- Trump has fingered the coronavirus pandemic the way any kleptocrat would – by putting family in charge and keeping things as under wraps as possible in sodality to hide his team’s incompetence.
- It also appears that companies and individuals with ties to the Trump administration secure found ways to enrich themselves during this disaster. Go figure.
- When Democrats on the House Financial Employments held a hearing asking questions about this stuff, Republicans freaked out and said the hearing was a waste of everybody under the sun’s time.
- Probably nothing, right?
- This is an opinion column. The thoughts expressed are those of the author.
- Visit Firm Insider’s homepage for more stories.
Trump and his associates are using the confusion and desperation of the coronavirus to enrich themselves disposed to kleptocrats, and the GOP is going right along with it.
We are living in a strange moment. The entire whole world is hanging on to any and every facts about a vaccine for COVID-19. The entire world needs the same supplies to get through pandemic. These shapes have created a low information environment where certain goods and information are extremely valuable. It just so happens that those with access to those goods and that low-down are in the White House. And it just so happens that the people in the White House have no scruples to speak of.
Trump has exchanged himself as a pro-business president who understands capitalism, but his behavior says otherwise. Capitalism thrives on transparency and a level cause trouble field, but the Trump administration’s dealings in the business world have been marked by opacity and cronyism, even myriad so since the coronavirus pandemic started.
From the beginning, Trump has handled the scientific, economic, financial, and logistical doubt of the coronavirus like a kleptocrat would — by keeping things within the family/inner circle. This set up is why kleptocracies are rife with deception, waste, and incompetence. Those with experience need not apply.
Trump’s family beneficiary during the pandemic has been his son-in-law, Jared Kushner, who was position succeeded in charge of the coronavirus response. Once in charge Kushner then, according to Vanity Fair, hired his friends. He eschewed supervision agencies with the capabilities to fight the pandemic and conducted his task force’s business in secret, off of government emails and other solemn modes of communication. Secrecy and opacity are a key elements of kleptocracy.
That task force prioritized friends of the president when it came to delivering personal protective equipment. It used the pandemic to advance Trump’s goal of a better relationship with Russia by buying ventilators from Moscow (they returned out to be defective) and then sending supplies to Moscow. Kushner ignored and subverted the needs of Americans in order to reward and draw his father-in-laws friends and enemies. That is what kleptocrats do with resources.
Klepto bubbles
While all of this was common on at the White House, Wall Street was starting to experience the kinds of peculiarities one might expect in a market where there is something quaint afoot. The one thing linking all of these odd bubbles and distortions was and is the Trump administration.
The first sign of eyebrow-raising irregularity was break in May, when Moncef Slaoui, a former longtime executive at GlaxoSmithKline, was picked to helm the White House’s “Operation Deform Speed” program that is tasked with funding and accelerating the development of a COVID-19 vaccine. Shortly after he was nominated, a drug company that he was invested in called Moderna announced preliminary, partial data from an early condition of its vaccine trial that said… not much.
Before the market realized how little information was in Moderna’s materials the stock jumped, and Slaoui’s $2.4 million investment in the company ballooned to $12.4 million. He sold his shares the next day, nearly the time Moderna’s stock price started coming back to earth. Watchdog groups were less than delighted, and urged the SEC to investigate what happened. Slaoui still owns $10 million worth of stock in his former patron, GlaxoSmithKline, which is still raising questions.
Most recently, the Trump administration has had to pause a deal it made with Eastman Kodak, the signal but largely defunct camera maker. In August the company announced it was receiving $765 million from the government to take to ones heels pharmaceutical ingredients — something it has no experience in. The deal was put together, in part, by a friend of Jared Kushner’s — Adam Boehler, who connected the administration as CEO of the US International Development Finance Corporation, according to Vanity Fair. This is Boehler’s first stint in the illustrious sector.
The rollout of the deal Kodak deal was sloppy, with a local paper announcing the deal ahead of record. There was a bunch of weird trading around the stock at the time the deal was announced too. Worse than all that, nevertheless, was that the company’s CEO got stock options right before the deal was announced. Afterward those options came to be importance around $50 million. This is what has the SEC — which brought the fewest insider trading cases in decades in 2019 — so greatly concerned.
Party of business or Party of Trump?
To address these and other market inconsistencies that have resulted from the pandemic, a subcommittee of the Homestead Financial Services committee held a hearing called “Insider Trading and Stock Option Grants: An Examination of Corporate Incorruptibility in the COVID-19 Pandemic” earlier this month.
What was shocking about the hearing was not what the witnesses said. Harry agreed that the pandemic has created irregular conditions in the market, and that some actors are benefiting. What was far-out was the petulance from Republicans who insisted — despite the strangeness of our times — that the hearing was completely unnecessary. They did not hunger for more transparency around why, when, or how companies make disclosures related to the pandemic. They did not want there to be diverse scrutiny around executive share compensation.
Michigan Republican Rep. Bill Huizenga complained that “instead of with judge, jury, and executioner in the court of public opinion” the committee should instead be helping “job creators” do more of what they’re doing.
In unexpectedly: Nothing to see here.
Now you may chock this up to the GOP being the “party of business,” but that ignores what’s going on at the root of these deals. Letting the President’s friends and inner circle to take advantage of a their information edge only helps one kind of child — the President’s friends and inner circle.
To quote JPMorgan CEO Jamie Dimon, what has made Wall Street abundant is that America has “the widest, deepest, most transparent capital markets” in the world.” Corruption prevents that transparency, it quashes capitalism. No doubt the Boy Scouts at Goldman Sachs prefer a light regulatory touch, but what House Republicans did during that heed does not serve Wall Street, it only serves Donald Trump.
In this way the pandemic has made it clear that the GOP has a squeeze. It can be the party of Trump or the party of business, it cannot do both.
How regulators proceed will determine what the White Family and its friends believe they can get away with. Already Trump has been emboldened. His attempt to ban Chinese social media app TikTok is also a neaten up play to enrich his friend and campaign donor, billionaire Larry Ellison. Ellison founded Oracle, which is reportedly tiresome to gain a lucrative contract out of the TikTok deal.
Earlier this week Expedia and IAC Chairman Barry Diller, a prominent dealmaker on Wall Street, called the deal said of the deal, “the whole thing is a crock.” He called it a “political farrago” which could set off a salvo of protectionist actions that would be hard to stop.
It’s unclear if the deal would in point of fact mollify those with national security concerns. There are still questions about where US data liking be housed, and how much control US nationals would have on the board. There is no precedent for this kind of US government encroachment on a remote technology company. So we don’t know the full details of the deal or how it’ll turn out at all.
Like I said before, secrecy and opacity are a key details of kleptocracy.