Democrats Demand Answers From Hegseth Following Defense Stock Inquiry Report
Democrats are demanding answers over a report that Secretary of War Pete Hegseth might have attempted to make a large investment in defense stocks through a broker in the lead-up to the Iran war.
“If this report is accurate, it would appear to represent an appalling effort to profit off of your knowledge of the President’s plans for war,” Democratic Sens. Elizabeth Warren, Richard Blumenthal, Tammy Duckworth, Jeff Merkley and Gary Peters wrote in a letter to Hegseth that was provided to ABC News.
“This would be a profound conflict of interest and a potential violation of your federal ethics agreement — and betrayal of the nation paying the price for this war and the troops you are sending into harm’s way,” the letter adds. The Pentagon has rejected the report.
Earlier this week, the Financial Times reported that a broker for Hegseth who worked at Morgan Stanley contacted BlackRock in February. The broker allegedly inquired about making a multi-million investment in iShares Defense Industrials Active ETF.
The outlet noted that the investment did not happen in part because it was not yet available to Morgan Stanley clients.
iShares Defense Industrials Active ETF holdings include RTX Corp, Lockheed Martin, and Northrup Grumman. All three are defense contractors. RTX Corp., for example, produces missiles and interceptors. Lockheed and Northrup are defense and aerospace contractors.
Elsewhere, the outlet detailed that Hegseth is prohibited by the defense department’s standards of conduct from owning stock in 10 major industry-specific corporations such as Lockheed Martin, Northrop Grumman, General Dynamics, Huntington Ingalls Industries, Boeing, RTX Corporation, and L3Harris. Hegseth’s financial disclosure statements do not indicate that he has holdings in any of those companies, ABC News reported.
The Pentagon quickly pushed back on the Financial Times report and demanded a retraction.
“This allegation is entirely false and fabricated. Neither Secretary Hegseth nor any of his representatives approached BlackRock about any such investment. This is yet another baseless, dishonest smear designed to mislead the public,” Pentagon spokesman Sean Parnell wrote on X.
“We demand an immediate retraction. Secretary Hegseth and the Department of War remain unwavering in their commitment to the highest standards of ethics and strict adherence to all applicable laws and regulations,” Parnell stated.
Regardless, in the letter to Hegseth, Democrats have asked for answers to a series of questions regarding his finances.
“Since this was a multi-million dollar investment in a sector-specific fund, your agreement appears to indicate that your broker would have needed your approval or that you did not intend to meet the commitments you made in your ethics agreement,” the senators wrote according to ABC News.
The senators ask in the letter whether Hegseth asked his broker to make any investment similar to the one described in the Finanicial Times story. They also, according to ABC News, ask about whether he disclosed military information to the broker, what steps he’s taken to avoid conflicts of interest, and for an accounting of any defense stocks owned by him or his wife.
