Defense Startup Govini Founder Gillespie Arrested in Child Sex Sting

Eric Gillespie, the founder of Virginia-based defense tech startup Govini, has been arrested and charged with multiple felonies in Pennsylvania, including attempting to solicit a minor for sexual contact, authorities announced Monday. The charges cast a shadow over the company, a rising star in the defense technology sector, and have triggered internal and external reviews.

Gillespie, 57, faces four felony counts, including unlawful contact with a minor, according to the Pennsylvania Attorney General’s Office. He was denied bail by the judge, who cited flight risk and concerns for public safety.

Govini, which boasts a $900 million U.S. government contract and multiple deals with the Department of Defense, has placed Gillespie on administrative leave. The company recently announced surpassing $100 million in annual recurring revenue, solidifying its status as a prominent “unicorn” in the defense technology landscape. Govini is also a key partner in the U.S. Army’s Next Generation Command Control (NGC2) program.

The Pentagon is reportedly scrutinizing Gillespie’s arrest and potential security implications. “While the Department cannot comment on individual security clearances in accordance with the Privacy Act, we take these allegations very seriously,” a senior War Department official stated.

Gillespie is listed as executive chairman of Govini on his LinkedIn profile. He was also previously appointed to the Freedom of Information Act Advisory Committee by the Obama Administration in 2014, reflecting his past reputation as an expert in government transparency.

The White House has directed all security clearance inquiries regarding Gillespie to the Pentagon.

In a statement released Wednesday, a Govini spokesperson confirmed that the company “was notified of felony charges against Eric Gillespie” on Monday and took “immediate action to place Mr. Gillespie on administrative leave.”

“The Company will fully cooperate with law enforcement in connection with their investigation. We acknowledge the severity of these charges and as a Company will hold all our employees to the highest ethical standards. We stand steadfast in support of all victims of abuse of any kind,” the spokesperson added.

According to the Attorney General’s office, the arrest stemmed from an online sting operation where an agent posed as an adult on a chat platform frequented by individuals seeking to connect with children. Gillespie allegedly engaged in a conversation and attempted to arrange a meeting with someone he believed to be a pre-teenage girl in Lebanon County, Pennsylvania.

“During the investigation, Gillespie alluded to methods he accessed children, and other evidence was found regarding contact with children,” the office stated. Authorities have declined to comment on specifics regarding electronic devices seized during the operation, but are urging the public to come forward with any information related to the case.

The situation raises significant questions about Govini’s future and the potential impact on its government contracts. The company’s software suite, powered by AI, is utilized by every branch of the U.S. military and other federal agencies to analyze supply chains and assess critical details of companies under consideration for government acquisition.

This access to sensitive information has led to increased scrutiny of Govini’s internal security protocols and data handling practices. Lawmakers and security experts are likely to call for a thorough review of the company’s security measures to ensure the integrity of its systems and prevent any potential compromise of classified data.

Govini is part of the $99.6 million U.S. Army’s Next Generation Command and Control (NGC2) program, alongside major players such as Anduril Industries, Palantir, Striveworks, Instant Connect Enterprise, Research Innovations, Inc., Microsoft and Lockheed Martin. The NGC2 program aims to revolutionize command and control operations by providing commanders with real-time data and infrastructure in communication-disrupted environments.

The arrest could potentially disrupt Govini’s participation in the NGC2 program and other critical defense initiatives. While the company has taken swift action to distance itself from Gillespie, the allegations could damage its reputation and erode trust with government partners. The long-term implications for the company’s contracts and its ability to secure future deals remain uncertain. The impact also resonates within the broader venture capital community, particularly Bain Capital Tech Opportunities, which recently led a $150 million investment in Govini. The due diligence processes undertaken by venture firms when investing in companies with such sensitive government projects will undoubtedly face renewed scrutiny in light of these allegations.

CNBC has reached out to Bain Capital for comment, but has not yet received a response.