Trump Media Company Taking Money From Russian Cutouts? No, No, That Can't Be Right!
Free photo Trump Truth Social Social Media App - Max Pixel

Scoop Machine Hugo Lowell has done it again! The Guardian reporter broke the news this morning that Trump Media & Technology Group, the parent company of his janky knockoff Twitter platform Truth Social, is under SEC investigation for an $8 million cash infusion from a Kremlin-linked entity that appears "to be controlled in part by the relation of an ally of Russian president Vladimir Putin."

In 2021, Trump launched Trump Media with an MS Paint-quality pitch deck and a promise to take on Apple, Amazon, Netflix, CNN, and (hell, why not, right?) Stripe. More or less immediately, the company ran into trouble, and not just because the Truth Social media platform was overrun with Nazis and pictures of literal shit. See, the plan was to take the company public via a special purpose acquisition company (SPAC) called Digital World Acquisition Company. Basically, SPACs hoover up a bunch of cash from investors, go public, and then buy a private company, which is then spared having to go through the onerous disclosure obligations required if it went public on its own.

The problem is ... well, let's just block quote our own selves here, shall we?

SEC regulations say a SPAC is supposed to go public before negotiating with the target company. The New York Timesreported in October that DWAC was under investigation for violating this rule by negotiating with Trump and the backers of his social media venture before the initial public offering, specifically through a Miami banker named Patrick Orlando. Orlando, who just so happens to be DWAC's CEO, was allegedly talking to Trump in March of 2021, despite putting out prospectuses in May, June, July, August, and September saying “We have not selected any specific business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target."

This was bad news for everybody involved, because SPACs have a certain amount of time to acquire a company, after which they have to give the money back to their investors. DWAC probably can't buy Trump Media while it's under investigation by both the SEC and the DOJ. Then in June, it was reported that the entire board of directors of Trump Media had gotten subpoenas from the Southern District of New York. And in October, Will Wilkerson, one of the company's founders who was later pushed out, turned whistleblower and started talking to the media and investigators about all the hinky shit he'd seen.

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In November 2022, DWAC's shareholders voted to give the company until September 2023 to consummate the deal, which might still be blocked outright by the SEC. But in the meantime, without the $1.3 billion in cash that closing would bring in, Trump Media had been desperate for cash for upwards of a year. Maybe desperate enough to do some extremely dumb shit, according to The Guardian:

The first $2m payment to Trump Media came in December 2021 when the company was on the brink of collapse after the planned merger with DWAC – that would have unlocked millions for the company – was delayed when the SEC opened an inquiry into whether the arrangement broke regulatory rules.

Trump Media needed a bridge loan to keep the company afloat. But it struggled to get financing until DWAC’s chief executive Patrick Orlando sourced a $2m loan wired from Paxum Bank registered in Dominica, according to the wire transfer receipt reviewed by the Guardian.

The wire transfer identified Paxum Bank as the beneficial owner, although the promissory note identified an entity called ES Family Trust as the lender. Two months later, an unexpected second $6m payment arrived in Trump Media’s account from ES Family Trust, the transfer receipt showed.

Paxum Bank is part-owned by an individual named Anton Postolnikov, whose cousin Aleksandr Smirnov is a longtime ally of Russian President Vladimir Putin. And the Guardian notes that SDNY prosecutors were particularly interested in Paxum Bank, which "has a history of providing banking services for the pornography and sex worker industries, which makes it higher risk of engaging in money laundering and other illicit financing."

Indeed, the transaction was flagged inside Trump Media as well, according to Wilkerson, who said that CFO Phillip Juhan considered returning the money. But ultimately that plan was rejected because Trump Media had only $12 million cash on hand and couldn't afford to give back two-thirds of it.

Whether Donald Trump himself knew about the deal is unclear — he's been kind of distracted lately what with golf and shitposting about Governor Ron DeSantis. But the Guardian reports that Don Jr., who is on the board, appears to have known in advance that the money was coming.


[The Guardian]

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Liz Dye

Liz Dye lives in Baltimore with her wonderful husband and a houseful of teenagers. When she isn't being mad about a thing on the internet, she's hiding in plain sight in the carpool line. She's the one wearing yoga pants glaring at her phone.


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