The Commerce Department on Tuesday rejected Democrat lawmakers' suggestions that Secretary Howard Lutnick improperly benefited his former firm, Cantor Fitzgerald, through a $1.6 billion federal investment in USA Rare Earth, telling Newsmax the award resulted from a competitive process and that Lutnick complied with all ethics, divestiture and recusal requirements.

"As Secretary Lutnick discussed during his [April 22] congressional hearing, he nor anyone at the department has interacted with or had any discussions whatsoever with Cantor Fitzgerald regarding the rare earth minerals industry or any of the companies mentioned in this inquiry," a Commerce Department spokesperson told Newsmax. "Cantor Fitzgerald played no role in the award with the Department."

Sens. Elizabeth Warren, D-Mass., Ron Wyden, D-Ore., and Chris Van Hollen, D-Md., along with Rep. Zoe Lofgren, D-Calif., sent letters Monday to Cantor Fitzgerald and USA Rare Earth seeking information about the transaction and whether Lutnick's former ties to the investment firm created potential conflicts of interest.

In both letters, the lawmakers said Lutnick had not answered their written inquiries. During an April 22 hearing before the Senate Appropriations Committee, however, Lutnick discussed his contacts with USA Rare Earth and said he would revisit the lawmakers' letter.

"I met the executives of USA Rare Earth, introduced to me by a gentleman named Ken Moelis, who is a famous banker," Lutnick said. "So, he brought the deal to us because it is well-known that China has weaponized rare earths and critical minerals against the country, and it is very important for the United States to unleash our ability to do rare earths, critical minerals, and magnets.

"And USA Rare Earth has a mine-to-magnet integrated model. ... It was presented to me by Ken Moelis, and then I introduced them to the CHIPS team to pursue the transaction."

The USA Rare Earth deal, first announced in January and finalized in June, called for up to $1.6 billion in federal loans and incentives in exchange for a government ownership stake. USA Rare Earth also raised $1.5 billion through a share offering from private investors in connection with the deal.

Lutnick led Cantor Fitzgerald for more than 30 years before transferring ownership of the Wall Street firm to his adult children in May 2025. The firm is now led by his son Brandon Lutnick as chairman and CEO.

In their letter to Brandon Lutnick, the lawmakers raised concerns about potential conflicts of interest related to the U.S. government's $1.6 billion investment in USA Rare Earth. They sought information on how Cantor was selected as the placement agent, the fees it collected and any meetings between firm representatives and Commerce Department officials.

A Cantor spokesperson told The Wall Street Journal the firm had no role in USA Rare Earth's negotiations with or financing from the government, including anything involving Howard Lutnick. The spokesperson added that Cantor has a longstanding commercial relationship with USA Rare Earth that predates the Commerce secretary's appointment.

A similar letter was sent to USA Rare Earth CEO Barbara Humpton. The lawmakers wrote that Humpton "attested to Secretary Lutnick's decisive and personal involvement after meeting with him in November, describing how he opened doors to influential agency staff that manage billions in CHIPS Act funding and officials" at the Department of Energy and War Department.

"You claimed that Secretary Lutnick was especially interested in USAR, and recounted that Secretary Lutnick asked: '[W]hat would it take to go faster and scale further?' " the letter stated.

The Commerce Department disputed any suggestion that USA Rare Earth received preferential treatment.

"Before selecting awardees for any funds, CHIPS for America conducts a vigorous and competitive merit-based process to ensure the greatest talent in America receives funding," the spokesperson told Newsmax. "USA Rare Earth went through the same competitive and merit-based application process as all CHIPS for America award recipients.

"The Secretary has fully complied with the terms of his ethics agreement, including all divestiture and recusal requirements, and will continue to do so. He has divested all financial interests in Cantor Fitzgerald, Newmark, and BGC [Group]."