In the New York Times from this past Thursday (May 1), the lead story was a scathing exposé of alleged corruption of our current President. The headline and sub-headline (print version) were “Trump Shapes the Policy On Crypto, and Cashes In. Hushed Deals and Foreign Investors Propel President’s Digital Money Start-Up.” The sub-headline in the online version was even more scathing: “World Liberty Financial has eviscerated the boundary between private enterprise and government policy in ways without precedent in modern American history.” The story fills the entire upper right-hand quadrant of the front page, plus another full page and a half in the interior of the paper.
So according to the Times, this is not just some ordinary, every day, run-of-the-mill political corruption. Rather, it is corruption that has “eviscerated” boundaries between business and government, and is “without precedented in modern American history.”
Is there any substance to these charges?
As readers here know, my view has long been that the game of politics is inherently corrupt. Politicians are in a position to use the powers of their offices in a thousand ways, large and small, to benefit themselves and their friends and supporters, and to disadvantage adversaries. Almost no human being is immune from the temptation to use those powers for such purposes at least a little. And thus there is no such thing as a politician against whom at least some charge of corruption cannot credibly be alleged.
And it is far worse with today’s massive and intrusive federal administrative state. Essentially every business is under the thumb of federal regulation — and even if a business is not currently regulated, it could be. Every business is also taxed, and the taxes for any given business could be either increased or decreased at any time. So if a President is involved in changing regulation in any way, or in changing taxation in any way, or even in not changing regulation or taxation when some people say that he should, did he do that to benefit the financial interests of himself or his family, or did he do it because he thought it was good public policy? And don’t forget, it could be both!
Because every politician does things that can credibly be charged as corruption, I think that by far the most important question about any allegation of political corruption is whether the action in question is at least arguably illegal, and if so, what is the theory of illegality? Beyond that, it is also completely fair to ask whether something might not be right or good, even if legal. Just because something isn’t even arguably illegal doesn’t make it immune from criticism. All allegations of self-dealing are fair game for criticism of a politician, and for the voters to take into account.
With that background, let’s give the Times their best shot to make their case. The subject of the big May 1 article is a crypto start-up by the name of World Liberty Financial. WLF was launched in September 2024, shortly before the recent election. The majority owner of WLF is The Trump Organization (which the Times calls a “Trump family corporate entity”). Since taking office for his second term, President Trump has significantly eased the federal regulation of the crypto industry, including ending SEC investigations and disbanding a Justice Department task force focused on the industry. The Times calls this a “broad unwinding of Biden-era scrutiny of the industry.” From the Times:
Mr. Trump’s return to the White House has opened lucrative new pathways for him to cash in on his power, whether through his social media company or new overseas real estate deals. But none of the Trump family’s other business endeavors pose conflicts of interest that compare to those that have emerged since the birth of World Liberty. The firm, largely owned by a Trump family corporate entity, has erased centuries-old presidential norms, eviscerating the boundary between private enterprise and government policy in a manner without precedent in modern American history.
Mr. Trump is now not only a major crypto dealer; he is also the industry’s top policy maker. So far in his second term, Mr. Trump has leveraged his presidential powers in ways that have benefited the industry — and in some cases his own company — even though he had spent years deriding crypto as a haven for drug dealers and scammers.
The gist of the Times’s claims against Trump in the piece is summarized as a “range of conflicts of interest trailing the company.” Here is their list:
- World Liberty has directly benefited from Mr. Trump’s official actions, such as his announcement of a federal crypto stockpile that would include a digital currency the firm has invested in. The president’s announcement caused a temporary jump in the value of World Liberty’s holdings.
- World Liberty has sold its cryptocurrency to investors abroad, including in Israel and Hong Kong, according to interviews and data obtained by The Times, establishing a new avenue for foreign businesses to try to curry favor with Mr. Trump.
- Several investors in World Liberty’s coin managed firms that the federal government accused of wrongdoing. They include an executive whose fraud case was suspended after he invested millions of dollars in World Liberty. Other investors and business partners, some of whom haven’t been publicly identified before, are looking to expand in ways that will require the Trump administration’s approval.
- World Liberty proposed swapping cryptocurrencies with at least five start-ups, and often used the Trump name to solicit steep payments as part of the deals. Even in an industry with a disreputable history, the deals raised alarm among veteran executives.
My reaction is, is that the best you’ve got? The most serious of the allegations is the first one, that “World Liberty has directly benefited from Mr. Trump’s official actions.” And so have hundreds and hundreds of other businesses benefited from the broad de-regulatory agenda of the second Trump administration. Trump himself may be benefiting from the de-regulation of crypto, but everyone else also has the opportunity to do the same. And any gains could be undone by a crackdown in a subsequent administration. Meanwhile, despite the frequently over-heated language of the Times piece, it never makes any suggestion of illegality. If there is any basis under which this may be illegal, I am unaware of it. Perhaps some readers may have a theory.
Looking at this situation at a more general level, our recent Presidents (and other prominent politicians) can be divided into three big categories from the perspective of exposure to corruption. In Category One, we have people, like Trump, who have come to office with substantial business interests that they have retained while in office. In Category Two are the politicians who have served in public office for their entire careers, and have never held a significant private sector job or business interest.
Category Three consists of those who had a career in the private sector, but substantially cashed out before entering public service, and now just have investment portfolios. Examples from Category One include Lyndon Johnson and Jimmie Carter. Also, if I might take one non-presidential example, Nancy Pelosi. Examples from Category Two include Bill Clinton and Joe Biden. Examples from Category Three include Ronald Reagan and the two Bushes.
From the point of view of potential corruption, it might be best to have all politicians come from Category Three. However, nothing in the Constitution requires that. And nothing about Category Three makes it completely free from temptation to corruption either. Plenty of political decisions affect the value of investment portfolios, even diversified ones.
As between Categories One and Two, I’ll take politicians from Category One any day. Someone from Category Two who advances to the high office of the Presidency has tremendous temptation to develop personal wealth by accepting large payments from third parties to influence government policy.
Both Clinton and Biden are clear examples of this.
Bill Clinton created the Clinton Foundation in 2001 after leaving office, and the Foundation then raised more than $2 billion over the next 15 years, during much of which time his wife was widely expected to become the next President. Large donors included foreign actors with clear interests in influencing U.S. policy. The overhead of the Foundation provided hundreds of millions of dollars to fund the Clintons’ lifestyles and staff.
This enterprise skirted extremely close to the edge of quid pro quo bribery. In the case of Biden, between 2019 and 2023 I wrote an entire eleven-part series titled “Biden’s — Stone Cold Crooked,” explaining why the publicly available facts about the Bidens’ conduct in Ukraine and China made for a lay-down case of quid pro quo bribery. Somehow the Biden Justice Department was never interested in pursuing the case.
Over in Category One, consider the case of Lyndon Johnson. Josh Blackman at the Volokh Conspiracy has a summary in a post from January 1, 2025. The summary is largely derived from the Robert Caro biography of Johnson. Lyndon and Lady Bird Johnson owned television and radio stations in the Austin, Texas area. From Blackman:
As Mr. Johnson rose through the ranks in the House, and later the Senate, Robert Caro observed, there was a "twenty-year-long string of strikingly favorable rulings by the Federal Communications Commission" for KTBC. Caro at 286. Coincidentally, Austin was "one of the few metropolitan areas with only a single commercial television station."
When Johnson became President, he purported to put his holdings, including the broadcast stations, in a “blind trust”; but Blackman notes that the trustees were close personal friends and the trust would never meet the technical requirements for a true “blind trust.” Similarly, Jimmie Carter retained his heavily regulated (and subsidized) peanut farm business while President, while also creating a half-baked “blind trust.”
According to Reuters here on January 10, Trump has not created a “blind trust,” but has withdrawn from “daily management” of his business interests, and has turned that over to his sons. Reuters quotes a supposed “ethics expert” as saying that Trump’s arrangements are “not good enough.” Did that ethics expert ever criticize the arrangements of Johnson or Carter?
Is the insubstantial distinction between Trump’s arrangements and the Johnson/Carter “blind trusts” what the Times is referring to as “eviscerating the boundaries between business and government” and something “without precedent in modern American history”?
And then there’s Nancy Pelosi. Critics have noted multiple times over the years where Pelosi or her husband seemed to have done a profitable stock trade just before some Congressional action. This piece from Yahoo Finance on January 8 notes that Pelosi’s stock portfolio was up 54% in 2024, which beat the performance of every hedge fund in the country. At the same time, a bill to restrict stock trading by congresspeople somehow never advanced while Pelosi was Speaker.
Anyway, if you ask for my view of the biggest political corruption incidents of the past few years, numbers one and two would be:
- ) the multi-hundreds of billions of dollars of funding for the institutions of the Left from the government, and
- ) the Censorship Industrial Complex put together by the Biden administration to suppress conservative speech.
Those things don’t seem to draw big front-page articles from the Times.
