Howard Lutnick is pushing for the Treasury job, starting a battle with rival Bessent

Billionaire hedge fund manager Scott Bessent was not expected to be named Treasury secretary in President-elect Donald Trump’s new administration Tuesday morning, but his nomination is on hold as another contender makes a last-ditch effort to land the job, FOX. Business has learned.

The challenger — investment bank CEO Cantor Fitzgerald and Trump transition chairman Howard Lutnick — are said to be “campaigning hard” behind the scenes for the coveted role with Bessent, stalling any announcement, according to three people familiar with the matter.

The feud between Bessent, 62, and Lutnick, 63, escalated following Tuesday’s announcement that financier John Paulson was stepping down because of “complex financial obligations” involving his family’s office fund, Paulson Capital, which manages his fortune. that is said to be close to $4 billion. Meanwhile, Bessent runs the investment firm Key Square Group, which he founded and had nearly $600 million in assets under management by 2023.

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John Paulson visits “Mornings With Maria” at the FOX Business Network studios on Oct. 23, 2024, New York City. (Photo by John Lamparski/Getty Images / Getty Images)

Both Paulson, 68, and Bessent have been top contenders for the job given how much money they’ve raised for Trump (more than $50 million combined) and their work as key economic advisers during the campaign. FOX Business previously reported that Paulson’s path to work was complicated by his involvement in Treasury-controlled companies Fannie Mae and Freddie Mac that the incoming Trump administration may release from government regulation, thus benefiting the shares.

Lutnick was considered a dark horse in the Treasury job, one of the most important cabinet positions in any White House. The no-nonsense CEO is best known for helping Cantor during the 9/11 attacks where he lost his brother and over 600 co-workers in the attack on the north tower. Lutnick was recognized for her philanthropy through the Cantor Fitzgerald Relief Fund, which helps support families affected by acts of terrorism, natural disasters and other emergencies.

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Lutnick, a longtime friend and frequent donor to Trump, plays a leading role in the former president’s transition team in selecting administration staff. In effect, he will be advising Trump – who is the final decision-maker in the process – to nominate himself.

People close to the matter say Lutnick has recently insisted that he should be selected as his efforts are opposed by members of Trump’s team who believe Besent would be a better candidate. His consideration also faces opposition from Treasury officials who see Lutnick’s ties to the crypto company Tether, currently under investigation by the department, as a problem during his Senate confirmation.

Scott Besent, founder and CEO of Key Square Group, in an interview during the Republican National Convention (RNC) in Milwaukee, Wisconsin, on July 16, 2024. (Vincent Alban/Bloomberg via Getty Images/Getty Images)

While Trump is close to the mercurial Lutnick, Bessent is said to be on the edge between the two and an announcement could come at any time, sources familiar with the transition say.

A spokesman for the transition team did not comment; Lutnick and Bessent had no comment.

Tether, the offshore stablecoin company that issues the world’s largest stablecoin, USDT, has been the target of several US lawsuits from the Commodity Futures Trading Commission and the New York attorney general for misleading investors about its stablecoin holdings. and engaging in suspected market manipulation. . A report by the Wall Street Journal last month suggested that Tether may once again be on the road to legal action, this time from the Justice and Treasury departments for allegedly violating sanctions. Tether dismissed the allegations and says there is no evidence that an investigation is ongoing.

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Cantor Fitzgerald acts as the “custodian” of Tether, meaning it oversees some of the firm’s assets including its $90 billion portfolio of US Treasurys, which plays a key role in providing funding for its USDT stablecoin. Lutnick publicly confirmed the financial stability and legitimacy of the company despite widespread skepticism and widespread criticism from the broader crypto industry.

Lutnick, of course, will be forced to resign from Cantor if he is appointed Treasury secretary. But putting Lutnick in a top Treasury position in the Trump administration would give him carte blanche in deciding which organizations should be subject to sanctions under the Office of Foreign Assets Control (OFAC), the regulatory body responsible for economic and trade sanctions. If he doesn’t recuse himself from the Tether matter, it would presumably give him authority over the ongoing investigation, meaning any current Tether probe would end up in the hands of someone with an ongoing financial and personal interest in the company.

Meanwhile, many industry stakeholders expressed excitement at the prospect of the possible nomination of Bessent, a favorite of Trump’s top advisers to take over from outgoing Treasury Secretary Janet Yellen.

Treasury Secretary Janet Yellen at a news conference during the Group of 20 finance ministers and central bank governors in Rio de Janeiro, Brazil, on July 25, 2024. (Photographer: Dado Galdieri/Bloomberg via Getty Images/Getty Images)

Like Lutnick, Bessent is a supporter of cryptocurrency, telling FOX Business in an interview this summer that he’s excited about Trump’s embrace of digital assets, which represent freedom, and believes the crypto economy is here to stay.