When former President Donald J. Trump’s social media company went public this week, supporters and investors betting on Mr. Trump’s political success helped drive the value of a loss-making firm through the roof. Mr. Trump ended the first day of public trading $4.6 billion richer on paper.
If Mr. Trump is elected president, it may not be the last time the company is used as a vehicle to benefit Mr. Trump’s pocketbook, experts said.
Trump Media & Technology Group — the owner of Truth Social, the site Mr. Trump uses to rally his backers and blast his opponents — could present a new, fairly straightforward route for foreign leaders or special interests to try to influence him. Should he retain his control of the company while in office, the ethical questions that arose from Mr. Trump’s hotels and other properties in his first term as president would only multiply when applied to a publicly traded media company, they said.
“This will be a very easy vehicle for foreign governments that want to curry favor with the president to throw money at him in a way that benefits his financial bottom line,” said Jack Goldsmith, a law professor at Harvard University and a top Justice Department official under President George W. Bush.
Corporations and other players wanting to sway Mr. Trump could buy advertising on Truth Social, other experts said. They could try to get on his radar by buying shares in the company. As the nation’s leader whose every utterance is monitored around the world, Mr. Trump would also be in an extraordinary position to drive traffic — and ultimately revenue — by the habitual use of the site.
Ethics experts see few legal obstacles to these scenarios. Presidents are not covered by federal conflict-of-interest law, and efforts to use constitutional checks failed during Mr. Trump’s first term.
Asked how Mr. Trump would manage his roughly 60 percent stake in Trump Media if elected, Steven Cheung, a campaign spokesman, said he would “follow ethics guidelines,” but did not offer specifics.
A number of presidents tried to steer clear of the appearance of profiting off their position by voluntarily putting their assets and investments in blind trusts. President Biden did not need to do that because he invested only in diversified funds that included a variety of companies, a White House spokesman said. Mr. Trump’s decision to maintain his financial interest in his real-estate businesses while president overturned prevailing ethical norms.
Mr. Trump’s critics filed multiple lawsuits claiming that he violated the emoluments, or anti-corruption, clauses of the Constitution, language designed to prevent a president from profiting from his official position, and foreign or state officials from influencing a president through gifts or benefits. They argued that Mr. Trump had illegally benefited from payments from foreign leaders and others who patronized his properties.
But the lawsuits were either dismissed or, after Mr. Trump lost his 2020 re-election bid, declared moot by the Supreme Court. It was never established what constituted an emoluments violation and what would be the remedy.
“I don’t have any doubt whatsoever that the emoluments clause would prove even less an obstacle to Donald Trump were he elected in November than it was when he was president before,” said J. Michael Luttig, a conservative former federal appeals court judge who has argued that Mr. Trump’s attempts to overturn the 2020 election disqualify him from holding public office.
Representative Jamie Raskin, Democrat of Maryland, who led a congressional inquiry into Mr. Trump’s conflicts of interest, said: “The emoluments clause right now has been reduced to nothingness. In order to breathe life back into it, Congress must develop a legislative machinery to enforce the principle.”
Foreign or special interests are not the only concern that arises with presidential control of a media company, said Richard Painter, who served as the chief ethics lawyer to President George W. Bush and who later ran for Congress as a Democrat.
If Mr. Trump were re-elected and used Truth Social to communicate in the way that he used Twitter during his first term, Mr. Painter said, “he would be helping himself to profits through United States government traffic” while putting Truth Social’s competitors at an unfair disadvantage.
He said Mr. Trump would most likely face the same type of criticism that dogged Silvio Berlusconi, whose company controlled much of the national television broadcasting in Italy while he served as the country’s prime minister. Mr. Berlusconi, who served nine years as prime minister, dismissed allegations of conflicts of interest by saying that he had relinquished control of his media empire to his sons. Three independent watchdog groups said Mr. Berlusconi’s control of major media outlets threatened or limited the independence and diversity of Italy’s press.
After Mr. Trump’s election in 2016, his advisers said that presidents were not required to separate themselves from their financial assets and that Mr. Trump’s precautions would be sufficient to protect him from influence seekers. Mr. Trump described the emoluments clause as “phony.”
He gave his sons day-to-day control of the Trump Organization, the main umbrella group for his businesses, but was still closely tied to the organization. Mr. Trump also pledged to donate any profits from foreign government spending to the U.S. Treasury.
Mr. Raskin and other Democrats on the House Committee on Oversight and Accountability estimated that Mr. Trump’s businesses garnered at least $7.8 million from foreign governments or their leaders while he was in office, mostly from China and Saudi Arabia. The Trump Organization donated only about $459,000 to the Treasury, they said.
Perhaps even more than with his hotels, golf courses and other enterprises, Mr. Trump’s personal involvement in the social media company is considered critical to its success.
In filings with the U.S. Securities and Exchange Commission, Digital World Acquisition Corporation, the company behind the merger, tied the operation’s hopes directly to Mr. Trump. Were Mr. Trump to divest of his financial interest, or no longer devote a substantial amount of time to Truth Social, the business could suffer, the filings stated.
Mr. Trump created Truth Social in 2021 after Twitter barred him from its platform, citing the risk of violence. Mr. Trump has fewer than seven million followers, compared with about
87 million on X, formerly Twitter. He continued to post almost exclusively on Truth Social even after X reinstated him in November 2022, a sign of his commitment to the platform.
During the first nine months of last year, Trump Media took in just $3.3 million in revenue — all from advertising on Truth Social — and had a net loss of $49 million. But after concluding the merger, Trump Media closed its first day of trading on Nasdaq under the ticker DJT, with an estimated market value of close to $8 billion. That is more than 2,000 times its estimated annual revenue and more than the valuation of corporations like Alaska Airlines and Western Union.
The stock was so high-flying that trading in its shares had to be briefly halted because of extreme volatility.
Mr. Trump, who has been scrambling to post a $175 million bond stemming from a civil fraud case, is currently prohibited from cashing out his shares for six months.
Although Mr. Trump will not serve as the firm’s chairman, the board is stacked with staunch allies. Besides his son, Donald Trump Jr., they include: Devin Nunes, a former Republican congressman from California and Trump Media’s chief executive; Kash Patel, who served as Mr. Trump’s counterterrorism adviser on the National Security Council and who has suggested that some journalists will be legal targets if Mr. Trump is re-elected; Robert Lighthizer, the former U.S. Trade Representative; and Linda McMahon, a Trump campaign fund-raiser who led the Small Business Administration under Mr. Trump.
Matthew Goldstein contributed reporting. Kitty Bennett contributed research.
