline’s. Another of the advisory firm’s co-founders, Nitin Chadda, is the investment co-chair for Ridgeline Partners. Chadda served as senior advisor to the secretary of Defense during Obama’s second term.
The companies within Ridgeline’s portfolio include data and tech startups that have received government contracts, including some deals with the Department of Defense, according to public disclosure reports. Another one of its portfolio companies is partially funded by a nonprofit venture firm that originally was created to assist the Central Intelligence Agency.
It’s yet another example of the business ties among Biden’s appointees raising questions about potential conflicts of interest. Blinken, a managing partner at WestExec, has been on a leave of absence from the firm since joining the Biden campaign.
Blinken was also involved with Pine Island Capital Partners. The investment firm was recently featured in a prospectus for a special purpose acquisition company, pitching access to those interested in buying a stake. Biden’s recent choice for secretary of Defense, retired Gen. Lloyd Austin, is also part of the Pine Capital’s advisory team in Washington, D.C. Pine Island is listed as a strategic partner of WestExec.
Neera Tanden, Biden’s choice to head the Office of Management and Budget, has been running a nonprofit that has been largely funded by Wall Street financiers and Silicon Valley giants.
Progressives are calling for more transparency about Biden appointees linked to the fund and the companies in its portfolio.
“We need to understand exactly who is connected to this firm and the companies in its portfolio - many of which rely on government contracts or investments – how this will relate to decisions which they are likely to have to make, and whether potential conflicts can even be cured,” David Segal, the executive director of the progressive Demand Progress, told CNBC in an email.
Ridgeline’s website says that it “invests in commercially viable technology companies that are critical to national security.” The firm’s website also lists eight members of WestExec’s team, including Chadda and Flournoy, whom Biden reportedly considered for Defense secretary before he picked Austin. Ridgeline’s website doesn’t describe any potential roles of the WestExec leaders, and Blinken is not listed on the fund’s homepage.
A spokesperson for WestExec declined to answer detailed questions on their working relationship with Ridgeline and referred CNBC to a part of the firm’s website that gives a brief overview of their partnership. The representative also said WestExec has no role in Ridgeline-backed companies applying for or receiving contracts.
Andrew Bates, a spokesman for the Biden transition team, told CNBC in a statement that, while Blinken has not been involved in the company’s operations, he will divest his interest in Ridgeline if he is confirmed by the Senate. The statement did not say how much he has invested in the company.
“Joe Biden has pledged the most ethically rigorous administration in American history, and every Cabinet member will abide by all disclosure requirements and strict ethics rules – including recusals when appropriate,” Bates said.
As the official confirmation process begins, Blinken will have to file a public financial disclosure report, which could give a glimpse into how much he has made since starting WestExec and any stake he has in Ridgeline.
Ridgeline’s other co-founders have a mix of experience in finance, venture capital and various government apparatuses. Ben Walker, a co-founder and partner at Ridgeline, was a founding partner of Harpoon Ventures, another venture capital firm. He also has experience as a member of the defense council for the Truman National Security Project.
Andrew McMahon is also listed as a co-founder and partner. Among his many other prior experiences, McMahon’s LinkedIn page says he was a policy analyst at the Office of Management and Budget during the Obama administration.
Ryan Clinton is another co-founder and partner at the fund. His LinkedIn profile says he has a background in “defense technology.” Just prior to running Rigeline, he worked at Anduril, a defense technology company that was co-founded by longtime Trump-ally Palmer Luckey. Clinton’s LinkedIn page says he worked on “business development and growth,” and his profile suggests his work for Anduril focused on the Department of Defense.
Walker, McMahon and Clinton did not return requests for comment.
Of the 13 companies they currently have listed in Ridgeline’s portfolio, at least three have seen significant government contracts. Opentrons, a New York-based startup that says it makes robots for biologists, has picked up almost $90,000 in government contracts since late 2019. The Departments of Commerce, Agriculture and Interior recently bought services from Opentrons.
Wallaroo Labs, a New York-based data and technology company, is also listed in Ridgeline’s portfolio. In late 2019, Wallaroo received a Department of Defense contract worth just under $50,000.
Fluree is also a Ridgeline portfolio company. It received a nearly $50,000 contract late from the DoD late last year. The data company is based out of North Carolina and Ridgeline is listed among a number of tech and military giants as its partners, including Amazon Web Services, the U.S. Air Force and the Google Cloud Platform.
Australian technology firm Myriota is part of the portfolio, too. Though the startup doesn’t appear to have any recent government contracts linked to them, they are funded, in part, by In-Q-Tel, a nonprofit that was created to help provide high end technology to the CIA, a report on the agency’s website says.
In-Q-Tel combined with other investors to spend $28 million in Series B funding to grow Myriota’s satellite network, according to a press release from April. In-Q-Tel’s latest 990 disclosure form from 2018 says the group is a 501(c)(3) and finished that year with over $450 million in net assets.
“ln-Q-Tel identifies, adapts, and delivers innovative technology solutions that serve the national security interests of the United States government and its allies,” the filing says under its mission statement.