Peters Joins Colleagues in Pressing Defense Secretary Hegseth on Potential Conflicts of Interest, Investments in Defense Firms Ahead of Iran War

WASHINGTON, DC - U.S. Senator Gary Peters (MI) joined his colleagues in sending a letter to Defense Secretary Pete Hegseth pressing for transparency on potential conflicts of interest and violations of his federal ethics agreement. The letter comes after reports revealed that Hegseth's broker reportedly attempted to make major defense investments shortly prior to Trump's war with Iran in February 2026. Ahead of the initial U.S. strikes on Iran, Hegseth's broker at Morgan Stanley reportedly contacted BlackRock about making a multimillion-dollar investment in the asset manager's Defense Industrials Active ETF. The request was significant enough to trigger an internal flag at BlackRock.

"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,"?wrote the lawmakers. "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."

Presidentially appointed, Senate-confirmed Department of Defense officials like Hegseth are prohibited from owning or purchasing the publicly traded stock of a company if that company is one of the 10 entities awarded the most amount of contract funds by the Department of Defense in a fiscal year during the five preceding fiscal years. In 2026, Hegseth was specifically prohibited from owning any stock in Lockheed Martin, Northrop Grumman, General Dynamics, Huntington Ingalls, Boeing, RTX Corporation, and L3Harris Technologies, all companies currently included in BlackRock's Defense Industrials Active ETF.?

Guidance from the Office of Government Ethics warns that sector funds focused on a single industry can create a liability for government officials under the criminal conflict of interest statute. The law and Department of Defense policy is clear that DOD personnel must continuously monitor and prevent conflicts of interest.?

"The American people deserve leaders they can trust to put national security ahead of their own financial self-interest,"?the lawmakers continued.?"If the recent reports are accurate, we now know that, behind closed doors, you were setting yourself up to profit from your ownership of stock in multiple defense contractors."

The full letter can be found here.

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