Bottled in Bond - Trump, TMTG, Hunterbrook, and Walmart
Trump
One reason it doesn't pay to get optimistic about our justice system ever handing down penalties against Donald J Trump is that it will tie itself in absolute knots to deliver even the tiniest bit of accountability for his rampant criminality:
With Donald J. Trump on the clock to secure a nearly half-billion-dollar bond in his civil fraud case, a New York appeals court handed the former president a lifeline on Monday, saying it would accept a far smaller bond of $175 million.
If $175 million feels like a completely arbitrary amount, that's because it is. The court, rather than treating Trump like a teenager accused of stealing a backpack, picked a number literally out of thin air that it presumably believed he could afford.
And, he did, sort of! Despite having nearly three hundred million surreptitiously lopped off his bond, it appears Trump didn't have that cash either, so he got a bond from this guy:
Hankey, a Trump supporter who made a fortune providing high-interest auto loans to customers with poor credit, soon reached out to Trump’s team to negotiate a deal that would allow Trump to stay the penalty while he appealed a massive New York civil fraud judgment.
Hankey approached Trump (unsolicited) to offer to pay his entire bond, and when it was reduced to $175 million and Trump claimed he could cover that, he still went with Hankey for some reason instead of, you know, a bond company in New York.
Why? It gets stranger - it seems that what actually happened (maybe? I am writing this on Thursday and the situation is changing almost hourly) was that Trump did not 'put up the cash' as Hankey claimed, but merely 'pledged' a bank account that allegedly has the funds in it to Knight Insurance. Except, Knight Insurance doesn't appear to be able to issue bonds in New York so maybe that can't happen either?
I do not pretend to understand the brains of rich people, but it really takes some sort of specimen to go out of your way to offer the world's least trustworthy businessman a $175 million dollar loan based on an IOU. The optimal situation here is that the bond from Knight is refused, and someone decides to look into what is actually happening at this weird company.
What does Knight Insurance do? Well:
A 2015 article in Forbes magazine described Hankey calculating how he might provide a hypothetical customer with a low credit score a loan at 23.99 percent. The article said that his company at the time had 336,000 outstanding car loans from 23,000 auto dealerships, and that his company repossessed 250 cars per day because of problems with repayment.
It will not surprise you to learn that Hankey's loan company has paid tens of millions' in fines for illegal debt collection practices, because it's the simplest way to become rich in this country - inflicting predatory financial treatment on a class of folks no one in power cares about.
Not all subprime loans are the same, however. Another one of Hankey's companies has bailed Trump out before:
Hankey is also the largest individual, non-institutional shareholder of Axos Bank, a little-known online company that in 2022 provided $225 million in crucial loans to keep Trump’s businesses afloat after many of his longtime lenders cut ties in the aftermath of the Jan. 6, 2021, attack on the U.S. Capitol.
Hankey denies knowing about said loans, but Axos Bank's CEO is another unabashed Trump supporter, who claims everything was on the up-and-up:
One day after the warning by Trump’s accounting firm became public, Axos’s blunt-spoken president and CEO — a Republican donor named Gregory Garrabrants — signed off on a $100 million loan for Trump Tower, the 58-story Manhattan skyscraper that had long been Trump’s home and base of operations, according to the bank.
Three months later, Garrabrants approved a second deal that provided $125 million for Trump’s Doral resort, a sprawling golf course complex in Miami-Dade County he had owned since 2012. Axos also financed part of a loan that helped facilitate the $375 million purchase of Trump’s D.C. hotel by a group of investors.
If you're a former president on the brink of bankruptcy after trying to overthrow the government, there's a bank for you! It happens to be a located in a San Diego strip mall, but nevertheless.
It is hard to know how close Trump came to financial ruin, because despite the NY ruling his finances are an opaque jumble, and any wealth he does possess is tied up in his heavily leveraged properties. But, even in his darkest times, there are enough loan sharks with access to enough money to bail the Big Boy out, whether or not his financial statements contain a shred of accuracy.
TMTG
Listen, the last thing I wanted to do this week was write not one but two sections about Trump ducking consequences, but here we are.
The last time we talked about TMTG it was on the ropes - being investigated by the SEC and dealing with whistleblower complaints of corporate malfeasance after Trump forced some of its founders out. At the time, I gloated:
Now, with TMTG facing lawsuits and investigations, its app languishing, and the prospect of Trump rejoining Twitter when Elon Musk buys it, we can savor the stories of backstabbing, infighting, and the speed at which Trump managed to take what could have been a massive financial windfall and squander it...
Boy, that was a lot of wrong in a single paragraph. What I did not appreciate at the time was that the DoJ, SEC, and all relevant authorities kind of didn't want to deal with the tire fire that was the DWAC/TMTG merger and while they did charge a couple of Trump's accomplices with insider trading and levy a few fines, regulators eventually kind of shrugged and let it happen.
Now, at long last, TMTG is public as 'DJT' which was also the ticker of his casino company that went bankrupt (both he and Elon seem to enjoy reviving failed projects). Right now there is an exhausting amount of reporting detailing Trump's 'net worth', which is a fundamental misunderstanding of how market caps and stock trading work, but, sure, let's assume that there are retail investors - Trump supporters, shadowy billionaires, whatever - willing to buy $6 billion worth of stock in a company that lost $58 million dollars on $4 million in revenue last year, yeah, Trump's finally rich. Great.
Would you believe there is an even more criminal-adjacent story behind how TMTG managed to keep the lights on for the year and a half it spent in legal limbo? Of course there is:
Donald Trump’s social media company Trump Media managed to go public last week only after it had been kept afloat in 2022 by emergency loans provided in part by a Russian-American businessman under scrutiny in a federal insider-trading and money-laundering investigation.
At this point, it would be unthinkable for one of Trump's businesses not to be funded by an international money launderer. Basically, the nephew of a sanctioned Russian oligarch set up a couple offshore companies to funnel millions into TMTG in 2022 in exchange for convertible stock options. Some of the money was refunded from TMTG to the offshore trust but, again, it is indicative of what a precarious situation Trump was in at the time, when he couldn't front a few million bucks to keep his sham media company afloat with a potential 10-figure windfall on the horizon.
Did that bridge loan allow TMTG to pursue its goal of building a big social media platform, or taking over cable news, or whatever it claimed in its shoddy filing statements? Of course not, the company is essentially a memecoin wrapped in a C Corp that happens to be publicly traded. No one buying DJT is under any illusion the company is ever going to be successful - after two years, Truth Social is still a (barely) custom Mastodon instance with a few hundred thousand active users shouting conspiracy theories and racism into a barren echo chamber. Its
Some have suggested that DJT is a way for Trump to solicit bribe money without risking campaign finance violations, or that his most fervent fans can use the stock as a way to show support, with no concern for whether they'll be wiped out when it inevitably tanks, either via Trump selling off his considerable stake or the market souring on it or, really, any number of other factors (crime, etc).
I disagree with these takes because there is one characteristic of modern right-wing zealots people are discounting - utter certainty that they are the smartest people in the room. Believing that you are both investing in your beloved Emperor and are going to become unfathomably rich as a result are not contradictory opinions in the minds of these people. Trump voters are, to a person, temporarily embarrassed millionaires who have earned the right to exist outside the social contract.
A meme stock predicated purely on Trump's involvement with a sham company run by detritus scraped out of the Apprentice casting book and West Palm's caddy community is a perfectly tuned instrument for the only song to which Trump knows the chords - scamming gullible rubes out of their money.
Hunterbrook
We have talked before about Hindenburg Research, a hedge fund predicated on deep investigative work to expose malfeasance at the companies it shorts. Another hedge fund called Hunterbrook has taken a somewhat different approach - it built its own 'newsroom' and hired journalists to do investigative reporting, which it will then use to make trades against bad companies.
The idea is that the funds derived from the hedge fund will fund a robust journalistic enterprise while maintaining ethical boundaries between the two organizations. You can essentially throw a dart and find malfeasance at a publicly traded company, so they've got their work cut out.
Hunterbrook wasn't content to simply trade against companies doing bad stuff, though. The company also has a 'nonprofit affiliate' (?) which plans on bringing consumer lawsuits against companies when it can:
Hunterbrook’s nonprofit affiliate has entered an agreement with BSF in exploration of a class action lawsuit against UWM seeking restitution for homebuyers. If you think you are paying too much on your mortgage, visit WasIRippedOff.com to learn if you might have used an independent broker who doesn’t shop and contact BSF.
[...]
Two of the authors of this article filed a whistleblower report to the S.E.C. represented by a former S.E.C. Commissioner. One, Matthew Termine, is also a party to the Hunterbrook nonprofit affiliate’s agreement with BSF.
Aaaaand, of course, securities lawsuits!
Upon publication, Hunterbrook Media plans to share this article and the data with:
[...]
Shareholder litigation firms whose clients own $UWMC shares and may have claims due to UWM’s governance and performance, including paying the CEO and his family over $600 million in annual dividends despite reporting a $70 million loss in 2023...
We talk a lot in these pages about how punishing companies for wrongdoing often falls to plaintiffs and their (very well-paid) lawyers, and it seems Hunterbrook plans on taking a multi-pronged approach to punish companies it sets its sights on. Is this...ethical? When given the choice between providing journalists with the funds to expose rapacious capitalism and the status quo of said capitalists buying up and gutting every newsroom that could hold them accountable, I'll come down on the side of Hunterbrook, even if I have to hold my nose a little.
Walmart
Well, here is a headline:
Walmart hits ‘Project Gigaton’ goal 6 years early, cutting roughly a Japan’s worth of emissions from its supply chain
In 2017, of its own accord, Walmart created a project with the goal of eliminating one gigaton of greenhouse gas emissions from its global supply chain. The original target was 2030, but they hit it six years early. Cool?
The company did so by 'encouraging' its suppliers to reduce emissions in one of a variety of categories - cutting waste, making packaging more eco-friendly, etc. It has its own verification and certification process for this, gilded in the requisite amount of corporate-speak:
In FY 2023, more than 750 suppliers earned “Sparking Change” status, and more than 1,100 received “Giga Guru” status, Singh said.
Sure. And, through significant effort and investment from Walmart, its thousands of suppliers did cut a ton of emissions from the supply chain, which is good! Even if we assume that some suppliers probably cut corners here and there, having the nation's largest retailer actively encouraging its vendors to make better packaging, ship more efficiently, and so on is unarguably a net positive for society.
But. The question I keep coming back to is:
How many 'Japans worth' of emissions does one fucking retail chain emit???
Walmart has around ten thousand locations around the world and over a hundred thousand suppliers, and the six thousand who participated in the project account for around seventy-five percent of the company's sales but...if Walmart cut an entire developed nation's emissions out of its supply chain, how much is left to go? How many Japans we talking here?
We, as consumers, are easy targets for scolding about our shopping habits, our fake carbon footprints, and what-have-you. But Walmart clearly has many gigatons of emissions circulating through its supply chain and we can't do anything other than hope they enjoy the positive PR from this and...voluntarily do it some more?
Rarely are the existential costs of our commoditized, financialized world of cheap, disposable goods quantified, but Walmart casually eliminating a Japan's worth of carbon in seven years because it felt like it sure begs more questions than it answers.
Short Cons
ARS Technica - "On Friday, a lone Microsoft developer rocked the world when he revealed a backdoor had been intentionally planted in xz Utils, an open source data compression utility available on almost all installations of Linux and other Unix-like operating systems. The person or people behind this project likely spent years on it. They were likely very close to seeing the backdoor update merged into Debian and Red Hat, the two biggest distributions of Linux, when an eagle-eyed software developer spotted something fishy."
Defector - "The National Hot Dog and Sausage Council (from here on out referred to as Big Hot Dog) claims that the average American eats ... 70 hot dogs a year."
NYT - "It was the first outdoor test in the United States of technology designed to brighten clouds and bounce some of the sun’s rays back into space, a way of temporarily cooling a planet that is now dangerously overheating."
The American Prospect - "Inmates in Oregon state prisons must obtain approval from a TLC Committee to receive everything from fish oil supplements to pain relief medications to medical scans needed to treat a dislocated wrist. And, an analysis of court records shows, Oregon TLC Committees frequently deny requests for care that are not considered “medically necessary” or life-threatening, leaving inmates in serious and excruciating pain with untreated medical conditions lasting months or even years."
The Verge - "Worse, after the May bankruptcy, almost $20 million in executive headcount was left on the [Vice] budget, one source told me. (“False. This grossly exaggerated figure is off by several million dollars,” said Sorzano.)"
Floodlight News - "Chevron is the city's largest employer, largest taxpayer and largest polluter. Yet when it comes to writing about Chevron, The Richmond Standard consistently toes the company line. And there's a reason for that: Chevron owns The Richmond Standard."
Meidas Touch - "David Zere, host of the MAGA Real America's Voice show Breaking Point, kicked off a firestorm of social media misinformation Friday when he falsely claimed that disgraced former President Donald Trump had paid off the mortgage for the family of slain NYPD officer Jonathan Diller."
Kansas City Defender - "In a historic victory and demonstration of collective power, the citizens of Kansas City have rejected a proposal that threatened to exploit the everyday people of Kansas City in favor of billionaires and corporate greed."
Know someone thinking of posting a $175 million dollar bond for a friend? Send them HERE!