The Pentagon is looking to build a more robust deep-cover spying program to conduct economic warfare against China and other U.S. competitors, according to half a dozen people familiar with the initiative.

This new next-generation spying program — in which U.S. operatives would go undercover as businesspeople or other private-sector personnel, without any overt U.S. government affiliation — is intended to be a covert prong of the Pentagon’s larger economic warfare campaign, the people said.

This new spy program of “nonofficial cover officers,” or NOCs, is being overseen by Tom Rakusan, a 39-year CIA veteran and now senior adviser to Deputy Defense Secretary Steve Feinberg, according to those familiar with it, who spoke on the condition of anonymity to discuss the sensitive initiative.

Rakusan, who retired from the CIA in 2021, rose to deputy director of operations – the CIA’s top spy runner — in 2017. He later led the CIA’s response to Russia’s election-interference campaign in the 2016 presidential election.

After leaving the agency, Rakusan joined Cerberus Capital Management, the private equity firm co-founded by Feinberg, and followed the billionaire to the Pentagon in 2025.

Experts from within the Pentagon’s service branches and Office of the Under Secretary of War for Intelligence and Security, as well as retired CIA officials, have been pulled in to work on the initiative, people familiar with the program said.

The program is in the planning phase and is not operational, they said.

Where it will sit inside the Pentagon is unclear, said multiple individuals familiar with the planning. The effort might function as a new, stand-alone deep-cover unit, or an enhancement and expansion of existing Pentagon clandestine human intelligence-gathering capabilities.

The Defense Department, in response to questions from The Washington Post, denied such an initiative is underway. “This query appears to be built on information that is simply not true,” Pentagon deputy press secretary Jacob Bliss said in a statement. “Whoever is feeding you these claims are either badly misinformed or deliberately leading you astray to paddle [sic] their fantasies.”

The CIA declined to comment. Rakusan did not respond to a request for comment.

Congressional committees do not appear to have been briefed on the initiative.

A new economic warfare priority

The Trump administration has embraced economic warfare as a key tool of statecraft. It has imposed tariffs and export controls, made investments in critical U.S. resources and technologies, coordinated with private capital to shore up support for key components of the defense-industrial base, and prioritized economic intelligence.

In a September speech, CIA Deputy Director Michael Ellis said the United States is broadening its espionage against China, targeting Chinese companies in such areas as artificial intelligence, biotechnology and advanced semiconductors. While U.S. intelligence agencies have long spied on key Chinese firms, Ellis’s public discussion of the CIA’s shifting priorities was an unusual disclosure by a high-ranking agency official.

Ellis’s predecessor as CIA deputy, David S. Cohen, argued in a recent article published in Foreign Affairs that the U.S. intelligence community should go a step further. The U.S. should end a long-standing prohibition on sharing economic secrets gathered via espionage with U.S. companies working on advanced technology to give them a competitive advantage, he wrote.

“We have been collecting economically sensitive information for years and years,” Cohen said in an interview. “We should not be hung up on whether we should be providing (U.S. companies) a commercial advantage,” although there would have to be oversight to guard against favoritism or corruption in choosing which firms benefit. Cohen said he was unaware of the Pentagon NOC initiative.

Some of the Pentagon’s economic-warfare-related activities have been overt. Feinberg announced the formation of an Economic Defense Unit this year as part of a drive toward “deterring, denying, disrupting, and helping to defeat adversaries through economic means,” according to a memo Feinberg wrote to senior Pentagon officials announcing the unit’s formation. DefenseScoop first reported on the EDU memo.

Feinberg tapped George Kollitides, another Cerberus alumnus and senior adviser at the Pentagon, to run the EDU in February. That office has since announced hundreds of millions of dollars in public investments in refineries and mining interests domestically and abroad. One deal used $750 million in Pentagon funds to help secure a major deposit of rare earth minerals in Brazil.

Alongside the Pentagon’s public-facing economic-warfare-related mandates, Rakusan is overseeing the planned build-out of the clandestine component, according to the former officials.

Multiple individuals familiar with the program said the EDU was once seen as the potential home for this enhanced deep-cover initiative. But the increased press and congressional scrutiny directed toward the EDU and its investments – and the possibility that such attention will only increase if Democrats retake Congress in November – has led to an abandonment of that idea, said one person familiar with the current planning.

Turf wars in spy world

Not all of Rakusan’s former colleagues are enthusiastic about the new effort. “Rakusan just wants to build his own CIA down in the Pentagon,” said a former senior CIA official familiar with the discussions around the program.

Rakusan is a polarizing figure among some of his former agency colleagues, but he is lauded by many for his operational aggressiveness and prowess.

He was “a pipe swinger,” recalled a White House official from the first Trump administration, keen to hit the Russians back hard after their 2016 interference in the U.S. presidential election.

Rakusan undertook high-wire operations throughout his CIA career, traveling in Iraq on a Czech passport, according to former officials, and was similarly supportive of subordinates undertaking risky missions.

The reaction inside Langley to the Pentagon initiative has been frosty, according to the former agency official. The CIA has traditionally been resistant to other agencies stepping on what it perceives as its core human-spying turf, insisting that such efforts be coordinated under the CIA chief of station in the country concerned.

The move to augment the Pentagon’s capabilities comes as the CIA’s own NOC program has withered away, former agency officials say. Operating under nonofficial cover is considered particularly risky because officers in the program cannot work out of American embassies or other U.S. government facilities, and they cannot claim diplomatic immunity if detained.

A COVID-era internal CIA report revealed that roughly 75% of all deep-cover agency officers would be eligible for retirement by the mid-2020s, another former CIA official said. These veteran NOCs are now retiring without new ones being trained to replace them — a sort of quiet death by attrition, former officials say. Despite recent efforts to rethink the program, very few actual deep-cover CIA officers remain in the field, they said.

The agency’s NOC program has waxed and waned over the decades, with ambitious plans for expansion frequently giving way to a chastening, after agency difficulties in scaling up such initiatives — usually because of inadequate training or mismanagement of young deep-cover officers.

One such attempt in the 2000s, championed by Congress’s intelligence committees and known inside the CIA as the Global Deployment Initiative, was a particularly acute example of this dynamic, former intelligence officials say, because of the proposed size and rapidity of the NOC buildup and insufficient oversight of it. The program collapsed, with many young NOCs being forced to go “inside” the building at CIA or leave the agency.

The Defense Department has had its own long-standing struggles with fielding deep-cover spies.

The Defense Intelligence Agency and Joint Special Operations Command, among other Pentagon elements, have long experimented with commercial-cover operations, with decidedly mixed results.

In one illustrative post-9/11 case, a group of Joint Special Operations Command-affiliated NOCs operating in a remote corner of Africa had their cover exposed when they stumbled upon a group of geologists and engineers who began asking questions about their activities, according to an investigation by the High Side, a Substack focused on special operations and intelligence.

The NOCs were posing as employees of a mining company but had no real knowledge of the subject – which quickly became apparent to the actual experts with whom they were speaking.

The NOCs somehow talked their way out of the jam, and the Joint Special Operations Command later began sending its commercial-cover operatives to specialized schools to undertake crash courses in their supposed areas of expertise, according to the High Side.

The Pentagon faces multiple challenges with deep-cover spying, former officials say. Military service records are difficult to hide, and the rise of biometrics and other “digital dust” means working under alias has become increasingly fraught. Plus, the martial bearing of many undercover Pentagon operatives makes them often easy to spot.

The legal remit under which the new economic-warfare-focused deep-cover spy program might operate remains murky, the people familiar said.

The military’s Title 10 authorities allow for “Intelligence Preparation of the Battlefield,” which the Pentagon has interpreted to allow a broad swath of espionage-related activities, including some far afield from narrow battlefield intelligence, former officials say.

U.S. intelligence agencies such as the CIA operate under Title 50 authorities, which govern their abilities to collect intelligence and conduct covert actions abroad.

The new Pentagon NOC initiative would likely function as a sort of “Title 60” entity, said multiple former officials – a half-joking reference to a nonexistent hybrid legal authority combining elements of Title 10 and Title 50.

The effort also reflects shifting power dynamics inside the Trump administration, with an ascendant Pentagon seeking a record budget of $1.5 trillion.

CIA Director John Ratcliffe has promised a more muscular approach to recruiting human sources overseas and stealing adversaries’ secrets. But some former officials say the CIA remains cautious about undertaking aggressive spying operations, with an assertive Pentagon willing to shoulder greater risks.

The Pentagon “has a lot of money and a lot of authorities and a lot of capabilities,” a former senior CIA official said. “And God bless ’em.”