Mary Trump, the outspoken niece and frequent critic of former president Donald Trump, has shared her perspective on Truth Social, the social media endeavor led by her uncle. She believes that there is a possibility that it could be a campaign funding scam worth billions of dollars.
Mary Trump expressed her concerns about Truth Social in a lengthy tweet on Monday. She speculates that the platform may be covertly raising campaign funds, thereby circumventing federal regulations and potentially allowing unauthorized foreign influence.
Mary expressed her concerns in a tweet, stating that Truth Social might potentially be a front for a campaign finance scam.
According to the spokesperson, direct donations to political candidates are regulated by FEC laws. These laws set limits on the donation amount and mandate transparency regarding the origin of the donations. However, with Truth Social becoming a publicly traded company, supporters and even foreign entities now have a covert means to financially support Donald without making a direct political donation.
According to Mary Trump, the public listing of the social platform in March resulted in an inflated financial valuation without a strong foundation. This, in turn, could potentially lead to campaign finance irregularities.
Mary Trump claims that by allowing supporters and potentially foreign entities to buy stock, funds can be indirectly redirected to Donald Trump’s financial resources. This method supposedly allows for bypassing the strict donation limits and transparency requirements set by the Federal Election Commission (FEC).
Individual contributions to federal candidates are limited to $3,300 per election cycle, as stated in the regulations provided on the FEC website. These regulations aim to prevent an unfair concentration of financial power in politics by setting clear boundaries for political action committees (PACs) and candidate committees.
The FEC prohibits contributions from various entities, including corporations, labor organizations, national banks, federal government contractors, and even foreign nationals.
The commission requires thorough reporting of campaign contributions, including the disclosure of donors’ identities and the details of campaign expenditures, aiming to promote transparency in the electoral process.
In a Substack post accompanying the tweet, Mary Trump raised concerns about the potential ramifications of Truth Social becoming a publicly traded entity. She suggested that this move could potentially enable foreign governments to bypass FEC regulations and acquire a considerable amount of Truth Social stock. As a result, these foreign entities could establish a financial stake in the platform, potentially putting Donald Trump in a position where he owes them a favor.
The situation also falls under the purview of the Securities and Exchange Commission (SEC), which has regulations in place.
The Securities and Exchange Commission (SEC) requires institutional investors to disclose their ownership stakes in companies. This disclosure is mandatory for any investor that acquires 5 percent or more of a company’s outstanding shares. The rule applies to both domestic and foreign institutions, aiming to promote transparency and provide information about significant shareholders in U.S. companies.
Both the FEC and SEC have been contacted by Newsweek for comment.
According to public records, institutional ownership of Truth Social stock appears to be quite limited. The only institutional holder of Truth Social stock that has been identified is the Fidelity Concord Street Trust, which holds a 0.01 percent stake, equivalent to 17,141 shares.
The low level of institutional ownership indicates that there are currently no noticeable foreign actors involved in the stock. Instead, the stock prices are being influenced by the volatile nature of “meme stocks.” These stocks can experience upward movement driven by public sentiment and cultural affiliations.
According to Mary Trump, there is a concern that once the lock-up period for the stock ends in September, the former president may decide to sell his shares and use the funds for his campaign. She pointed out that this would be within the legal boundaries set by the FEC regulations, and there would be no limits on the amount he could divert towards his campaign.
In a Substack post, the writer pointed out that Donald has been able to redirect a significant portion of the cash generated from the sale of shares to support his campaign, thanks to the substantial amounts of money involved.
Last week, Donald Trump’s media enterprise, Trump Media & Technology Group Corp, completed a merger with blank-check company Digital World Acquisition Corp. This merger resulted in a significant financial gain of approximately $4 billion for Trump. Throughout the previous year, Trump’s company generated $4.1 million in revenues. However, during the same period, it experienced a loss of $58 million.
Market experts have previously labeled Truth Social as the initial “election stock” that will serve as a representation of the financial consequences tied to Trump’s personal brand. Some have even dubbed it an overvalued meme stock.
On Tuesday, Newsweek sent an email to the Donald Trump campaign, seeking their comment on the matter.
