'Massive betrayal': Hegseth hit with stark threat over alleged bid to profit from Iran war
Senate Democrats are pushing for an investigation into US Defense Secretary Pete Hegseth following a report that he attempted to make a “big investment” in weapons stock just weeks before President Donald Trump launched an aggressive war against Iran.
Three Democrats on the Senate Armed Services Committee—Sens. Elizabeth Warren (D-Mass.), Tammy Duckworth (D-Ill.), and Richard Blumenthal (D-Conn.) were joined by Sens. Gary Peters (D-Mich.) and Jeff Merkley to send Hegseth a letter on Wednesday.
They told the secretary that his reported attempt to broker the deal “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 Financial Times reported earlier this week that Hegseth’s “broker at Morgan Stanley contacted BlackRock in February about making a multimillion-dollar investment in the asset manager’s Defense Industrials Active ETF... shortly before the US launched military action against Tehran.”
However, the purchase was reportedly never made because the massive bundle of stocks was not available to Morgan Stanley clients at the time.
A Pentagon spokesperson has also denied the story, calling it “entirely false and fabricated” and claiming that neither Hegseth nor any of his representatives ever approached BlackRock.
But, as the lawmakers noted, FT reported that the inquiry was significant enough for BlackRock to flag it internally.
Hegseth and other Pentagon officials confirmed by the Senate are prohibited by law from owning or purchasing publicly traded stock in the 10 companies that have received the largest Defense Department contracts over the past five years.
But the fund held stocks in several of these companies, including Lockheed Martin, Northrop Grumman, General Dynamics, Huntington Ingalls, Boeing, RTX Corporation, and L3Harris Technologies.
Reports of the proposed deal by Hegseth’s broker come as the Trump administration has faced other accusations of trading on insider information about the president’s next moves to win big on prediction market services. Platforms like Polymarket have seen bettors take home monster winnings by placing wagers predicting major military actions in Venezuela and Iran just hours before Trump launched them.
The lawmakers noted that while the war is costing American taxpayers more than $1 billion per day and has saddled Americans with soaring gas prices, it has proven highly lucrative for major defense contractors, whose stocks jumped significantly in the days after the war was launched, even as the rest of the market took a tumble.
The Trump administration is currently demanding another $200 billion to prosecute the war on top of a $1.5 trillion budget request to fund the Defense Department, which the lawmakers said would likely result in these companies’ profits and stock prices continuing to climb.
The US-Israeli war against Iran, launched on February 28, has been condemned as illegal by many international law experts and human rights groups, who have accused the US of violating the UN Charter and committing war crimes.
According to a report on Wednesday from the Human Rights Activists News Agency (HRANA), a US-based human rights monitor for Iran, more than 1,600 civilians have been killed since the war began, including 244 children. At least 13 US troops have also been killed since the conflict broke out.
The lawmakers told Hegseth regarding his reported investment attempt: “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.”