William Brangham:
The Pentagon today strongly denied a report by The Financial Times that Defense Secretary Pete Hegseth’s stockbroker wanted to make large investments in major defense companies in the days before the US and Israel began to strike Iran.
That report raises serious concerns about many people in the Trump administration and those close to them who appear to be profiting in unusual ways.
White House Secretary Liz Landers takes a closer look.
Liz Landers:
Early last week, as the United States and Iran continued to exchange strikes in the Middle East, there was a spike in crude oil futures trading around 6:49 a.m. Eastern time. A few minutes later, at 7:05 am, the president posted on his social media platform that he was suspending strikes on Iran’s power plants and electrical equipment for five days.
The stock market opened and oil prices fell. An amount of 800 million dollars was made in the business. The timing of the market move may have been sudden, but it created a similar atmosphere. And traders don’t just get rich in traditional markets.
Polymarket, a prediction market where people can bet on anything from sports to politics, has seen several users bet specifically on the US military’s ties to Iran and earn money. Ahead of the president’s recent announcement that the US and Iran were engaged in productive talks, several newly established accounts bet about $160,000 that a ceasefire would happen on March 31st or April 15th.
Following the president’s comments, the stake was doubled in value and will pay $1 million if a ceasefire is reached on April 15. Polymarket and other aforementioned sites like Kalshi allow users to bet anonymously so that the bettor’s identity remains anonymous.
But potentially lucrative payouts like these have raised concerns about the potential for insider trading, says David Hill, a journalist who writes about gambling for “Rolling Stone” and hosts the podcast “American Gambler Book Club.”
David Hill, American Football Player:
I think it’s fair to assume that there is a lot of insider trading going on in the forex markets, just like there is a lot of insider trading going on in the stock market. You know, a lot of people know the results of these things before people do. And so some people will take advantage of that and take advantage of it.
Liz Landers:
Polymarket, which calls itself the world’s largest prediction market, announced new rules last week outlining three areas of prohibited insider trading behavior, to prevent trading that includes stolen confidential information, illegal tips and insider trading.
They even gave an example specifically about members of the military betting on military operations, advising that it is prohibited. It raises questions about the morality of gambling on these activities, which involve life or death situations.
David Hill:
I personally would not want to bet on whether someone will live or die.
I think one of the concerns here is that, if there is a market for something like death, that there is a kind of moral hazard involved, rightly so, and that people should not be allowed to predict the death of another person, not only because it is moral, but also because there can be — that it creates these kinds of wrong incentives, and that people’s lives are at risk.
Liz Landers:
Kalshi told us that government employees are not allowed to make predictions in the political markets and said it does not refer to possible investigations. Polymarket did not respond to questions from PBS News.
There are at least eight bills in Congress that seek to regulate the prediction markets, including a bipartisan House bill that would bar elected government officials, senior government employees and their families from trading in the prediction markets.
But these platforms aren’t the only way people are making political profits these days. For some who have ties to the president or who claim to have ties to him, another lucrative business opportunity has emerged, lobbying for a presidential pardon.
Trump’s aggressive use of his clemency powers has been controversial from the start.
President Donald Trump:
We hope they come out tonight, obviously.
Liz Landers:
Hours after being sworn in for a second term, he pardoned more than 1,500 defendants involved in the January 6 Capitol attack. Many other high-profile pardons have followed, including political figures, business leaders and people with ties to the president or his allies.
And the lobbyists are involved in helping to help who can get into the system, to get millions.
Ken Vogel is a reporter for the New York Times.
Ken Vogel, The New York Times:
In the first year of Trump 2.0, we saw $5.2 million in lobbying fees disclosed for clemency-related efforts. And that was eight times more than what we saw in the last year of the Biden administration.
Liz Landers:
Vogel says this has created a kind of pay-for-play mentality during the Trump administration, where people with money and connections can jump ahead of the pardon line.
Ken Vogel:
It’s created this kind of industrial amnesty that in some ways seems to be changing the perception that the people who deserve it the most are the ones who are going to be pardoned, and instead it’s kind of rewarding people who have connections or the ability to pay people who have connections to get directly to President Trump.
Liz Landers:
And when President Trump in his speeches said that the attack theft is a priority…
President Donald Trump:
We are cracking down on fraud in Somalia, putting an end to the blatant and shameless theft of taxpayer dollars.
(Enjoy)
Liz Landers:
… his decisions about who gets forgiveness seem to contradict that. The more than 50 pardons and turnovers he made in his second season are fraudulent. Crimes such as money laundering, bank fraud and wire fraud are some of the crimes he often clears.
In a statement, White House press secretary Karoline Leavitt said — quote — “President Trump is using his constitutional authority to issue pardons and pardons at his discretion. Anyone who spends money on pardons is wasting their money.”
Many of those who were granted clemency by Trump had their fines and restitution waived, totaling tens of millions of dollars. But for their victims:
Ken Vogel:
They are desperate. To them, this is a form of blasphemy that is harmful. And these pardons and in some cases even commutations cancel those obligations, those financial debts. Therefore it is to take money out of the pockets of the victims, or at least to stop the way that can make them at least get compensation for the financial losses they have done at the hands of these people who have received forgiveness.
Liz Landers:
For people in the White House orbit, there is a lot of money that can be traded for getting information or the ear of the president.
For “PBS News Hour,” I’m Liz Landers.
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