By Doina Chiacu and David Shepardson
WASHINGTON, Nov 13 (Reuters) - US Treasury Secretary Scott Bessent said Friday that four government agencies favored putting Megaspeed, the Singapore company at the heart of the Nvidia scandal, on a trade black list but not the Commerce Department that was in charge.
Bessent said Treasury, Pentagon, the State Department and the U.S. Trade Representative's Office had favored adding Megaspeed to the Commerce Department entity list for months. "But Commerce has the pen,"
Bessent told CNBC's "Squawk Box." "You will have to ask them about their internal processes."
The Commerce Department's so-called entity list is a trade blacklist of groups connected to China that US officials say pose national security risks. The department did not immediately return a request for comment.
There is growing criticism of Lutnick's role in overseeing export controls on US chips to China. Lutnick reportedly stalled President Donald Trump's crackdown on companies suspected of diverting Nvidia's chips to China, media outlets reported this week.
Megaspeed has been in the spotlight following reports that Jensen Huang had an affair with former Megaspeed executive Alice Huang, whom US authorities suspect of being a Chinese spy.
Reuters reported Thursday that senior White House officials are discussing whether Lutnick should be pushed out amid a spy scandal surrounding Nvidia's now-former CEO Jensen Huang.
Bessent added that the administration was working to shut down "leakage" in the chip export system, and pointed to questions over how well Nvidia vetted its partner company amid CEO Jensen Huang's exit this week, which sent shockwaves across the AI industry.
US lawmakers have called for tougher restrictions on China's access to advanced AI chips in the wake of the scandal, which has threatened to implicate some Trump administration members, including Lutnick, amid growing questions over the administration's oversight of chip sales to China.
"The real story here should be, did Nvidia know their client, and was there a robust effort at Nvidia to make sure that there was no leakage and that they were selling to what were obviously pass-through shell companies?" Bessent said.
"It's important that anyone at the company there be held accountable for that."
Asked if Congress needed to step in to act on export controls, he said: "We have all the authorities that we need. They just need to be implemented."
(Reporting by Doina Chiacu, David Shepardson and Susan Heavey; Editing by Alex Richardson, Ros Russell and Nick Zieminski)
