Conservative "Squawk Box" host Joe Kernen is concerned that Commerce Secretary Howard Lutnick has a conflict of interest.
Speaking to Lutnick on Wednesday, Kernen brought up the Commerce Department's $1.6 billion investment in the company USA Rare Earth.
The concern is that Lutnick's former financial services firm, Cantor Fitzgerald, served as placement agent for the deal and may have benefited financially. Lutnick swears that his sons run the company now, a similar point that President Donald Trump makes about his sons running the Trump Organization.
Democratic lawmakers sent a letter to Cantor Fitzgerald Chairman Brandon Lutnick in July seeking information about the firm’s role, fees and communications surrounding the transaction. The inquiry does not establish wrongdoing; it asks whether Lutnick’s government position, family ties and prior leadership of Cantor Fitzgerald created an improper overlap in a deal involving strategically important rare-earth minerals.
“It is imperative your company provide complete transparency about the substantive conflict of interest concerns raised by the circumstances of this investment,” the letter said, which was led by Sen. Elizabeth Warren (D-Ma.). “Secretary Lutnick appears to have played a part in facilitating USAR’s deal with Commerce.”
"So, USA Rare Earth, I understand this, you ran Cantor [Fitzgerald]. You had a relationship. You ran their IPO before you became a commerce secretary. So, no surprise there. You put it in a trust and your sons are now running a Cantor. And you know, there was a pipe financing deal done. Where to get, I think, the financing is from the Commerce Department was involved with raising some of the, some of the equity and obviously they get a fee. So, the perception is that you're sitting now at Commerce and you're able to control what Cantor is getting in terms of fees. With your sons running that company, it looks like a conflict of interest. How do you respond to that?"
Lutnick responded by saying, "It's just not."
He swore he had no idea what was going on with USA Rare Earth until pal Ken Moelis flagged it. USA Rare Earth acquired Texas Mineral Resources in March 2026. According to a report from the Junior Mining Network, "Moelis & Company LLC acted as financial advisor and White & Case LLP acted as legal advisor for USA Rare Earth. Roth Capital Partners LLC acted as financial advisor and Loeb & Loeb LLP acted as legal advisor to Texas Mineral Resources Corp."
The government announced its funding deal with USA Rare Earth in January 2026 and made it official in June.
Lutnick told Kernen that the U.S. must gain an edge over China in rare Earth minerals because China is "weaponizing" them.
"These are small businesses, right? In the larger scheme of the US economy," Lutnick said about USA Rare Earth, which has a market capitalization of between $3.9 billion and $4.3 billion, depending on the stock price.
"And I got to tell you Ididn't put my companies in a trust. My kids bought my company, so I am no longer involved inmy old company at all. My kids bought it from — from me," said Lutnick. "This is minor stuff, anyway. You know that I am well-to-do. I don't worry about this kind of stuff."