Trump-backed Navy Secretary Phelan ousted after clashes with Hegseth

The Pentagon abruptly removed Navy Secretary John Phelan, ending a 13-month tenure that had become a test of how much power Defense Secretary Pete Hegseth could assert over one of the Pentagon’s biggest civilian posts. Phelan, a major Trump donor and the first Navy secretary in more than 15 years without prior military service, left effective immediately as the Navy pressed ahead with a huge new budget and shipbuilding plan.

Phelan was confirmed by the Senate on March 24, 2025, in a 62-30 vote and sworn in the next day. His background was unusual for the job: before taking the post, he founded Rugger Management, LLC in Palm Beach, Florida, and earlier co-founded MSD Capital and co-managed MSD Partners, the investment firms tied to Michael Dell. That mix of Wall Street experience and political access made his appointment one of the most closely watched civilian picks in the defense establishment.

His exit now lands in the middle of a broader shake-up at the Pentagon under Hegseth, who has already forced out other senior military leaders, including the Army’s top general. The removal also comes as the Navy unveiled its fiscal 2027 budget request, a $377.5 billion plan that includes $65.8 billion for shipbuilding and calls for 34 vessels. That is the kind of spending package where leadership stability matters, because it shapes contracts, industrial planning, and the pace of fleet modernization.

Tensions inside the department had been building around Phelan’s support for a new battleship, a push that reportedly raised alarms in the building and suggested a clash between strategy, symbolism, and politics. The timing deepened the intrigue: Phelan had just attended the Navy League’s Sea-Air-Space symposium and publicly helped frame the service’s message around shipbuilding capacity and maritime dominance before he was shown the door.

Undersecretary of the Navy Hung Cao, a former Virginia Senate candidate and special operations veteran, will serve as acting secretary. The Navy oversees nearly one million sailors, Marines, reservists, and civilian employees, so any turmoil at the top can ripple through readiness decisions, personnel management, and multibillion-dollar contracts. Phelan’s removal leaves those choices once again in the hands of a Pentagon already marked by rapid turnover and a growing struggle over who really speaks for the Navy.