This story was originally published by ProPublica. Republished under a CC BY-NC-ND 3.0 license.

On Oct. 2, the second day of the government shutdown, Homeland Security Secretary Kristi Noem arrived at Mount Rushmore to shoot a television ad. Sitting on horseback in chaps and a cowboy hat, Noem addressed the camera with a stern message for immigrants: “Break our laws, we’ll punish you.” 

Noem has hailed the more than $200 million, taxpayer-funded ad campaign as a crucial tool to stem illegal immigration. Her agency invoked the “national emergency” at the border as it awarded contracts for the campaign, bypassing the normal competitive bidding process designed to prevent waste and corruption.

The Department of Homeland Security has kept at least one beneficiary of the nine-figure ad deal a secret, records and interviews show: a Republican consulting firm with long-standing personal and business ties to Noem and her senior aides at DHS. The company running the Mount Rushmore shoot, called the Strategy Group, does not appear on public documents about the contract. The main recipient listed on the contracts is a mysterious Delaware company, which was created days before the deal was finalized.

No firm has closer ties to Noem’s political operation than the Strategy Group. It played a central role in her 2022 South Dakota gubernatorial campaign. Corey Lewandowski, her top adviser at DHS, has worked extensively with the firm. And the company’s CEO is married to Noem’s chief spokesperson at DHS, Tricia McLaughlin.

The Strategy Group’s ad work is the first known example of money flowing from Noem’s agency to businesses controlled by her allies and friends.

Government contracting experts said the depth of the ties between DHS leadership and the Strategy Group suggested major potential violations of ethics rules.

“It’s corrupt, is the word,” said Charles Tiefer, a leading authority on federal contract law and former member of the Commission on Wartime Contracting in Iraq and Afghanistan. He said that the Strategy Group’s role should prompt investigations by both the DHS inspector general and the House Oversight Committee. 

“Hiding your friends as subcontractors is like playing hide the salami with the taxpayer,” Tiefer added.

Federal regulations forbid conflicts of interest in contracting and require that the process be conducted “with complete impartiality and with preferential treatment for none.”

“It’s worthy of an investigation to ferret out how these decisions were made, and whether they were made legally and without bias,” said Scott Amey, a contracting expert and general counsel at the watchdog group Project on Government Oversight.

The revelations come as the amount of money at Noem’s disposal has skyrocketed. The so-called Big Beautiful Bill granted DHS more than $150 billion, and Noem has given herself an unusual degree of control over how that money is spent. This summer, she began requiring that she personally approve any payment over $100,000.

Asked about the Strategy Group’s work for DHS, McLaughlin, the agency spokesperson, said in an interview, “We don’t have visibility into why they were chosen.”

“I don’t know who they’re a subcontractor with, but I don’t work with them because I have a conflict of interest and I fully recused myself,” she said. “My marriage is one thing and work is another. I don’t combine them.” Her husband, Strategy Group CEO Ben Yoho, didn’t respond to questions.

In a written statement, DHS said, “DHS has no involvement with the selection of subcontractors.” They added that the Strategy Group does not have a direct contract with the agency, saying “DHS cannot and does not determine, control, or weigh in on who contractors hire.” 

Contracting experts said that agencies can and do sometimes require that subcontractors be approved by officials. It’s not clear how much the Strategy Group has been paid.

This is not the first time that the Strategy Group has gotten public money through a Noem contract. As governor of South Dakota in 2023, her administration set off a scandal by hiring the Ohio-based company to do a different ad campaign, paying it $8.5 million in state funds. While the state said the contract was done by the book, a former Noem administration official told ProPublica that Noem quietly intervened to ensure the Strategy Group got the deal. ProPublica granted some people anonymity to discuss the deals because of their sensitivity.

The firm also paid up to $25,000 to one of Noem’s closest advisers in South Dakota, previously unreported records show. (The adviser, 28-year-old Madison Sheahan, now serves at DHS as the second-in-command of Immigration and Customs Enforcement. Sheahan didn’t respond to questions about why she was paid.)

The DHS ad that the company filmed at Mount Rushmore has aired during “Fox & Friends” in recent days. Executives from the Strategy Group traveled to the shoot and hired subcontractors to fill out the film crew, according to records and a person involved in the campaign. The ad’s aesthetic sits somewhere between a political campaign ad and a Jeep commercial as Noem tells would-be immigrants to “come here the right way.”

“From the cowboys who tamed the West to the titans who built our cities,” Noem says, as images of Trump Tower in Chicago and Trump raising his fist after the assassination attempt last year flash on the screen, “America has always rewarded vision and grit.” Noem continues: “You cross the border illegally, we’ll find you.”

Watch the DHS Ad Filmed at Mount Rushmore

The ad is the latest in a campaign that Noem debuted in February, just a few weeks after she took charge of DHS. “Any delay in providing these critical communications to the public will increase the spread of misinformation, especially misinformation by smugglers,” the agency wrote, explaining why it was skipping the competitive bidding process normally required for government contracts. The initial ads featured Noem thanking Trump for securing the border.

The contracts total $220 million so far, leading the DHS ad budget to triple in the most recent fiscal year, according to Bloomberg. The lion’s share of ad contracts is typically used to buy TV airtime or spots on social media. Advertising firms make money by taking an often-hefty commission. Federal records show the contracts have gone to two firms. One is a Republican ad company in Louisiana called People Who Think, which has been awarded $77 million. 

But the majority of the money — $143 million — has gone to a mysterious LLC in Delaware. The company was created just days before it was awarded the deal.

Little is known about the Delaware company, which is called Safe America Media and lists its address as the Virginia home of a veteran Republican operative, Michael McElwain. McElwain has long had his own advertising company (separate from the Delaware one), but there’s little evidence that firm could handle a nine-figure federal contract on its own: It reported just five employees when it received COVID-19 relief money a few years ago.

How, where and to whom Safe America Media doled out the $143 million is unknown. Any subcontractors hired to do work on the DHS ads are not disclosed in federal contracting databases. 

The office funding the ad contracts is listed as the DHS Office of Public Affairs, which is run by McLaughlin, contract records show. McLaughlin married Yoho, the Strategy Group CEO, earlier this year. 

In its statement, DHS said the agency does its contracting “by the book” and the process is run by career officials. “It is very sad that Pro Publica would seek to defame these public servants,” DHS added.

Asked about why the agency chose Safe America Media, DHS said, “The results speak for themselves: the most secure border in American history and over 2 million illegal aliens exiting the United States.” McElwain and People Who Think didn’t respond to questions.

Yoho was still in college when he first served as campaign manager for a U.S. congressman. Now, at 38 years old, he’s a national player in the cutthroat industry of political advertising. Federal election records show tens of millions in payments to his firm during the 2024 election cycle, coming from dozens of Republican congressional candidates. And Noem has proved a particularly lucrative client.

Lewandowski brought Yoho into Noem’s inner circle back in South Dakota, according to two people familiar with the matter, putting the young consultant in charge of the ad side of her 2022 gubernatorial reelection campaign. Noem had a more than $5 million advertising budget for the race, records show. After she won in a landslide, Yoho, who has called Noem a friend, came to South Dakota to attend her inauguration ceremony. He sat off to the side of the stage, next to Lewandowski. (Lewandowski didn’t respond to a request for comment.)

By then, Yoho’s next big project with Noem was already in the works. In late 2022, Noem was quietly preparing to launch another sprawling ad campaign — only this time, the money would come from state coffers. The stated goal was to encourage workers to move to South Dakota. The upcoming contract opportunity wasn’t public yet, but Yoho was already involved in planning the campaign, according to records first reported by Sioux Falls Live.

Then on Jan. 12, 2023, Yoho’s company registered to do business in South Dakota under the name Go West Media. The next day, the contract opportunity went live.

Seven companies submitted proposals for the project. Then the pressure from above set in, according to a former Noem administration official involved in the process.

The former official said a top Noem aide told them the governor would be angry if Yoho’s company didn’t win the contract. “He was very direct: ‘She wants to do it,’” they said. Contemporaneous text messages reviewed by ProPublica corroborate that senior Noem administration officials pushed for Yoho to get the contract. Eventually, he did. (In its statement, DHS denied that Noem influenced the process.)

Noem starred in Yoho’s ads herself, dressing up as a dentist, a plumber and a state trooper as she touted her state’s growing economy. Exactly how much Yoho and the Strategy Group made off the $8.5 million deal is unclear. Some of the money was used to purchase spots on Fox News, including one during a Republican presidential debate. Some of the money appears to have gone back to South Dakota — into the bank account of another of Noem’s top advisers.

Sheahan, now the second-in-command at ICE, was paid up to $25,000 by Go West in 2023 for “consulting,” according to a financial disclosure document Sheahan later filed. At the time, Sheahan was serving as both the operations director for Noem as governor and the political director for Noem’s campaign work, according to a copy of her 2023 resume obtained by ProPublica. Her responsibilities included coordinating “daily logistics and operations” for Noem and her team, the resume said. She also managed the “relationship with high level donors” to American Resolve, Noem’s network of outside political groups. 

As his firm received millions from the South Dakota state government, Yoho separately continued to work for Noem in other capacities. He worked under Lewandowski on the publicity campaign for Noem’s 2024 memoir, according to a person familiar with the matter. (The book became famous for including an anecdote about Noem shooting her dog.)

The Strategy Group also received a stream of payments for social media consulting and media production work over the last few years from Noem’s American Resolve PAC. Federal election records show the PAC made its last payment to Yoho’s company this February, a couple weeks after Noem took her post as the head of DHS.

This story was originally published by ProPublica. Republished under a CC BY-NC-ND 3.0 license.

Elon Musk’s SpaceX has taken money directly from Chinese investors, according to previously sealed testimony, raising new questions about foreign ownership interests in one of the United States’ most important military contractors.

The recent testimony, coming from a SpaceX insider during a court case, marks the first time direct Chinese investment in the privately held company has been disclosed. While there is no prohibition on Chinese ownership in U.S. military contractors, such investment is heavily regulated and the issue is treated by the U.S. government as a significant national security concern.

“They obviously have Chinese investors to be honest,” Iqbaljit Kahlon, a major SpaceX investor, said in a deposition last year, adding that some are “directly on the cap table.” “Cap table” refers to the company’s capitalization table, which lists its shareholders.

Kahlon’s testimony does not reveal the scope of Chinese investment in SpaceX or the identities of the investors. Kahlon has long been close with the company’s leadership and runs his own firm that acts as a middleman for wealthy investors looking to buy shares of SpaceX.

SpaceX keeps its full ownership structure secret. It was previously reported that some Chinese investors had bought indirect stakes in SpaceX, investing in middleman funds that in turn owned shares in the rocket company. The new testimony describes direct investments that suggest a closer relationship with SpaceX.

SpaceX has thrived as it snaps up sensitive U.S. government contracts, from building spy satellites for the Pentagon to launching spacecraft for NASA. U.S. embassies and the White House have connected to the company’s Starlink internet service too. Musk’s roughly 42% stake in the company is worth an estimated $168 billion. If he owned nothing else, he’d be one of the 10 richest people in the world.

National security law experts said federal officials would likely be deeply interested in understanding the direct Chinese investment in SpaceX. Whether there was cause for concern would depend on the details, they said, but the U.S. government has asserted that China has a systematic strategy of using investments in sensitive industries to conduct espionage.

If the investors got access to nonpublic information about the company — say, details on its contracts or supply chain — it could be useful to Chinese intelligence, said Sarah Bauerle Danzman, an Indiana University professor who has worked for the State Department scrutinizing foreign investments. That “would create huge risks that, if realized, would have huge consequences for national security,” she said.

SpaceX did not respond to questions for this story. Kahlon declined to comment.

The new court records come from litigation in Delaware between Kahlon and another investor. The testimony was sealed until ProPublica, with the assistance of lawyers at the Reporters Committee for Freedom of the Press and the law firm Shaw Keller, moved in the spring to make it public. SpaceX fought the effort, but a judge ruled that some of the records must be released. Kahlon’s testimony was publicly filed this week.

Buying shares in SpaceX is much more difficult than buying a piece of a publicly traded company like Tesla or Microsoft. SpaceX has control over who can buy stakes in it, and the company’s investors fall into different categories. The most rarefied group is the direct investors, who actually own SpaceX shares. This group includes funds led by Kahlon, Peter Thiel and a handful of other venture capitalists with personal ties to Musk. Then there are the indirect investors, who effectively buy stakes in SpaceX through a middleman like Kahlon. (The indirect investors are actually buying into a fund run by the middleman, typically paying a hefty fee.) All previously known Chinese investors in SpaceX fell into the latter category.

This year, ProPublica reported on an unusual feature of SpaceX’s approach to investment from China. According to testimony from the Delaware case, the company allows Chinese investors to buy stakes in SpaceX so long as the money is routed through the Cayman Islands or other offshore secrecy hubs. Companies only have to proactively report Chinese investments to the government in limited circumstances, and there aren’t hard and fast rules for how much is too much.

After ProPublica’s report, House Democrats sent a letter to Defense Secretary Pete Hegseth raising alarms about the company’s “potential obfuscation.” “In light of the extreme sensitivity of SpaceX’s work for DoD and NASA, this lack of transparency raises serious questions,” they wrote. It’s unclear if any action was taken in response.

Kahlon has turned his access to SpaceX stock into a lucrative business. His investor list reads like an atlas of the world. The investors’ names are redacted in the recently unsealed document, but their addresses span from Chile to Malaysia. One is in Russia. At least two are in mainland China. One is in Qatar. (In one email to SpaceX’s chief financial officer, Kahlon said a Los Angeles-based fund had money from the Qatari royal family and was already invested in SpaceX.)

“You made a big fortune,” a China-based financier wrote to Kahlon four years ago. “Lol something like that. SpaceX has been the gift that keeps on giving,” Kahlon responded. “All thanks to you.”

Kahlon first met with SpaceX when it was a fledgling startup, according to court records. SpaceX’s CFO, Bret Johnsen, who’s been there for 14 years, testified that Kahlon “has been with the company in one form or fashion longer than I have.” Johnsen also testified that SpaceX has no formal policy about accepting investments from countries deemed adversaries by the U.S. government. But he said he asks fund managers to “stay away from Russian, Chinese, Iranian, North Korean ownership interest” because that could make it “more challenging to win government contracts.”

There are indications that by 2021, Kahlon was wary of raising funds from China. The U.S. government had grown increasingly concerned about Chinese investments in tech companies, and that June, Kahlon told an associate he was “being picky” with who he’d let buy into a new SpaceX opportunity. “Only people I want to have a relationship with long term. No one from mainland China,” Kahlon said.

But as he raced to assemble a pool of investors, those concerns appeared to fade away. By November 2021, Kahlon was personally raising money from China to buy SpaceX stakes. He told a Shanghai-based company that if it invested with him, it would get quarterly updates on SpaceX’s business development, “visits to SpaceX, and the opportunities to interview with Space X’s CFO,” court records show.

The Shanghai company ultimately sent Kahlon $50 million to invest in Musk’s business, according to court records. SpaceX had the deal canceled after the plan became public.