Marty Davis, the wealthy head of a Minnesota kitchen countertop manufacturer, is a steadfast supporter of former President Donald J. Trump. He donated hundreds of thousands of dollars to help elect Mr. Trump in 2020 and encouraged him to fight to overturn the 2020 election results.
Shortly after Mr. Trump’s social media company announced in October 2021 that it planned to go public through a merger with a cash-rich shell company, Mr. Davis was one of the first to loan the fledgling company millions to help it raise up to its IPO was able to stay afloat by completing the merger and financing the launch of its Truth Social platform.
According to documents reviewed by The New York Times, Mr. Davis made a $5 million loan to Trump Media & Technology Group. His loan was part of $40 million that Trump Media raised from more than a dozen private investors, some of whom helped finance efforts to elect Mr. Trump and are now likely shareholders in his social media company.
It’s not uncommon for startups to seek wealthy investors for funding, but the stock holdings raise questions about the potential for conflicts of interest and undue influence over Mr. Trump should he return to the White House.
Other early backers include two Texas billionaires, a Florida hedge fund manager and a trust with ties to a Russian-American owner of an offshore bank who is the nephew of a former high-ranking Russian government official, the documents show. One of the billionaires, Kenny Troutt, a retired Dallas telecommunications executive, has donated more than $1.1 million to efforts to support Mr. Trump’s three White House bids. Mr. Troutt is serving as co-chairman of a major fundraiser for the former president in Palm Beach, Florida, on Saturday.
“It was the deal of the century,” said Massimo D’Angelo, an attorney for Patrick Walsh, a Florida hedge fund manager who loaned Trump Media $6.2 million.
When Trump Media closed its merger with Digital World Acquisition Corp. in March. Finally went public, these early investors stood to profit handsomely: Most of the loans were designed to be converted into stock at a price of about $22 apiece, while Trump Media’s shares traded at about $40. It is unclear whether any of them made money by selling their shares.
Some Trump Media supporters like Mr. Walsh have little to no political connection to the former president. For example, Karl Pfluger, an oil and gas billionaire who was one of Trump Media’s largest lenders, providing nearly $10 million, is a major donor to Texas Republicans but is not a prominent Trump donor.
Shannon Devine, a spokeswoman for Trump Media, said: “The media should be wary of relying on documents from critics of our company who have provided the press with outdated, misleading and falsified materials in the past.”
Mr. Davis declined to comment. Mr. Pfluger, president of Oryx Midstream Services, an oil pipeline company, did not respond to a request for comment. A senior executive in Mr. Troutt’s family office, who signed the loan agreement, declined to comment. Mr. Troutt, who now breeds racehorses, made his $3 million loan to Trump Media through an affiliate.
Mr. Trump, who owns 57 percent of Trump Media, did not personally put much money into starting the company.
Ethics experts say if Mr. Trump wins the White House and doesn’t divest himself of his stake in Trump Media, it could open up a whole new opportunity for foreign actors or special interests to curry favor with him, including by buying advertising on Truth Social.
At last count, the value of Mr. Trump’s stake was about $3 billion. Trump Media itself is currently worth around $5 billion, although the company lost $58 million last year and made just $4.1 million from advertising on Truth Social, its only source of revenue. On Friday, shares of Trump Media fell about 12 percent to close at about $40 a share – giving back all the gains it had posted since its first day of trading.
Roy Bailey, the co-chairman of Mr. Trump’s 2020 campaign who helped raise some of the financing for Trump Media, declined to discuss any of the lenders. Bailey’s Dallas-based company loaned Trump Media at least $33,000, according to a loan agreement obtained by the Times.
Wes Moss and Andy Litinksy, two of Trump Media’s founders, oversaw fundraising from outside investors. The two men were former contestants on Mr. Trump’s reality TV show “The Apprentice.” They had pitched Mr Trump on the idea of starting the company in January 2021, after he was banned from Twitter, now called X, following the Capitol riots on January 6.
Mr. Moss and Mr. Litinsky had signed most of the loan agreements on behalf of Trump Media but are no longer associated with the company. They are fighting in court with Trump Media over the preservation of their approximately 6 percent equity stake in the company.
A lawyer for both men declined to comment.
The loan agreements reviewed by The Times were provided by Stephen Bell, Philip Brewster and Patrick Mincey, lawyers for a former Trump Media employee, William Wilkerson. The agreements were contained in thousands of pages of documents submitted to the Securities and Exchange Commission in connection with a whistleblower complaint filed by Mr. Wilkerson. The regulator was investigating whether Digital World violated securities laws by entering early merger talks with Trump Media. Last summer, Digital World reached a settlement with the SEC and agreed to pay an $18 million penalty.
Mr. Davis, the Minnesota businessman, gave $5 million to Trump Media through an obscure limited liability company. He is one of Trump Media’s best-known financial backers.
Mr. Davis, a longtime Republican donor, successfully lobbied the Trump administration to impose tariffs on quartz from China in 2018 to address damage caused to his company by illegal dumping. Although he did not contribute to Mr. Trump’s campaign in 2016, he donated about $350,000 to Mr. Trump’s re-election in 2020. In October 2020, he hosted a $100,000-per-person fundraiser for Mr. Trump Home in Minnesota.
His efforts to push Mr. Trump to fight the results of what he called a “corrupt election” came to light during a congressional investigation into the Jan. 6 insurrection at the Capitol and were later reported by Talking Points Memo. In a Dec. 9, 2020, text message to Mark Meadows, then the White House chief of staff, Mr. Davis said he needed an Oval Office meeting with the president to “tell him what I’m doing now to fight for him.” !” He added: “Also, strongly support 2024 if he gets screwed.”
A week later, he texted Mr. Meadows again and said he had told Mr. Trump that there was widespread illegal voting in Minnesota — a claim that election officials in the state refuted.
The most curious of all Trump Media investors is a company called ES Family Trust, which borrowed up to $8 million in late 2021 and early 2022. The trust has ties to Anton Postolnikov, a Russian-American financier who lives in South Florida. Divorce documents for Mr. Postolnikov and his wife, verified from The Times indicate a financial connection to the ES Family Trust.
As recently as last year, Mr. Postolnikov was the primary owner of Paxum Bank, a small bank based on the Caribbean island of Dominica, which transferred part of the loan to Trump Media, according to documents reviewed by The Times. The bank processes payments for adult entertainment companies.
Mr. Postolnikov is the nephew of Aleksandr Smirnov, who served as a senior Russian government official for nearly 15 years. Two years ago he was deputy manager of a state-owned seaport company.
A statement released last year on behalf of Mr. Postolnikov denied that he was in any way connected to allies of Russian President Vladimir V. Putin and said lies about him were being spread on Russian websites. Mr. Postolnikov came under scrutiny as part of an insider trading investigation by federal prosecutors who were examining trading in Digital World securities around the time of the merger announcement in 2021, according to a filing related to the matter. He has not been accused of wrongdoing and his attorney declined to comment.
Kitty Bennett, Rachel Shorey and Oleg Matsnev contributed to the research.
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2024-04-05 20:09:17
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