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"Commerce Has The Pen": Bessent Throws Lutnick Under The Bus Amid Agreement To Testify In Nvidia Spy Scandal

Tyler Durden's Photo
by Tyler Durden
Authored...

Treasury Secretary Scott Bessent on Friday publicly pinned the failure to blacklist Megaspeed on Howard Lutnick's Commerce Department, as Lutnick agreed to testify before the Senate Banking Committee over the Nvidia spy scandal.

Commerce Secretary Howard Lutnick

Asked on CNBC's "Squawk Box" about reported tension between the two over why the Singapore-based Nvidia customer still isn't on the Entity List, and whether only Commerce could have put it there, Bessent said: "I can tell you there was coordination. Treasury, War, USTR, and State were in favor of putting Megaspeed on the entity list for months."

"But Commerce has the pen. Commerce BIS has the pen. And you will have to ask them about their internal processes."

BIS is Commerce's Bureau of Industry and Security, the export-control arm run by Under Secretary Jeffrey Kessler. Axios reported this week that Kessler was repeatedly warned about Megaspeed in deputy meetings, and Sen. Elizabeth Warren (D-Mass.), the top Democrat on the Banking Committee, said Thursday that Lutnick and Kessler "must explain why they have not closed export control loopholes and act today to ensure our advanced technology is not fueling China's military."

Bessent also turned on Nvidia itself. Asked whether higher-end chips had made it to China through Megaspeed, he said "there is a lot of leakage in the system and we are constantly working to close that down."

"The story has been thus far on Jensen Huang's personal foibles," he said. "The real story here should be, did Nvidia know their client? And was there a robust effort at Nvidia to make sure that there was no leakage and that they were selling to what were obviously pass-through shell companies?"

"And I think it's important that anyone at the company there be held accountable for that," he added.

Lutnick, meanwhile, has "proactively agreed to appear voluntarily" before Senate Banking, Commerce spokesperson Kristen Eichamer said in a statement. Chairman Tim Scott (R-S.C.) asked Lutnick and former Nvidia CEO Jensen Huang on Thursday to appear before the committee in early December.

"Given the Department of Commerce's central role in issuing and enforcing export control regulations, your testimony before the Committee will be essential to our oversight of these efforts," Scott wrote.

It's the same wording House Oversight Chairman James Comer used in March, when Lutnick "proactively agreed to appear voluntarily" for questions about his ties to Jeffrey Epstein on the eve of a threatened subpoena. He sat for that closed-door interview in May.

As we reported Thursday, Bessent asked Lutnick in the White House Situation Room on Nov. 5 why Megaspeed wasn't on the Entity List, and Lutnick reportedly answered, "I don't know. I'll look into it." Commerce denied the conversation took place. Axios also reported that Trump approved action against suspected chip diversion three times this year, and that Lutnick held it up each time over fears of a trade war with China.

Commerce's own investigation of Megaspeed was halted after Nvidia's general counsel contacted the agents running it, and the case reportedly moved to the Justice Department. Commerce hasn't added a single company to the Entity List in more than a year.

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