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- [00:01]
Terry Gross
This message comes from Capital One.
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Eric Lipton
Banking with Capital One helps you keep.
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Terry Gross
More money in your wallet with no fees or minimums on checking accounts.
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Eric Lipton
What's in your wallet? Terms apply.
- [00:10]
Terry Gross
See capitalone.combank for details.
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Eric Lipton
Capital one NA member, FDIC, US or other means. Thank you. Your support means so much to us. Now more than ever, you help make NPR shows freely available to everyone. We we're proud to do this work for you and with you. Okay. Let's start the show. This is FRESH air. I'm Terry Gross. Since President Trump has returned to office, his conflicts of interest have surpassed those of his first term. He's no longer hesitant about pursuing profits without restraint, according to my guest, Eric Lipton, an investigative reporter for the New York Times. Lipton has written a series of articles about the president's conflicts of interest relating to his family's real estate and development companies and and cryptocurrency company World Liberty Financial. Lipton writes that World Liberty Financial has eviscerated the boundary between private enterprise and government policy in ways without precedent in modern history. Trump has urged Congress to pass a bill known as the Genius act, which would make it easier for US Companies to deal in a type of cryptocurrency known as stablecoin. After advocating for passage of the bill, the Trump family crypto company started issuing its own stablecoin and became one of the biggest issuers in the world. Partly as a result of Lipton and his co authors reporting, Democrats are now trying to amend the Genius Act. I spoke with Eric Lipton yesterday morning about his reporting on Trump's conflicts of interest. While we were recording, a Senate subcommittee opened an inquiry into, quote, Trump crypto corruption. Hours later, Senate Democrats introduced the End Crypto Corruption act, which would ban the president, vice president, senior executive branch officials, members of Congress and their immediate families from financially benefiting from issuing, endorsing or sponsoring crypto assets such as meme coins and stablecoins, both of which we discuss in this interview. Eric Lipton, welcome back to FRESH air.
- [02:19]
Terry Gross
Thanks for having me.
- [02:20]
Eric Lipton
So you described the crypto legislation before Congress, now, the Genius act, as the first formal act by Congress to create a regulatory system that could help the industry grow. So let's start with what is stablecoin, which is the type of crypto at question here?
- [02:37]
Terry Gross
Stablecoins are extremely popular in the crypto world, and they're a way of having a type of a token that has a steady value. It's worth a dollar no matter what is happening in the bitcoin market, up or down because there's so much volatility in crypto. And the advantage of a stablecoin is once you have a dollar to dollar crypto token, you, you can use it to buy and sell things because it has a reliable value. So it is also one of the most profitable chunks of the whole crypto space for companies that issue stablecoins. Because once they have your money in a stablecoin, they invest your money and they make a lot of yield on it. And you don't get that yield, you don't get the interest on your money, they take it. And so it's a very profitable part of the business. But it has been held back because in the United States, the Federal Reserve and the treasury have been concerned about, you know, could stablecoins represent a threat to the economy? And so it has not grown as much as it perhaps could if it had some regulatory structure around it. And that's what this act would do.
- [03:34]
Eric Lipton
If it's stable at a dollar, why not just use a dollar?
- [03:38]
Terry Gross
Why use crypto if you're just building a crypto that's tied to the dollar? It's a very good question. I mean, it is more fluid than a dollar and it can cross borders with fewer restrictions. But that's also one of the concerns is they could be used for money laundering or drug trafficking if it's not properly regulated.
- [03:57]
Eric Lipton
So how would the Genius act regulate stablecoin?
- [04:02]
Terry Gross
I mean, the Genius act would officially recognize stablecoins as a functioning part of the financial sector and it would create some requirements for issuers of the stablecoins. The biggest thing that it would do is it would recognize stablecoins as a legitimate part of the US Financial sector. And it would also be assigned to banks and other financial institutions that you should start to incorporate them into your mix of services. So the reason it's so important as the industry is that it would legitimize stablecoins and embrace them through an act of Congress. And so I think that you would see significant growth in the stablecoin market in the United States and globally if Congress enacted it.
- [04:42]
Eric Lipton
Well, let's get to the conflict here. So Trump called on Congress to pass this legislation. Then World Liberty Financial, the Trump family crypto company, said it was going to release its own stablecoin called USD1. And Trump or his family would be profiting from the legislation that he asked Congress to pass. The Trump family company is now one of the biggest issuers of stablecoin in the world. So talk about that conflict.
- [05:11]
Terry Gross
It's a very odd situation, because you have simultaneously a President of the United States who is both appointing the financial regulators. So effectively, he's the top five financial regulator in the United States and therefore the world. And he is also one of the biggest players in the same regulatory space. So he is the regulator and the regulated. And it is a very unusual situation. I spoke with both historians and former White House ethics lawyers, and no one could identify another example of a conflict of interest that was so blatant and worrisome as having Trump be both the regulator and the regulated in this case.
- [05:50]
Eric Lipton
So you expressed the concern that the bill lacks strong provisions to stop money laundering, and Democrats in Congress are concerned about that, too. But, you know, Trump's Justice Department recently terminated a crypto crimes task force, a task force that could perhaps have helped keep on the lookout for money laundering. No longer exists.
- [06:14]
Terry Gross
Yeah, I mean, this is a single piece of a much broader kind of landscapes of conflicts of interest when it comes to the Trump family and cryptocurrency. And among the other examples are the fact that Trump appointed an acting director of the SEC and now has appointed a permanent chair of the sec, who among the first acts was to roll back most of the enforcement actions that the agency was taking relative to violations of federal securities law and banking secrecy requirements. And again, one of the first things that Trump did was to appoint an acting head of the securities and Exchange Commission, which is the chief regulator of the cryptocurrency industry, who rolled back dozens of enforcement actions around the cryptocurrency industry, either froze those actions or actually stopped pending lawsuits against companies that had violated federal securities laws. And some of those same companies that have been freed of regulatory actions are actually business partners of World Liberty Financial. And not only that, but he actually pardoned a gentleman named Arthur Hayes, who is an investor in one of the financial partners of World Liberty. So, I mean, he has rolled back regulatory actions relative to his business partners and given a pardon to, effectively, one of his business partners.
- [07:32]
Eric Lipton
So you say that the crypto world's ultimate goal in Washington is to secure ambitious legislation that would cement the industry's standing in the US Financial system.
- [07:41]
Terry Gross
And.
- [07:41]
Eric Lipton
And that the crypto world wants to make the crypto sector part of the larger banking sector. Like, what would that look like if the crypto industry got its way?
- [07:53]
Terry Gross
Well, I mean, cryptocurrency has been around for quite a while now, and it's largely been a way for people to make financial bets that it's going to rise in value. It hasn't had a great Deal of use case. It's like, what is it inherently about? And there's a lot of people in the industry who say, well, we want to have a use case. We want it to be used for buying and selling things. And for banking. You could use it to take out a loan. You could take loan in your crypto. You could invest your crypto and earn yield. Like, you'd put a deposits in the bank, and you could do international transactions. And it has been held up by the lack of a regulatory structure to oversee it. And so this is a moment, and Trump embraced the crypto industry unlike any other presidential candidate in American history, because it hasn't been around that long. And he said, we are going to become the crypto capital of the world. And the industry pushed in tens of millions of dollars to help him get elected. And on Monday night at his golf club in New Jersey, President Trump had a dinner that cost a million and a half dollars to get into that was sponsored by the crypto industry. And so the crypto industry is quite excited about President Trump. And the question is whether or not he is going to spoil this moment of opportunity for the industry because his family is pursuing profits so aggressively that it's creating questions about a conflict of interest.
- [09:14]
Eric Lipton
Trump established a strategic Bitcoin reserve. I don't really understand what that is. Can you explain it?
- [09:21]
Terry Gross
Yeah, it's effectively, it's sort of something similar to a Fort Knox. I mean, the United States has a place where it stores gold. It's like a reservoir of gold. The gold used to back up the dollar. It's just a place that the United States government holds gold. The idea of a strategic reserve is that the United States would collect a certain number of cryptocurrency tokens that are popular in the marketplace and just hold them as a store of value. And just like you might collect foreign currencies and hold them because you want to invest in other foreign currencies. So Trump announced earlier this year that he was going to create a strategic reserve of certain types of cryptocurrency. And the reason that it became a conflict of interest was that among the cryptocurrencies he mentioned when he did a social media posting was one called Ether. And it turns out, of course, that his son's company, which he financially benefits from personally, World Liberty, had purchased tens of millions of dollars worth of ether before Trump included that in his social media posting. And as soon as he said, well, we're going to put ether into the strategic reserve, ether surged in value because oh, if they're going to put this type of crypto into the reserve, it must be worth more. So that was essentially, he was basically writing himself a check because of course, if you're going to mention one particular type of cryptocurrency, it's going to drive up its price, and it did. Now, Ether has since dropped in value because there's a lot of other things happening in the global economy, but at least temporarily, Trump's announcement drove up an asset that his family had already invested in.
- [10:48]
Eric Lipton
So the Trump family company, World Liberty Financial, their crypto company, does more than stablecoin. We've talked about the stablecoin, describe the company to us and the range of things that they do regarding crypto.
- [11:01]
Terry Gross
So World Liberty was effectively created in September, October of last year as the presidential election was coming towards a close. And it's a brand new company, therefore, relatively speaking, and its goal is pretty ambitious. It wants to be a modern day bank that offers a range of services. And it started off by selling tokens in which you could buy, it's called a governance token, and you could buy the right to have some say in decisions that the company's making. So before the election, they had a really hard time selling those tokens because it was started off by Trump's sons and some of their friends who had some experience in the crypto sector, but there wasn't much motion behind it. So they only sold tens of millions of dollars in tokens initially. But once Trump was elected, suddenly there's the thought, oh, it's going to be the future President of the United States. This is probably going to do well. He's going to have the power to influence policy and next thing you know, they sell $550 million worth of tokens. And a large chunk of the revenue from those tokens is supposed to be going to the Trump family and their business partners. So their services, their goals are to offer, eventually offer the ability to deposit your crypto into World Liberty and to borrow money off of it, or to earn, yield on it, or to use what they call the stablecoins to buy and sell things. I mean, it's essentially going to be a modern day bank. It's going to offer a range of services. That's their goal. So far, what they've done is to sell a governance token and a stablecoin.
- [12:33]
Eric Lipton
What does President Trump and his sons, Don Jr. And Eric have to say about conflicts of interest regarding the president with this company?
- [12:45]
Terry Gross
I mean, the White House has said to us the same statement each time we ask about this, that President Trump has no conflicts of interest because his sons are running this business, and that he has divested of his interest to his sons, of his corporations. And he did sign a statement In January of 2017, after his first term started, in which he transferred control of his assets to his sons. And that is true. But the issue is that Trump is still the financial beneficiary of these companies. And so when he files his financial disclosure every year, as he's required to do under federal law, we can see that the same entities that are earning revenue from the crypto business or from the hotel business or the golf business and the many businesses that he's in, that Trump himself is financially benefiting from them.
- [13:35]
Eric Lipton
Hasn't Trump said that he is immune from conflicts of interest?
- [13:40]
Terry Gross
I mean, in fact, that is true. The President of the United States and the Vice President are the only two members of the executive branch that are exempt from a federal criminal law that makes it a crime to take an action that brings you or your family direct financial benefit. I mean, so that's a criminal offense if you do that. If you are an employee of the federal government and you take an action that specifically benefits your family, that's a federal crime, and you could go to jail for that. And the president is exempt from that. Because the president's powers are so broad. I guess the presumption is that you can't prevent the president from doing something that might benefit his family financially. But historically, despite that exemption, presidents from both parties have taken steps to avoid conflicts of interest by either selling off assets, putting assets into a blind trust in which they don't have any control, or trying to avoid their family being involved in financial efforts that create obvious conflicts of interest. Now, there have been, throughout history, relatives of presidents that have drawn attention because of their business activities. I mean, Billy Carter, the brother of Jimmy Carter, Neil Bush, the brother of George W. Bush, obviously, Hunter Biden, the son of Joe Biden, have been engaged in business activities that have drawn assertions of conflicts of interest. And in many cases, they were well substantiated. But when I speak with various historians who have examined these things, and as a reporter, I've looked at them myself, I've never seen so many simultaneous activities, as we're seeing now, with the Trump sons and President Trump himself, through his financial benefits, as they're playing out right now before us.
- [15:23]
Eric Lipton
So we talked about the Trump family cryptocurrency business. Let's look at the Trump family real estate business and developments. It's working on in foreign countries. Last month, Eric Trump visited Gulf states, including the United Arab Emirates and Qatar, working on real estate developments there. And he met with Saudi leaders, too. So if you could choose one of those real estate developments that Eric Trump was discussing and tell us about the potential conflicts you see there.
- [16:02]
Terry Gross
Yeah, I mean, the thing that really is problematic is when they are doing deals that involve government entities. So, for example, they have a business partner in the Middle east called DAR Global, and they now have six ongoing real estate projects with them, most of them in the Middle East. But Dar Global, along with Eric Trump, the president of DAR Global, was in Qatar on Wednesday of last week. And there they signed a deal that was financed by the government of Qatar and its sovereign wealth fund. And so that effectively means that the government of Qatar and the wealth that it gets from merely the natural gas and the energy business is backed up the Trump family in a real estate deal that they're going to do there. Now, I spoke with Eric Trump about this, and he says, well, Qatar is helping Dar Global with the property that it's getting access to, and our deal is with Dar Global. But the bottom line is that they are a part of this deal and that they were there. An official from the government of of Qatar was there during the signing, standing right in front of Eric Trump. And to have the family of the president in a business deal with a foreign government at the same time as President Trump is about to fly over there and do foreign policy matters with various states in the Middle east, including Qatar, is, you know, what are his imperatives there when he makes a foreign policy decision? Is he doing it because it's in the interest of the United States, or is he doing it because it helps his business interest in that same country? It's an open question.
- [17:38]
Eric Lipton
So what's the importance of American relations with that state, with that Gulf state? What's at stake in terms of foreign policy?
- [17:47]
Terry Gross
It's a very small nation. It's a peninsula that sticks out into the Gulf there. But it's a hugely important one, very wealthy nation. There's a large military base. The United States has more military assets there than just about any place else in the Middle East. Also in Bahrain nearby. But that's a very important place to the United States military. They also play a critical role as an intermediary between a number of the nations in the tensions that exist in the Middle east between Israel and Iran and Saudi Arabia and other nations. So there's a huge foreign policy agenda that involves that country. And so how are the United States foreign policy interests being influenced by the Trump family's financial interest?
- [18:31]
Eric Lipton
Well, let's look at another example of a potential conflict of interest in the Gulf. World Liberty Financial recently made a deal to take $2 billion worth in cryptocurrency from an Emirati venture fund that's backed by the government of Abu Dhabi. This is all a little bit confusing, but very important. So explain what the potential problem is.
- [18:54]
Terry Gross
Here in this case. You know, as World Liberty is launching its stablecoin, you know, they overnight become one of the biggest stablecoin issuers in the world. And stablecoins are one of the most profitable chunks of the whole cryptocurrency atmosphere because they can take this yield and keep it for themselves and the 3% yield that they get off of investing that, that stablecoin. So what happened here is that the government of Abu Dhabi, which decided from the United Arab Emirates that they were going to put money into another company called Binance, they decided they were going to do it through World Liberty. So they were going to deposit $2 billion into World Liberty, and that was going to come from this United Arab Emirates sovereign wealth fund effectively. So, I mean, again, here you now have a Middle Eastern government that's going to put $2 billion of its capital into a company that financially benefits President Trump and his sons at the same time that the United States has enormous foreign policy matters before the United Arab Emirates relative to maybe military sales of weapons, maybe whether or not they get access to certain advanced American computer chips that they need to develop their artificial intelligence industry, enormous choices that President Trump has to make. How are they influenced by the fact that this same government has now put $2 billion into a company that his family runs, and that is going to bring him and his family tens of millions of dollars in revenues as a result? It's a kind of a conflict of interest we really just we have never seen before in probably all of American history, if not at a minimum, modern American history. That again, he's both the regulator and the commander in chief, and he is the financial beneficiary of trades that are happening that he effectively oversees.
- [20:48]
Eric Lipton
So let's take a break and then we'll talk more. If you're just joining us, my guest is Eric Lipton, and he's been writing a series of articles about President Trump's conflicts of interest. We'll be right back after a short break. I'm Terry Gross, and this is FRESH air. At about the same time that Eric Trump was in the Gulf working on real estate and crypto deals. Don Jr. Was in Serbia and Bulgaria working on real estate deals pertaining to the Trump family company. So let's look at what's happening in Serbia. I want you to choose one of the projects that Don Jr. Was working on there and talk about potential conflicts.
- [21:31]
Terry Gross
Yeah, Don Jr. Is in Bulgaria, Serbia, Romania. And in Serbia, for example, at a site that the United States bombed along with NATO during.
- [21:43]
Eric Lipton
Imagine if you will, a show from NPR that's not like npr, a show that focuses not on the important, but the stupid, which features stories about people smuggling animals in their pants, incompetent criminals and ridiculous science studies. And call it Wait, Wait, Don't Tell Me because the good names were taken. Listen to NPR's Wait, Wait, Don't Tell me. Yes, that is what it is called. Wherever you get your podcasts, tariffs, recessions, how Colombian drug cartels gave us blueberries all year long. That's the kind of thing the Planet Money podcast explains. I'm Sarah Gonzalez, and on Planet Money, we help you understand the economy and how things all around you came to be the way they are. Para que sepas. So, you know, listen to the Planet Money podcast from npr. On the indicator from Planet Money podcast.
- [22:34]
Terry Gross
We'Re here to help you make sense of the economic news from Trump.
- [22:39]
Eric Lipton
Tariffs.
- [22:39]
Terry Gross
It's called in game theory a trigger strategy or sometimes called grim trigger, which sort of has a cowboy esque ring to it to what exactly a sovereign wealth fund is.
- [22:50]
Eric Lipton
For insight every weekday, listen to NPR's.
- [22:53]
Terry Gross
The Indicator from Planet Money. During the Balkan war when Clinton was president, the former Yugoslav Ministry of Defense has been sitting there as a sort of semi destroyed structure for decades now. And the president of Serbia and his administration have decided that Jared Kushner, President Trump's son in law, should be allowed to build a luxury hotel and apartment complex on that site, which has sat vacant for decades. And that site would then have a Trump International Hotel in Serbia, the first in Europe. And so at the same time that Eric Trump is in Dubai talking about new hotel and crypto projects, Don Jr. Is in Eastern Europe and the Balkans and he actually has dinner with the president of Serbia. And the president of Serbia boasts on a Facebook posting that he's grilling a pig for Don Jr. For dinner. And it's that president who has granted this concession to Jared Kushner and the Trump family to build a Trump International Hotel in Serbia on property that's owned by the government. Serbia also has a lot of interest with the United States. It wants to get into the European Union. And it wants the United States to aggressively push Europe to allow it into the European Union because it has not yet been allowed and that would improve its economy. And the president in Serbia also has been facing intense protests in Serbia over issues relating to his management of the government there. And Donald Trump Jr. S presence in Serbia is a sign that he is supported by, you know, the president of the United States and the family of the president. And so the president of Serbia is giving an incredibly valuable concession to the Trump family. And the Trump family is effectively helping boost his standing in Serbia as he seeks to maintain control of the country. Again, that alone would be a kind of a headline grabbing conflict of interest that would demand newspaper coverage for weeks. But here we have all of these things simultaneously happening. It's actually quite difficult to keep up with them all and to try to explain them all to the public because each one is so complicated but also represents such a historic level conflict of interest.
- [25:09]
Eric Lipton
Do you think that's advantageous to the Trump family that it's complicated and there's so many conflicts it's hard to keep track?
- [25:15]
Terry Gross
I do. I think that it is. It's hard to write about them all. It's hard to read about them. It takes a fair amount of energy simply to keep up. And they kind of all blur together and they're happening simultaneously. Yeah. So I think, I mean, is it by design? I don't know. What I think is happening is that they are unleashed and they sense a moment of opportunity to pursue businesses that will generate profit for themselves and their family. And they are aggressively doing that. And there's no restraint on that pursuit. And so that's what's playing out right now.
- [25:54]
Eric Lipton
Okay. I hope I'm not adding to the confusion here, but I'm going to ask you about one other potential conflict, and this is in Bulgaria, another country that Don Jr. Visited in April. He appeared on stage with somebody named Anton Trenchev, co founder of a crypto firm named Nexo. Tell us the story about that, though.
- [26:13]
Terry Gross
Nexo was targeted by the securities and Exchange Commission during the Biden administration for violating federal securities laws. And it paid a large fine and it then withdrew from the American marketplace. So then in the last couple weeks, Don Jr. Was invited to be the headline speaker at an event that nexto was sponsoring there in Bulgaria. And there on stage was Don Trump Jr. With a huge portrait of him as he was speaking and talking about the Trump administration and US Issues and the crypto business. And then the co founder of the company announces, wow, Donald Trump, Trump Jr. Is there, that they're going to reenter the United States marketplace, that they've already been having meetings with the securities and Exchange Commission and that America has re embraced crypto and that we're coming back to America and we're here with Don Jr. To celebrate our return to the United states. And Don Jr. Is being paid to be present as they relaunch their crypto business in the United States. And they push out press releases and photos of that event. So there's the mixing of a financial interest and a regulatory matter. And there's so much happening simultaneously. How do we possibly keep up with it and explain this all to readers?
- [27:31]
Eric Lipton
So let's get to something else that's a potential conflict. And this is something brand new called Executive Branch, which is like a, it's a private Club in Washington, D.C. tell us about this club and what you need to do to become a member of it.
- [27:47]
Terry Gross
So the club was announced a couple weekends ago and Donald Jr. Was actually in the Balkans and Eastern Europe at the time, giving his paid speeches and visiting with the Serbian president where they're going to build a hotel. But while that was underway back in Washington, he's the part owner of what's called the Executive Branch, which is going to be a new private club that's opening in Georgetown. Expansive space there at a club that recently shut down. And in order to be a member of the club, there's a $500,000 membership fee and news reporters will not be allowed in there, the public will not be allowed in there. But effectively it's gonna become a modern day Mar? A Lago, like the Trump family have in Florida or like the Trump Hotel in D.C. used to be before they sold that after Trump left his first term, where there will be a gathering of Trump family members of their friends, including among the other partners are Don Jr. S venture capital partners from a company called 1789. And another founding, founding member is Jeff Miller, who's a lobbyist that got more than 35 new clients since the start of the Trump administration. He represents an incredible array of regulated industries. And David Sachs, who is the White House AI and crypto advisor, is also a founding member. So already you've got a White House advisor, a lobbyist, the Trump family, and Don Jr. S venture capital business partners that are helping either found it or own it. And this is going to be a place of confidential meetings. And now when I spoke with the representatives for Executive Branch and I spoke with a lawyer and several other folks that are associated with it. About this, they say that this is a social place for people to gather, that they will not be disrupted because the Trump people are often not welcome in a liberal city like D.C. and that all this is is about a safe place for people to gather and relax. But it also is certainly going to be a place where there will be influential people who have unusual access to Trump affiliates. And I have to imagine it's going to be a lot like the Trump Hotel or Mar a Lago is right now. And Don Jr. Owns a chunk of that. Now, Donald Trump, the president does not actually, as far as I know, own a stake in the executive branch, but his son does. And it's going to be fascinating to watch this place, although we're going to have to watch from the outside because we aren't going to be let in.
- [30:14]
Eric Lipton
David Sachs, a founding member in executive branch who I believe is also a crypto advisor to President Trump, he described this private club executive branch as a place for younger, hipper, Trump aligned Republicans to gather. And I'm trying to think how many young, hip Republicans have $500,000 to join a private club. Young $500,000.
- [30:40]
Terry Gross
Yeah. I mean, there are a lot of venture capitalist Silicon Valley types that put large amounts of money into President Trump's reelection campaign and many of them associated with the crypto industry that are so anxious to see him adopt this cryptocurrency regulatory environment that embraces crypto. There are going to be a lot of members from that environment. And David Sacks is sort of the leader of that whole crew. He himself came from the crypto industry. He was an investor. So, I mean, I suspect it will be a pretty crypto heavy hangout place. And those folks are quite wealthy. And Jeff Miller, one of the lobbyists, represents a company called Tether. He was recently hired by Tether. Tether is the largest stablecoin issuer in the world and it's trying to become a bigger player in the United States marketplace. So, I mean, all of the things we've been talking about are going to be playing out inside this clubhouse behind closed doors and, you know, and then Donald Trump Jr. Is essentially going to be making money off of it.
- [31:40]
Eric Lipton
Let me reintroduce you here. My guest is New York Times investigative reporter Eric Lipton, and he's written a series of articles about President Trump's conflicts of interest. We'll be right back after a short break. This is FRESH air. So some of the people involved with the Trump family businesses have, shall we say, interesting backgrounds. For example, Zach Folkman and Chase Herro, two of the partners in the crypto business World Liberty Financial, the Trump family company. Tell us about their backgrounds.
- [32:12]
Terry Gross
They are kind of serial entrepreneurs, you might call them. They have been trying to pursue a bunch of different business interests over quite a number of years and they've had a number of unsuccessful efforts. They tried to start two different crypto companies that one of them was subject to, you know, an inappropriate release of some of its funds.
- [32:34]
Eric Lipton
This message comes from NPR sponsor Shopify. Start selling with Shopify today.
- [32:38]
Terry Gross
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Eric Lipton
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Terry Gross
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- [32:45]
Eric Lipton
Go to shopify.com NPR when Malcolm Gladwell presented NPR's Throughline podcast with a Peabody Award, he praised it for its historical and moral clarity. On Throughline, we take you back in time to the origins of what's in the news, like presidential power, aging and evangelicalism. Time travel with us every week on the Throughline podcast from npr.
- [33:12]
Terry Gross
Know that fizzy feeling you get when you read something really good. Watch the movie everyone's been talking about or catch the show that the Internet can't get over. At the Pop Culture Happy Hour podcast, we chase that feeling four times a week. Week. We'll serve you recommendations and commentary on the buzziest movies, tv, music and more, from lowbrow to highbrow to the stuff in between. Catch the Pop Culture Happy Hour podcast from npr. Another one went out of business. They also were selling everything from a colon cleanser to a way to meet hot girls, a website to give advice for how to meet hot girls. And so they were not your usual business partners that you would expect to see the Trump family align themselves with. And they got introduced to the Trump family through Steve Witkoff, who is President Trump's Mideast adviser, who's helping attempt to negotiate peace in the Middle East. And Steve Witkoff's also trying to work in Russia relative to the war in Ukraine. His son Alex Witkoff is one of the investors in World Liberty and they brought in Zach Folkman and Chase Hero, who are these two individuals who'd had a series of business efforts that have interesting providence.
- [34:31]
Eric Lipton
One of them came up with a kind of pay for play idea. Can you describe that deal?
- [34:39]
Terry Gross
As we were investigating the startup of World Liberty, we heard from several crypto companies that Zach Folkman, using the nickname of Z Money, was sending signal messages out to cryptocurrency executives around the world saying that if they would give World Liberty perhaps $15 million worth of an investment that World Liberty would use its clout and the Trump family name to buy their token and bring them international attention. And the executives we spoke with were, in several cases, felt that that was a deceptive transaction that was making it appear as if the Trump family and World Liberty had independently decided that it should invest in their token. And they declined that offer because they felt that it was just the kind of thing that the cryptocurrency industry should be attempting to avoid, in which it's not an arm's late transaction. And so that's what we learned that Zach Folkman was doing as World Liberty was trying to raise money. And we do know that there were multiple partnerships formed with cryptocurrency companies, but we spoke with three of them that were offered these kinds of terms and that turned it down.
- [35:55]
Eric Lipton
Yeah, because it sounds like we're going to bring you credibility with the Trump name and international attention. Probably would raise the price of crypto coin. Right?
- [36:06]
Terry Gross
It did. In fact, once these partnerships were being announced, there were short term spikes in the price of almost all of the companies they invested in. So they had the ability to drive market decisions by making that investment, and they knew that. So what they were saying is, okay, if you give us $15 million, we'll buy like $12 million of your token and we'll keep $3 million as part of the deal.
- [36:31]
Eric Lipton
Yeah. So it looks like it's a vote of confidence in that other company's crypto, but it's really in part a way of making money for the Trump family crypto.
- [36:43]
Terry Gross
Yeah. Behind the scenes, there was money that was being exchanged and there was no public transparency about the financial relationship between the parties.
- [36:50]
Eric Lipton
Right. One other crypto thing I want to ask you about, which is using memecoin, which is basically like a souvenir. It doesn't have, like, financial value. It's more like a collectible than a coin. Is that fair description?
- [37:07]
Terry Gross
Yeah, that's right.
- [37:07]
Eric Lipton
Yeah. So the Trump family crypto business used memecoin as a way of raising money in return for access to the President. Would you describe that plan?
- [37:21]
Terry Gross
Yes. Yet another in the crazy roadmap of things that we've been trying to examine is that there are two crypto companies that the Trump family has started recently. The second one is selling a Meme coin, which is something like a collectible. It's like a Beanie Baby or a baseball card, and you buy it and it has a certain value. And so the day before Trump was inaugurated, he announced that he was issuing a new meme coin $trump. And overnight, it became one of the most valuable meme coins in the world. And of course, in this case, yet again, the Trump family owns most of the stockpile of the meme coins that are being issued there. And it also is going to make transaction fees off of it. So every time that meme coin is bought and sold that it gets a small chunk of money. And now, in order to continue to drive up the price of that meme coin, President Trump announced recently they're going to have effectively an auction where whoever owns the most of these Meme coin tokens will have the privilege of having dinner with President Trump at his golf club in Virginia later this month in May. And the people who among the 220 that the people at the top of that list will actually also get to make a visit to the White House. So, I mean, again, it's like, this is how I can't even, like, imagine that the President of the United States and his family are doing an auction that is now playing out as we sit here to be able to buy more of their crypto token and to bring money to the Trump family in exchange for getting access to the president. So it's for his personal benefit. It's not a campaign contribution. It's to personally enrich the family of the president. That's happening right now, in addition to all the other things that we've spoken about that's playing out with the meme coin.
- [39:11]
Eric Lipton
And the invitation said that it will be the most exclusive invitation in the world, a chance to have a, quote, intimate private dinner, unquote, with Trump at his members only golf club in Virginia. But is like exclusive and intimate private dinner appropriate words to describe a dinner with 220 people?
- [39:33]
Terry Gross
Yeah, well, that's, I mean, you know, if anything, you know, Donald Trump is an incredible marketer and brand builder and he's marketing and brand building, and he's been doing that for decades now. And that's what he's doing here again.
- [39:50]
Eric Lipton
So Trump used his properties, his hotels and Mar a Lago in ways that profited Trump in his first term, and he's doing that again in the second term. And a good example, which is something that you wrote about a little earlier, is when the Saudis held their live golf tournament in the U.S. in Florida. And LIV is like the Saudi rival to the pga, the Professional Golf association, which runs this really important tour and championship in the U.S. so how do Trump properties tie in to the rival Saudi LIV tour and championship so the.
- [40:38]
Terry Gross
LIV Golf is backed by the sovereign wealth fund of Saudi Arabia. And they've spent an enormous amount of money trying to create a competitive league to the pga. And in the United States, the Trump family has been one of their most important partners. And so for the fourth year in a row, they have had the tournament now at the Trump Dural outside of Miami, not far from the Miami Airport. I was there for the tournament this year, but this is the first time that Trump has been president of the United States in the White House while there is a Saudi funded golf tournament at his club in Florida. In the previous years he was in the private sector. So whatever, it doesn't really matter. But now you have effectively the Saudi sovereign wealth fund paying money to the Trump family while Trump is president of the United States. And the United States has massive foreign policy interest with the Saudi Arabia. It's thinking about selling them F35 fighter jets. It's thinking about giving them nuclear technology to help them build their nuclear industry. And so what I saw when I was down there at Trump Doral and there on the golf course was the governor of the public investment fund of the Saudi Arabia. He effectively runs more capital than just about any place anyone else in the world, hundreds of billions of dollars. And he is also the head of LIV Golf. And he was there on the golf course as the tournament was getting started. And Eric Trump was there as well. And Donald Trump had been there the night before I got there. So it's another conflict of interest. You have the Saudi Arabia paying money through LIV Golf to the Trump family at the same time as in the next couple weeks, President Trump is on his way to Saudi Arabia to talk about foreign policy matters.
- [42:29]
Eric Lipton
Okay. Time for one more break. Let me reintroduce you. If you're just joining us, my guest is New York Times investigative reporter Eric Lipton. He's written a series of articles about President Trump's conflicts of interest. We'll be right back. This is FRESH air. So we've talked about a bunch of conflicts or potential conflicts of interest involving President Trump. And in terms of reaction, Democrats are trying to block a bill pertaining to cryptocurrency that would stand to benefit the Trump crypto company, the Trump family crypto company. Do you have any sense of what the Democratic strategy is to try to block that bill?
- [43:10]
Terry Gross
Yeah, I mean, it's something that's just developed in recent days and several of them actually cited our stories as a factor in it.
- [43:17]
Eric Lipton
That's why I asked.
- [43:18]
Terry Gross
Yeah. And so I think that they are demanding that the Republicans give them some concession.
- [43:25]
Eric Lipton
On the next through line from npr. For the presidency, I'm indebted to almighty God. I'm in charge of the country, and I need to serve all the American people and not just the political machine. The origins of the modern civil service. Listen to Throughline wherever you get your podcasts.
- [43:48]
Terry Gross
You're listening to the NPR Network, live from NPR News.
- [43:51]
Eric Lipton
I'm Lauren Schmies.
- [43:52]
Terry Gross
A living, breathing record of your neighborhood, the country, the world, told by thousands of local journalists who live in the places where stories unfold, backed by a national newsroom that puts it all in perspective. Hear the whole country's story, hear ways of thinking that challenge your own. Hear the bigger picture with npr. And I do suspect that there will be a resolution of this. And I know that there are conversations ongoing right now between the Republicans and Democrats in the Senate to try to see if they can reach a resolution, because there's a lot of Democrats that are supportive of trying to help the cryptocurrency industry continue to mature in the United States. And I think that there are some Democrats who really want to see the president's family banned from actually participating in the stablecoin industry. And that's a bigger ask that I sort of wonder whether or not Republicans, I doubt that Republicans would agree to that. There could be some modifications made in the legislation that would tighten language around anti money laundering. That's more likely to occur. But what's clear is that the Democrats sort of see this as an important moment to pause and to use the clout that they have, because you need at least 60 votes to get something called cloture to move ahead on debate and to vote on legislation in the Senate. And they're using that clout to kind of they see this as a moment of opportunity to raise some of these issues and to demand potentially some concessions from Republicans. And that's playing out as we speak.
- [45:27]
Eric Lipton
Do you have any expectations about what the next step is going to be for Democrats pertaining to the genius Act?
- [45:34]
Terry Gross
Well, as we record this right now, on Tuesday, the House Financial Services Democrats had planned to stand up and walk out of a House hearing as a form of protest, to go to do their own hearing in which they're gonna open an investigation into Trump's crypto conflicts. They're so frustrated that there has been so little scrutiny of it and little response from Republicans that they're going to have kind of a show by walking out today and demanding that this be investigated. So the Democrats clearly have decided that this is an issue they want to engage on and that they want to try to elevate the national awareness of this issue. And that's happening on a daily basis right now.
- [46:23]
Eric Lipton
So what was your reaction when you found out that Maxine Waters had read out loud one of your articles about Trump crypto conflicts of interest? She read it out loud before a House Financial Services Committee hearing.
- [46:36]
Terry Gross
It was great. And of course, it's sort of cool to have a member of Congress read a story that you wrote. But, you know, what was most important to me is that there be more accountability and transparency. And I think that happens when people are aware of what's happening. And her reading it helps increase the awareness. And that's really what we're doing here by writing about these things is trying to make the American public and really the world more aware of the conflicts of interest that we're seeing and that we're trying to document.
- [47:07]
Eric Lipton
Eric Lipton, it's a pleasure to have you back on the show. Thank you so much. And thank you so much for your reporting.
- [47:13]
Terry Gross
Thank you.
- [47:14]
Eric Lipton
Eric Lipton is an investigative reporter for the New York Times. While we were recording our interview yesterday morning, a Senate subcommittee opened an inquiry into, quote, Trump crypto corruption. Hours later, Senate Democrats introduced the End Crypto Corruption act, which would ban the president, vice president, senior executive branch officials, members of Congress and their immediate families from financially benefiting from issuing, endorsing or sponsoring crypto assets such as meme coins and stablecoins. Tomorrow on FRESH air, we'll talk about how technology now shapes every aspect of parenting, from our online identities to the pressures of sharing our lives in real time. Our guest will be journalist Amanda Hess, author of the new book Second Life Having a Child in the Digital Age. I hope you'll join us to keep up with what's on the show and get highlights of our interviews. Follow us on Instagram prfreshair. Fresh Air's executive producer is Danny Miller. Our technical director and engineer is Audrey Bentham. Our managing producer is Sam Brigger. Our interviews and reviews are produced and edited by Phyllis Myers, Annre Boldonado, Lauren Krenzel, Teresa Madden, Monique Nazareth, Thea Chaloner, Susan Yakundi, Anna Bauman, and Joel Wolfram. Our digital media producer is Molly CV Nesper. Roberta Shorrock directs the show. Our co host is Tanya Moseley. I'm Terry Gross. Sam.