WASHINGTON – A U.S. House Democrat is calling out the Trump administration’s deal to buy a stake in Trilogy Metals, the company trying to develop Alaska’s Ambler mining district.
Rep. Jared Huffman, the top Democrat on the House Natural Resources Committee, sees a repeating theme: When the Trump administration invests government money in a private firm, someone benefits.
“The corruption — it's the same template. Cut and paste,” said Huffman, D-Calif., “You know, add in your favorite Trump family member or friend of the inner circle of the Trump family, and you get the same pattern.”
Trilogy’s share price shot up in early October, when the Trump administration announced it would spend $35 million to buy a 10% stake in the company.
Huffman, at a House Natural Resources subcommittee hearing Wednesday, said it was a windfall for one particular investor.
“Records indicate that a senior White House economic advisor who held a significant equity position in the company saw the value of his shares increase by about $70 million before he ultimately divested,” Huffman said.
He was referring to hedge fund manager John Paulson, a big fundraiser for President Trump. After Trump won re-election, Paulson bowed out of the running to be Treasury secretary but said he planned to work with Trump’s economic team.
As reported previously by Bloomberg and Northern Journal, federal documents show Paulson’s firm owned shares of Trilogy Metals worth $30 million in late September. Paulson sold them some time between October and December. The exact date isn’t listed, but the Trump administration announced its investment decision Oct. 6. The stock price tripled the next day.
Neither Paulson’s company nor Trilogy responded to reporter inquiries.
Huffman says it’s a bad look when an administration insider appears to profit big from a government investment. Hearing witness Faith Williams of the Project on Government Oversight said so, too.
“In order to make determinations about conflicts of interest, the appearance of conflicts of interest, possible corruption, we need transparency,” she said. “And that's what's really lacking in many of these deals.”
The Trilogy investment was a minor point at the hearing. Committee Democrats spent far more time on Vulcan Elements, a start-up magnet company that the government bought an ownership stake in, after it won the backing of Donald Trump Jr.’s venture capital firm.
Hearing witnesses called by committee Republicans described the public benefits of the government’s equity purchases. They said it’s vital that the U.S. build domestic supply chains for critical minerals and remove China’s leverage over American production of cars, planes and weapons.
Gracelin Baskaran, from the Center of Strategic and International Studies, testified that, historically, the U.S. has taken action to get minerals it needs.
“We financed nickel mines in Latin America when private markets didn’t function,” she testified. “We established price floors for uranium in the1940s … . We traded surplus dairy products to Jamaica to get bauxite back in the 1960s. We’ve done bold and creative things when the political will existed.”
Tad DeHaven, a policy analyst at the Cato Institute, has been looking into the Trump administration’s investments in private companies. He said the 13 such deals he’s found are steps toward “state socialism.”
“It is a fundamental undermining of the American capitalist model,” DeHaven said in a phone interview. “And the great irony here is that it's Republicans doing it.”
The House hearing ended abruptly. Republicans voted to adjourn after Democrats tried to compel Trump Jr. to testify.
Alaska Congressman Nick Begich declined an interview request to discuss the Trilogy investment. He was at the hearing briefly. He voted to table the subpoena motion and to adjourn.
