Democrats angling to take back Congress this fall are laying the groundwork for deep investigations into President Donald Trump’s ever-expanding critical mineral spending spree — and the industry is taking note.
Mineral deals struck by the Trump administration are rife with conflicts of interest, Democrats say. They point to ties between some companies and the business empires of Trump’s family and that of Commerce Secretary Howard Lutnick, who has helped shepherd many of the awards for the administration. Business leaders from Australia to Canada to the U.S. considering big financing packages — which in some cases total more than $1 billion — will need to decide whether they want to sign up for possible congressional scrutiny that could put their companies under a microscope.
“Some people are like, ‘Great, I want that, I want equity, I’m going to take the deal.’ Other people are saying, ‘I don’t want to be anywhere near the administration when the investigations come,’” said one defense industry lobbyist with mineral clients granted anonymity to speak freely. “There’s going to be a booming practice in investigations.”
Lutnick and Trump have both said they stepped away from their family businesses, leaving them in the hands of their children. Representatives for Eric Trump and Donald Trump Jr. and for financial services firm Cantor Fitzgerald, run by Lutnick’s sons, have insisted there is no wrongdoing for Democrats to investigate.
It’s a complicated moment for large international mining companies and small mineral processing startups. Unprecedented amounts of federal money are available to help build out domestic supply chains for minerals currently dominated by China, although often with the condition that the government will take an equity stake in the company.
The idea that the U.S needs non-Chinese sources for the raw materials that feed technologies like semiconductors, data center equipment and solar panels is not new. The Biden administration emphasized the idea of building out domestic supply chains for an array of minerals, particularly to boost manufacturing for renewable energy projects. During Trump’s second term, federal agencies have ratcheted up that effort, often with defense technologies and the AI boom in mind.
Meanwhile, Democrats are laser focused on the financial ties of Eric Trump and Donald Trump Jr. to some companies in line for federal assistance. They are also scrutinizing the role of Cantor Fitzgerald, the firm run by Lutnick for decades, in putting together financing for projects.
Lawmakers this summer repeatedly launched oversight inquiries and demanded internal records from federal agencies and companies. They’ve already attempted to subpoena Donald Trump Jr., a move rejected by their GOP colleagues. But Democrats promise that oversight onslaught will only intensify if they reclaim at least one chamber of Congress this fall.
An industry official in the mineral sector echoed that the buzz of possible future investigations has some company executives on edge. “Nobody wants to be part of a letter that says, ‘Preserve anything about this because we’re looking at investigations,’” said the person, who was granted anonymity as they were not authorized to speak to the media. “But every company is going to have to make a choice and balance if they need those funds.”
White House spokesperson Kush Desai dismissed the threat of investigations and defended the administration’s push for critical minerals..
“The only special interest guiding the Trump administration’s decision-making is the best interest of the American people,” Desai told POLITICO in a statement. “Securing and reshoring America’s critical supply chains has been a top priority for President Trump, and Secretary Lutnick along with the rest of the Administration continue to take historic action to safeguard America’s national and economic security.”
A spokesperson for Donald Trump Jr. and Eric Trump said in a statement that the brothers are “experienced business leaders” who have pursued investments in a range of sectors for decades.
“Their investment decisions are based solely on their independent business judgment and personal convictions and they do not seek to influence, direct, or participate in any government decision, procurement, award, regulatory action, or other governmental process,” the spokesperson said. “Attempts to portray their ordinary investment activities as improper are a deliberate distortion of the facts and claims suggesting that they are profiting from the government are categorically false.”
Stan Neve, a spokesperson for Cantor Fitzgerald, said the company draws on “over a decade of mining-sector experience and our leadership in U.S. equity capital markets,” and is “a natural partner for companies raising capital to meet the growing demand for critical minerals.” Cantor’s involvement, said Neve, is limited to supporting capital raising in the public markets and “does not include participation in negotiations with the current or any prior administration.”
A Commerce Department spokesperson said neither Lutnick nor anybody at the department “has interacted with or had any discussions whatsoever with Cantor Fitzgerald regarding the rare earth minerals industry” or companies that lawmakers have said they want to investigate.
Lutnick divested from Cantor Fitzgerald when he was confirmed and complies with all components of his ethics agreement, the spokesperson said.
For his part, Trump stepped away from management of his family businesses and put assets in a trust managed by his children.
Trump earlier this month unveiled more than $3 billion in federal backing for a slew of projects at a State Department event with executives, adding to the some 160 deals that Trump said the administration has struck. The GOP megabill last year also provided the Defense Department’s Office of Strategic Capital with more than $100 billion in lending authority for critical mineral projects.
Democrats want more information about how those financial packages came to be, who directly benefits and if there are conflicts of interest — and are vowing to pressure the private sector if the White House or agencies drag their feet when responding.
“If we can’t get what we need by going to the Trump administration, then we’re going to go around the side door, and that’s the companies,” said a House Democratic aide, granted anonymity to speak frankly. “That’s effectively the Trump administration throwing all those companies under the bus.”
House Natural Resources ranking member Jared Huffman (D-Calif.) told POLITICO that Democrats are facing a “total stonewall,” with no Republican help at the same time as Trump has purged inspectors general across the government.
“If we win back the House and have the ability to back up our investigations with Article I power, [that’s] becoming more important for each passing day,” Huffman said.
‘Troubling pattern’
As the Trump administration signs off on more awards, the list of congressional Democratic investigations is growing — as is industry pushback.
Nicole Rodgers, president of the Alliance for Mineral Security, an industry association representing producers and end-users, said some of the early deals made by the Trump administration were done with an “‘ask forgiveness later’ kind of approach.”
Rodgers declined to discuss specific projects, but said the scrutiny by federal agencies has grown much tougher since then. “The concern I have is that we’re going to throw the baby out with bathwater,” she said.
Rodgers said she fears critical minerals producers — many of which remain small startups — will have to expend “seven or eight figures on legal bills” defending themselves from congressional investigations rather than advancing U.S. minerals production and eroding China’s dominance over the sector.
“Oversight review belongs on the companies if they don’t perform, and I think that should be a metric that the Congress and the administration should be absolutely focused on,” Rodgers said.
Earlier this month, Huffman and House Oversight ranking member Robert Garcia (D-Calif.) launched a probe into North Carolina-based Vulcan Elements, a rare earth startup that’s in line to receive a $620 million federal loan from the Pentagon. Donald Trump Jr. is a partner in the Florida-based investment firm 1789 Capital that is backing Vulcan.
Citing ProPublica reporting that the White House intervened to secure the loan for the company, Huffman and Garcia accused Vulcan CEO John Maslin of being the “beneficiary of political favoritism” and of misleading House Natural Resources Committee Democratic staff during an April meeting. “This deal is part of a troubling pattern of opaque, multi-million-dollar deals with politically connected companies,” Huffman and Garcia wrote.
Joshua Henderson, a spokesperson for Vulcan, said the company “did not ask or solicit its investors to facilitate the Pentagon loan announced in November.”
The Defense Department declined to comment when asked about the House letter.
A.J. Merton, a lawyer for 1789 Capital, said the fund’s position hasn’t changed. “As the fund stated publicly through counsel earlier this year, it ‘not only had zero involvement with the government’s loan and equity transactions involving Vulcan, but it had zero knowledge any of these transactions were even contemplated.’ The letter is not addressed to 1789 Capital and offers no evidence to the contrary,” said Merton, a co-managing partner at the law firm Quinn Emanuel Urquhart & Sullivan.
“Repackaging press clippings on congressional letterhead does not turn unnamed sources into evidence, and that practice is a hallmark of partisan stunts and politically motivated harassment, not oversight,” he said.
Investigations are also percolating in the upper chamber.
Democratic Sens. Elizabeth Warren of Massachusetts, ranking member of the Banking, Housing and Urban Affairs Committee, Adam Schiff of California and Richard Blumenthal of Connecticut, ranking member on the Homeland Security Investigations Subcommittee, called on federal agencies last month to preserve records tied to investments the Trump administration is planning or has finalized with more than a dozen firms.
The list includes Cantor Fitzgerald and Oklahoma-based USA Rare Earth, which recently closed a $1.3 billion loan and additional $277 million investment from the Department of Commerce. Cantor served as a “lead placement agency” that helped the mining company raise money through a private stock offering, according to a news release from USA Rare Earth, which declined to comment.
The Commerce spokesperson said Cantor Fitzgerald “played no role” in the award, adding that USA Rare Earth went through a “vigorous and competitive” application process.
Neve with Cantor said the company had a longstanding commercial relationship with USA Rare Earth that predates Lutnick’s service in government.
Cantor “had no role in USA Rare Earth’s negotiations or financing arrangements with the U.S. government,” he said.
The senators also called on agencies to preserve information around an ongoing deal for Kaz Resources, a company developing tungsten mines in Kazakhstan that is in line to receive at least $1.6 billion in financial support from the Export-Import Bank and U.S. International Development Finance Corp.
The lawmakers cited New York Times reporting that Trump personally intervened by calling the president of Kazakhstan last September — who was then meeting with Lutnick in New York — to ensure a company then called Cove Kaz Capital Group could access the country’s tungsten deposits, the largest in the world. Trump’s sons, according to the newspaper, held a stake in another company that merged this spring with Cove Kaz to create Kaz Resources.
“This may represent only the tip of the iceberg of the true scale of money flowing to interests connected to the Lutnick and Trump families,” the lawmakers wrote.
The spokesperson for Donald Trump Jr. and Eric Trump said their only connection to the mine project was a “passive” investment in an entity involved in the merger that created Kaz Resources and said they had “never even discussed the project with anyone from the company.” The government had already decided to award federal financing before the Trump brothers indirectly invested, the spokesperson added.
“They have never had any role whatsoever in the operation, management, or decision-making of the company that was awarded the project and, to be clear, played absolutely no role in the company’s pursuit of the project or in any of the negotiations relating to that project,” the spokesperson said.
Kaz Resources pushed back on any assertions of wrongdoing in a statement.
“Beyond the political tubthumping, this is a joint venture with bipartisan support, spanning both the Biden and Trump administrations, designed to end American industry’s dependence on Chinese tungsten,” the company said.
When asked about the letters, Desai with the White House said Democrats have spent decades talking about safeguarding national security and helping working-class Americans by reshoring manufacturing back to the United States. “President Trump is actually delivering,” he said. “ Instead of playing political games, Democrats should work with the President to cement his historic wins for the American people.”
Trump, for his part, has rebuffed criticism and assertions of self-dealing.
“But I let my kids, you know, do business,” Trump said in a January interview with The New York Times when asked about his family doing business abroad. “I prohibited them from doing business in my first term, and I got absolutely no credit for it. I didn’t have to do that.”
“I have a very honest family,” the president continued. During Trump’s first term, the Trump Organization did ink agreements to build resorts in foreign countries, including working with state-owned companies.
‘Thorough diligence’
The investigations are aimed at exposing wrongdoing — not necessarily facilitating criminal charges — said one Democratic Senate aide. “Congress’ best tool sometimes is sunshine, more than … the delivering of charges,” said the aide, granted anonymity to speak freely.
Democrats have also called on federal watchdogs to investigate companies waiving oversight rules, while researchers have warned that there’s little insight into how mineral projects are selected and vetted.
“These investments could be recast by a future administration as favoritism, inviting the kind of investigation that followed the failure of federally backed Solyndra, which became shorthand for picking winners without sufficient due diligence,” researchers at the Center on Global Energy Policy at Columbia University’s School of International and Public Affairs concluded in an online post. Solyndra is a solar manufacturer that collapsed into bankruptcy in 2011 after receiving federal loans.
But mineral companies moving through the queue to secure federal financing insist there’s been no wrongdoing and federal oversight is sufficient.
Gene Berdichevsky, CEO of Sila Nanotechnologies, which received a $1.4 billion conditional loan from the Pentagon this month told POLITICO that he understands the potential for Democratic scrutiny, but believes his company went through a “very rigorous” due diligence process before it was selected for the award. The company’s project in Washington state produces silicon anode material, a replacement for graphite in EV batteries and other modern technologies.
“I’ve raised over $1.6 billion of private capital over 15 years, and I will say this was a more thorough diligence process than we’ve experienced than any of the private fund raises that we’ve had,” Berdichevsky said, describing four-hour-long “grilling sessions” with more than 30 U.S. government representatives.
The industry official in the minerals sector pushed back on the lawmakers’ focus on Cantor Fitzgerald, saying the firm has long been involved in the capital-intensive junior mining industry, even before Trump came to office.
“This was just a normal business operation,” the person said.
