Commerce Secretary Howard Lutnick voids ‘illegal’ $7.4B agreement to pay Biden-staffed nonprofit for semiconductor research
Commerce Secretary Howard Lutnick made a bold move on Monday by canceling a Biden administration agreement that involved distributing billions of dollars for semiconductor research through a nonprofit called Natcast. The decision was made based on concerns about accountability and legality surrounding the setup and operation of Natcast.
The funding in question was part of the 2022 CHIPS and Science Act, which allocated $11 billion for semiconductor research and development. However, instead of managing the distribution of funds within the Commerce Department, the Biden administration opted to create an external entity in the form of Natcast. This decision raised red flags for Lutnick, who highlighted the lack of authorization for such an arrangement in the CHIPS Act.
Before leaving office, the Commerce Department had agreed to provide $7.4 billion in advance payments to Natcast, effectively sidelining the incoming Trump administration and raising concerns about transparency and oversight. This prompted the new administration to reconsider the involvement of Natcast in the distribution of semiconductor research funds.
Lutnick pointed out that the Government Corporation Control Act prohibits agencies from establishing corporations to act as agencies without specific authorization, which was not the case with Natcast. The selection committee of Natcast included individuals with ties to the Biden administration, raising further questions about the independence and fairness of the process.
The decision to revoke the agreement with Natcast comes in the wake of revelations by EPA Administrator Lee Zeldin about rushed funding allocations to left-leaning non-governmental organizations before Inauguration Day. Zeldin uncovered questionable practices involving billions of dollars parked at an outside financial institution, highlighting concerns about self-dealing and conflicts of interest.
Moving forward, Lutnick’s Commerce Department aims to ensure efficient use of taxpayer funds and uphold American leadership in the semiconductor industry. By ending the relationship with Natcast, the Department seeks to return responsibility and accountability for executing the CHIPS Act as intended by Congress. Legal remedies may be pursued against Natcast to address any potential violations.
The decision to cancel the agreement with Natcast reflects a commitment to upholding transparency, accountability, and legality in the distribution of semiconductor research funds. By taking this bold step, the Commerce Department aims to safeguard taxpayer resources and maintain America’s competitive edge in the semiconductor industry.
