The US Pentagon announced Wednesday (local time) that Navy Secretary John Phelan is leaving his position, shortly after it was announced that the 62-year-old had been fired, CNN reported.
Phelan’s departure comes amid tensions with Defense Secretary Pete Hegseth over his implementation of shipbuilding reform and his close relationship with US President Donald Trump. While the Trump administration has not made clear the reason for his departure, it comes as the U.S. Navy enforces a blockade of Iranian ports and targets vessels linked to the Islamic Republic during a shaky truce that was recently extended.
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Who is John Phelan?
Unlike many others in similar positions, Phelan had no previous military service or senior defense leadership experience when he was appointed in late 2024.
According to SMU, he is the co-founder and chairman of Rugger Management LLC, a private investment firm based in Palm Beach, Florida. Prior to starting the company, Rugger co-founded MSD Capital in 1998, the private equity firm of Michael Dell, founder and CEO of Dell Technologies.
He also co-founded MSD Partners, an SEC-registered investment advisor established to enable a select group of outside investors to invest in strategies developed by MSD. In addition, he is Chairman Emeritus of MSD. Prior to MSD, he spent seven years as a principal at ESL Partners, an investment firm based in Greenwich, Connecticut. Here, Phelan was responsible for the company’s distressed and distressed investments and helped grow the firm from $50 million in assets under management to more than $2 billion.
Prior to ESL, he served as Vice President at Equity Group and was in charge of Acquisitions (Western Region) for Zell-Merrill Lynch Real Estate Opportunity Funds. Phelan began his career at Goldman Sachs & Co., where he worked as a financial analyst in the investment banking division.
According to SMU, he earned an MBA from Harvard Business School. He graduated Phi Beta Kappa and with honors from SMU with a bachelor’s degree in economics and political science. He also holds a general course with an emphasis in economics and international relations from the London School of Economics.
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Phelan is a board member of the Whitney Museum of American Art and the Aspen Art Museum (Chair), and a board member of Spirit of America and the Third Option Foundation.
Why was Phelan fired?
Citing sources, CNN reported that tensions between Phelan and Hegseth had been simmering for months. He believed that the Minister of the Navy was proceeding too slowly in introducing shipbuilding reforms. In addition, the defense secretary was angered by Phelan’s direct communication with Trump, which he saw as an attempt to bypass him.
A shipbuilding meeting between the US president and Hegseth took place on Wednesday, where the issues came to a head. The US president was reportedly frustrated by the slow pace of shipbuilding and became convinced that he needed to be replaced. CNN officials said Trump and Hegseth decided to install someone who would move faster, and Trump told the defense secretary to “take care of it.” Hegseth then sent a message to Phelan informing him to either resign or be fired.
Pentagon statement on Phelan’s departure
Pentagon spokesman Sean Parnell announced Wednesday that Phelan is leaving his post “effective immediately.” In a post on X, he wrote: “On behalf of the Secretary of War and Deputy Secretary of War, we are grateful to Secretary Phelan for his service to the Department and the United States Navy.”
Phelan’s departure is the first among military service secretaries nominated by Trump. However, Hegseth has fired many senior military officers across the services since taking charge of the Pentagon.
