By Matt Peterson and Paul R. La Monica
Trump Media & Technology Group gave restricted stock potentially worth hundreds of thousands of dollars to President Donald Trump's nominee for FBI director, Kash Patel, and Linda McMahon, the nominee to run the Department of Education, along with others connected to the company.
The stock grants were disclosed Thursday in regulatory filings with the Securities and Exchange Commission.
Trump Media is the owner of the social media network Truth Social. The president owns the majority of the company's shares indirectly in a revocable trust held in the name of his son, Donald Trump Jr.
Restricted shares were also given to Trump Jr., along with Robert Lighthizer, a former U.S. trade representative in Trump's first term, and Eric Swider and W. Kyle Green, directors of Trump Media.
All six stock recipients are members of Trump Media's board of directors.
Patel and McMahon were each issued received nearly 26,000 restricted shares, worth approximately $820,000 based on the stock's closing price of $31.60 on Thursday. They would be able to immediately access 25% of those shares, worth roughly $205,000. They would be issued the remaining 75% in nine equal parts that vest each quarter through March 2027.
In response to questions from lawmakers, Patel wrote in testimony submitted Jan. 30 to the Senate Judiciary Committee that he did not know the Trump Media board would issue stock to him and that he would not accept it.
"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," Patel wrote.
Trump Media and the White House didn't immediately respond to requests for comment. McMahon didn't respond to a request for comment sent through the America First Policy Institute, where she is board chair. Patel couldn't be reached through his foundation, Fight With Kash, or through Kash Patel Productions.
According to guidelines from the Office of Government Ethics, presidents and vice presidents "are not legally subject to the restrictions" of conflict of interest laws, though they "should conduct themselves as if they were so bound." But Jessica Tillipman, associate dean for government procurement at the George Washington University Law School, said the restrictions should apply to Patel and McMahon.
"Most public servants don't want people to think they are taking advantage of their position for private gains," she told Barron's. "They don't want to give off the appearance of conflicts."
Other legal and ethics experts are also raising concerns about the stock grants for McMahon and Patel.
"Cabinet-level officials have immense responsibilities to the public, and their power must be used for that end. When cabinet officials hold stock in the president's media company, it raises questions about whether their decision making will be influenced by the president's financial interests," said Delaney Marsco, director of ethics for the Campaign Legal Center, in an email to Barron's.
Richard Painter, professor of corporate and government ethics law at the University of Minnesota and chief White House ethics lawyer from early 2005 to mid-2007 under President George W. Bush, took it a step further. He argued that McMahon and Patel could face questions about conflicts of interest if they are confirmed by the Senate.
"They should resign as board directors [of Trump Media] and sell the stock," Painter said in an interview with Barron's. "If not, they should have to recuse themselves from any matter that could effect the stock and they should stay off Truth Social."
Shares of Trump Media rose nearly 1% Friday. But despite the rally, the stock has fallen nearly 7% this year and has tumbled 20% since just before Trump's inauguration.
All of this is despite the fact that Trump Media recently announced plans to launch a fintech brand dubbed Truth.Fi. The company has also said it may use cash to invest in Bitcoin and other cryptocurrencies.
The stock, now trading a little below $32, is 60% below the record high of nearly $80 that it hit last March. That was shortly after Trump Media went public through a merger with a blank-check company.
Trump Media has yet to report a profit. Its revenue is tiny compared with other social media companies such as Meta Platforms, Snap, and Reddit.
Write to Matt Peterson at matt.peterson@dowjones.com and Paul R. La Monica at paul.lamonica@barrons.com Corrections & amplifications: This story was updated to reflect Patel's written testimony to the Senate Judiciary Committee, in which he said he would decline to accept stock issued by Trump Media. An earlier version of this article incorrectly said he received it.
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
February 07, 2025 21:05 ET (02:05 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
Comments