Democratic Lawmakers Demand Investigation Int...

A group of 25 congressional Democrats has called on the Commerce Department's inspector general to investigate whether Secretary Howard Lutnick is violating ethics guidelines by promoting artificial intelligence (AI) data center projects that could financially benefit his family, according to a letter released on Thursday.

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Led by Senator Elizabeth Warren and Representative Madeleine Dean, the lawmakers sent a letter dated December 17, Wednesday, to Acting Inspector General Duane Townsend questioning whether Lutnick's official actions to boost AI data centers are influenced by conflicts of interest. The Commerce Department responded that Lutnick has fully complied with his ethics agreement regarding divestiture and recusals and will continue to do so, including the sales of holdings in Cantor Fitzgerald and Newmark Group.

The scrutiny centers on Lutnick's family ties to Cantor Fitzgerald LP, the financial services firm he formerly led, which is heavily invested in Newmark Group Inc., a real estate broker facilitating leases for data centers. After stepping down as CEO, Lutnick transferred his stake to trusts benefiting his adult children, with his eldest sons assuming leadership roles.

The lawmakers argued that while data center expansion enriches the Lutnick family, it forces American households to bear higher energy costs, with some communities seeing utility bills surge more than 250 percent over five years.

Ethics Agreement Compliance Questioned

According to the congressional letter and press releases, Lutnick signed an ethics agreement requiring him to divest his Cantor stake. However, he did not complete the transfer until October 6, 2025 — months after his February 18 confirmation and well past the May 19 deadline stipulated in his agreement. During this period, Lutnick continued to have a financial interest in parts of the family business while serving as commerce secretary, operating under an ethics waiver from the White House.

The transfer created what lawmakers described as an unprecedented situation: "Never in modern U.S. history has the office [of the Commerce Secretary] intersected so broadly and deeply with the financial interests of the commerce secretary's own family," the letter stated. Lutnick's sons, Brandon and Kyle, now lead Cantor and have a controlling ownership stake in it.

Stan Neve, a Cantor Fitzgerald spokesperson, disputed the Democrats' claims. "Cantor's support for investors in the growing technology and infrastructure sectors goes back many years, well before Secretary Lutnick started his role in the administration," Neve said. "Any accusation to the contrary is wrong."

Under the leadership of Lutnick's sons, Cantor is on track to post revenue upwards of $2.5 billion, an all-time high and a jump of more than a quarter over last year, Bloomberg News previously reported.

Data Center Promotion Raises Concerns

The lawmakers detailed multiple instances where Lutnick allegedly promoted data center projects with potential connections to his family's business interests. They cited his public appearances promoting data center projects, including at least one his family's company has worked on, and reported pressure on foreign governments to invest in the U.S. data center industry.

Specifically, the letter highlighted a chips export deal requiring the United Arab Emirates to build data centers in America in exchange for loosened export control restrictions on advanced chips. The lawmakers noted that Newmark Group is positioned to profit from that Emirati investment.

The letter also referenced a South Korean investment deal where one start-up vying for funding has paid the Lutnick family's companies millions in fees to help secure financing and land for a new data center. Lutnick was photographed with the startup's founder at an event celebrating its partnership with a South Korean company on the same project.

Energy Cost Impact on Households

The Democrats emphasized that data center expansion, while profitable for the Lutnick family, is making it harder for American families to pay monthly utility bills. "Because the billionaire Lutnick family has significant financial investments in data centers — and the electricity needs of those data centers drive up utility bills for families across the country — there is a substantial public interest in ensuring that Secretary Lutnick is not violating federal ethics law," the lawmakers wrote.

When utility companies spend billions on new electricity infrastructure to support data centers, they may charge more to local households connected to the grid to offset costs. Energy-hungry data centers are sending power costs to records across much of the U.S., pulling everyday households into paying for the digital economy.

The lawmakers requested the inspector general review whether Lutnick violated his obligation to recuse from specific matters involving Cantor or its subsidiaries, why his divestiture was delayed, the terms and enforcement of his ethics waiver, and whether he participated in decisions related to AI data centers that impacted projects in which Cantor or Newmark has a financial interest.