A Trump Grift Too Far?

Last month, Trump Media & Technology Group, a publicly traded company with Donald Trump as the largest shareholder, unveiled a new product called Truth API. This product purportedly offers a real-time feed of the platform's most impactful "Truths." Former Trump advisor Michael Cohen had previously stated that Trump's primary motivation for running for President was to market himself.

After being suspended from Twitter and Facebook in January 2021, Trump launched his own social-media platform, Truth Social, in February 2022. Despite daily posts on the platform, Truth Social never gained significant traction. Truth API appears to be Plan B, aiming to monetize Trump's individual posts on Truth Social, particularly those concerning sensitive topics like tariffs, the Federal Reserve, and Middle East peace agreements.

The service debuted on August 1st, despite objections from Democrats and ethics experts. In a recent earnings call, interim CEO Kevin McGurn announced that over ten customers, mostly high-frequency trading firms, had signed up. McGurn also stated that Trump Media is exploring partnerships with hyperscalers, news organizations, and AI developers.

This news sparked further outrage, with Democratic Senator Mark Warner introducing a bill to prevent social-media companies from selling fast access to government accounts. Two media organizations, The Intercept and the Freedom of the Press Foundation, filed a lawsuit in a New York federal court, arguing that Truth API infringes on their constitutional right to access presidential statements on equal terms with other press organizations and the public.

They described the situation as a "brazen grift" targeting both the markets and the First Amendment.

Trump Media & Technology lacks legal protections that other entities have, but it maintains it is not engaging in wrongdoing. CEO McGurn noted that other social-media platforms offer API feeds for businesses, but Trump rarely posts on his current platform, X. Musk's X does provide corporate subscription options, some of which start at around forty thousand dollars per month.

However, Trump Media is relying on its API to revive a social-media business that has seen a thirty percent drop in visitors since July compared to the same period last year, and a $238.1 million loss for the latest quarter, primarily due to a sharp decline in the value of its bitcoin and other digital assets.

In July 2023, the company made the ill-fated decision to accumulate bitcoin on its balance sheet, a mistake given the crypto's subsequent decline. Recently, Trump Media has shifted focus to nuclear fusion by merging with TAE Technologies, a California-based firm working on a carbon-free energy source. Despite these efforts, Trump Media's stock (trading under DJT) has plummeted by about seventy-five percent since the beginning of last year.

Former ethics lawyer Richard Painter, who served in the George W. Bush administration, warned that the White House likely has no oversight of these business ventures, as Trump is not directly involved. Painter emphasized that Trump owns a significant stake in Truth Social, which could raise serious ethical concerns.