Howard Lutnick: Tether’s friend in the White House

Good morning and welcome to White House Watch. Steff will be back in the saddle on Tuesday. For today, here’s what’s on deck:

• Tether’s advocate in the White House

• The US presidential transition and Syrian turmoil

• Mitch McConnell’s anti-isolationist plan

An incoming member of the US government is one of the biggest backers of cryptocurrency tether, despite the fact that it has become the go-to digital asset for international criminals, according to law enforcement officials, prosecutors and recent indictments.

Howard Lutnick, Donald Trump’s pick to lead the commerce department, has fiercely defended Tether, which pulled $5.2bn in profits during the first half of 2024. Lutnick’s company, the broker Cantor Fitzgerald, took a stake in Tether while also managing a significant portion of its reserves on its behalf.

While speaking at a Nashville crypto conference in July, Lutnick pointed to Tether’s founder as one of the few industry players who could prove he was running a legitimate business. Yet among Tether’s users are sanctions evaders, drug cartels, North Korean hackers, and Iranian and Russian spies.
Tether has rejected accusations that it facilitates global criminal activity, pointing out that its use by criminals is so-called secondary market activity where bad actors trade its tokens between themselves.

It was actually shortly after Lutnick’s remarks in Nashville that he was named co-chair of the Trump transition team, a role that gives him sway over administration positions, including those that oversee crypto regulation. Trump has since nominated crypto advocate Paul Atkins to run the Securities and Exchange Commission. 

Meanwhile, tether also continues to feature regularly in international criminal cases. Law enforcement operations around the world have shown tether being used by groups including Iran’s Revolutionary Guards, Hamas and Hizbollah.

None of these concerns appear to have stopped Lutnick from hyping up Tether’s potential to transform global finance. He has defended Tether in a similar manner to the scrappy style that defined his rise in American finance and now politics.

Team 47: who’s made the cut

Trump announced Andrew Ferguson as his choice to replace Lina Khan as chair of the Federal Trade Commission.

Kari Lake, the TV anchor who had unsuccessful Senate run last month, was tapped for director of Voice of America. (AP)

The president-elect named his eldest son’s fiancée Kimberly Guilfoyle the US ambassador to Greece. (BBC)

He also chose private equity executive Tom Barrack to be ambassador to Turkey. (Politico)

Transitional times: the latest headlines

• Meta donated $1mn to Trump’s inauguration — the first time it has contributed to such a fund.

• The US presidential transition is hampering Washington’s ability to respond to turmoil in Syria, amid fears of an Isis resurgence.

• FBI director Christopher Wray will step down before Trump is sworn in, yielding to the president-elect’s plan to install new leadership.

• Trump posted on Truth Social that he would speed up regulatory approvals for investors spending at least $1bn in the US.

• US Treasury secretary Janet Yellen warned that the sweeping tariffs the president-elect has proposed would lead to higher inflation.

What we’re hearing

Since stepping down as the longest-serving Republican Senate leader in US history, Mitch McConnell has zeroed in on his mission for the final two years of his term: serving as a bulwark against the isolationist wing of his party.

That puts him directly at odds with Trump and vice-president-elect JD Vance, who do not want the US to spend any more money on Ukraine.

“We’re in a very, very dangerous world right now, reminiscent of before world war two,” the 82-year-old said in an interview with the Financial Times. “Even the slogan is the same. ‘America First.’ That was what they said in the ’30s.”

McConnell is no fan of the once and future president. In a new biography of the Kentucky lawmaker, he called Trump “stupid” and a “despicable human being”. But in this must-read interview [free to read], McConnell shared, for the first time, that he voted for Trump last month — even if he couldn’t bring himself to speak his name, simply saying:

“I supported the ticket.”

One way McConnell could push back on Trump is through the Senate confirmation process for some of his controversial nominees. McConnell declined to show his hand in the interview, growing testy under questioning about defence secretary pick Pete Hegseth, who has faced sexual assault allegations.

“We’ll take each of the nominees as they come, and they’ll go through the vetting process,” McConnell said. “From an institutional point of view, each of these nominees will be treated like others have for a couple hundred years.”

When pressed about the Russia-friendly Tulsi Gabbard, who Trump named as director of national intelligence, McConnell responded:

“How many times do we have to say the same thing over and over again? You’re wasting your time and mine too.”

Viewpoints

• The US is the outlier in how the world is thinking about global trade, argues senior trade writer Alan Beattie.

• Modern historians are wary of ascribing change to individuals, but Trump provides the biggest test yet for the “Great Man theory”, writes Simon Kuper.

• Pimco economist Tiffany Wilding details the ways Trump could stanch the rising US budget deficit.

• Trump’s longtime ally Steve Bannon said progressive lawmaker Ro Khanna is one of the few Democrats who really understands why Kamala Harris lost. Khanna spoke to the Puck’s Peter Hamby about what it all means. (Puck)