The fund, operated by Pallas Advisors, a consulting firm which works on “navigating complex national and international security dynamics,” focuses on providing capital to tech companies involved in the national security sector. The role of private equity firms is to provide capital for start-ups and growing businesses; essentially Spencer will lead the firm’s decisions on which companies and projects to invest in.
There remains little publicly accessible information on Pallas Advisors and its new investment fund. However, Pallas recently participated in a July 22, 2020, investment fundraiser, partnering with Lockheed Martin Ventures and Paladin Capital. The firms raised $13 million for CalypsoAI, a firm founded by former Department of Defense and former Defense Advanced Research Project Agency (DARPA) employees.
An attorney for Pallas co-founder Sally Donnelly clarified that the firm would not be lobbying due to ethics restrictions on former political appointees.
When asked about the issues presented by the revolving door and in response to reviewing a copy of POGO's report on the subject, Spencer wrote in an email that he "support[s] a cooling off period across the board." He wrote that he differentiates between a board member position and a lobbying position, but that he believes "that Board member[s] should never be allowed to interact with the client on behalf of the Company."
On lobbying positions, Spencer wrote that he thinks a 3-5 year cooling off period would be more appropriate. "I did not feel comfortable having a '2 year cooled' former Flag/Gen officer representing a contractor in a meeting where contracts were being discussed. It's too soon and it's a lottery ticket in my opinion," he wrote in an email to POGO.
Mr. Spencer provided POGO with an ethics opinion issued to him by the Navy's designated agency ethics official that details the regulations and laws that govern his post-government employment.
“I did not feel comfortable having a '2 year cooled' former Flag/Gen officer representing a contractor in a meeting where contracts were being discussed. It's too soon and it's a lottery ticket in my opinion.” - Richard V. Spencer on lobbying by former senior officials
Secretary of the Navy,
Pallas founding partner Sally Donnelly toutedSpencer’s public service and expertise in the private sector as keys to growing Pallas Ventures. “He combines executive experience running and modernizing one of the world’s most complex public sector enterprises—the U.S. Navy—with a distinguished and successful career in selecting and growing private sector companies.”