EXCLUSIVE: DHS Kills $58M Coast Guard Marketing Deal Over LGBTQ, DEI Ideology

The Department of Homeland Security has rejected a nearly $58 million contract for advertising and marketing support services for the U.S. Coast Guard Recruiting Command after determining the outside vendor promoted LGBTQ and other “inclusive” ideologies 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 to personally review contracts and grants over $100,000 to increase oversight and reduce unnecessary spending. The contract under review, obtained by the DCNF, requested $57,971,387 from the U.S. Coast Guard (USCG) for media consulting firm Lempugh, Inc. (LMD) to “execute the third option period for continued advertising support services” for one year. (RELATED: DC Water CEO Oversaw $520 Million in DEI Contracts — and the Largest Wastewater Spill in U.S. History)

“Secretary Noem personally reviews and approves all DHS contracts worth more than $100,000. One of the latest contracts rejected by the Secretary is this nearly $58 million contract with an advertising and marketing company whose website is riddled with blogs about how to successfully market to a transgender audience and how not to ‘wash out the rainbow’ in marketing campaigns,” a DHS spokesperson told the DCNF.

In a memo requesting approval of the LMD contract, USCG Commander Admiral Kevin E. Mondaya wrote that it would increase “awareness of the USCG among the target recruiting audience, resulting in both more online applications and improved recruiter efficiency.”

The commander also told DHS in the memo that failure to approve the contract would “significantly decrease” recruiting and “impede the ability to meet staffing needs,” adding that “one in four recruits were directly attributable to advertising” under the existing blanket purchase agreement (BPA).

However, upon further review by the media agency, Noem identified ideology promote the inclusion of transgender marketing as well as other culturally “inclusive” measures.

The U.S. Department of Homeland Security emblem on the USImmigration and Customs Enforcement building, seen January 7, 2026 in Washington, DC. (Photo by Heather Diehl/Getty Images)

LMD is a Maryland-based marketing and advertising agency with expertise in government communications and outreach. In addition to previous 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,” has articles on its website covering marketing tactics aimed at “LGBTQ+ audiences and allies,” transgender people, and diversity, equity, inclusion, and accessibility (DEIA).

In the “Rainbow-Washing” message put forward by DHS, a corporate strategist denounces “performative activism designed to appeal to LGBTQ+ audiences and their allies” and advises brands to make “LGBTQ+ inclusion” a “core” part of company policy.

Other blog posts on the website include titles such as “The Dos and Don’ts of Marketing to Transgender Audiences” and “Does Your Brand Pass the DEIA Vibe Check?” In the latter, communications specialist Chanda Vuong, who works with Coast Guard recruiters nationwide, discussed “do’s and don’ts” strategies for businesses to “stay awake and be more inclusive” in an “authentic” way.

The nearly $58 million contract with LMD was scheduled to begin Friday and last until February 26, 2027.

“The Secretary’s contract review policy has saved American taxpayers approximately $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 DC bureaucrats, results like these speak for themselves.”

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