Sen. Elizabeth Warren (D-Mass.) speaks during U.S. Trade Representative Jamieson Greer’s testimony during a Senate Finance Committee hearing on U.S. President Donald Trump’s trade policy at the Capitol on April 8, 2025 in Washington, DC.
Kevin Mohatreuter
Democratic senators raised concerns about conflicts of interest over Commerce Secretary Howard Lutnick’s former firm Cantor Fitzgerald’s involvement in deals with critical mineral startups. American rare earths.
Sens. Elizabeth Warren of Massachusetts, Chris Van Hollen of Maryland, and Sen. Ron Wyden of Oregon, the top Democrat on the Finance Committee, said in a letter obtained by CNBC that the deal raised questions about whether Mr. Lutnick’s immediate family benefited financially.
“It is imperative that federal investments in critical industries are free of conflicts of interest and are made on merit,” the senators said in a Feb. 25 letter, requesting more information about their involvement in the deal.
Last month, the Commerce Department issued a letter of intent to USA Rare Earths, providing $1.6 billion in funding to support the company’s planned expansion of rare earth mining and magnet manufacturing operations.
The deal required USA Rare Earths to secure at least $500 million in private financing. USA Rare Earths has selected Kantar as the “lead agent” for a total funding round of $1.5 billion, according to financial filings.
Lutnick stepped down as Kantar’s chairman and CEO last year to lead Commerce. His son, Brandon, became chairman and his son, Kyle, was named executive vice chairman. Lutnick transferred his shares in Cantor to his son and other adult children through a trust controlled by Brandon.
“We have grave concerns about the Department of Commerce’s decision to enter into this transaction in which a former company run by your sons has a clear financial interest,” the senators said.
“Given its close relationship with Cantor and Cantor’s apparent financial interest in USAR, the Department of Commerce’s investment should be closely scrutinized,” they said.
CNBC has reached out to the Department of Commerce for comment.
The Cantor-led funding round was a type of transaction known as a private investment in public equity (PIPE). These transactions typically involve intermediaries selling discounted stocks to a limited number of investors while receiving commissions, the senators wrote.
“If the PIPE funds were raised under these circumstances, it appears that USAR paid your family’s company to secure public funds from the government agency you lead, and then matched it with private funds,” the senators said.
The senators also expressed concern about the participation of financial companies led by donors to President Donald Trump’s campaign and inaugural committee in fundraising for U.S. rare earths. They include Blackstone co-founder and CEO Stephen Schwarzman, Citadel founder Ken Griffin and Point72 Asset Management founder Stephen Cohen, according to financial filings.
Mr. Schwartzman donated to President Trump’s super PAC, Mr. Griffin gave money to the 2025 Presidential Inaugural Committee and Mr. Cohen donated to his first term inauguration.
“It is unclear how or why Trump administration allies became involved with USAR PIPE or the extent to which they were aware of the Department of Commerce’s direct investment in USAR,” the senators said.
Citadel spokeswoman Zia Ahmed said Griffin has donated to multiple presidents across administrations. “The investments in US rare earths were made by funds managed by Citadel, not by Ken Griffin personally,” Ahmed said.
CNBC has reached out to Blackstone and Point72 for comment.
The letter asks for information, including when Lutnick became aware that Cantor represented U.S. Rare Earths in the funding round and whether he or Commerce were involved in it.
