Dems Call to Investigate Commerce Secretary Boosting AI Data Centers That 'Enrich His Entire Family'
"Never in modern US history has the office intersected so broadly and deeply with the financial interests of the commerce secretary’s own family," according to the New York Times.
A group of Democratic lawmakers has called for the Commerce Department to investigate whether its billionaire secretary, Howard Lutnick, is improperly boosting artificial intelligence data centers that "stand to enrich his entire family."
The group of 25 House and Senate Democrats, led by Sen. Elizabeth Warren (D-Mass.) and Rep. Madeleine Dean (D-Pa.), sent a letter on Thursday urging the department's acting inspector general, Duane Townsend, to review whether Lutnick violated any part of the ethics agreement he signed following his nomination.
That agreement required him to divest his stake in the financial services firm Cantor Fitzgerald, which he had owned and led for decades. Cantor owns the Newmark Group, a real estate broker that facilitates leases for AI data centers.
Lutnick stepped down from his position as CEO in February, handing his financial stake in the company to his adult sons, Brandon and Kyle.
Though the transfer of his stake was supposed to happen in May, records show he did not do so until October, after receiving an ethics waiver from the Trump administration that allowed him to continue working on matters that could affect the company.
The lawmakers described some of these potential conflicts in the letter, many of which were revealed by a New York Times investigation last month:
Multiple press reports indicate that, in his capacity as head of the Commerce Department, Secretary Lutnick has helped boost AI data centers in ways that will likely enrich his own family. He has made public appearances promoting data center projects—including at least one that his family's company has worked on.
Furthermore, Secretary Lutnick has reportedly pressured foreign governments to invest in the US data center industry. For example, as part of a recent AI chips export deal with the United Arab Emirates (UAE), Secretary Lutnick reportedly pushed the UAE to "build data centers in America,” in exchange for the United States loosening export control restrictions on certain advanced chips. The Trump administration ultimately approved this deal, under which the Lutnick-backed Newmark Group is primed to profit from that Emirati investment.
Similarly, as part of another trade deal, Secretary Lutnick reportedly pushed South Korea to invest hundreds of billions of dollars in the United States. One startup vying for some of South Korea's investment has paid the Lutnick family's companies millions in fees to help it secure financing and land for its new data center.
Though businesspeople have often occupied the role of Commerce Secretary, the Times reported last month that "never in modern US history has the office intersected so broadly and deeply with the financial interests of the commerce secretary’s own family, according to interviews with ethics lawyers and historians."
According to the company's most recent quarterly earnings report, Newmark has completed more than $25 billion in data center deals over the past 12 months, resulting in its most lucrative year in the firm's history.
Citing evidence that the construction of AI data centers considerably spikes energy costs for consumers, the lawmakers said, "There is substantial public interest in ensuring that Secretary Lutnick is not violating federal ethics law to propel data centers that will be profitable for his family while making life more expensive for working Americans."
