WASHINGTON (Reuters) -The U.S. Commerce Department said on Monday that one of its agencies will take over operational responsibility to oversee $7.4 billion in semiconductor research funds, saying that the private non-profit established under the Biden administration to handle that function "served as a semiconductor slush fund."
The National Institute of Standards and Technology will assume operational responsibility for the National Semiconductor Technology Center, a public-private consortium established under Democratic President Joe Biden, from the National Center for the Advancement of Semiconductor Technology (Natcast).
The department said the Biden administration illegally created Natcast, and as a result the agreement granting the organization up to $7.4 billion in taxpayer money is invalid.
Natcast was an "effort to skirt clear legal restrictions prohibiting government agencies from establishing corporations," the Commerce Department said on Monday in a statement, and said that the Biden administration "stacked Natcast with former Biden officials."
“From the very beginning Natcast served as a semiconductor slush fund that did nothing but line the pockets of Biden loyalists with American tax dollars,” Commerce Secretary Howard Lutnick said in the statement.
Natcast was created "to manage and disburse up to $7.4 billion in taxpayer funds," Lutnick said in a letter Monday. Natcast and Commerce did not immediately answer how much of the funds have been spent.
Commerce said the Biden administration acted "to protect Natcast from any real oversight or accountability and tie the hands of future administrations."
Natcast did not immediately respond to a request for comment.
Commerce said the semiconductor technology center operations will be reformed, which was required under the $52.7 billion Chips and Science semiconductor manufacturing and research subsidy law.
Last week, Natcast said it was aligned closely with the priorities of the White House, saying that it was "a linchpin to realizing a more prosperous, competitive, and secure leadership position for America."
In January the Biden administration announced plans to build a research and development facility in Tempe, Arizona, expected to open by 2028 while another research center opened in Albany, New York, in July.
(Reporting by David Shepardson; Editing by Mark Porter and Leslie Adler)
