Washington — During President Trump’s first term, an Ohio company was admonished by Republicans and Democrats in Congress after an audit claimed it made millions in excess profit from federal defense contracts.
Facing bipartisan frustration, TransDigm Group Inc. eventually of its own accord paid the money back. Yet after another review in 2021 outlined similar concerns, the company did not voluntarily refund millions of dollars in question. Since then, campaign finance records show the company’s CEO Kevin Stein has donated to candidates from both major political parties and gave more than $300,000 to the National Republican Congressional Committee earlier this year as Mr. Trump and many others within the GOP sharply criticized what they viewed as waste in government.
“Both sides should be screaming from the rooftops about this,” William Hartung, a defense spending expert at the Quincy Institute for Responsible Statecraft think tank, said about TransDigm’s business practices which he views as having taken advantage of a dysfunctional system.
TransDigm may be little known to the public at large, but the company has attracted attention in the halls of Congress. Within the last decade, Stein has testified to lawmakers amid scrutiny of the business, which deals in parts for both military and commercial aircraft.
“As my oversight has exposed, TransDigm has spent years fleecing taxpayers to the tune of millions of dollars,” Iowa GOP Sen. Chuck Grassley said in a statement. “The Department of Defense Inspector General needs to conduct aggressive oversight of TransDigm’s abuses and ensure proper accountability is had. At the same time, the Defense Department must step up its game to implement enhanced internal controls and explore alternative pathways of production, including through reverse engineering of spare parts, to avoid being swindled by contractors like TransDigm.”
TransDigm did not respond to multiple requests for comment.
In February 2019, an audit released by the Department of Defense Inspector General’s Office “determined that for 112 contracts, TransDigm earned $16.1 million in excess profit for 46 parts it sold to the [Defense Logistics Agency] and the Army for $26.2 million between January 2015 and January 2017.”
Months later as part of a House Oversight Committee hearing, Stein refuted the report, arguing in a written statement that its findings were “based on cost data that excludes many actual costs of doing business.”
Still, lawmakers took issue with the company.
North Carolina GOP Rep. Mark Meadows, who would later become Mr. Trump’s chief of staff towards the end of the president’s first term, encouraged the company during the hearing to “chalk it up to marketing expense and pay the American taxpayer back immediately.”
Florida Democratic Rep. Debbie Wasserman Schultz argued the business was “grossly robbing the American taxpayers and impacting our military readiness and our ability to make sure that we have the ability to accomplish mission-critical goals.”
Across Capitol Hill that same day, Grassley said during a speech that the report “exposes a galactic price gouging, colossal rip-off and out-of-this-world waste.”
The company later voluntarily repaid the $16.1 million.
Close to three years later, during Democratic President Joe Biden’s tenure, the Defense Department’s Inspector General’s Office released another report looking at January 2017 to June 2019. That audit alleged findings “that TransDigm earned excess profit of at least $20.8 million on 105 spare parts on 150 contracts.”
A 2022 House hearing on that report was far more politically divisive than the similar one held in 2019. Stein testified again, and shared what he described as deep concern “with the fundamental errors in this report,” while some Republicans took issue with the attention being trained on TransDigm.
“I don’t think we should be picking on any one company, particularly an American-owned company, here,” North Carolina GOP Rep. Virginia Foxx said during the hearing.
Democrats continued to challenge company leaders, along with Grassley, a Republican.
“You all are the perfect poster child of an out-of-control defense budget that puts the interests of wealthy, well-connected people like yourselves ahead of the best interests of the American people,” progressive Michigan Democratic Rep. Rashida Tlaib said at the time.
Later, Grassley signed a letter asking for the amount of money identified in the 2021 audit to be repaid. A response from Stein obtained by CBS News shows the CEO argued that “while the headline from the audit report may be TransDigm made “excess profit,” the reality is that this conclusion is derived from the audit report inexplicably counting millions of dollars of real costs as profit and creating an artificial profit measure not found in law.”
The Defense Department, which has the largest discretionary budget in the federal government, has long been susceptible to price gouging contracts. According to the Pentagon’s inspector general, the Government Accountability Office has included the Defense Department’s contract management in its “High‑Risk List” of programs vulnerable to waste and fraud since 1992.
A spokesperson for the federal government’s Defense Logistics Agency told CBS news on Tuesday that in early 2022, it had “requested voluntary refunds from TransDigm for the $20.8M identified in the 2021 report.”
“To date, DLA has not received a refund and TransDigm has not indicated their intent to pay,” the spokesperson said.
Before the 2024 general elections, Stein donated to help Mr. Trump’s presidential run, as well as to political efforts for Republicans and Democrats. On occasion, that resulted in his giving to a Democratic incumbent — and the Republican challenger — as he did in a recent Senate race in Pennsylvania that ended with then Democratic Sen. Bob Casey narrowly losing to Republican Dave McCormick.
Last year, after having donated to Republicans, Stein also gave money to a few House Democratic candidates including some from frontline seats in the 2024 cycle whose wins went on to play a part in keeping Republicans’ majority narrow.
Stein has also helped fund a political operation that received donations from TransDigm leaders. Records show from late 2019 until the end of last year, the group called TransDigm Group Inc. Employee Political Action Committee gave money to dozens of Democrats and Republicans, including candidates from both major parties who now hold roles on the House oversight panel that in the past has questioned the company, as well as politicians who are part of Democratic leadership.
After starting at TransDigm in 2014, Stein rose through the ranks over time, according to an online biography. Earlier this year, the company announced that he would retire as CEO at the end of September. Republican Ohio Rep. Max Miller, whose campaign counts Stein as a donor, called him “a great guy.”
“In terms of my dealings with him, he’s been very straight and narrow,” Miller said. “I’ve had dealings with other people who are not straight and narrow that I will not take money from and tell them, ‘bye and there’s the door.’ And believe it or not, members of Congress do that more frequently than people would think.”
A clear focus of Stein’s political donations in the early part of this year has been House Republicans. Through a joint fundraising group tied to Minnesota Rep. Tom Emmer, the third highest-ranking Republican in the House, money from Stein has also gone towards a set of Republican campaigns that could be critical in deciding which party holds control of the House for the final two years of Mr. Trump’s time in the White House.
Republicans losing just three seats in the House could be the difference between the GOP having unified control of Washington for the final two years of Trump’s presidency or the party’s power and influence being limited before he leaves office.
Outside of the House chamber last week, New York GOP Rep. Mike Lawler maintained that congressional Republicans and the Trump administration are looking to root out waste in government. He pushed back however on any concerns about the CEO’s political spending after being asked about the dollars that have recently been given to his own campaign and other House Republican political operations.
“Obviously, in America, people are able to support whoever they want,” Lawler said. “We don’t live in communist Russia, unless you would like to go down that road.”
(Except for the headline, this story has not been edited by PostX News and is published from a syndicated feed.)
