Constitutional Concerns Raised Over Commerce Department's Alleged Unapproved Equity Stake

Prominent commentator James Surowiecki has publicly alleged that the U.S. Commerce Department engaged in "wildly unconstitutional behavior" by purportedly acquiring an equity stake in a private company without legislative approval. The accusation, made via social media, specifically implicated former President Donald Trump and financier Howard Lutnick in the alleged action. Surowiecki's tweet from August 26, 2025, brought the claim to light, sparking questions about the scope of executive department authority.

The core of Surowiecki's contention rests on the principle of legislative oversight for federal spending and financial commitments. > "There is nothing in the Constitution that empowers the Commerce Department to take an equity stake in a company without legislative approval. This is just wildly unconstitutional behavior by Lutnick and Trump," Surowiecki stated in the tweet. This assertion aligns with Article I, Section 9, Clause 7 of the U.S. Constitution, known as the Appropriations Clause, which mandates that no federal funds can be spent without an act of Congress.

The U.S. Department of Commerce typically focuses on promoting economic growth, trade, and technology, and its standard operations do not involve taking equity stakes in private companies. Such investments, when undertaken by the U.S. government, usually occur under explicit statutory authority granted by Congress, often through entities like the Treasury Department or the Small Business Administration, particularly during economic crises or for specific policy goals. Without a clear legislative mandate, direct equity investments by federal agencies raise significant constitutional questions regarding the separation of powers and the proper use of federal funds.

Howard Lutnick, CEO of Cantor Fitzgerald, served as an informal economic advisor and significant fundraiser for the Trump administration. While he was a known figure in the administration's economic circles, widely reported instances of him orchestrating the Commerce Department taking equity stakes in companies during that period are not publicly available. The specific alleged action cited by Surowiecki has not been widely reported in mainstream news outlets, suggesting it remains an unconfirmed assertion made on social media.

The allegation underscores ongoing debates about governmental overreach and the boundaries of executive power concerning financial interventions in the private sector. Should such an action be confirmed, it would likely face intense legal scrutiny and challenges regarding its constitutional legitimacy and adherence to established appropriations procedures.