You probably recall that the Trump Organization renovated the Old Post Office Building down Pennsylvania Avenue from the White House and transformed it into a luxury hotel— the Trump International Hotel; it opened in September 2016. It was the subject of various ethics-related complaints, starting with the obvious conflicts of interest since Señor T retained ownership of the Trump Organization while serving as president. No one doubts that foreign governments— particularly the UAE and the Saudis— as well as domestic interests, patronized the hotel to gain favor with a crooked, “Trump First” presidency. The Emoluments Clause of the Constitution prohibits federal officials, including the president, from receiving gifts or payments from foreign governments. Fat, above market-value payments from foreign entities using the hotel were clear violations of the constitution and obvious attempts to influence a corrupt president through financial means, direct quid pro quo or not.
Reviewers mostly agreed that the hotel was grand on the outside but a complete disaster and “a frightful dump” on the inside. Luxury Travel Intelligence reviewed it and found major shortcomings in its service and operations. It called the decor “garish,” said that it was not suited to the discerning business traveler and ranked it as the third worst hotel in the world.
Anyone who ever took a high school civics course, understands that maintaining public trust in the integrity and impartiality of government decision-making is crucial for a functioning democracy, something Trump is unlikely to have spent a nano-second thinking about. But even if he didn’t, these kinds of conflicts of interest and perceptions of influence undermine this trust and erode confidence in the fairness and transparency of governmental processes.
If a hotel is an ethics problem, the Trump Media & Technology Group will a mess of unimaginable proportions. Last week, we looked at how the Kremlin was laundering money into Trump’s scammy, worthless media company, keeping it afloat before the merger. And Kremlin go-between, Anton Postolnikov, isn’t the only one buying good-will from Trump by dumping cash into the floundering, valueless scheme. Yesterday, Matthew Goldstein and Sharon LaFraniere noted the similarity between some of the biggest “investors”in the media company with a list of big Trump campaign donors. Trump’s political backers pumped millions of dollars into the business he owns 57% of, raising “the potential for conflicts of interest and undue influence over Trump should he return to the White House.”
Postolnikov’s uncle is a crony of Putin, former Russian deputy minister of Justice, Aleksandr Smirnov, while Postolnikov himself, who owns a shady offshore bank, is under criminal investigation by both the FBI and the Department of Homeland Security. Two of his associates, the Shvartsman brothers, just pleaded guilty to insider trading (securities fraud).
“Other early backers,” wrote Goldstein and LaFraniere, “include two Texas billionaires, a Florida hedge fund manager… One of the billionaires, Kenny Troutt, a retired Dallas telecommunications executive, has given more than $1.1 million to efforts backing Trump’s three White House bids.” He was one of the co-chairs of Trump’s major fund-raiser yesterday, which Trump claims raised over $50 million.
When Trump Media finally went public in March after closing its merger with Digital World Acquisition Corp., those early investors stood to profit handsomely: Most of the loans were designed to convert into shares at around $22 a piece, whereas Trump Media shares traded around $40. It’s unclear if any of them have cashed in by selling their shares.
…Ethics experts have said if Trump wins the White House and fails to divest himself of his stake in Trump Media, it could open up an entirely new avenue for foreign actors or special interests to try to curry favor with him, including by buying advertising on Truth Social.
At last count, Trump’s stake was worth about $3 billion. Trump Media itself is currently valued at around $5 billion even though it lost $58 million last year and earned just $4.1 million from advertising on Truth Social, its sole source of revenue. On Friday, Trump Media shares fell about 12 percent and closed at around $40 a share— giving back all the gains it recorded since its first day of trading.
…Wes Moss and Andy Litinksy, two of the founders of Trump Media, oversaw the fund-raising from outside investors. The two men were former contestants on Trump’s reality television show The Apprentice. They had pitched Trump on the idea of starting the company in January 2021 after he was booted off Twitter in the aftermath of the Jan. 6 riot at the Capitol.
Moss and Litinsky had signed most of the loan agreements on behalf of Trump Media, but are no longer associated with the company. They are feuding in court with Trump Media to maintain their roughly 6 percent equity stake in the company.
…The loan agreements reviewed by The Times were provided by Stephen Bell, Philip Brewster and Patrick Mincey, lawyers for a former Trump Media employee, William Wilkerson. The agreements were included in thousands of pages of documents supplied to the Securities and Exchange Commission in connection with a whistle-blower complaint filed by Wilkerson. The regulator was investigating whether Digital World had violated securities laws by engaging in premature merger talks with Trump Media. Last summer Digital World reached a settlement with the S.E.C. and agreed to pay an $18 million penalty.
…The most curious of all the investors in Trump Media is a entity called ES Family Trust that lent up to $8 million in late 2021 and early 2022. The trust has ties to Anton Postolnikov, a Russian American financier who lives in South Florida. Divorce records for Postolnikov and his wife, reviewed by The Times, suggest a financial connection to the ES Family Trust.
As late as last year, Postolnikov was the principal owner of Paxum Bank, a small bank based in the Caribbean island of Dominica that wired some of the loan money to Trump Media, according to documents reviewed by The Times. The bank processes payments for adult entertainment companies.
Postolnikov is the nephew of Aleksandr Smirnov, who served as a high-ranking Russian government official for almost 15 years. As of two years ago, he was the deputy head of a state-owned enterprise governing seaports.
A statement published on Postnolnikov’s behalf last year denied that he was connected in any way to allies of President Vladimir Putin of Russia and said Russian websites were spreading lies about him. Postolnikov drew scrutiny in an insider-trading investigation by federal prosecutors who looked into trading of Digital World securities around the time of the merger announcement in 2021, according to a filing in connection with the matter. He was not charged with any wrongdoing and his lawyer declined to comment.
Earlier this morning, Drew Harwell noted that there have been some big financial winners at Truth Social, even as the company lost $58 million last year. That’s the way the scheme was set up. The company generated just $4 million (ad revenue)and yet, the principals at the company were paid “millions of dollars in salaries, bonuses and stock, according to documents it filed with the Securities and Exchange Commission… The online analytics firm Similarweb estimates that Truth Social’s traffic is less than 1 percent of Reddit’s, a platform that received $800 million in revenue last year. But a stock-market frenzy has supersized Trump Media’s value to about $5.5 billion— more than the market values of Macy’s, Columbia Sportswear and Alaska Airlines, which make billions in revenue a year.”
The big winner, of course, has been Trump, who has gained billions of dollars from the failing company. Also on the gravy train, crooked former Congressman Devin Nunes (over $6 million in salary and bonuses) and board members Eric Swider and Kash Patel, a Trump volunteer national security advisor, who is likely to be part of the new administration if Trump— God forbid— wins.
The other four board members— Trump’s former trade representative Robert Lighthizer; Trump’s former Small Business Administration leader Linda McMahon; the Louisiana attorney W. Kyle Green; and Trump’s son Donald Trump Jr.— were not paid last year, though a filing said the board could give itself “stock as non-cash compensation… from time to time.”
One former board member, Dan Scavino Jr., a longtime Trump aide who led his White House’s social media operation and is now advising Trump’s presidential campaign, was paid $240,000 last year through a consulting agreement with his company, Hudson Digital. Scavino will also receive a $600,000 retention bonus this month.
Trump Media also issued a $2.2 million “executive promissory note” to Scavino. The company gave similar promissory notes to other executives, which automatically converted on the day of the merger into stock. The filings do not specify whether Scavino’s note was converted.
Trump Media’s chief financial officer, Phillip Juhan, received 490,000 shares, worth $19.8 million. He was paid $337,500 last year, and his salary jumped to $365,000 when the merger closed. He last worked as the finance chief of a chain of fitness clubs.
Chief operating officer Andrew Northwall received 20,000 shares, worth $812,000. He was paid $365,000 last year. Previously he worked at Parler, the social network that was popular among pro-Trump rioters at the U.S. Capitol on Jan. 6, 2021.
Juhan and Northwall also will receive $600,000 retention bonuses this month.
Other executives will receive a total of $1.24 million in bonuses. They include chief technology officer Vladimir Novachki, who also received 45,000 shares, worth $1.8 million, and general counsel Scott Glabe, who received 20,000 shares, worth $812,000. Glabe served as an associate White House counsel under Trump.
…The Trump Media deal sits at the center of four ongoing lawsuits, all of which were filed within the last two months:
Trump Media and Digital World sued Arc and Orlando in Florida, saying their “irrational and disturbing behavior” had “imposed massive costs” and caused “extensive reputational harm.”
Litinsky and Moss’ United Atlantic Ventures sued Trump Media in Delaware, saying Trump had pushed a “last-minute stock grab” that would dilute their shares. Trump is scheduled to be deposed in that lawsuit this month.
Arc sued Digital World, its chief executive and three board members in Delaware, saying they had worked to deprive Orlando of millions of shares.
Trump Media sued Moss, Litinsky and Orlando in Florida, accusing the co-founders of mismanaging the company with a “toxic corporate culture” and seeking to force the forfeiture of their shares. The Delaware judge in the United Atlantic Ventures lawsuit said at a hearing April 1 that he was “gobsmacked” that Trump Media filed this suit when the dispute was already playing out in his court.
Digital World said it spent $19.6 million on “legal investigations” last year, mostly due to its $18 million settlement with the SEC, a Trump Media filing shows.
Trump Media also agreed last year to pay an unnamed law firm $500,000 for services, the filing said. In November, the firm was issued a $500,000 convertible note with a conversion price of $10 per share; that stake is worth $2 million today.
