Bulwark: The Trump Investigation You Probably Haven’t Heard About

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The Trump Investigation You Probably Haven’t Heard About

 

Even among the especially well informed, five has been the magic number of criminally tinged investigations implicating former President Donald J. Trump.

 

But as it turns out, there’s a sixth—this one involves both DOJ and the Securities and Exchange Commission (SEC), and it implicates conduct since Trump left office and after he was expelled from Twitter and launched his own social media platform, Truth Social.

 

The matter involves a so-called “blank check company” called Digital World Acquisition. Blank check companies have no established business plan but gather funds and sell shares to investors with the intention of merging with or acquiring another company in the future. The investors have no idea what they will ultimately be investing in. Under SEC rules, after an initial public offering (IPO), a blank check company’s funds must be deposited in escrow prior to a transaction and held there until shareholders officially approve a merger. As of 2020, a particular form of blank check company known as “special purpose acquisition companies,” or “SPACs,” made up 50 percent of the market for IPOs. This figure represents a huge spike prompted by the SEC’s temporary inability to approve traditional IPOs due to the COVID-19 pandemic. Trump took advantage of it to launch Truth Social.

 

In April 2021, Trump’s representatives had a videoconference with Patrick Orlando, Digital World’s chief executive. A month later, Digital World advised the federal government in securities filings that it had not identified or had discussions with any potential merger targets.

 

In October, Trump Media & Technology Group merged with Digital World, which provided $293 million in funding it raised in its IPO on September 8, 2021, mostly from big investors who pitched in as much as $30 million apiece. The series of events drew the attention of the SEC, which opened an investigation in December 2021, presumably out of a concern that Trump and Digital World might have secretly planned the merger before going public and failed to disclose their communications to the SEC. According to reporting by the New York Times, the average time for public blank check companies to find a target to merge with and complete a deal is 17 months. Digital World did it within a month of going public. The SEC probe has delayed the Trump Media-Digital World merger indefinitely.

 

rump, who reportedly knew Orlando beforehand, launched his lumbering social media site, Truth Social, through Trump Media in February 2022. The delayed merger, if completed, would provide the company with up to an additional $1.3 billion in capital. As of April 2022 (more current data is not readily available), there were 513,000 active daily users and 2 million monthly users on the site, as compared to Twitter’s 368 million active monthly users.

 

In June 2022, it was revealed that a federal grand jury—which issued subpoenas to Digital World board members—is also involved. Last week, the Guardian reported that federal prosecutors have expanded their criminal investigation to examine two loans totaling $8 million that were wired to Trump Media through the Caribbean from entities connected to an ally of Russian Federation President Vladimir Putin.

 

The first payment of $2 million came in December 2021, around the same time the SEC opened its initial investigation. Orlando, who is a licensed SEC broker, reportedly sourced the payment from Paxum Bank, which is registered in the tiny Caribbean island of Dominica (not to be confused with the Dominican Republic). A promissory note identified another entity, ES Family Trust, as the lender. Two months later, ES Family Trust sent Trump Media another $6 million.

 

There is some indication that Donald Trump Jr. was aware of the $2 million payment. The Guardian reports that he sent an email acknowledging a message that the payment was pending.

 

So, to sum up: Donald Trump is involved in yet another probe that could potentially result in criminal charges against him or his associates, this one a yearslong federal investigation by the SEC and DOJ relating to the creation and funding of his Truth Social platform.

 

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