Pentagon Tries to Cast Bank Runs as National Security Threat
Key Excerpts from Article on Website of The Intercept
Posted: April 10th, 2023
In recent months, the Pentagon has moved to provide loans, guarantees, and other financial instruments to technology companies it considers crucial to national security — a step beyond the grants and contracts it normally employs. So when Silicon Valley Bank threatened to fail in March following a bank run, the defense agency advocated for government intervention to insure the investments. The Pentagon had even scrambled to prepare multiple plans to get cash to affected companies if necessary, reporting by Defense One revealed. Their interest in Silicon Valley Bank stems from the Pentagon’s brand-new office, the Office of Strategic Capital. The secretary of defense established the OSC in December specifically to counteract the investment power of adversaries like China in U.S. technologies, and to secure separate funding for companies whose products are considered vital to national security. The national security argument for bailout, notably, found an influential friend in the Senate. As the Biden administration intervened to protect Silicon Valley Bank depositors on March 12, Sen. Mark Warner, D-Va., who chairs the powerful Senate Intelligence Committee and also sits on the Banking Committee, issued a press release warning that the bank run posed a national security risk. Warner — the only member of Congress to have publicly tied SVB to national security — has received significant contributions from the financial sector. Since 2012, Warner has received over $21,000 from Silicon Valley Bank’s super PAC.
Note: Many tech startups with funds in Silicon Valley Bank were working on projects with defense and national security applications. Explore revealing news articles on the rising concerns of the emerging technologies that the Defense Department is investing in, given their recent request for $17.8 billion to research and develop artificial intelligence, autonomy, directed energy weapons, cybersecurity, 5G technology, and more.