Palantir goes from Pentagon outsider to Mattis’ inner circle

The Trump era has brought a change of fortune for a Silicon Valley software company founded by presidential adviser Peter Thiel — turning it from a Pentagon outcast to a player with three allies in Defense Secretary Jim Mattis’ inner circle.

At least three Pentagon officials close to Mattis, including his deputy chief of staff and a longtime confidante, either worked, lobbied or consulted for Palantir Technologies, according to ethics disclosures obtained by POLITICO. That’s an unusually high number of people from one company to have such daily contact with the Pentagon leader, some analysts say.

It also represents a sharp rise in prominence for the company, which just months ago could barely get a meeting in the Pentagon. Last year, Palantir even had to go to court to force its way into a competition for a lucrative Army contract.

Thiel was one of the only Silicon Valley titans to openly support Trump during the campaign, a role that gave him a prime speaking slot at last summer’s Republican convention. He has since acted as a key adviser arranging meetings among the president and other tech executives. While there’s no evidence he had a direct hand in these specific Pentagon hires, analysts say they absolutely show his growing influence in the administration, where he holds no formal role.

“It is unusual to have several people with close ties to a particular contractor working in close proximity to the Defense secretary,” said Loren Thompson, a leading defense consultant. “It’s probably just a coincidence that several people with Palantir ties are around Mattis, but it certainly doesn’t look good.”

The Pentagon says every employee in the secretary’s office must pass a vetting process. It adds that the individuals in question don’t make decisions about what the military might buy and, therefore, can’t give a preference to purchasing Palantir products.

“All DoD senior appointees must comply with a rigorous process of disclosure, divestment and, where necessary, recusal from any deliberations or decision-making related to their past employment,” Pentagon spokeswoman Dana White said. “These officials have complied with the required legal steps to serve the Department of Defense.”

Their job descriptions, however, show an extraordinarily close proximity to Mattis. And Thompson said the fact that they’re not working in acquisition “doesn’t resolve the ethical concern.”

“They presumably bring a certain perspective to their jobs based on previous ties that might influence the advice they provide,” he said.

Palantir won its lawsuit against the Army, arguing that the service’s contracting processes for a new battlefield intelligence system closed the door to commercial off-the-shelf options — like the one developed by Palantir — that could complete the same mission at a lower price. Last fall, a judge ruled in favor of the tech company, challenging the Pentagon’s acquisition rules.

As evidenced by the lawsuit, Palantir’s startup mentality has led it to shun the way business is typically done in Washington and, as a result, made some enemies in the process, including some larger, more traditional defense companies.

But its steady lobbying efforts and brazen tactics to line up politically powerful allies, much like the methods that traditional defense contractors employ, have paid off with an enviable number of government contracts in recent years.

The Palantir alumni around Mattis are his deputy chief of staff, Anthony DeMartino; senior adviser Sally Donnelly; and Justin Mikolay, a special assistant in the secretary’s front office.

DeMartino, who consulted for the company, said on his ethics disclosure that he had been “consulting on government relationships” for the data analytics company. Palantir did not respond to multiple requests for specifics about what DeMartino or the other staff did at the company, or when they worked there.

DeMartino previously served in the Army, including a tour at the Defense Intelligence Agency, according to a source who served with both him and Mikolay. After leaving the military, DeMartino went to work for consulting firm SBD Advisors and consulted for Bloomberg, Doctors Without Borders and Uber in addition to Palantir, according to his ethics disclosure.
His primary responsibility as deputy chief of staff is managing personnel-related issues for the Office of the Secretary of Defense, White said. That means he works closely with the White House liaison to make sure employees coming into the Defense Department are properly vetted and situated in their new roles.

Donnelly helped found SBD and listed Palantir in a long list of clients she had consulted for, including Bloomberg, General Motors and the World Wildlife Fund. She gives strategic guidance to Mattis on a range of issues, including those pertaining to Congress and foreign government engagement, White said.

Her attorney, Rich Gross, said he could not discuss the specific nature of Donnelly’s work for Palantir or its duration because of a nondisclosure agreement she signed with the company. But he said SBD, which she sold earlier this year, generally focused on helping clients “navigate the political and media environment in the national security space, assess risk and maximize opportunities.”

Gross said the Pentagon general counsel’s office is drafting guidelines for Donnelly to ensure she avoids any conflicts of interest involving previous clients.

“She has been careful not to get involved in any discussions involving her former clients,” Gross said.

Mikolay describes himself as Palantir’s former “lead for government relations and public partnerships” on his ethics disclosure form. His LinkedIn page identifies him as a Palantir “evangelist” who started at the company in February 2013.

He currently works as the director of strategic communications for Mattis and deals with crafting “themes and messages” for the secretary, White said.

Mikolay began his career at Palantir after serving both in uniform and as a Defense Department civilian. After graduating from the Naval Academy, Mikolay attended Princeton University for a graduate degree and became a submariner. He eventually worked in uniform as Mattis’ speechwriter when the general led U.S. Central Command, the source who served with him said. As a civilian, Mikolay was a speechwriter for former Defense Secretary Leon Panetta.

Byron Callan, an analyst with Capital Alpha Partners, said he is “skeptical” that three staffers with ties to Palantir will cause the Pentagon to flip its position on the company or start doing business with it. But he said having these Silicon Valley voices on the inside could foster a continuation of some of former Defense Secretary Ash Carter’s priorities to build bridges between the Pentagon and industry in hubs of innovation.

“It was debatable whether this whole push that Carter had when he was SecDef would survive,” Callan said. “When you have people at Palantir in the positions they are, you have to believe there are some voices that are not just standing in the visitors area waiting to get in and talk about it.”

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