Video: Blumenthal Presses Hegseth on Abysmal Record in Only Previous Financial Management Role

[WASHINGTON, D.C.] – During today’s Senate Armed Services Committee hearing on the nomination of Pete Hegseth to be Secretary of Defense, U.S. Senator Richard Blumenthal (D-CT) raised Hegseth’s documented record of financial mismanagement and misconduct while leading two non-profit organizations. During his questions, Blumenthal entered into the record the tax forms for both organizations from during Hegseth’s tenure (available here and here). 

“I think what we need in that position is not just better, but the best in financial management because those decisions are life and death decisions affecting the 3.4 million Americans who serve our national security and our national defense and put their lives on the line, said Blumenthal.

Blumenthal outlined the steep decline in revenue Hegseth oversaw at both Veterans for Freedom and Concerned Veterans of America, which also ran significant deficits during Hegseth’s tenure. By the time Hegseth left Concerned Veterans of America, the organization “had deep debts, including credit card transaction debts of about $75,000.”

“That isn't the kind of fiscal management we want at the Department of Defense. We can't tolerate it at the Department of Defense. That’s an organization with a budget of $850 billion—not $10 or $15 million, which was the case at those two organizations—and it has command responsibility for 3.4 million Americans. The highest number that you managed in those two organizations was maybe 50 people.”

“I don't believe that you can tell this Committee—or the people of America—that you are qualified to lead them,” Blumenthal concluded.

Last week, Blumenthal wrote Chairman Roger Wicker (R-MI) to share his concern about the Committee preparing to move forward with Hegseth’s nomination without access to full information about Hegseth’s personal conduct and previous work experience. That request followed an earlier letter to Committee leadership requesting that the Committee “ensure that Concerned Veterans of America (CVA) and the Veterans for Freedom (V.F.F.) preserve and produce all financial records and correspondence, particularly concerning credit card transactions, relating to Peter Hegseth’s tenure at these organizations to the Committee for review.”

The full text of Blumenthal’s exchange with Hegseth is copied below. Video of Blumenthal’s remarks is available for download here.

U.S. Senator Richard Blumenthal (D-CT): Thanks, Mr. Chairman. Thank you for having this hearing. Thank you for being here, Mr. Hegseth, and I want to join in expressing appreciation and respect for your service to our country, and thanks to all the veterans who are here today, and thank you for your service as a Ranking Member of the Veterans Affairs Committee. I hope we can focus on doing better for our veterans and doing better in management of the Department of Defense. There is always room for improvement. I think what we need in that position is not just better, but the best in financial management because those decisions are life and death decisions affecting the 3.4 million Americans who serve our national security and our national defense and put their lives on the line.

I want to talk about financial mismanagement at the two organizations that you headed—which are the only test of your financial management that we have before this Committee—the Veterans for Freedom and Concerned Veterans for America. You took over the Veterans for Freedom in 2007. In 2008, you raised $8.7 million, but spent more than $9 million, creating a deficit. By January 2009, you told donors that the organization had less than $1000 in the bank and debts of $434,000. By 2010, revenue at the Veterans for Freedom had dropped to about $265,000 dollars. In the next year, it had dropped further to $22,000. You don't dispute these numbers, do you?

Pete Hegseth: Senator, I'm extremely proud of the work me and my fellow vets did at Vets for Freedom. A bunch of young vets with no political experience, a small group, working hard every single day–

Blumenthal: I apologize for interrupting—

Hegseth: We raised donor funds, and we have letters submitted for the record from almost everyone that worked with me every single day, including our Chief Operating Officer, who will attest that every dollar we raised was used intentionally toward the execution of our mission, which is supporting the war fighters—exactly why we are here today—the war fighters in the Iraq Surge. There was a campaign in 2008, Senator, it was Barack Obama versus John McCain—

Blumenthal: If I could just ask you another question—

Hegseth: We believed John McCain would be the right person to win, and so we spent more–

Blumenthal: Because I have the tax returns from that organization—

Hegseth: I’m glad they’re here for the record—

Blumenthal: which I'm going to ask to be entered into the record, Mr. Chairman.

Senate Armed Services Committee Chair Roger Wicker (R-MS): Without objection.

Blumenthal: These tax returns are yours, they have your signature, and I'm going to ask that members of the Committee review them, because they are the only documents. I've asked for others. I’ve asked for the FBI report that would presumably document—it should have documented—this kind of financial mismanagement, and these are the 990's from that organization. By the year of 2011, donors had become so dissatisfied with that mismanagement, they in fact ousted you, they merged that organization with Military Families United, and thereafter, you join a second organization as Executive Director for Concerned Veterans—

Hegseth: In between, Senator, I went to Harvard University for two years and Afghanistan—

Blumenthal: I want to ask you questions. I want to ask you questions about Concerned Veterans for America. Again, another set of tax returns. The 990’s from that organization. I ask they be made part of the record, Mr. Chairman.

Wicker: Without objection. Both of those returns are now part of the record.

Blumenthal: 2011 to 2016. At the end of 2013, shortfall of $130,000. At the end of 2014, shortfall of $428,000. You had a surplus the following year, but then another deficit of $437,000. By the time you left, that organization had deep debts, including credit card transaction debts of about $75,000. That isn't the kind of fiscal management we want at the Department of Defense. We can't tolerate it at the Department of Defense. That’s an organization with a budget of $850 billion—not $10 or $15 million, which was the case at those two organizations—and it has command responsibility for 3.4 million Americans. The highest number that you managed in those two organizations was maybe 50 people. Let me ask you, how many men and women now serve in the United States Army? What is its end strength?

Hegseth: Senator, I would like an opportunity to respond to the impugning of my leadership of a veterans organization, Concerned Veterans of America—

Blumenthal: We’ll, I’ve asked you a question—

Hegseth: You’re on the VA Committee, sir, and I appreciate your service there. The VA Accountability Act and the MISSION Act were all brain childs of Concerned Veterans for America. We used our donor money very intentionally and focused to create policy that bettered the lives of veterans.

Blumenthal: Mr. Hegseth, I'm asking you a very simple question. How many men and women currently serve in the United States Army?

Hegseth: Senator, the United States Army, 450,000 on active duty, sir.

Blumenthal: And how many in the Navy?

Hegseth: In the Navy, it’s 425, sir.

Blumenthal: Well, it’s 337 this year. How many in the Marine Corps?

Hegseth: 175,000.

Blumenthal: 172,300. Those numbers dwarf any experience you have by many multiples. I don't believe that you can tell this Committee—or the people of America—that you are qualified to lead them. I would support you as a spokesperson for the Pentagon. I don't dispute your communications skills. But I believe that we are entitled to the facts here. I've asked for more documents. I assume you would be willing to submit to an expanded FBI background check that interviews your colleagues, accountants, ex-wives, former spouses, sexual assault survivors, and others, and enable them to come forward.

Hegseth: Senator, I'm not in charge of FBI background checks.

Blumenthal: But you would submit to it and support it?

Hegseth: I'm not in charge of FBI background checks.

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