The White House is allowing Commerce Secretary Howard Lutnick to temporarily retain massive banking, financial services and real estate investments despite conflicts-of-interest concerns, according to a memo obtained by NOTUS.
“I have determined that your disqualifying financial interest is not so substantial as to be likely to affect the integrity of your service to the government,” White House counsel David A. Warrington wrote to Lutnick in the memo, which is dated July 8.
In the memo, Warrington detailed the terms of Lutnick’s “limited” waiver from his conflicts of interest.
Lutnick, a billionaire Wall Street financier and investor, may continue to “participate personally and substantially” in general government business that “may have a direct and predictable effect” on investment bank Cantor Fitzgerald LP, real estate entity Newmark Group Inc. and financial services firm BGC Group Inc., in which Lutnick retains financial interests, per the waiver.
That includes providing remarks during meetings, giving speeches and other public commentary and receiving briefings on matters that could influence his personal investments, the waiver states.
He “will not be permitted” to engage in specific government matters in which Cantor Fitzgerald, BGC Group or Newmark Group “is or represents a party,” the waiver states. Nor may Lutnick “hold meetings with representatives” of these companies, the conflicts-of-interest waiver states.
The waiver notes that Lutnick is actively attempting to divest of his Cantor Fitzgerald, BGC Group and Newmark Group holdings but is awaiting “U.S. and foreign regulatory approvals to close on purchase agreements” of his assets.
“This waiver has been drafted out of an abundance of caution to account for the comprehensive scope and significance of the secretary’s responsibilities,” Warrington wrote.
Lutnick is the former chairman and CEO of Cantor Fitzgerald, having earlier this year elevated his sons, Kyle and Brandon, to top jobs. Investment platform 26North, investment firm Oak Hill Advisors and Cantor Fitzgerald itself are listed as the prospective buyers of Lutnick’s holdings, the waiver memo states.
Federal conflicts-of-interest law generally prohibits Cabinet secretaries and other executive branch members from retaining personal financial interests that directly conflict with their government service. The law also allows for exceptions, subject to the issuance of a formal government waiver.
Possible conflicts of interest are under additional scrutiny given the Trump administration’s interest in creating a sovereign wealth fund. Lutnick made headlines this week when he said the federal government is considering buying stakes in publicly traded defense companies, in the vein of the government obtaining a 10 percent stake in computer chip maker Intel.
“All members of the Trump administration are in compliance with all conflicts of interest laws, including Secretary Lutnick,” White House spokesman Kush Desai told NOTUS in an email.
The Commerce Department did not respond to a request for comment.
Before his confirmation in February as Commerce secretary, Lutnick presided over a network of hundreds of corporate entities, according to a personal financial disclosure filed in December with the Office of Government Ethics.
His financial holdings in Cantor Fitzgerald, Newmark Group and BGC Group together reached into the hundreds of millions, and possibly billions of dollars, the disclosure revealed.
But in a 28-page ethics agreement Lutnick signed in January, he outlined steps he’d take to resign from corporate leadership positions, divest of many financial holdings or otherwise avoid conflicts of interest. Lutnick’s business ties to China drew particular scrutiny prior to his nomination.