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Sen. Elizabeth Warren (D-Massachusetts) caught Secretary of Defense Pete Hegseth contradicting his own statement on Wednesday, over reports that his stockbroker tried to make an investment in a defense company weeks before the U.S. and Israel launched a war on Iran.
During a line of questioning on insider trading related to the Department of Defense, Warren brought up a report by the Financial Times from March that said that a broker for Hegseth attempted to make a multimillion dollar investment in BlackRock’s Defense Industrials Active ETF, but was blocked because the transaction was flagged internally by BlackRock employees.
This is an equity fund that invests “in companies that may benefit from increased government spending on defense and security amid geopolitical fragmentation and economic competition,” according to BlackRock. Military contractors RTX, Lockheed Martin, Northrop Grumman, and Palantir make up a major proportion of the fund.
“The law clearly prohibits the Secretary of Defense from owning stock in the 10 biggest defense contractors,” said Warren. “Did you, through your broker at Morgan Stanley or otherwise, seek to invest in any defense-related funds right before Trump started the Iran war?”
“I’ll give it to you as a big, fat negative,” Hegseth said.
“Is your broker getting your personal sign off on any investment in individual stocks?” said Warren.
“Bigger, fatter, negative,” Hegseth responded.
Moments later, however, Hegseth contradicted himself.
“He’s not getting your sign off because he makes investments in defense stocks?” Warren said, incredulously. “Does he know that he has to get your sign off before he does that?”
“Of course,” said Hegseth in an exasperated tone. “I don’t know what you’re looking for, but you ain’t gonna find it.”
As Warren pointed out, Department of Defense personnel are required to monitor their personal finances for potential conflicts of interest. In an ethics statement personally signed by Hegseth and submitted prior to his Senate confirmation last year, the defense secretary said that he will ensure any broker he uses “obtains my prior approval on a case-by-case basis for the purchase of any assets” other than ones that are approved for purchase by officials in his position.
The questioning came on Hegseth’s second day in the U.S. Capitol testifying about the Trump administration’s $1.5 trillion Pentagon budget request. Earlier in the day, his opening remarks before the Senate were interrupted by anti-war protesters with Code Pink, who called Hegseth a “war criminal” and held a sign that said “No war on Iran.”
Hegseth also demurred when Warren asked him if he is aware of reports of potential insider trading in relation to military activity, including a U.S. soldier who was arrested last week after he allegedly won $400,000 on a bet on the U.S.’s abduction of Venezuelan President Nicolás Maduro on Polymarket.
“Do you have any other explanation other than insider trading? Do you have a story for why, just minutes before there’s an announcement, there’s a surge in trading activity?” Warren asked.
“I’m more focused on doing my job and ensuring we execute properly, which, thankfully under this administration, our troops have done incredible things in all these missions,” Hegseth responded, brushing off his responsibilities to rein in corruption as leader of the Pentagon.
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