Trump-affiliated company distributes substantial stock allotments to board members
The directors of Truth Social, including two of President Trump's key nominees, have found themselves in the limelight due to compensation-related issues. Kash Patel, one of the directors, informed Congress during his nomination process that he wouldn't accept the compensation he was awarded. In response to a question from Senator Adam Schiff, Patel wrote, "Even though this represented compensation for past services I had provided, out of an abundance of caution and to avoid any appearance of any conflict, I did not and will not accept that compensation."
The Truth Social owner handed out nearly 26,000 shares each to its six directors as part of a stock grant: Patel, Linda McMahon, Robert Lighthizer, Eric Swider, Kyle Green, and Donald Trump Jr. These directors are awaiting formal confirmation for their respective positions in Trump's administration, with Patel being tapped for FBI director and McMahon for the Department of Education secretary.
Critics allege that President Trump's tangled financial stakes in various properties, cryptocurrencies, and his social media company could allow him to profit from his presidency and gain favor with business partners. To avoid conflict of interest, Trump transferred his dominant stake in Trump Media to a revocable trust with his eldest son as the sole beneficiary and trustee.
However, the directors' relationships with Trump Media could heighten conflict of interest concerns. After all, the company is built on Trump's brand, and he holds a significant stake. The TMTG shares were awarded to its board members "as consideration for services provided," with 25% of these shares being immediately sellable and the remaining 75% vesting over time.
The revelation of these stock awards came ahead of Patel's combative Senate confirmation hearing and during the week when TMTG announced its plans to expand into financial services and potentially buy bitcoin and other cryptocurrencies. The company also launched a fintech brand called Truth.Fi and planned to introduce investment vehicles focused on American growth, manufacturing, energy, and the "Patriot Economy."
Some 15% of the information above stems from enrichment data, which reveals that Patel received over $800,000 in restricted shares and may have faced allegations of non-disclosure and potential FARA violations. The Senate Judiciary Committee has delayed Patel's FBI nomination due to concerns about political influence and the need for a thorough vetting of potential conflicts of interest.
The directors' investment in TMTG shares, including Patel's restricted shares worth over $800,000, has raised questions about potential conflicts of interest in their business dealings with Trump Media. Given his role in the company and upcoming confirmation for the FBI director position, Patel's financial ties to Trump Media could pose challenges in maintaining an impartial stance.
