Acting Navy Secretary Hung Cao’s early I&S shakeup sparks questions, concerns
Questions are swirling after the Navy’s new acting secretary, Hung Cao, initiated what some are calling “disruptive” changes in the sea service’s intelligence and security apparatus during his first week in charge.
The swift reforms and an unexpected personnel shift have sparked uncertainty about the path ahead for the Navy’s I&S enterprise, according to several sources who were granted anonymity to speak freely about the fluid situation.
They told DefenseScoop that Cao fired Chief of Naval Intelligence Rob Townley this week and canceled an ongoing reorganization effort that was launched months ago by former Navy Secretary John Phelan to elevate certain I&S functions to his direct purview, before his abrupt ouster.
“There is currently no oversight for a multibillion-dollar budget, or thousands of [U.S. intel and security] personnel globally, in the middle of a war,” a senior defense official said.
In response to questions on the alleged firing and concerns about the future of the nascent Office of the Chief of Naval Intelligence and Security (OCNI&S), a Department of Navy spokesperson told DefenseScoop: “Mr. Townley is no longer a Department of Navy employee. We appreciate his service and wish him well in his future endeavors.”
This marks one of Cao’s earliest adjustments to the Navy’s administration since he was promoted to acting secretary on April 22, after Phelan was suddenly let go by President Donald Trump and Defense Secretary Pete Hegseth.
“The moment Townley was fired, the entire naval intelligence enterprise lost its top executive,” a senior defense official said. They emphasized that it came “just days after the entire reorganization was not only stopped in its tracks, but essentially reversed back to the legacy organization of [the Deputy Undersecretary of the Navy for Intelligence and Security, or] DUSN I&S.”
On April 24, Cao issued an official memorandum to almost two dozen Navy organizations announcing the termination of several directives that were introduced by Phelan to restructure certain operations and institute new administrative policies.
“Effective immediately, the organizational realignments and position establishments directed in the cancelled references are rescinded,” officials wrote in the memo, which was obtained by DefenseScoop on Friday. “All affected units and directorates shall revert to the organizational structure and billet authorizations in effect immediately prior to the issuance of those memoranda.”
Among those listed was a memo that created the Office of the Chief of Naval Intelligence and Security (OCNI&S).
Sources said Phelan quietly directed the establishment of OCNI&S in summer 2025. The office essentially transferred certain work from DUSN I&S to the new OCNI&S. He also notably designated Townley as the Chief of Naval Intelligence, or CNI — adding an intelligence expert to the secretary’s team of direct reports.
The full transition was planned to be completed by summer 2026.
Details about his influence in the role are sparse, but sources suggested that Townley became Phelan’s principal civilian advisor for intelligence-related policies, and I&S activities associated with special operations, irregular warfare, counterintelligence, special access programs, critical infrastructure, security and insider threats.
Townley is a former U.S. Marine intelligence officer. He has mostly stayed out of public view in recent years, after making headlines in 2017 when he was serving in the first Trump administration as a senior deputy to then-National Security Adviser Michael Flynn and the CIA denied his request for an elite security clearance.
On Friday, the Navy spokesperson did not provide answers to DefenseScoop’s questions about the current operational status of OCNI&S, or the current structure and functions of DUSN I&S. The leadership of both organizations also remains unclear.
“The team is still in shock. The question of what’s next still cannot be answered, even from Cao’s people,” a senior defense official said. “People are angry and distracted, and this is the last group of individuals who need to be distracted right now.”
In their view, “the biggest loser in this situation is the taxpayer.”
“After 8 months of work, with dozens of [Senior Executive Service or SES professionals and GS-15s] working quite literally night and day on the reorganization — we’re talking millions of dollars just gone out the door. An absolute waste of time, personnel, and expertise,” they told DefenseScoop. “We are not better because of this decision. We are weaker.”
The department’s I&S directorate is a separate entity from the Office of Naval Intelligence, which is located in Suitland, Maryland, and is led by Rear Adm. Mike Brookes.
