Exclusive: DHS kills $58M Coast Guard marketing deal over LGBTQ, DEI ideology

The Department of Homeland Security rejected a nearly $58 million contract for advertising and marketing support services for the U.S. Coast Guard Recruiting Command after determining that the outside vendor promotes LGBTQ and other “inclusive” ideology as part of its core offerings, the Daily Caller News Foundation first learned.

In June 2025, DHS Secretary Kristi Noem issued a policy requiring her personal review of contracts and grants over $100,000 to increase oversight and curb wasteful spending. The contract under review, obtained by the DCNF, sought $57,971,387 from the U.S. Coast Guard (USCG) for media consulting firm Lempugh, Inc. (LMD) to “execute Option Period Three for continued Advertising Support Services” for one year.

“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,” a DHS spokesperson told the DCNF.

In a memo seeking approval of the LMD contract, USCG Commandant Adm. Kevin E. Lunday wrote that it would increase “awareness of the USCG among the target recruiting audience, which results in both more online applications and improved recruiter effectiveness.”

The Commandant also told DHS in the memo 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).

However, upon further review of the media agency, Noem identified ideology promoting the inclusion of transgender marketing along with other culturally “inclusive” measures.

LMD is a marketing and advertising agency based in Maryland that claims expertise in government communications and outreach. In addition to prior work for the Coast Guard, the firm lists the Department of Energy, DHS, and the Cybersecurity and Infrastructure Security Agency (CISA) among its past clients.

The company, which bills itself as a “change agency,” features articles on its website covering marketing tactics for “LGBTQ+ audiences and allies,” transgender individuals, and diversity, equity, inclusion, and accessibility (DEIA).

In the “Rainbow-Washing” post highlighted by DHS, a company strategist decries “performative activism that is designed to pander to the LGBTQ+ audience and allies” and advises brands to make “LGBTQ+ inclusion” a “core” component of company policy.

Other blog posts on the website include titles such as “The Do’s & Don’ts of Marketing to the Transgender Audience” and “Does Your Brand Pass the DEIA Vibe Check?” In the latter, communications specialist Chanda Vuong, who collaborates with Coast Guard recruiters nationwide, discussed do and don’t strategies for companies to “’stay woke’ and be more inclusive” in a way that is “authentic.”

The nearly $58 million contract with LMD was requested to begin on Friday, lasting till Feb. 26, 2027.

“The Secretary’s policy reviewing contracts has saved U.S. taxpayers roughly $50 million every day since she took office on January 25, 2025,” the DHS spokesperson told DCNF. “Despite constant criticism of this policy from the media and D.C. bureaucrats, results like these speak for themselves.”

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