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Noem’s ouster comes as Trump’s Cabinet keeps causing him problems

3 hr ago / PUBLISHED Mar 5, 2026, 3:37 PM ET

[Donald Trump’s] unorthodox Cabinet spent the last 13-plus months testing the wisdom of a president prioritizing loyalty over experience.

That came to a head this week when someone finally got the ax.

Trump announced Thursday afternoon that he is replacing embattled Homeland Security Secretary Kristi Noem with Sen. Markwayne Mullin of Oklahoma. The move comes after a brutal pair of hearings this week in which Noem was pressed by Democrats and even some Republicans on the Trump administration’s unpopular immigration crackdown and other matters.

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Noem epitomizes how Trump’s Cabinet has often complicated his message and created sideshows that draw attention to some of the administration’s worst vulnerabilities.

Trump was angry with two days of testimony Tuesday and Wednesday – particularly Noem’s assertion, which he denies, that the president was aware of an expensive DHS ad campaign that featured her.

GOP Sen. John Kennedy focused on the $220 million ad campaign that prominently featured Noem and resulted in a lucrative subcontract for the husband of a now-former Department of Homeland Security spokesperson, according to ProPublica. The Louisiana Republican repeatedly asked Noem whether Trump had signed off on the idea, and Noem repeatedly indicated Trump had.

(DHS has claimed the ad campaign led to many self-deportations. But the department’s credibility is in tatters given its many false claims, and its claims about self-deportations appear vastly inflated.)

Kennedy concluded that this was “hard for me to believe, knowing the president as I do.”

It was apparently difficult to believe for a reason, because Trump said it didn’t happen.

“I never knew anything about it,” he told Reuters in a phone ⁠interview Thursday.

He followed that up with a post on social media announcing Noem’s replacement. (He praised her “spectacular results” and announced she’s getting a new job — special envoy for the Shield of the Americas.)

But it’s not just Noem who’s stepping on rakes.

Pete Hegseth

Defense Secretary Pete Hegseth on Wednesday caused a stir – and inspired some White House clean-up work – by claiming that the media focused too much on soldiers killed in the Iran war. Trump has often made off-color comments about the sacrifices of service members, but that takes on new significance in the war Trump has now chosen.

(And this comes after his role in “Signal-gate” produced a harsh inspector general’s report in December that said he had jeopardized a mission and soldiers’ lives.)

Marco Rubio

Secretary of State Marco Rubio has struggled mightily to explain the administration’s justification for the war – or at least, to do so in a way that’s consistent with the other things members of the administration (and Trump) are saying.

Lori Chavez-DeRemer

Labor Secretary Lori Chavez-DeRemer appeared to be in something of a competition with Noem for which of them can be the subject of more exposés. Chavez-DeRemer’s now include one earlier this week from the New York Times which described a Labor Department in crisis.

The New York Times previously reported that her husband had been banned from the department’s headquarters amid sexual assault allegations. (A criminal investigation into that matter has been closed.) And this week, two of her top aides have been forced out amid an investigation into misconduct at the agency, the Times reported.

“The secretary remains focused on advancing the president’s America First agenda and carrying out the department’s mission to support American workers,” a Labor Department spokeswoman told the Times.

Pam Bondi

The administration’s many missteps on the Jeffrey Epstein files also continue to cause it major problems.

On Wednesday, five Republicans on the House Oversight Committee joined with Democrats to take the highly unusual step of issuing a subpoena to Attorney General Pam Bondi to explain her department’s mishandling of the Epstein files. Apparently Bondi’s highly combative and dismissive recent testimony didn’t satisfy the Republicans who actually care about this issue.

Howard Lutnick

We also learned this week that Commerce Secretary Howard Lutnick will testify voluntarily after facing his own pressure to do so. Lutnick has played a subtly significant role in deepening the administration’s Epstein morass.

That’s not just because of his false claims about having distanced himself from Epstein two decades ago, but also his comments late last year indicating he believed Epstein lured people into getting massages and then blackmailed them. Those comments flatly contradicted what the Justice Department had said, as well as Trump’s declared desire to move on from the story.

So to sum up, Trump’s Cabinet has played a significant role in making his Epstein files problem worse, in turning his winning issue of immigration into a liability, and in further muddling an already muddled message about an unpopular war.

And that’s to say nothing of the increasing questions some secretaries are facing about potential misconduct and self-dealing.

The screw-ups come even as the administration has appeared internally sensitive to Cabinet members creating political problems.

The White House held a midterm messaging and strategy session in February in which Cabinet members were told that they were likely to be impeached if Democrats win the midterms.

The Cabinet officials were told that, while Trump will say what he will say, they need to not go off-script.

“This is a team sport,” an administration source summarized the tenor of the meeting to CNN’s Kristen Holmes.

And it’s pretty clear the American people don’t have much regard for his Cabinet.

A Gallup poll in December showed four members of it were more than 20 points underwater in their approval ratings, including Bondi and Hegseth. The Pew Research Center in January showed Hegseth 15 points underwater. And a poll a month ago from Quinnipiac University showed voters wanted Noem removed by a wide margin, 58%-34%.

None of those numbers are normal for Cabinet secretaries. Or, to put it a different way, none of those numbers are normal for Cabinet secretaries who are typically allowed to stick around.

And now Noem is the first out the door.

Pentagon formally designates Anthropic a supply chain risk amid feud over AI guardrails

Updated on: March 5, 2026 / 4:35 PM EST / CBS News

The U.S. military has formally designated artificial intelligence firm Anthropic a supply chain risk, a senior Pentagon official and a source directly familiar with the situation told CBS News, a sweeping move that could cut it off from military contracts.

The Trump administration and Anthropic — the only AI company deployed on the Pentagon’s classified networks — are at an impasse over Anthropic’s push for guardrails that would explicitly ban the U.S. military from using its Claude model to conduct mass surveillance on Americans or power fully autonomous weapons. The Pentagon says it needs the ability to use Claude for “all lawful purposes,” and argues those uses of AI are already not allowed.

Defense Secretary Pete Hegseth announced last week that Anthropic would be cut off from its government contracts and designated a supply chain risk, but Anthropic had not received formal notification of that step until Thursday.

Hegseth said the military will phase out Anthropic over six months. A source told CBS News that no timeline for offboarding Claude was provided in Thursday’s designation.

The U.S. military has used Claude in its strikes on Iran that began last weekend, two sources familiar with the matter previously told CBS News. It’s not clear exactly how the artificial intelligence model is being deployed.

Anthropic received the supply chain risk designation two days after CEO Dario Amodei told investors he was still in talks with the Pentagon “to try to deescalate the situation. Amodei said at a Morgan Stanley conference that the two sides “have much more in common than we have differences,” according to audio exclusively obtained by CBS News.

Anthropic has previously vowed to legally challenge any attempt to label it a supply chain risk, calling the move “legally unsound” and warning it would set a “dangerous precedent for any American company that negotiates with the government.”

In an interview with CBS News last week, Amodei said he wants to work with the military to protect U.S. national security interests, but the company is standing firm in insisting on guardrails. He argued that AI could offer the government vast new surveillance powers that are “contrary to American values,” and AI isn’t precise enough to be used for fully autonomous weapons that target people without human input. In his view, the law hasn’t caught up with technology.

“We have these two red lines,” Amodei said. “We’ve had them from day one. We are still advocating for those red lines. We’re not going to move on those red lines.”

The Pentagon’s position is that it’s already illegal for the military to conduct mass surveillance on Americans, and fully autonomous weapons are already restricted by internal Defense Department policies, so there is no need to put restrictions on any of those uses of AI in writing.

Emil Michael, the Pentagon’s chief technology officer,said in an interview with CBS Newslate last week: “At some level, you have to trust your military to do the right thing.” But he also noted that “we’ll never say that we’re not going to be able to defend ourselves in writing to a company.”

Michael said last week the Pentagon offered a compromise that would acknowledge in writing the laws and policies that restrict mass surveillance and autonomous weapons. Anthropic called those compromises inadequate, saying the offer was “paired with legalese” that effectively let the military disregard the guardrails.

The disagreement grew increasingly bitter last week, with Trump administration officials accusing Anthropic of trying to restrict the military’s operations and impose its own values onto the federal government. Hegseth called Anthropic “sanctimonious,” Michael said Amodei has a “God-complex” and Mr. Trump called the company “radical left” and “woke.”

The Trump administration gave Anthropic a deadline of last Friday evening to agree to let the military use Claude for “all lawful purposes.” With the two sides still far apart, Mr. Trump on Friday ordered federal agencies to immediately stop using Claude, though the Defense Department was given up to six months to phase the technology out.

Anthropic rival OpenAI — known for ChatGPT — then announced that it had cut a deal with the military.

“From the very beginning, this has been about one fundamental principle: the military being able to use technology for all lawful purposes,” a senior Pentagon official told CBS News on Thursday. “The military will not allow a vendor to insert itself into the chain of command by restricting the lawful use of a critical capability and put our warfighters at risk.”

Amodei has strongly criticized the Trump administration’s decision, calling it “retaliatory and punitive.”

Asked by CBS News last week if he had a message for Mr. Trump, Amodei said “everything we have done has been for the sake of this country” and “for the sake of supporting U.S. national security.”

“Disagreeing with the government is the most American thing in the world,” he said. “And we are patriots. In everything we have done here, we have stood up for the values of this country.”

U.S. military now seeking to

Kristi Noem ousted from Homeland Security post amid recent turmoil

Trump reportedly furious with Noem’s performance in congressional hearings this week over controversial ad contract

By Charles Creitz, Alex Miller
Fox News

Published March 5, 2026 1:44pm EST | Updated March 5, 2026 6:01pm EST

Kristi Noem, the former South Dakota congresswoman and governor who has led President Donald Trump’s Department of Homeland Security in his second term, was ousted from her position on Thursday.

Trump announced on Truth Social that he will nominate Sen. Markwayne Mullin, R-Okla., to replace Noem, effective March 31.

“The current Secretary, Kristi Noem, who has served us well, and has had numerous and spectacular results (especially on the Border!), will be moving to be Special Envoy for The Shield of the Americas, our new Security Initiative in the Western Hemisphere we are announcing on Saturday in Doral, Florida. I thank Kristi for her service at ‘Homeland.’”

In her first official statement on X following her departure, Noem thanked Trump for her upcoming appointment.

“Secretary [Marco] Rubio and Secretary of War [Pete Hegseth] are incredible leaders and I look forward to working with them closely to dismantle cartels that have poured drugs into our nation and killed our children and grandchildren.”

“The western hemisphere is absolutely critical for U.S. security. In this new role, I will be able to build on the partnerships and national security expertise, I forged over the last 13 months as Secretary of Homeland Security. We have made historic accomplishments at the Department of Homeland Security to make America safe again: we delivered the MOST secure border in American history, 3 million illegal aliens have left the U.S., we have located 145,000 children, FEMA delivered disaster relief at a 100% faster rate, we ushered in the golden age of travel, saved the American taxpayer $13 billion and revitalized the U.S. Coast Guard,” she added.

Trump said Mullin has done a “tremendous job” in Congress and cited his resume as a former undefeated MMA fighter.

“As the only Native American in the Senate, Markwayne is a fantastic advocate for our incredible Tribal Communities. Markwayne will work tirelessly to Keep our Border Secure, Stop Migrant Crime, Murderers, and other Criminals from illegally entering our Country, End the Scourge of Illegal Drugs and, MAKE AMERICA SAFE AGAIN,” Trump said.

Mullin is the first Native American senator in decades, following Sen. Ben Nighthorse Campbell of Colorado. He appeared just as caught off guard by the announcement as the rest of Washington.

After dashing to vote for DHS funding, which ultimately failed again, and then sneaking through the back of the Senate, he held court on the steps outside the upper chamber. When asked if he was headed to the White House to meet with Trump, he said he wasn’t sure.

“I think I need to talk to my wife first,” Mullin said.

Mullin currently does not serve on the Senate Homeland Security and Governmental Affairs Committee, the panel that will be responsible for confirming him. But, he does have a strong relationship with Trump.

“I’ve got to be honest with you, I wasn’t expecting the call today, but I am super excited. And I’m more excited about just getting ready to get started,” Mullin said. “There’s a lot of work we can do to get our Homeland Security working, you know, working for the American people.”

Noem, 54, will likely be at least temporarily replaced by Deputy Secretary Troy Edgar, a Navy veteran and former mayor of Los Alamitos, California, in the line of succession for the agency.

Noem’s tenure marked a distinct reversal of the open-border policies permitted by predecessor Alejandro Mayorkas during the Biden administration, and DHS has notched record drug interdictions totaling more than half a million pounds of illegal drugs in her first year.

Her management of Trump’s mass deportation agenda has also led to more than 2 million reported self-deportations in 2025 and about 670,000 removals of illegal immigrants, a figure supporters have hailed as the most successful immigration enforcement operation in history.

Her agency has also been unafraid to hit back at high-profile critics, including California Gov. Gavin Newsom; Rep. Eric Swalwell, D-Calif.; Minnesota Gov. Tim Walz; and 2026 midterm candidate David Trone of Maryland, who accused DHS of “executing people in the streets” as he filmed a protest ad outside a Williamsport compound recently purchased for use as a detention facility.

Such criticisms of her mass deportation operations, particularly in Minneapolis, appeared to somewhat sour public sentiment on the administration’s handling of the immigration issue, as U.S. Border Patrol Cmdr. Gregory Bovino — a DHS subordinate — was replaced in the Twin Cities by border czar Tom Homan amid the firestorm.

Meanwhile, reports surfaced Thursday that Trump is “furious” with Noem over her performance in bicameral Judiciary Committee hearings this week, particularly over a contract for an advertisement that Sen. John Kennedy, R-La., and others grilled her on.

Trump reportedly took issue with her suggesting to Kennedy that he approved a taxpayer-funded ad subcontracted to a firm connected with her inner circle, according to National Review, which also reported that Mullin was being considered a top candidate for her replacement.

A White House official confirmed to Fox News that Trump did not know about the ad and did not approve it, despite her claims to the contrary at the hearings.

“It was a combination of her many unfortunate leadership failures. From [Minnesota] to the ad campaign to the allegations of an affair,” a source familiar with the situation told Fox News.

When confronted by reporters on the Capitol steps, Mullin indicated he had only short notice of Trump’s decision to pick him as Noem’s successor.

“No, the president and I still have to communicate so we’ll talk about it moving forward,” Mullin said. “The president and I have already talked – We have to talk to the president and get on the same page… I’ll talk to you all [later].”

In Wednesday’s House hearing, Noem was questioned by Rep. Sydney Kamlager-Dove, D-Calif., over rumors of an affair with DHS “special government employee” Corey Lewandowski, a top figure in Trump’s 2016 campaign.

Noem criticized Kamlager-Dove in response, as her husband, insurance company owner and former South Dakota first gentleman Bryon Noem, sat just feet behind her.

Kamlager-Dove asked Noem if at any time during her tenure she had “sexual relations with Corey Lewandowski,” before slamming the longtime Trump aide as a “failed campaign manager” and someone lacking military experience.

Rep. Jared Moskowitz, D-Fla., followed up, pressing Noem on Lewandowski while wearing a Justice for Cricket pin, referencing the dog Noem once wrote she had to euthanize on her farm.

“I really think you need to say the word ‘no’ into the record so that you can clear that up,” Moskowitz said.

Noem pushed back hard on both Democrats, saying what they were implying is “offensive” and telling Chairman Jim Jordan, R-Ohio, that she was “shocked that we’re going down and peddling this tabloid garbage in this committee today.”

“The socialist, liberal left: you go off and you attack conservative women and you say that we’re either stupid or we’re sluts. That’s what you do. And I will tell you sir… I am neither of those,” Noem fumed at Moskowitz.

Through the recent turmoil, many Republicans remained highly complimentary of Noem’s tenure.

When Swalwell pressed her on the ad campaign and contract, Noem shot back that while the Alameda Democrat was “focusing on photo-ops and luxury jets, I’m focused on the fact that the Coast Guard might not get paid because your party is choosing not to fund them.”

Fox News’ Jacqui Heinrich contributed to this report.

Charles Creitz is a reporter for Fox News Digital.

He joined Fox News in 2013 as a writer and production assistant.

Charles covers media, politics and culture for Fox News Digital.

Charles is a Pennsylvania native and graduated from Temple University with a B.A. in Broadcast Journalism. Story tips can be sent to charles.creitz@fox.com.

Justice Department posts FBI interviews related to Trump sex abuse allegation

Published Mar 5, 2026, 5:26 PM ET / Source: CNN

By

[Hannah Rabinowitz]
,

[Casey Tolan]

47 min ago

[Image 1]

President Donald Trump in the Oval Office of the White House, on Tuesday.

Andrew Caballero-Reynolds/AFP/Getty Images

The Justice Department has posted online three FBI interviews related to sexual assault allegations against President Donald Trump that had been missing from the massive trove of Epstein files released by the Department of Justice.

A CNN analysis discovered dozens of witness interviews were missing from the online archive of evidence related to the Jeffrey Epstein investigation, all of which were memorialized in a so-called “302” memo that lays out what an interviewee told FBI agents. The 302s do not include other corroborating information or agents’ opinions.

Among the missing records were three interviews related to a woman who told agents that Epstein had repeatedly abused her decades ago, starting when she was approximately 13 years old, and who also accused Trump of sexually assaulting her.

Trump has consistently denied wrongdoing in connection with Epstein.

Under the law, the DOJ can withhold files that were duplicates, privileged, or are part of an ongoing federal investigation.

The Justice Department has not explained why the Trump-related witness interview descriptions were not released but said in a statement last week that it had initiated a review to see whether any documents were “improperly tagged in the review process.” If that happened , the department said it would release them, the statement said.

The Justice Department also republished images to the Epstein files library on Wednesday that had been temporarily taken down after being flagged for potential nudity.

The department has been fiercely criticized for its redaction process, and has had to repeatedly take down documents, edit redactions, and republish them. Among the most egregious issues reported were victims whose identities, or photos, were made public without their knowledge.

There are still several thousand images left to repost, a department official told CNN, which will also be done Thursday.

Democratic state attorneys general sue Trump over tariffs

2026-03-05T20:56:44.467Z / The Washington Post

The lawsuit accuses the president of trying to “sidestep” a Supreme Court ruling that overturned many of his previous levies.

March 5, 2026 at 3:56 p.m. EST Yesterday at 3:56 p.m. EST

2 min

10

Arizona Attorney General Kris Mayes, left, and Oregon Attorney General Dan Rayfield outside the Supreme Court in November. They are helping lead a lawsuit against Trump administration tariffs. (Mark Schiefelbein/AP)

By Alec Dent

A coalition of Democratic-led states sued President Donald Trump on Thursday in the U.S. Court of International Trade, arguing that his newly imposed across-the-board tariffs are illegal.

The suit is led by the Democratic attorneys general from Oregon, New York, California and Arizona along with attorneys general from 18 other states.

Inside the decision to remove Kristi Noem as DHS secretary

March 5, 2026 / 6:08 PM EST / CBS News

The decision to replace Kristi Noem as Department of Homeland Security secretary came together quickly, and the timing of President Trump’s announcement caught many across DHS off guard, even as tensions had been building for weeks between Noem and the White House, according to senior White House and DHS officials.

Though many officials within DHS conceded that the writing was on the wall, the exact timing of the president’s Truth Social post announcing that he intended to replace her with Republican Sen. Markwayne Mullin of Oklahoma took DHS officials and the secretary herself by surprise. The post went up during her live remarks as the keynote speaker at Sergeant Benevolent Association Major Cities Conference in Nashville, although just before she took the stage, the president briefly spoke with her by phone to inform her of his decision.

Following the controversial immigration crackdown in Minneapolis and fatal shootings of two American citizens, Renee Good and Alex Pretti, administration officials tell CBS News the aggressive tactics used by ICE and CBP had become politically problematic nationwide, drawing criticism not only from Democrats but also from some supporters of the president’s immigration agenda who viewed the operations as overly broad and poorly executed.

Inside DHS, the president’s earlier decision to put border czar Tom Homan in charge of winding down the Minneapolis operation — effectively sidelining Noem — was widely viewed as an early sign of Trump’s dissatisfaction with her performance.

The backlash against Noem’s statements regarding Pretti and Good corresponded with a quiet shift in enforcement strategy in recent weeks. Officials said under Homan’s leadership, the administration moved away from sweeping urban enforcement operations and refocused efforts on arresting immigrants in the country illegally who also have criminal records. The departure of top border official Gregory Bovino, a vocal field commander charged with the earlier operations in LA and Chicago, also reflected that recalibration.

Several officials said that in the weeks following the Minneapolis controversy, both Noem and Lewandowski had lost support from key figures inside the White House, even after they appealed directly to both the president and senior White House officials in an effort to salvage their standing.

According to two people familiar with the matter, Trump’s frustrations were also evident during a tense conversation late Wednesday with longtime adviser Corey Lewandowski, which centered in part on controversial advertising spending by DHS — roughly $220 million — that had drawn scrutiny from the administration and on Capitol Hill.

Inside DHS, another source of friction stemmed from a directive Noem issued in June 2025 to require her personal written approval for contracts, grants and funding obligations above $100,000. Although she intended to tighten oversight, officials said the policy created significant backlogs for what they described as mission-critical funding, including disaster relief programs run by FEMA.

Senior officials across DHS also complained privately about what they described as the micromanagement of contracts and operational decisions by Noem and Lewandowski, which they said undermined the trust of leaders who run major DHS components.

A series of smaller controversies also drew attention inside the administration, including the so-called

How each House member voted on Trump’s Iran war powers

2026-03-05T22:58:47.580Z / CNN Politics

By

[Curt Merrill],

[Annette Choi]

43 min ago

PUBLISHED Mar 5, 2026, 5:58 PM ET

The Middle East Donald Trump

The House rejected a war powers resolution on Thursday that would have required the Trump administration to seek congressional approval before continuing military action in Iran.

President Donald Trump ordered strikes on Tehran on February 28 and called for the overthrow of the current regime. The conflict has escalated across the Middle East since then — with European countries pledging military aid to Cyprus and Western allies in the Gulf, and US-Israeli and Iranian strikes continuing into the[sixth day of war].

The GOP-led Senate also rejected a similar measure to rein in Trump’s war powers in a 53 to 47 vote on Wednesday.

Airline and travel groups warn of risks to air traffic as partial shutdown persists

March 5, 2026 4:42 PM UTC / Reuters

WASHINGTON, March 5 (Reuters) – Groups representing major U.S. airlines and travel groups warned on Thursday that an ongoing partial government shutdown ​could snarl air traffic as the busy U.S. spring break travel season nears.

Funding ‌for the Homeland Security Department lapsed on February 13 after Congress failed to reach a deal on immigration enforcement reforms demanded by Democrats. That halted operational funding for several government agencies, including the ​Transportation Security Administration.

The Reuters Iran Briefing newsletter keeps you informed with the latest developments and analysis of the Iran war. Sign up here.

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About 50,000 TSA airport security screeners are working without pay and as ​the shutdown continues more workers could be unable or unwilling ⁠to come to work because of financial hardship.

Carriers are expecting a record-breaking spring ​travel period, with 171 million passengers expected to fly, up 4% over the ​same two-month period last year, said Chris Sununu, CEO of trade association Airlines for America. He castigated lawmakers for not voting to end the shutdown.

“The fear is that, once again, they’re not going ​to act until something really desperate happens, until we get long lines,” Sununu said, ​adding the repeated shutdowns are putting the U.S. aviation system at risk.

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Spring break travel will heat ‌up ⁠as TSA workers get their first zero paycheck on March 13, Sununu said. He urged the Trump administration to reinstate Global Entry, which expedites U.S. customs and immigration clearance for pre-approved, low-risk travelers entering the United States.

U.S. Travel Association CEO Geoff Freeman said ​it was unacceptable not ​to pay airport ⁠security workers.

“TSA officers screen nearly a billion passengers a year. With an average salary of around $35,000, these are workers ​who simply cannot afford to miss a paycheck,” Freeman said. “Every ​time Washington ⁠fails to fund the government, these essential workers pay the price. So do travelers. So does the economy.”

Ha Nguyen McNeill, the top official at the TSA, told ⁠Congress last ​month that around 1,110 transportation security officers left ​the TSA in October and November 2025 following a 43-day government shutdown, a more than 25% increase ​from the same time period in 2024.

Reporting by David Shepardson; Editing by Nia Williams

Our Standards: The Thomson Reuters Trust Principles.

节点运行失败

US Democrats working on bill to rein in prediction markets after Iran bets

By Michelle Price
March 5, 2026 7:00 PM UTC Updated 1 hour ago

Item 1 of 2 U.S. Rep. Mike Levin (D-CA) speaks during a visit to Viasat Inc., in Carlsbad, California, U.S., November 4, 2022. REUTERS/Mike Blake/ File Photo

[1/2]U.S. Rep. Mike Levin (D-CA) speaks during a visit to Viasat Inc., in Carlsbad, California, U.S., November 4, 2022. REUTERS/Mike Blake/ File Photo [Purchase Licensing Rights, opens new tab]

• Summary
• Companies

• Levin and Murphy push for legislation against war-related financial gains
• Platforms like Polymarket face scrutiny over insider trading allegations
• Polymarket removed nuclear explosion bets after backlash

WASHINGTON, March 5 (Reuters) – U.S. Democratic ​lawmakers Representative Mike Levin and Senator Chris Murphy are working on a bill ‌to rein in prediction markets after well-timed bets ahead of the U.S.-Israeli air strikes in Iran stoked concerns over the legality and ethics of such trades, Levin told Reuters.

While the effort is unlikely to become law ​in the near future, it intensifies pressure on the likes of Polymarket and Kalshi ​amid growing concerns wagers on the platforms create incentives to foment conflict ⁠and disclose classified information.

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“Chris Murphy and I are working on this. It’s unbelievably clear to ​me that if anyone is using prior knowledge of military action for financial gain that ​should be absolutely illegal,” the California congressman said in an interview.

The Commodity Exchange Act bars event contracts that are deemed “contrary to the public interest,” including those involving war, terrorism, or assassination, but that law still gives ​prediction markets far too much leeway, said Levin.

On Wednesday, Polymarket removed bets on the likelihood ​of a nuclear explosion anywhere in the world after online backlash.

“There is no good way for people ‌to be ⁠betting on war and death,” said Levin, adding other Democratic lawmakers share his concerns and he hopes to build a coalition around the effort.

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Last month, six other Democratic senators called out the platforms after a mystery trader made a roughly $410,000 profit betting on the ouster of Venezuelan ​President Nicolas Maduro.

On Saturday, ​analytics firm Bubblemaps ⁠flagged that six accounts made a $1.2 million profit from Polymarket bets on the ousting of Iran’s Supreme Leader Khamenei just hours before he was ​killed in the air strikes.

Responding on X, Levin and Murphy said the ​trades suggested ⁠insiders were profiting from the war. Murphy added such trades should not be legal and that he planned to introduce legislation “ASAP.”

Spokespeople for Murphy and Polymarket did not immediately respond to requests for ⁠comment.

A spokesperson ​for Kalshi said the platform bans and enforces against ​insider trading. “We also don’t list markets directly tied to death.”

Polymarket, which mostly operates overseas, has said prediction markets harness ​the wisdom of crowds to create accurate, unbiased forecasts.

Reporting by Michelle Price, Editing by Nick Zieminski

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