Democratic Senators, including Elizabeth Warren, Ron Wyden, and Chris Van Hollen, have raised concerns to US Commerce Secretary Howard Lutnick regarding a $1.6 billion rare-earth minerals deal. They warned that the agreement with USA Rare Earth, Inc. (USAR) could potentially benefit Lutnick’s immediate family and his former firm, Cantor Fitzgerald. The senators highlighted a pattern of actions by Lutnick that could lead to financial gains for his family and former company.
The Department of Commerce recently announced a tentative deal with USAR, involving up to $277 million in direct funding and up to $1.3 billion in loans, while also acquiring a 10% stake in the company. Concurrently, USAR secured $1.5 billion in private funds with Cantor Fitzgerald playing a key role in the transaction. The senators expressed concerns over the involvement of Cantor, a firm previously led by Lutnick and now managed by his sons, in a deal facilitated by the Commerce Department.
Ethics experts cited in the letter raised alarms about potential conflicts of interest, given Lutnick’s past association with Cantor and his family’s current leadership of the firm. The senators questioned Lutnick’s role in promoting and engaging with the USAR deal, including meetings with the company’s executives to expedite the process. They also highlighted the participation of prominent Trump allies in purchasing discounted shares of USAR during the private fundraising phase.
In response to these concerns, the senators have requested Lutnick to provide detailed explanations by March 11 regarding his involvement in the deal, interactions with ethics officials, and compliance with federal recusal requirements. The rare-earth minerals sector is crucial for various industries, including defense, semiconductors, and electric vehicles, with the US aiming to reduce dependence on Chinese supplies. The Trump administration had prioritized domestic sourcing of critical minerals to enhance national security and economic resilience.
