The U.S. Commerce Department said on Monday that one of its agencies will take over operational responsibility for a $7.4 billion semiconductor research fund, saying a private nonprofit established by the Biden administration to perform the function "acts as a secret fund for semiconductors."
The National Institute of Standards and Technology will assume operational responsibilities for the National Semiconductor Technology Center from the National Center for Semiconductor Technology Advancement (Natcast), a public-private partnership established during the term of Democratic President Joe Biden.
The department said the Biden administration illegally created Natcast, invalidating an agreement that awarded the organization up to $7.4 billion in taxpayer funds.
The U.S. Commerce Department said in a statement on Monday that Natcast was "designed to circumvent clear legal restrictions prohibiting government agencies from forming companies" and that the Biden administration "installed former Biden officials in Natcast."
"From its inception, Natcast was a secret semiconductor fund whose role was simply to line the pockets of Biden supporters with American taxpayer dollars," Commerce Secretary Howard Lutnick said in a statement.
Lutnick said in a letter Monday that Natcast was created to "manage and disburse up to $7.4 billion in taxpayer funds." Natcast and the Department of Commerce did not immediately say how the funds would be spent.
The Commerce Department said the Biden administration's move "is intended to protect Natcast from any real oversight or accountability and to tie the hands of future administrations."
Natcast did not immediately respond to a request for comment.
The Commerce Department said operations at the Semiconductor Technology Center will be overhauled as a requirement of the $52.7 billion Chips and Science semiconductor manufacturing and research subsidy bill.
Last week, Natcast said it was closely aligned with White House priorities, which it called "key to achieving a more prosperous, competitive and secure American leadership."
In January, the Biden administration announced plans to build an R&D facility in Tempe, Arizona, expected to open in 2028, while another research center will open in Albany, New York, in July.