Pete Hegsethembattled President-elect Donald Trump’s pick for defense secretary, received a six-figure severance package and signed a nondisclosure agreement when he left the Concerned Veterans of America organization. Payment has arrived amid allegations of financial mismanagement, repeated incidents of drunkenness and sexual improprieties, as well as dissension among its leaders over Hegseth’s foreign policy views.
The Army veteran turned Fox News host signed a nondisclosure agreement when he stepped down as CEO in January 2016, two sources associated with Concerned Veterans of America told CBS News, with one source saying that the agreement provided for a financial payment. CVA sources spoke to CBS News on condition of anonymity because they were not authorized to publicly discuss legally binding contracts, while fearing professional retaliation.
Public tax returns reviewed by CBS News confirm that Hegseth received more than $172,000 between October 2016 and September 2017 – well after Hegseth officially left his role as CEO of Concerned Veterans of America in January 2016.
Hegseth remained listed on tax returns as a former CEO working 50 hours per week between 2016 and 2017. An archived 2016 biography on Hegseth’s website described him as a Fox News contributor and host, and made no mention no continuing role with Concerned Veterans for America.
In a statement to Military Times at the time of his departure, Hegseth said he was leaving his role with the organization to focus on publishing a book and other advocacy work, while CVA said wish him good luck “in all his future endeavours”.
Contacted by CBS News, Hegseth’s attorney, Timothy Parlatore, did not respond prior to publication.
But Hegseth pushed back Wednesday on reports that Trump considers other candidates for secretary of defense. On Capitol Hill, as he continued to visit Republican members of Congress, he told CBS News he had no plans to withdraw his name. He also said he spoke with Trump Wednesday morning and that the president-elect encouraged him to keep fighting.
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Experts consulted by CBS News said severance packages and nondisclosure agreements for departing CEOs are common. Such payments are made for a number of reasons, including to maintain professional relationships, to work as an advisor to a new CEO or to ensure a soft landing for departing executives, they explained.
Hegseth disputed the allegation that he was forced out as CEO. On December 4, he retweeted a letter obtained by the New York Post about X, saying: “Read for yourself. You will see that the truth is on our side. »
The letter, written on Concerned Veterans of American letterhead in January 2016, was authored by Randy Lair, administrator of the veterans advocacy group.
“The truth is that Pete resigned as CEO of Concerned Veterans of America due to a difference of opinion regarding the future of the organization and so that he could focus on other efforts, including its relationship with Fox News,” Lair said. wrote in part.
He added: “Pete was not fired by the organization and, in fact, at CVA we worked with him. [sic] “This difficult decision was mutually agreed that late 2015 was the best time for both parties…The bottom line is that Pete Hegseth voluntarily resigned his position and CVA recognizes and appreciates his accomplishments as CEO.”
Sources affiliated with Concerned Veterans of America at the time of Hegseth’s tenure told CBS News that there was a “difference of opinion” about Hegseth, directing the organization toward advocacy for foreign policy views in favor of military intervention. The organization’s senior leaders strongly opposed Hegseth’s foreign policy advocacy because of his historic mission of supporting conservative solutions at the Department of Veterans Affairs.
However, the sources also pointed out what Lair’s letter did not mention, namely internal evaluations of Hegseth’s handling of the organization’s finances and alleged incidents of drunkenness and sexual misconduct, which Hegseth and Parlatore, his lawyer, denied it.
Hegseth’s financial records at Concerned Veterans for America
Hegseth led Vets for Economic Freedom Trust, operating as Concerned Veterans for America, from 2012 to 2016. Tax records show that in three of the five years of his leadership, the organization spent more money than it has collected through donations and other means.
Records from October 2012 to September 2013 show the organization brought in $3.8 million but spent $3.9 million, representing a shortfall of $130,000. Hegseth CEO compensation is estimated at $67,500.
Records filed between October 2013 and September 2014 show revenue increased by $15.7 million, but the organization spent $16.1 million, including $8.6 million on advertising and promotion, which which resulted in a shortfall of $428,000. Hegseth’s salary is $144,894.
Records from October 2014 to September 2015 show Hegseth’s salary increased to $182,549 and the organization posted a surplus for the first time since 2011, with revenue of $14.1 million and expenses just under $14 million.
However, the organization again spent more than it raised the following year, when Hegseth was named outgoing CEO. Records filed between October 2015 and September 2016 show the organization raised just under $16 million but spent $16.4 million, resulting in a shortfall of $437,000.
Documents show the organization’s expenses were cut after Hegseth’s departure. From October 2016 to September 2017, compensation and wages and salaries were reduced to $2 million, down from nearly $7 million the previous year. Travel spending was reduced to $416,000, down from nearly $2.4 million, and conference, convention and meeting spending was $124,000, down from $2.4 million.
Hegseth has denied allegations of financial mismanagement, repeated incidents of drunkenness and sexual misconduct within the organization. In an opinion piece in the Wall Street Journal published Dec. 4, Hegseth said, “We had hundreds of employees and thousands of volunteers — and yet, based on the anonymous accusations of a few disgruntled employees, the media traditional ones made it feel like we ran a college fraternity. This is simply false.
Allegations at Vets for Freedom
Before joining Concerned Veterans for America, Hegseth led Vets for Freedom (VFF) from 2007 to 2010, where he also faced allegations of financial mismanagement.
In 2008, the organization raised $8.7 million, but spent $9.1 million. Filings show she received a $20,000 loan to “provide additional liquidity to the organization.”
The New Yorker reported that donors feared their money would be wasted and arranged for VFF to merge with another organization, Military Families United, which took over most of its management.
VFF’s revenues dropped to $268,000 in 2010 and in 2011 the organization’s revenues were $22,000. Hegseth joined Concerned Veterans for America the following year.
Margaret Hoover, host of PBS’s “Firing Line” and a former advisor to Vets for Freedom, said in a CNN interview that Hegseth had “managed very poorly” the organization. Hoover expressed doubts about his ability to lead the sprawling Department of Defense as it struggled with a staff of fewer than 10 people and a budget of less than $10 million.
“I don’t know how he’s going to run an organization with an $857 billion budget and 3 million people, based on what I’ve seen over the years,” she said.
James LaPorta
