'Pure corruption!' Lawmaker erupts over allegations of war insider trading

Rep. Robert Garcia (D-CA) is furious about new reporting that Defense Secretary Pete Hegseth sought out stocks related to defense just ahead of the Iran war, a red flag that he may have committed insider trading, and vowed on MS NOW's "Deadline: White House" that Democratic members of Congress will pursue an investigation.

The administration has already disputed the reporting, saying that Hegseth never reached out to BlackRock for financial information — but, anchor Nicolle Wallace noted, that's not even what the original story from the Financial Times alleged.

"Congressman, if the committee were to proceed and investigate this, the Defense Secretary's own statement is sort of a riddle wrapped in a lie," said Wallace. "The story doesn't allege that any that Pete Hegseth contacted BlackRock. The Financial Times is reporting that Pete Hegseth's broker at Morgan Stanley contacted BlackRock, and an internal alert system was set off by a, quote, 'multi-million dollar investment request for a product that wasn't even available outside of BlackRock.' It feels like something begging to be investigated. Is this on your radar?"

"Well, this is complete corruption," said Garcia. "And not only is it on our radar, in fact, today we are opening an investigation ... and both Morgan Stanley and BlackRock will be receiving letters from myself and the Oversight Committee today, asking a series of questions to preserve documents."

Additionally, he added, they contacted Hegseth, and "we also are expecting him to answer our questions."

"I mean, the idea that our Secretary of Defense or War, or whatever he wants to call himself, is trying to make money to enrich himself off playing games with our military is pure corruption and insane," said Garcia. "First, he should never be trading stocks as it relates to defense in the first place. And the fact that his own broker at Morgan Stanley, which by the way, this has been. Now this is being claimed by multiple people. The allegation is coming from multiple sources that are being reported. And it's also being reported that the folks at BlackRock were very concerned about this and the fact that the Secretary's broker at Morgan Stanley is trying to invest in war, where we all know very well that Pete Hegseth has the power to deploy our troops."

"I think this is some of the most serious reporting that we've seen out of this administration as it relates to the Pentagon," Garcia said. "And what I told the team earlier today, as we were discussing this, is, look, we have a lot of big investigations right now, whether it's Jeffrey Epstein, whether it's Kristi Noem, what she did to DHS with Lewandowski, whether it's RFK Jr. at HHS. But this also has to be a serious investigation because we're talking about war and peace and about launching a foreign war that could possibly enrich the Secretary of Defense."

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