The Department of Homeland Security has pulled the plug on a nearly $58 million Coast Guard recruiting contract, and the decision reflects more than routine procurement oversight.
According to an exclusive report from the Daily Caller News Foundation, DHS Secretary Kristi Noem rejected a $57,971,387 contract for advertising and marketing services for the U.S. Coast Guard Recruiting Command after determining that the vendor embeds LGBTQ and DEI ideology into its core branding strategy.
This was not a minor agreement. The proposed contract would have funded another year of “Advertising Support Services” under an existing arrangement. Coast Guard leadership made clear they believed the investment was critical to maintaining recruiting numbers.
In a memo seeking approval, Commandant Adm. Kevin E. Lunday warned that canceling the agreement would directly affect personnel goals.
"The Commandant told DHS that failure to approve the contract would “substantially diminish” recruitment and “impede the ability to meet personnel requirements,” adding that “one in four recruits has been directly attributable to advertising” under the existing Blanket Purchase Agreement (BPA)."
That argument centers on metrics and readiness. Recruitment is not theoretical. It determines whether the service can meet operational demands.
But once the contract reached the secretary’s desk, DHS officials said the concern was not advertising itself. It was the philosophy behind the firm receiving the funds.
A DHS spokesperson explained the rationale:
“Secretary Noem personally reviews and approves all DHS contracts over $100,000. One of the latest in a line of contracts rejected by the Secretary is this nearly $58 million dollar contract to an advertising and marketing firm that has its website riddled with blogs lecturing on how to successfully market to a transgender audience and how not to ‘rainbow wash’ in marketing campaigns.”
The issue, in other words, was not outreach. It was orientation. Lempugh, Inc. describes itself as a “change agency” and promotes blog posts such as “The Do’s & Don’ts of Marketing to the Transgender Audience” and “Does Your Brand Pass the DEIA Vibe Check?" In a highlighted “Rainbow-Washing” post, a strategist advises brands to make “LGBTQ+ inclusion” a “core” component of company policy (Daily Caller).
That framing goes well beyond standard audience research or demographic analysis. It reflects identity-based branding frameworks that DHS leadership concluded should not define federal military recruitment spending.
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For DHS leadership, that posture crossed a line. The Coast Guard’s mission is maritime security, law enforcement, and national defense. Recruitment messaging built around service, duty, and capability is one thing. Structuring a multimillion-dollar federal contract around ideological branding frameworks is another.
The spokesperson also emphasized that the broader contract review policy has produced measurable savings:
“The Secretary’s policy reviewing contracts has saved U.S. taxpayers roughly $50 million every day since she took office on January 25, 2025. Despite constant criticism of this policy from the media and D.C. bureaucrats, results like these speak for themselves.”
This decision does not eliminate recruitment advertising. It signals that DHS will scrutinize not only the price tag of major contracts, but the worldview attached to them.
In this case, oversight prevailed over inertia. The Coast Guard may still pursue support for recruiting. What it will not do, at least under this review structure, is outsource taxpayer-funded messaging to a firm whose public-facing strategy centers on identity-based branding frameworks.
That is executive accountability applied to a $58 million line item.
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