US Navy Secretary John Phelan was dismissed on Wednesday in a move that caught many by surprise, given its timing during active naval operations against Iran in the Strait of Hormuz. Pentagon spokesman Sean Parnell announced the departure as effective immediately, with Under Secretary Hung Cao named as acting Navy Secretary.
According to six sources familiar with the matter cited by CNN, the dismissal followed months of tension between Phelan and Defence Secretary Pete Hegseth, who believed Phelan was moving too slowly on shipbuilding reforms and was irritated by Phelan's habit of communicating directly with President Donald Trump, which Hegseth interpreted as an attempt to bypass him. Deputy Defence Secretary Steve Feinberg had also sought to take control of significant Navy shipbuilding and procurement responsibilities, functions that traditionally fall within the Navy Secretary's remit.
How the decision unfolded
Matters came to a head on Wednesday during a meeting between Trump and Hegseth at the White House focused on shipbuilding. Trump, who had himself grown frustrated with what he saw as insufficient progress, was persuaded during the meeting that Phelan needed to be replaced, according to a senior White House official cited by CNN. Trump told Hegseth to "take care of it," and Hegseth subsequently sent Phelan a message telling him to resign or be fired.
Phelan initially appeared uncertain that Trump was aware of the message and began calling other White House officials to ask whether they knew he had been asked to resign and whether the president had been informed. He then went to the West Wing lobby seeking a direct meeting with Trump, who agreed to see him briefly and confirmed that Phelan had lost his position.
"President Trump and Secretary Hegseth agreed that new leadership is required at the Navy," a senior government official told CNN.
The announcement drew particular attention because of its timing. The US Navy is currently playing a central role in enforcing a naval blockade of Iranian ports during the ceasefire in the war with Iran, having redirected 31 vessels to return to port and boarded two ships. Phelan's dismissal is the first among service secretaries appointed under Trump, though Hegseth has removed numerous senior military officers across the armed forces since taking charge of the Pentagon. The announcement also came during the annual Sea Air Space conference of the Navy League, which Phelan and other senior Navy officials had attended and addressed.
Phelan is a businessman with no prior military service. He and his wife raised millions of dollars for Trump's campaign before his appointment as Navy Secretary was confirmed in 2025. "John will be a tremendous force for our Navy members and a steadfast leader in advancing my America First vision," Trump said at the time of the appointment.
CNN had previously reported that Phelan's name appeared on a passenger list showing he had flown on convicted sex offender Jeffrey Epstein's plane in 2006, alongside Epstein, several other financiers and a passenger identified as French model agent Jean-Luc Brunel, a close associate of Epstein who was found dead in his cell in 2022 while facing charges of rape of a minor and sexual assault. A close friend of Phelan told CNN he had been invited onto the flight by Bear Stearns chief executive Jimmy Cayne, who died in 2021, and that Phelan did not know the plane belonged to Epstein until he arrived and did not interact with Epstein again thereafter.
Source: CNN