When President Donald Trump rolled out his first federal budget proposal last week, the administration defended its call for a $54 billion increase in defense spending by pointing to an ambitious reform agenda that would reduce the costs of military programs wherever feasible.

It was a particularly sensitive subject for new Office of Management and Budget Director Mick Mulvaney, who built a reputation during his tenure in Congress as a serious deficit hawk unafraid to challenge his Republican colleagues on ballooning war spending. One of his favorite punching bags was the Overseas Contingency Operations budget, which Mulvaney derided as a slush fund that should be eliminated . The Trump budget would increase both overall defense spending and the amount that flows to the OCO. To maintain his credibility and demonstrate that Trumps new hard power defense priorities werent just an excuse to throw money away, Mulvaney needed to sniff out wasteful endeavors.

He appears to have missed at least one. On Tuesday, Rep. Ro Khanna (D-Calif.) sent a letter to Secretary of Defense James Mattis and the Pentagons acting inspector general accusing defense contractor TransDigm Group of illegally overcharging the Department of Defense by acting as a hidden monopolist.

The business model Khanna described is devilishly clever, wildly profitable and totally at odds with the basic principles of a competitive market. TransDigm is essentially the Martin Shkreli of defense contractors. Its a large holding company that searches for specialty parts used in heavy machinery unique panels, connectors, cables and other components that are produced exclusively by a single company. TransDigm buys these producers and Pharma Bros them, dramatically inflating the price to exploit their monopoly.