Mary Trump, the outspoken niece of former president Donald Trump, expressed concern about Truth Social, a social media venture spearheaded by her uncle, suggesting that it could be a potential multi-billion-dollar campaign funding scam. She raised the alarm that the platform could serve as a front for an operation aimed at raising campaign funds, possibly evading federal regulations and opening the doors to unsanctioned foreign influence. With Truth Social now a publicly traded company, there are new ways for supporters, and even foreign entities, to financially back Donald Trump without being subject to the strict limits and transparency requirements of the Federal Election Commission (FEC).
FEC regulations impose limits on direct donations to political candidates and require transparency regarding the sources of donations to ensure a fair and transparent electoral process. Mary Trump argued that by allowing supporters and potentially foreign entities to purchase stock in Truth Social, funds could indirectly find their way to Donald Trump’s campaign, bypassing FEC donation caps. She suggested that the public listing of Truth Social has inflated its financial valuation without a solid foundation, potentially paving the way for campaign finance irregularities.
Mary Trump warned in a Substack post accompanying her tweet that Truth Social’s emergence as a publicly traded entity could circumvent FEC regulations, potentially allowing foreign governments to acquire significant amounts of stock in the platform and hold financial stakes that could influence Donald Trump. However, the Securities and Exchange Commission (SEC) has regulations in place to ensure transparency regarding institutional ownership of companies, establishing thresholds for reporting when an institutional investor acquires significant stakes in a company. As of now, public records show minimal institutional ownership of Truth Social stock, suggesting no detectable foreign actors influencing the platform’s stock prices.
Trump’s media enterprise, Trump Media & Technology Group Corp, recently merged with a blank-check company, Digital World Acquisition Corp, providing him with a windfall of $4 billion. The merger raised concerns among market experts, with some labeling Truth Social as an “election stock” reflecting the financial implications of Trump’s personal brand, and others considering it an overvalued meme stock. Mary Trump cautioned that once the lock-up period on Truth Social stock ends in September, Donald Trump could potentially sell his shares, diverting the cash to his campaign legally and without limits under FEC regulations. Newsweek has reached out to the Donald Trump campaign for comment on these issues.
The situation surrounding Truth Social raises questions about the intersection of finance, politics, and technology. Mary Trump’s warnings underscore the potential for opaque mechanisms that could facilitate campaign finance irregularities and unsanctioned foreign influence through publicly traded companies like Truth Social. The regulatory frameworks of the FEC and SEC play a crucial role in maintaining transparency and fairness in campaign financing and institutional ownership. As the story unfolds, it will be important to monitor the actions of both regulatory bodies and the Trump campaign to ensure compliance with established laws and regulations governing campaign finance and corporate governance in the United States.
