{"id":609,"date":"2026-08-11T19:16:35","date_gmt":"2026-08-11T19:16:35","guid":{"rendered":"https:\/\/frontierhousingreport.com\/?p=609"},"modified":"2026-08-11T19:16:35","modified_gmt":"2026-08-11T19:16:35","slug":"more-about-seth-moultons-conflicts","status":"publish","type":"post","link":"https:\/\/frontierhousingreport.com\/?p=609","title":{"rendered":"More About Seth Moulton\u2019s Conflicts"},"content":{"rendered":"
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Last week, I reported that Seth Moulton, who is challenging incumbent Sen. Ed Markey for the Massachusetts Democratic Senate nomination, was given a sweetheart opportunity to buy into three lucrative defense-related stocks not available to the general public. Moulton is a top Democrat on the House Armed Services Committee.<\/p>\n

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At last Monday\u2019s debate with Markey, the second of three debates between now and the September 1 primary, Moulton claimed that these were really his wife\u2019s investments, and that the criticism, raised by Markey in the debate, was \u201csexist.\u201d Yet the webAI investment, one of Moulton\u2019s biggest, is in his personal IRA.<\/p>\n

I asked Moulton\u2019s campaign press secretary to explain this discrepancy. She did not respond.<\/p>\n

More from Robert Kuttner<\/em><\/strong><\/p>\n

Moulton\u2019s holding in webAI, and his access to defense-related tech stocks on terms not available to ordinary investors, is part of a much larger story that I will address in this piece. The context has several parts.<\/p>\n

The first is the Pentagon\u2019s effort to expand what\u2019s known as the defense industrial base in areas where legacy companies have not been able to meet military needs for advanced technology and production. Late in the Biden administration, the Pentagon created the Office of Strategic Capital. The idea was for the government to funnel government-backed private capital into companies that provided critical technologies.<\/p>\n

This was further promoted under President Trump. All three of the companies that Moulton invested in fit the \u201ccritical technology\u201d definition. All three have defense contracts and expect more.<\/p>\n

The second is the effort by China to grow its own military tech industries, and to get around barriers created by the United States in order to get access to U.S. technologies and markets. The Pentagon has criteria for when Chinese involvement in a U.S.-based tech company puts it off-limits for classified work, but they are loose and somewhat subjective. There are no precise thresholds for how much Chinese ownership is too much. Even the latest regulation, issued on May 7, does not include precise percentage tests.<\/p>\n

The porous regulation is an example of the Trump administration\u2019s muddled China policy. On the one hand, Trump has brandished tariffs. On the other hand, his science and technology policies are being conducted by people with close Silicon Valley ties who are eager to make more deals with China. Against the advice of China hawks, Trump announced last year that he would allow Nvidia to sell H200 chips to China in exchange for the U.S. government receiving a cut of the sales.<\/p>\n

The Chinese, meanwhile, are displacing the U.S. in industry after industry, while Trump disdains anything smacking of industrial policy, much less one that promotes renewables. China now has 70 percent of the global EV industry.<\/p>\n

The third element of the larger story is the role of some key players, including a private equity mogul named David Shuman, whom I mentioned in last week\u2019s piece. Shuman is a longtime political supporter of Moulton, and a key player in the three companies in which Moulton was able to invest.<\/p>\n

Last week, I focused on Moulton\u2019s lucrative investment in a company called webAI. An even more instructive story is the case of Divergent Technologies, a military tech company that illustrates this interconnected web of interests.<\/p>\n

Divergent was founded in 2014 by a former Goldman Sachs executive named Kevin Czinger. According to a Washington Post<\/em> \u201cintelligence report\u201d in July 2025 by Josh Rogin, \u201cDivergent manufactures metal drone casings for General Atomics, designs and produces cruise missiles for CoAspire, and has customer relationships with legacy defense giants Lockheed Martin, RTX and Northrop Grumman, among others. In May 2025, Divergent announced a strategic partnership with Palantir Technologies.\u201d<\/p>\n

Divergent soon became a leader in technologies that combine 3D printing with AI, robotics, and machine learning. The company has developed a system, called the Divergent Adaptive Production System, that can make commercial or military products in the same factory. Czinger\u2019s son, Lukas, is the CEO of this part of Divergent. He plans a network of global factories that can serve commercial customers but quickly shift to military production as needed. This is called the Civil Reserve Manufacturing Network.<\/p>\n

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According to the Post<\/em> report, the FY2026 defense appropriations bill contained $139 million for just such an initiative, adding: \u201cThe Defense Department would have to hold a competition to award the funds, but it was clearly written to fit Divergent.\u201d And the Pentagon now has just such a program. (The final amount authorized was .)<\/p>\n

At a time when the administration is frantically seeing to replace the dwindling U.S. missile arsenal, which has been depleted by the Iran war, each of Divergent\u2019s printers can produce hundreds of low-cost missile airframes each year. Last January, Defense Secretary Pete Hegseth toured the Divergent factory in Torrance, California.<\/p>\n

Until 2024, Divergent had substantial Chinese funding. A company called Apollo, nominally based in Hong Kong but dominated by people associated with Chinese President Xi Jinping, owned about 13 percent of Divergent and had seats on its board.<\/p>\n

On July 26, 2024, Apollo and its subsidiary, Global 3D, 4.93 million shares in Divergent Technologies to Lateralus Holdings IV, LLC, for $101.53 million. And here\u2019s where the interlocks get really interesting.<\/p>\n

Lateralus is the personal vehicle of David Shuman, the longtime donor to Seth Moulton. Shuman formally joined Divergent\u2019s board of directors in August 2024, shortly after the sale agreement was signed.<\/p>\n

Since Lateralus bought out China\u2019s Apollo, Divergent\u2019s business with the Pentagon and its valuation have soared. The Post<\/em> reported last year that it is in the running for at least $10 billion in government contracts. The total value of Divergent\u2019s contracts has not been disclosed, but the company is well situated to profit from the latest military buildup. Last Wednesday, Deputy Defense Secretary Steve Feinberg wrote to industry leaders saying they had 21 days to submit plans to \u201cdrive significantly faster, more aggressive delivery schedules and\/or increased production for critical capabilities.\u201d<\/p>\n

Seth Moulton first invested in Divergent in 2023, at a time when the plan to have Lateralus buy out Chinese investors had not yet been consummated. His disclosure statements valued his purchase, held jointly with his wife, Liz, at between $50,001 and $100,000.<\/p>\n

In July 2025, Moulton purchased a second investment in Divergent, valued at between $15,001 and $50,000, this time via David Shuman\u2019s Lateralus Holdings IV.<\/p>\n

I asked David Shuman how and why Seth Moulton was able to make these investments on terms not available to ordinary investors. I put the same question to Divergent. I received no response.<\/p>\n

In his most recent financial filings, Moulton has valued his total Divergent holdings at between $100,002 and $200,000. Since his purchases, the value of Divergent has soared, thanks to its increased Pentagon business. It could well be worth a lot more.<\/p>\n

The Trump administration\u2019s confused and self-defeating relations with China should be the subject of intense scrutiny, especially by Democrats in Congress. Moulton should be at the center of this. Instead, he is compromised by his own investments and personal connections.<\/p>\n

Read more Max Miller\u2019s Endless Wars<\/a><\/p>\n<\/div>\n


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