The Trump administration clawed back more than $7.4 billion in taxpayer dollars from a nonprofit group created under the Biden-era CHIPS and Science Act for semiconductor research and development, Commerce Secretary Howard Lutnick announced on Monday.

The 2022 CHIPS Act allocated $11 billion in semiconductor research and development funding to the National Semiconductor Technology Center. Natcast operated the initiative under a long-term partnership with the Department of Commerce, which has been severed.

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Describing Natcast as a “slush fund” and an “illegal, unaccountable, left-wing created fake department,” Lutnick said the Commerce Department doesn’t recognize the California-based nonprofit group because it was established in violation of federal law.

“Rather than establishing these operations within the Department, however, Biden Administration officials spent significant time, effort, and resources creating an unaccountable, outside entity—Natcast—to administer taxpayer funds,” Lutnick wrote to Natcast CEO Deirdre Hanford in a letter.

In its final days, the Biden administration set up an agreement with Natcast that allowed the entity to receive $7.4 billion from the Commerce Department’s National Institute of Standards and Technology “in the form of advance payments,” according to the letter. Lutnick said the amount accounted for “virtually all of Natcast’s funding,” which was expected to last until 2034.

The agreement was executed on Jan. 16, four days before President Donald Trump returned to the White House this year.

“These actions do not just give the appearance of impropriety; they flout federal law,” Lutnick asserted.

The secretary cited the Government Corporation Control Act as the basis for his argument while also noting that no provision in the CHIPS Act authorized the creation of a company to serve as the National Semiconductor Technology Center’s operator.

“The Biden administration had no authority to enter into the last-minute agreement with Natcast to cement their illegal arrangement,” Lutnick wrote. “The GCCA plainly prohibits agencies from establishing a corporation to act as an agency without specific authorization, and the January 16, 2025, agreement does nothing other than set forth the terms of the Biden Administration’s attempt to do just that.”

Furthermore, Natcast’s executive and trustee positions were filled by former Biden officials. Among Natcast’s leaders are Donna Dubinsky, former senior counselor to former Commerce Secretary Gina Raimondo, and Hanford, former leader of the department’s Industrial Advisory Committee.

The committee responsible for selecting Natcast’s board members also included officials from the Biden administration, including Jason Matheny, a former White House specialist on technology and national security who now serves as the president and CEO of the RAND Corporation.

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The Washington Examiner contacted Natcast for comment on the letter.

“Ending this illegal relationship will ensure efficient use of taxpayer funds and continued American leadership in the semiconductor industry, and it will return responsibility—and accountability—for faithfully executing the CHIPS Act to the Department, as Congress intended,” Lutnick said, concluding that the Commerce Department “reserves the right to pursue all legal remedies against Natcast.”