Co-founder of Trump’s media company details Truth Social’s bitter infighting
Will Wilkerson, one of Trump Media & Technology Group’s first employees, alleges the company violated securities laws and that Trump pressured executives to hand over their shares to his wife. He shared a cache of internal documents with The Post and federal investigators that he says support his claims.
Litinsky tried to brush it off, telling Trump “the gift would have meant a huge tax bill he couldn’t pay,” Wilkerson said in an interview. “Trump didn’t care. He said, ‘Do whatever you need to do.’ ”
Five months later, Litinsky, who first met Trump in 2004 as a contestant on the TV show “The Apprentice,” was abruptly removed from the company’s board. Wilkerson said he believes it was payback for his refusal to turn over a small fortune to the former president’s wife. Litinsky thought so, too, according to an email Wilkerson and his attorneys shared with The Washington Post and the Securities and Exchange Commission. In that email, Litinsky complained that Trump was “retaliating against me” by threatening to “ ‘blow up the company’ if his demands are not met.”
Litinsky did not respond to emails and phone messages. It is unknown whether he still retains his shares.
The email — one of hundreds of previously unreported company messages, documents, photos and audio recordings that Wilkerson has provided to the SEC in connection with a whistleblower submission — reveals a stunning portrait of the animosity that has built up inside Trump Media since its high-profile debut last year.
Promoted as the centerpiece of Trump’s post-presidential business ambitions, the company had marketed itself as a budding media empire, with enterprises planned in social media, video streaming, live events and online payments — a powerful rival not just to Twitter but Disney, Google and Amazon.
But inside the company, Wilkerson said, those plans gave way to bitter infighting, technical failures and a chaotic jockeying for power among Trump allies that undermined its potential and left some employees crying at their desks.
Wilkerson, who was fired from his job Thursday as a senior vice president of operations at the company after he spoke to The Post, filed the whistleblower complaint with the SEC in August. The complaint, drafted by Wilkerson’s attorneys, alleges that the company’s bid to raise money via an investment vehicle known as a special purpose acquisition company, or SPAC, relied on “fraudulent misrepresentations … in violation of federal securities laws.”
The SEC, a federal watchdog agency, allows members of the public to submit tips, complaints and referrals about suspected financial wrongdoing via a document the agency calls a Form TCR. Whistleblowers can be granted confidentiality protections and, in some cases, financial awards. Litinsky did not join in the complaint.
Wilkerson is cooperating with investigations into Trump Media by the SEC and federal prosecutors from the Southern District of New York, said his attorneys, Phil Brewster, Patrick Mincey and Stephen Bell. Among the materials he filed with the SEC’s whistleblower office is a detailed, day-to-day computer log compiled by company co-founder Wes Moss, Litinsky and Wilkerson about their daily company-related activities.
He also provided to The Post a copy of that log as well as numerous other memos, photographs and videos that chronicled the creation of Trump Media. All of the materials Wilkerson shared with The Post were previously provided to government investigators, his attorneys said.
The SEC and the SDNY declined to comment.
In an SEC filing in December, Digital World acknowledged that the SEC was investigating and had sought documents related to the merger with Trump Media. In another filing in June, Digital World said it had become aware that a federal grand jury in the Southern District of New York had issued subpoenas to its board members seeking documents related to its initial public offering filings and “communications with or about multiple individuals.” The investigations, the company said, could “impede or prevent” the merger.
Wilkerson said he was still working for the company on Oct. 6 when his SEC complaint was first reported by the Miami Herald. A Trump Media attorney sent Wilkerson a letter that night suspending him for what the lawyer said was a “blatant violation” of his nondisclosure agreement.
After interviewing Wilkerson alongside his attorneys, The Post on Wednesday sent a detailed list of claims and questions raised by Wilkerson’s allegations to representatives for Trump, Trump Media and the Trump Organization, Trump’s long-running family business.
Only Trump Media responded, saying in a statement that Trump, as company chairman, had hired former congressman Devin Nunes (R-Calif.) as CEO to “create a culture of compliance and build a world-class team to lead Truth Social.” The company said it was already a success, having launched on the Apple and Google app stores, “executed multiple feature updates” and attracted millions of users. “Ignoring these achievements, The Washington Post sent us an inquiry rife with knowingly false and defamatory statements and other concocted psychodramas.” The statement did not directly address any of Wilkerson’s claims.
Trump Media fired Wilkerson on Thursday, citing his “unauthorized disclosures” to The Post. Brewster, his attorney, called the termination “patent retaliation against an SEC whistleblower of the worst kind.”
Digital World Acquisition, the SPAC that is pushing to take Trump Media public, has asked shareholders to give the company more time to finalize the merger, which would unlock hundreds of millions of dollars for Trump Media but is effectively frozen pending the outcomes of the federal investigations. Digital World and its chief executive, Patrick Orlando, did not respond to requests for comment.
The revelations to the SEC from Wilkerson, the most prominent company official to speak publicly about its operations, come at a turbulent time for Trump Media’s business. Investors, discouraged by the halted merger, have sent the SPAC’s share price plunging from a high of $175 to less than $18 on Friday. Roughly 4 million users follow Trump on the company’s sole product, Truth Social — far below his Twitter peak of 88 million. The company has pledged to investors it would surpass 50 million total users by 2024.
In past public statements, Nunes, Orlando and Trump have argued that Trump Media will ultimately prove to be a successful business. But Wilkerson said he expects its internal problems could lead the company to fall apart.
“We weren’t trying to be Trump Org 2.0,” he said. “We always saw Trump as the rocket fuel to send this thing to space. I wanted this to succeed more than anything. … But these are glaring issues, and they’re threatening me now for calling them out. I couldn’t stay quiet anymore.”
‘The Avengers’
Wilkerson, 38, isn’t a traditional Trump critic.
When Litinsky and Moss, another former “Apprentice” contestant, first started discussing the idea of a multipronged Trump media business after Trump’s November 2020 election loss, the men had asked for his help developing the business, Wilkerson said. A former executive producer for Litinsky’s conservative radio show, Wilkerson was excited about monetizing the following of a person he considered a master marketer with 40 years as a political and household name.
Wilkerson shared a photo from that time of the men sketching the original concept on a whiteboard, titled “Trump’s New Media Empire,” that would ultimately compose the company’s public pitch, including new business lines (“Trump Digital Subscription,” “Trump Documentaries”) and a chain of “Trump technologies,” including in servers and online payments.
After Trump supporters stormed the U.S. Capitol on Jan. 6, 2021, and Trump was banned from major social networks, the men drew up plans for a tech platform that would be “resilient to cancel culture and the impact of bias against the right,” according to the daily log Wilkerson shared with The Post and the SEC.
To meet with Trump, the men sought help from another “Apprentice” contestant, Bradford Cohen, a Florida criminal-defense attorney who represented two rappers, Lil Wayne and Kodak Black, to whom Trump had granted clemency on his final day in the White House.
In late January, three weeks after the riot, Cohen, Litinsky and Moss met with Trump at Mar-a-Lago, his opulent home and club in Palm Beach, Fla., to discuss the idea. Over cheeseburgers, Diet Cokes and ice cream, the men offered to build Trump a media company that he would own 90 percent of without putting in any of his own money, Wilkerson said. He was interested, and Trump Media was born. Cohen and Moss did not respond to requests for comment.
Raising money, however, proved to be a major challenge. The investment bankers they called rejected them because of fears over Trump’s post-election behavior, Wilkerson said. So they started cold-calling SPACs. Known as “blank-check companies,” SPACs sell shares to investors before merging with a private company, allowing the combined business to make money on the stock market without abiding by the traditional transparency requirements of a public listing.
They ultimately found a willing partner in Orlando, a financier in Miami who had recently launched a SPAC, Benessere Capital Acquisition, with $100 million in its coffers. In late February, Orlando, Wilkerson and other Trump allies outlined the vision for Trump in a Mar-a-Lago dining hall, taking photos to remember the moment.
“We viewed ourselves at the time as the Avengers,” Wilkerson said. “We were an unstoppable force.”
‘djt is pissed’
The next several months were a frantic rush to meet with potential partners, hire workers and build the business, Wilkerson said. The daily logbook shows the men flying to meetings with conservative media figures and exchanging proposals at bars, golf clubhouses and pizza joints. The team, Wilkerson said, also gave Trump regular in-person updates at Mar-a-Lago, Trump Tower and his golf club in Bedminster Township, N.J.
But as the company became more legitimate, it also started running into problems. Trump’s umbrella company, the Trump Organization, disputed a long-signed agreement between the start-up and Trump himself, demanding more control over how Trump’s likeness would be used, Wilkerson said. And Trump’s adult sons — Donald Jr. and Eric — began asking for large stakes in the company, Wilkerson said, even though they had been almost entirely uninvolved. Representatives for the Trump family business did not respond to requests for comment.
“They were coming in and asking for a handout,” Wilkerson said. “They had no bearing in this company … and they were taking equity away from hard-working individuals.”
Orlando brought his own issues. In June 2021, he’d raised tensions when he sent Trump a birthday letter in which he devoted hundreds of words to Trump’s “thought leadership” and “quick and genius guidance” during a recent meeting discussing the company’s name and logo.
“I was unaware of the extent of your brilliance,” Orlando had written. “On your birthday, my only wish is that you realize how proud we are of your successes to date.” The letter agitated the co-founders, Wilkerson said, who found it mawkish and overly familiar.
Moss and Litinsky were further unnerved when Orlando routed roughly $8 million into Trump Media, via an unknown group called the ES Family Trust, but refused to say where it had come from, Wilkerson said. Their previous investments had come from people they knew, but this money appeared to have been routed from a bank in the Caribbean island of Dominica through a cryptocurrency company, according to wire transfer and financial documents from the transaction that Wilkerson shared with The Post and the SEC. Digital World and Orlando did not respond to requests for information about the transaction or other reporting in this article.
When Orlando had first gotten involved, he’d suggested merging Trump Media with Benessere, the already-public SPAC. But Orlando also began suggesting a second option, Wilkerson said: one of Orlando’s newer SPACs, Digital World, that had yet to be launched but could raise much more money. In his complaint to the SEC, Wilkerson said the original SPAC “could not sufficiently capitalize [Trump Media] at a valuation that was acceptable” to Trump and the company’s leaders, and that it would also “result in Orlando making less money compared to substituting Orlando’s future SPAC.”
Digital World’s registration form, filed with the SEC in May 2021 and signed by Orlando, said the SPAC and its representatives had not “initiated any substantive discussions, directly or indirectly, with any business combination target.” But in Wilkerson’s complaint, he claims that Digital World and Trump Media had “substantive communications” regarding a merger that he alleged violated SEC rules.
On April 14, 2021, Moss and Litinsky learned in a meeting with Orlando that the Benessere deal was no longer viable but that Digital World could be an option, Wilkerson said; an entry in the computer log notes that day that “the BENE deal is OFF!!!!”
After leaving the meeting, Wilkerson said, the men were so stunned by the suggestion of something they believed to be improper that they wondered whether it was a government setup or if Orlando had been wearing a secret recording device. The log quotes Litinsky in calling it the “roughest day so far” and says, “Patrick [Orlando] pitches [us] plan b, I get scared, is he wearing a wire?”
The men arranged a brief follow-up meeting with Orlando shortly after — this time, to record their conversation with him, during which they stated their concerns. “We can only engage in discussions after they’re public. That’s the rule,” Litinsky can be heard saying on the recording, a copy of which Wilkerson shared with The Post and the SEC.
Orlando responded, “That’s exactly the rules we have to play by.” He then added, “We have to be very smart. Obviously, we can talk hypothetically about if there were another vehicle,” at which point Litinsky cuts him off. Later, Orlando says, “We’ll make some magic happen.” The men exchange some more pleasantries before parting ways.
Three months later, in late July, an entry in the log said Moss eventually talked to “djt on phone to discuss potential plan b.”
The Post asked three SPAC experts about whether a SPAC’s leadership knowing its target merger partner, and not disclosing it before filing its initial public offering document, known as a Form S-1, would violate SEC rules.
John Coates, a former acting director of the SEC’s corporate finance division, told The Post, “If the identity of a merger partner is known before a Form S-1 is filed and goes effective, it must be disclosed, whether it’s a SPAC or not. For a SPAC, a known merger partner is even more obviously material to investors.”
Michael Klausner, a Stanford University law professor, said it would violate SEC regulations and argued that “a failure to disclose the SPAC’s plans would be an end-around the IPO rules.”
Michael Ohlrogge, a New York University law professor, said the failure to tell investors could violate the SEC’s rules against material misstatements and omissions, but that there can be gray areas in instances where a sponsor runs multiple SPACs and targets a company with one SPAC after having seriously considered it with another. For example, in one instance involving a maritime shipping company, he said, the SEC halted its review of the SPAC’s filings but eventually allowed the merger to proceed.
Digital World held its initial public offering in September 2021 and announced its plan to merge with Trump Media one month later. The SPAC ultimately raised roughly $300 million, not including a separate $1 billion bundle — known as a “private investment in public equity,” or PIPE — from an unidentified group of investors set to pay out once the merger is complete.
In one video Wilkerson shared from October 2021, Orlando can be seen standing in the Trump Media office toasting with a large bottle of Veuve Clicquot champagne.
“I really want to build a $100 billion company. I think this is the team to do it,” he said. “Andy and Wes and the entire team … I’m so happy to be working with you guys. We’re going to see a lot of each other for decades to come.”
The log cites daily notes of Moss, Litinsky and Wilkerson strategizing how to handle the Trump family’s growing interest in the business’s rising fortunes; one person advised them, for instance, that Trump Jr. “needs a bedtime story and some love,” an entry shows.
The timeline entries also show the men growing accustomed to dealing with Trump’s sudden reversals and rage. On Sept. 23, 2021, the log records cite Litinsky saying, “President trump calls me in morning to yell at me because don jr is upset.” The next day, “Don jr calls Wes and yells at him.” On Oct. 12, “djt calls in crazy mood and he tries to renegotiate the entire deal … don jr walks in room and wants to get paid.” On Oct. 30: “djt is pissed.”
Tensions also began to grow inside the company over who was in control. Litinsky, Moss and Wilkerson, eager to hire a point person to handle financial marketing and public scrutiny, had in November gotten dinner at an Atlanta steakhouse with then-Rep. Nunes, a Trump loyalist and prominent Republican critic of Silicon Valley, Wilkerson said. Two months later, Nunes resigned from Congress to become the company’s CEO with Trump and the co-founders’ support.
Company filings show Nunes is paid a base salary of $750,000 a year that could increase to $1 million in the second year, plus bonuses and equity. He had no prior experience leading a tech company.
Wilkerson has expressed sharply critical views of Nunes’s leadership of the company. He told The Post that, in Nunes’s first days at the office, Nunes began exhorting workers to come in early and stay late and berating company officials over what he saw as flawed decision-making. Wilkerson added that he believed this fueled acrimony among the company’s more established employees.
He began “bringing in a camp of people who were Nunes loyalists,” Wilkerson said, “to the point where it became very fractious and hampered our ability to be productive.”
A small team of developers raced to build Truth Social from the company’s WeWork office floor in Atlanta, Wilkerson said. In February, shortly before it opened to the public, Wilkerson published the first post, or “truth,” to Trump’s profile: “Get Ready! Your favorite President will see you soon!” In a video he shared with The Post, Wilkerson can be shown hitting the button and saying, “History has been made.”
But days later, the site had an embarrassing launch, including a 13-hour outage and an overwhelming waiting list for new accounts. Wilkerson said many of the issues had been the fault of third-party vendors, including the video site Rumble, which he said had been delayed in preparing server hardware for the site’s debut.
Rumble spokesman Brian Doherty denied his company bore any responsibility for Truth Social’s difficult launch. Truth Social, he said, has run fully off Rumble’s servers since April and the company looks “forward to continuing to support” Trump Media.
In March, Wilkerson said, the company underwent a major shake-up. The board of directors, once composed of Trump, Litinsky and Moss, dropped Litinsky and added Nunes, Trump Jr. and a former Nunes aide, Kash Patel. Within days, the company’s chiefs of technology, product development and legal affairs resigned. Wilkerson said he remembers some other employees tearfully processing the sudden upheaval.
“It was such a violent removal of the founders of this thing,” he said. “It was a very jarring experience, and it set this company on a path where it may not be able to be redeemed.”
‘What value does the company have?’
Truth Social’s website has stabilized, and Trump has taken to using it as his primary online megaphone. But the site’s audience remains tiny compared with major social networks and — unlike its original proposal, promising a “big tent” for all kinds of political thought — it has been criticized for featuring largely pro-Trump comments and memes. Elon Musk, Twitter’s likely next owner and the world’s richest man, told the Financial Times last week that Truth Social is “a right-wing echo chamber” that “might as well be called Trumpet.”
The Digital World’s merger freeze also has thrown the company’s future into doubt. The company originally promised to close the merger by last month, but Orlando has since begun asking shareholders to vote to push back the deadline in hopes of resolving the federal investigations and sealing the deal.
Digital World — with help from its sponsor, Arc Capital, an investment firm based in Shanghai — has paid roughly $3 million to give itself until Dec. 8 to finish the merger. The company has delayed shareholder meetings three times, including earlier this week, without announcing whether it has received approval for an extension from the required 65 percent of shareholders.
The company has warned that a failed vote could force it to liquidate, without Trump Media pocketing any of the money it had raised. In an SEC filing last month, Digital World said investors had sent termination notices between Sept. 19 and 23, pulling out roughly $138 million from the PIPE.
The company, which has submitted SEC filings suggesting it has “enough operating capital” to last “until at least next spring,” recently changed its headquarters address from an office in Miami’s upscale Brickell financial district to a mailbox in a UPS Store in the Miami neighborhood of Coconut Grove.
Truth Social’s hallmark — Trump’s involvement — has been undermined by the possibility that a Musk-owned Twitter could restore Trump’s account. Trump has insisted he would not rejoin Twitter even if he is reinstated, though some Trump advisers told The Post they think he wouldn’t be able to resist.
Trump has also undermined confidence in the deal, saying in a Truth Social post last month that he may just end up skipping out on the SPAC deal and taking the venture private because he’s “really rich.”
“If he takes his bat and his ball and goes home, what value does the company have at that point?” Wilkerson said.
Wilkerson said he hopes that by speaking out he will help protect the company’s shareholders from possible harm. His attorneys said the information he has shared should shield him as a protected whistleblower from company retaliation, and they have questioned the terms of Trump Media’s nondisclosure agreement.
“It is drafted to silence him, to prevent him from talking, and to punish him if he does so,” his attorney Phil Brewster said.
Posts
No comments:
Post a Comment