Pentagon rejects claim of Pete Hegseth's alleged deal with investment firm, seeks retraction

The US Department of War on Monday (local time) strongly denied allegations that US Secretary of War Pete Hegseth or his representatives approached investment giant BlackRock regarding any potential deal, calling the claims "entirely false and fabricated."

In a post on X, Chief Pentagon spokesperson Sean Parnell dismissed the reports as a "baseless, dishonest smear designed to mislead the public," and demanded an "immediate retraction".

"Neither Secretary Hegseth nor any of his representatives approached BlackRock about any such investment," Parnell stated, asserting that the department remains committed to "the highest standards of ethics and strict adherence to all applicable laws and regulations."



The X post said, "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. 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."

Earlier, Reuters reported, citing the Financial Times, that a broker representing US Secretary of War Pete Hegseth sought to invest in a major US defence-focused fund in the weeks leading up to the US-Israeli military action against Iran.

According to Reuters, citing the Financial Times report, which cited three people familiar with the discussions, the broker, working with Morgan Stanley, contacted BlackRock in February regarding a potential multimillion-dollar investment in the Defence Industrials Active ETF (IDEF). The inquiry was flagged internally at BlackRock, the sources added.

BlackRock's $3.2 billion equity fund focuses on companies likely to benefit from increased government spending on defence and security amid geopolitical tensions, the Financial Times report mentioned.

Its top holdings include defence giants RTX, Lockheed Martin, and Northrop Grumman, as well as data analytics firm Palantir, all of which have close ties to the US Department of War.

The proposed investment did not proceed, as the ETF, which launched in May 2025, was not yet available for purchase through Morgan Stanley at that time, Reuters quoted, as reported by The Financial Times.

It remains unclear whether Hegseth's broker later invested in another defence-focused fund.

ETFs like IDEF are popular with investors due to lower fees, favourable tax treatment, and the ability to trade them like stocks, but broking platforms often carry only a subset of the more than 14,000 ETFs in the market, The Financial Times reported.

As the Secretary of War, Hegseth has consistently touted and showcased America's military capabilities following its military action against the Islamic Republic in West Asia.

Meanwhile, diplomatic engagements between Washington and Tehran continue amid the conflict, following US-Israel joint military strikes on Iran on February 28, which led to the death of 86-year-old Iran's Supreme Leader, Ayatollah Ali Khamenei, after which Tehran, in retaliation, targeted Israel and US assets in several Gulf countries, causing disruption in the waterways and affecting international energy markets and global economic stability.