Mary Trump, the outspoken niece and frequent critic of former president Donald Trump, has expressed her opinion on Truth Social. She believes that the social media venture, spearheaded by her uncle, could potentially be a campaign funding scam worth billions of dollars.
Mary Trump expressed her concerns in a lengthy tweet on Monday, suggesting that Truth Social could be secretly raising campaign funds in violation of federal regulations and potentially allowing unauthorized foreign influence.
In a tweet, Mary expressed her suspicion that Truth Social might be a cover for a campaign finance scam.
According to the speaker, direct donations to political candidates are governed by FEC laws, which set limits on the donation amount and mandate transparency regarding the origin of the donations. However, with Truth Social being a publicly traded company, there is now a covert avenue for supporters, and even foreign entities, to financially support Donald without having to make a direct political contribution.
Mary Trump is cautioning that when Twitter went public in March, its financial valuation was inflated without a solid foundation. This, in turn, could lead to potential campaign finance irregularities.
Mary Trump suggests that by permitting supporters, and potentially the foreign entities she mentioned, to buy stocks, funds can be indirectly channeled to Donald Trump’s accounts. This method bypasses the Federal Election Commission’s (FEC) strict donation limits and requirements for transparency.
Individual contributions to federal candidates are limited to $3,300 per election cycle, as stated in the FEC regulations available on its website. These regulations aim to prevent excessive financial influence in politics by setting clear limits for political action committees (PACs) and candidate committees.
The Federal Election Commission (FEC) prohibits contributions from various entities, including corporations, labor organizations, national banks, federal government contractors, and even foreign nationals.
The commission also requires thorough reporting of campaign contributions, including the names of donors and the details of campaign expenses, guaranteeing what it refers to as a transparent electoral process.
In a Substack post accompanying the tweet, Mary Trump raised concerns about the possibility of foreign governments gaining influence over Truth Social through stock ownership. She suggested that the platform’s status as a publicly traded entity could potentially allow FEC regulations to be bypassed, enabling foreign entities to purchase a substantial amount of Truth Social stock. This could potentially put Donald Trump in a position where he owes them a favor due to their financial stake in the platform.
The Securities and Exchange Commission (SEC) also has regulations regarding this matter.
The Securities and Exchange Commission (SEC) requires institutional investors to disclose any significant ownership in a company, which is defined as acquiring 5 percent or more of a company’s outstanding shares. This rule applies to both domestic and foreign institutions, promoting transparency in identifying the parties with substantial holdings in U.S. companies.
According to public records, institutional ownership of Truth Social stock appears to be quite limited. The only identified institutional holder is the Fidelity Concord Street Trust, which holds a 0.01 percent stake in the company, 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 prices seem to be influenced by the volatile nature of “meme stocks,” which can experience upward momentum 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 proceeds for his campaign. This action would be within the bounds of FEC regulations and would not be subject to any limits.
In a recent Substack post, the author highlighted the significant influx of cash that Donald has received from the sale of shares. This financial windfall provides him with a unique opportunity to redirect substantial funds towards his campaign, which has been facing financial constraints.
Last week, Trump’s media enterprise, Trump Media & Technology Group Corp, completed a merger with blank-check company Digital World Acquisition Corp, resulting in a substantial windfall of approximately $4 billion. The company generated $4.1 million in revenues in the previous year, but also incurred a loss of $58 million during the same period.
Some market experts have previously labeled Truth Social as the inaugural “election stock,” which serves as a representation of the financial consequences tied to Trump’s personal brand. Meanwhile, critics have categorized it as an “overvalued” meme stock.
