Washington, February 27. Democratic Senators have questioned US Commerce Secretary Howard Lutnick over a $1.6 billion rare-earth minerals deal, warning that the arrangement could benefit his immediate family and his former firm, Cantor Fitzgerald.
In a February 25 letter, Senators Elizabeth Warren, Ron Wyden, and Chris Van Hollen said the agreement brokered by the Department of Commerce with USA Rare Earth, Inc. (USAR) “could enrich your immediate family.”
“This follows in a long string of actions that you have taken in your capacity as the Secretary of Commerce that could stand to enrich your immediate family and former company,” the lawmakers wrote.
The Department announced a tentative deal worth up to $1.6 billion with USAR last month. Under its terms, the Department would provide “up to $277 million in direct funding and up to $1.3 billion in loans” while acquiring 16.1 million shares, or around a 10 per cent stake in the company.
On the same day, USAR announced that it had raised $1.5 billion in private funds with Cantor Fitzgerald “as the lead placement agent” for the transaction. The senators noted that “Cantor acted as a compensated broker for a company whose financial position was bolstered by a $1.6 billion public funding agreement from your Department.”
Lutnick previously owned and led Cantor for years. His ethics agreement required that he divest this interest. He transferred his stake to his adult sons, who now lead the firm.
Ethics experts cited in the letter said the “fact that the (USAR) deal is brokered by the Wall Street firm formerly run by the commerce secretary — and now headed by his sons — is reason to worry that the public interest is being subordinated, yet again, to the profit seeking of Trump cronies.”
The senators said Lutnick “publicly touted and reportedly were personally involved in” the USAR deal. They referred to reports that he met USAR’s chief executive in November 2025 and asked “what would it take [for USA Rare Earth] to go faster and to scale further?”
USAR’s chief executive, Barbara Humpton, was quoted as saying the “first condition is we were asked to go raise private money (by Commerce).” The company ultimately raised $1.5 billion in private investment in public equity funding alongside the federal commitment.
The lawmakers also pointed to SEC filings showing that billionaire Trump allies, including Steve Schwarzman, Ken Griffin, and Steven A. Cohen, bought discounted shares of USAR in the private fundraising transaction brokered by Cantor.
“If they had inside information on the Commerce Department, it could potentially implicate federal ethics rules – as well as raising questions about corruption related to financial rewards for wealthy supporters of President Trump and his administration,” the senators wrote.
They have asked Lutnick to respond to a series of questions by March 11, including details of his involvement in the deal, any guidance received from ethics officials, and whether he complied with federal recusal requirements.
Rare earth minerals are critical to defence systems, semiconductors and electric vehicles. China accounts for roughly 60 per cent of global rare earth mining output and about 91 per cent of production, underscoring US concerns over supply chain vulnerabilities.
The Trump administration has made domestic sourcing of critical minerals a strategic priority amid intensifying competition with China. Programmes under the CHIPS and Science Act have been used to support projects aimed at strengthening US manufacturing capacity and reducing reliance on foreign supply chains.