Donald Trump is facing some of the most serious threats to his financial empire in his long and tumultuous career. That’s his problem.
But the methods he’s using to get out of those troubles make him beholden to wealthy people with interests of their own—which, if reelected president, he would be in a position to advance. And that could be everyone’s problem.
Trump’s money woes begin with his urgent need for huge amounts of liquid cash—both to cover his never-ending legal fees and judgments, and to fund his campaign. A jury awarded the writer E. Jean Carroll more than $83 million in a defamation case in January. (Trump has posted a $92 million bond while he appeals the verdict.) In February, a judge in New York fined him nearly half a billion dollars in a civil fraud case involving property valuations. He owes legal fees for many other cases he’s involved in. Making matters worse, various aspects of his business suffered during his presidency because of negative publicity, and those troubles are compounded by the current weakness of the commercial real-estate market.
To make up for these challenges, Trump has turned to a few sources. He obtained a highly unusual bond from a California businessman for the civil fraud case, having persuaded an appellate court to reduce the amount to $175 million. He has been using political donations to pay his hefty legal bills, and his campaign’s effective merger with the Republican National Committee creates a new stream of cash for those. He has also brazenly pleaded for cash from large donors, reportedly telling a gathering of oil executives that he would pursue favorable policies if they raised $1 billion for his campaign and he won in November. Finally, the Trump Media and Technology Group went public this spring, providing Trump with a potentially enormous windfall, at least on paper. (“It’s one of the most obvious worthless stocks I have ever seen,’’ Alan Jagolinzer, an accounting professor at the University of Cambridge, in England, told The New York Times.) Each of these revenue streams gives leverage—financial, and perhaps psychological—over Trump to rich people whose fortunes could be affected by actions of the federal government.
“He made very clear throughout his presidency, and in the plan since then, that he is very open to people currying favor with him by financing him in a variety of ways,” Noah Bookbinder, the president of Citizens for Responsibility and Ethics in Washington, told me. Previously, someone looking for favor could donate to his campaign, schedule an event at a Trump golf course, or spend big at his hotel in Washington. Now the hotel is gone, but other possibilities have arisen.
“Donald Trump’s finances and the ways of potentially influencing him have gotten more complicated than what we were talking about in 2016, and even 2020,” Bookbinder said. “It’s a whole new world of ways to potentially funnel money to Donald Trump.”
Trump’s ongoing trial in Manhattan, on charges that he falsified business records to cover up a hush-money payment, showcases a small-scale example of how this works. David Pecker, the former publisher of the National Enquirer, testified that after he agreed to pay $150,000 to purchase and sit on the story of a woman who said she had sex with Trump, he was invited to a Trump Tower meeting with officials including FBI Director James Comey and future Cabinet-level officials, and was later feted with a White House dinner. This is deeply embarrassing—for Trump, given the reason he was indebted to Pecker; for the officials, who were made to mingle with a tabloid publisher (“Here is David Pecker, he’s the publisher of the National Enquirer, and he probably knows more than anybody else in this room,” Trump joked, per Pecker’s testimony; the men didn’t laugh, he recalled); and for the country. As a matter of substance, it’s probably relatively harmless.
But if $150,000 gets you a meeting with the director of the FBI, what does $175 million get you?
That’s the question raised by Trump’s bond in his civil fraud case. A defendant who is appealing a judgment is obliged to either post the amount he owes or to get a bonding company to offer an IOU—assuring that if the appeal is unsuccessful, the penalty will be paid. Trump’s attorneys testified in court that they had tried and failed to obtain a bond for the full amount of more than $450 million, and persuaded an appellate court to reduce the amount to $175 million. Trump was then able to secure a bond—but rather than use a New York State bonding company, he got it from Knight Specialty Insurance, a California-based company. Knight is owned by Don Hankey, a relatively unknown billionaire who has made millions in subprime loans.
The bond was odd. Initial filings for it contained errors that had to be corrected. Knight wasn’t licensed in New York, and the attorney general’s office raised questions about whether the company had enough money to actually cover the bond. Justice Arthur Engoron, the judge in the case, approved it only after a hearing in which Trump agreed to place collateral assets under Knight’s control.
The strangeness doesn’t end there. Hankey told Reuters that he charged Trump below market rate for the bond. He also said he supported Trump politically previously and in the current election and called the case against him “unfair,” though he said they had never met. Hankey has a financial incentive to get in Trump’s good graces: Federal regulators have taken actions against companies he controls at least four times in the past decade, NBC News reported, including repeated fines levied by the Consumer Financial Protection Bureau. As president, Trump could shield Hankey’s business from enforcement. He has made political interference in the Justice Department a centerpiece of his campaign for president, and during his first term, the CFPB was moribund and shackled.
“If you look at the laws of what an in-kind contribution is, it is exactly this— when you give a goods or services for not the full price because you want to curry favor with a candidate,” Adam Pollock, an attorney in New York and former assistant attorney general, told me. “In this day and age, nobody ever prosecutes those kind of in-kind contributions anymore, ever. But there’s a reason those laws exist. It’s because you don’t want to provide that kind of untoward access of how money corrupts politics. And I think we’re all just so jaded.”
Worth noting is that if Trump loses the appeal, he will still have to pay the penalty, or else he faces the prospect of the state attorney general seizing assets. (If appeals courts affirm Engoron’s ruling, Trump and his sons will also be barred from serving as officers of a company in the state for several years, which could paralyze the Trump Organization’s operations as they exist.) Trump has already acknowledged that he doesn’t have sufficient cash. That’s not a huge surprise—many of his holdings are in real estate, which is not liquid—but it is a problem for him, especially because the market for some of the assets he holds, specifically his large portfolio of urban office buildings, is depressed right now.
So when Trump Media and Technology Group, the parent of Trump’s Truth Social site, became a public company earlier this spring, it seemed like a timely windfall for the former president. Trump has a knack for wriggling out of a jam, and this looks like yet another example. His stake in the company is estimated at about $6 billion. But experts told me that paper wealth like this doesn’t always translate to liquid assets. The company’s equity is trading more like a meme stock than anything related to its underlying fundamental value: The price has dropped, and analysts expect it to fall further eventually. Regardless, Trump is barred from selling shares for months and may be unable to use stock as collateral. Once he is allowed to sell, he will be unable to cash out quickly, as doing so would tank the share price. (The company faces other question marks related to its auditor, who has agreed to cease operations and been charged by the Securities and Exchange Commission with “massive fraud.”)
This means that TMTG may not provide a miraculous cash infusion benefiting Trump, but it’s still a big gain for him. TMTG also illustrates other ways in which Trump is susceptible to financial leverage. The investor Jeff Yass was one of the biggest shareholders in the company that merged with Trump’s to go public. Assuming that Yass still owns the shares, this gives him substantial sway in keeping the inflated stock price high, which would in turn help Trump’s net worth swell. Perhaps Yass would not have invested simply to aid Trump—or to cozy up to him. But he and his wife are already the biggest political donors so far this election cycle, with all of their funds going to conservative causes. A Trump campaign source told The New York Times that Yass was expected to donate to pro-Trump efforts; Yass said he never had and would not. Because many donations can be hidden, the truth is almost impossible to know.
Yass is also a major investor in ByteDance, the parent company of TikTok. Trump was once a noisy critic of the Chinese-owned social-media platform. “As far as TikTok is concerned, we’re banning them from the United States,” he said in 2020. He issued an executive order to do so if ByteDance didn’t sell TikTok, but the order was soon blocked by judges. When Congress, backed by the Biden administration, took up a law to do the same this year, however, Trump suddenly turned against it. “Just so everyone knows, especially the young people, Crooked Joe Biden is responsible for banning TikTok,” he posted on Truth Social in April. The reversal came shortly after a meeting with Yass.
The public has no way to know why Trump flip-flopped, and both Trump and Yass say they didn’t discuss TikTok at their meeting, but some skepticism is reasonable under the circumstances. “We don’t know for sure whether [the meeting] resulted in Donald Trump changing his position,” Bookbinder told me. “But it’s certainly something where the American people have to question that.” Any other person of means might also conclude that a good way to get Trump to take up a view that benefits them—including reversing a long-held position—is to make a large investment in him.
Meanwhile, many of the old methods of influencing Trump remain. A Saudi Arabian sovereign wealth fund invested $2 billion in a private-equity firm founded by Jared Kushner, Trump’s son-in-law. Kushner has recently been raising money for the former president’s campaign. Serious questions also surround a development in Serbia led by Kushner and Ric Grenell, a former Trump-administration official who is rumored to be a candidate for secretary of state or national security adviser in a second term. Serbian and American observers have charged that the deal, which did not move through typical channels, is an attempt to win favor with Trump. All involved parties deny it, naturally.
That Trump would seek these bailouts should come as no surprise to anyone familiar with his business career. When he has struck serious financial difficulties in the past, he has sought and usually found some new source of funds. In 1990, for example, with Trump’s casino in Atlantic City foundering, his father walked onto the floor and bought $3.5 million in chips. (This turned out to violate state rules.) Later, when others had cut him off because of his habit of not paying his debts, he found in Deutsche Bank a willing lender. But DB was no more successful in dealing with Trump. An old joke goes that if you owe the bank $1 million, the bank owns you, but if you owe the bank $100 million, you own the bank. Trump defaulted on more than $600 million in DB loans.
When he was fined in the civil fraud case earlier this year, Trump found that none of his old lenders, including DB, was willing to help. His new sources of cash knew Trump’s history of stiffing those he owes, but they may have calculated that they stand to gain something far more valuable than repayment with interest: the power of the federal government at their beck and call.
