The Trump phone grift

0:02Today explained from Vox, Sean Rameswaram here in Washington, D.C., where all the attention is on the reflecting pool. Back in May, it was going to be indestructible. If you had a knife, I don't want to give anybody ideas. If you had a knife, you can't even cut it. Yesterday, it's been vandalized. Who would think that somebody would go into a pool and take a knife and start cutting it? People are big mad because it sure looks a lot like the president of the United States gave a buddy of his and another company like 15 million dollars or so of our taxpayer money to completely bungle a renovation of our national mall just weeks before our nation's 250th birthday.

0:40What a waste. What a scam. We're going to get to that one later in the week. But on the show today, we're going to talk about two Trumpy scams that are directly enriching the Trump family, all while Daddy Trump is running the country. The Trump phone, which maybe you've heard about, and a Trump bank, which maybe you haven't. Support for this show comes from Fetch Pet Insurance. Do you have a pet? Every six seconds, a pet owner in the U.S. gets hit with a vet bill of over$1 ,000. And it's almost always an unwelcome surprise. That's where Fetch Pet Insurance comes in. Fetch is the most complete pet insurance.

1:20Get paid back up to 90 % of vet bills. You can use any vet in the U.S. and Canada. All vets are in network. Go to FetchPet.com slash save right now for your free quote. That's FetchPet.com slash save. We've all been there. You pop into the shop for five minutes and all of a sudden you've forgotten where you parked. Car? Car? Unfortunately, that lost feeling is what it's like trying to manage your policy with other insurers. Here, car. Come out, come out, wherever you are. Please. With GEICO, you can use the app to easily manage all your policies in one place. Did this parking lot have a waterfall?

2:01I think you've wandered too far, mate. It feels good to find what you're looking for. It feels good to GEICO. Lisa, what happened? Greg waited until 9 o 'clock last night to get started. That's when my free minutes kick in. You are fired, you minute-hoarding clock watcher. Ding, ding, ding, ding, ding, ding. Bomb. I'm Don Preston, news editor at The Verge. And you recently wrote about a telephone? I did. A very specific telephone. The T1 phone 8002 brackets gold version, to be specific. What a name. What a name. AKA the Trump phone, which is what everyone's been calling it, just because it's a bit less of a mouthful.

2:39We're here to talk about the one, the only, maybe even the infamous Trump phone. Gold casing, a flag stamped on the back. This long-awaited T1 phone from Trump Mobile is finally here. But yes, it was just the one-year anniversary of the announcement of Trump Mobile and the Trump phone. The Made in America phone that wasn't really Made in America. One year later, it's still kind of only halfway launched. Do you have one? I do not I have one on the way We have paid for one The Verge has bought a phone We've put down money It is somewhere in transit at the moment How much does a Trump phone cost?

3:22499 bucks But to get that You've got to put down a$100 deposit So we paid$100 a year ago And have been waiting very patiently Ever since to see if we would get anything In exchange for that$100 It looks like maybe we actually will Donald Trump, president of the United States I believe user of the iPhone Yeah Why phone? Very unclear, in all honesty I think the bigger angle from the Trump organization perspective They just like licensed the name to this company that's running all this stuff Really, they seem to be building it all around the network There's Trump Mobile, which has this plan called the 47 plan which costs you$47.45 a month.

4:0845th president of the United States. 45th and 47th. Very carefully chosen numbers. Wow. And I think that's really what it's about. That's the way of making money. I chatted to a couple of executives from the company back in February this year, and they kind of said, we're in the razor blade business, not the razor business, by which they clearly meant the money is made in the monthly subscription service. The money is made in the plan. Here's what you get. Unlimited talk, text, and data. Free calls to over 100 countries, including places like US military bases. You will see the telecom tax being added to the cost of the plan.

4:41And this is really high. This is higher than the taxes and fees added by AT &T, T-Mobile, or Verizon. The phone, when I spoke to these executives, they kept trying to downplay the phone. Like the phone was this marketing idea they'd had. The phone was this thing that would drum up interest in the plan. And then suddenly all anyone wanted to talk about was the phone. I think I might be the first person to have the T1 Trump phone. Guys, you will not believe what I have in my hand. This is actually the Trump phone, the T1. It's actually real.

5:16So weird, but tell us about this phone. I mean, how does it compare to some of the most popular phones on the market? It's a very generic mid-range Android phone. huh it's golden it's kind of goldenish it's a bit of a yellowy gold uh in person from everything i've heard they couldn't even get the gold right the phrase p colored has been thrown around oh no this anodized aluminum is just straight up not gold no it's not even really yellow it's like orangey it's ugly it's not real gold look at this cheap piece of this is a phone circa like what 2018 it's goldenish it's got an american flag on the back on the back we've got the american flag with not enough stripes.

6:011, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11 stripes. This is the T1 phone. It's made for Americans. Though they kind of got the American flag wrong. I think in a way, one of the funny things about it is it's not a bad phone from the specs. The specs aren't, they're pretty decent. The screen looks nice. It's 120 hertz panel. It's got a pretty respectable Qualcomm chipset inside. It's got 512 gigabytes of storage. and 12 gigabytes of RAM, which is certainly in the current economy is actually getting kind of unusual. So bits of the spec sheet look pretty good for$499. The problem is there's just so much of a good phone these days.

6:42It's actually about the software and the support and the stuff around the pure hardware that's inside. And that's where we look at this and just think Trump Mobile is definitely going to be lacking. I mean, just the obvious thing is long-term support. They've made absolutely no commitment to how long they're going to keep giving people software updates for the phone. And when I asked executives about that, they just seemed kind of confused by the question, which isn't a great sign when you've got companies like Google and Samsung promising you'll get updates for seven years. This can be your phone for a long time.

7:09Okay, so it's a decent phone hardware-wise. It looks like it's going to be a problematic phone software-wise. Who is it for? Is it just for people who wear MAGA hats? Presumably, that's a big part of the base for this. I can't imagine they're really trying to drawing anyone who's uh uh particularly technically minded i think one of the telling things from what we've seen there's been a couple people who've gotten the phone and kind of managed to unbox it and see what's inside is it actually comes with a printed user manual which includes instructions like how to make a phone call which it's been a long time since apple sent out a phone with instructions on how to make a phone call and i think that probably speaks a little bit to the audience they think they have here, which is people who are as far from technically minded as you can get and really do not have a decent understanding of what they're buying here.

8:00Do we know how many such people have bought this thing so far? Not entirely. There were rumours for a long time that there had been 600 ,000 pre-orders of the phone, but I couldn't find a shred of evidence that that was true. I mean, that would be a huge number for a company like this and would represent a lot of money coming in, even just from the$100 deposits. It looks more likely that it's somewhere in the 20 ,000 to 30 ,000 range. They had a website leak. It turned out they weren't really securing order data properly. So some people managed to get in and pull out what appeared to be a complete database of every order that had been placed.

8:34And that had 27 ,000 and something entries in it. So that was as of about a month ago. So that looks like that might be the cap of how many of these they've sold. But it's hard to be certain, and the company hasn't confirmed or denied either way.

8:51And what do we know about the production process? You mentioned with some skepticism that one of the promises of this phone would be that it would be made in the United States, where, of course, not many cell phones are made. What's the truth of that claim? So it doesn't look like it's made in the U.S. at all. And in fact, even Trump Mobile admits that. Oh. Trump Mobile has had to make changes for its upcoming smartphone. Earlier this week, Made in the USA was taken off the Trump Mobile website. Well, now they're scrapping that tagline. It sounds like they just realized that the phone cannot be manufactured in the U.S.

9:29of A. for that price tag of$499. They said it was Made in the USA when they first announced the phone. And they walked that back less than two weeks later. It took, I think, 12 days for them to say, oh, no, okay. And they just very quietly went into the website, took away every mention of Made in the U.S., and replaced it with these very vague, suggestive phrases like... American hands behind every device. Or... Designed with American values in mind.

10:04this is like this is like iterations of the classic apple the iconic designed in cupertino right yes very careful in that they do now say it is assembled in the u.s i've been told that happens in miami um we don't know exactly what that means i mean made in the u.s is protected terminology the ftc has very strict regulations on what counts as made in the u.s uh and the the hard bit of it is basically every component has to be US made. And for a phone, that's borderline impossible. There is one company called Purism that manages it and their phone costs two grand. The FTC does also regulate assembled in the US.

10:41There are some criteria there. They're a bit broader. They're a bit looser. So hopefully it is honestly meeting those assembled in the US criteria. It means it's got to be more than a simple screwdriver assembly is the phrasing. So in theory, they can't just be getting a couple bits and slapping the cover on the phone and shipping it out. They have to be getting it in sort of a smaller number of pieces and making a substantial transformation, but we don't know exactly what's going on there. We're not sure where it is made, but we have some pretty good guesses. It looks uncannily like a phone called the HTC U24 Pro.

11:14And now that some people have managed to get the phone and tear it open, we know that it looks uncannily like that phone inside and out. It has pretty much the same body, almost all the same parts. The battery is different. That's basically it, which seems to really strongly suggest they are basically the same device. And that HTC phone is made in China. So we don't know where the Trump phone is made, but the phone it seems to be a carbon copy of is made in China. It sounds a little bit like a grift. Is it a grift, Dom? I have gone back and forth on this question every day for the past 12 months.

11:50I've been reporting about this thing kind of week in week out for seven or eight months now and constantly going back and forth on whether this is a scam a grift whatever um the general place i've settled on is that it's a bit of a rip-off they're definitely overcharging for what they're selling um but it's it's that combined with a lot of naivety about how realistic and simple it is to put together a phone and sell it you know they announced this thing would be made in the usa and would ship within two or three months of them announcing it, which anyone could just tell was nonsense. The moment they said this, everyone on the newsroom was like, well, that's not happening, so what is going to happen?

12:29Let's try and figure that out. Because it's not what they just said. And yeah, that's my general feeling. There's a sort of incompetence and naivety mixed with a little bit of a desire to just make a quick buck.

12:54Read Dom at TheVerge.com We're heading to the Trump Bank when we're back on Today Explained.

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16:46You follow drugs, you get drug addicts and drug dealers. But you start to follow the money and you get Today Explained. Zach Everson is a research director at something called the Trump Accountability Project at a group called Public Citizen. He and another guy try to keep track of all the president's many side hustles. Zach mostly follows the money. And lately, that's meant following the Trump family's efforts to basically get into banking. Yeah, what we're seeing here is making what happened in the first term look ethical. So there are essentially three steps here. First, in September 2024, shortly before the election, Trump's and the Whitcoffs launched World Liberty Financial.

17:33Trump announced World Liberty Financial in a live stream on X saying, quote, crypto is one of those things we have to do. World Liberty Financial, the new crypto platform in which President Donald Trump and his affiliates hold a 60 percent stake, announced a strategic token reserve designed to bolster Bitcoin, Ethereum and other cryptocurrencies. Second, they came out with two products for World Liberty Financial, a stablecoin and a crypto token. Just think about a digital currency like Bitcoin, World Liberty Financial, this digital token, kind of like that, but it's part of this broader cryptocurrency venture that the Trump family launched really just weeks before the election.

18:10President Trump's World Liberty Financial is jumping into the stablecoin game. They just introduced USD1, a digital asset whose value will be pegged to the U.S. dollar and backed by short-term U.S. government treasuries, dollar deposits and other cash equivalents. And now what they need is the banking authority so that they can cut down on the fees that they have to pay outside sources. They can increase the fees that they make and they can also centralize all regulation under the federal government.

18:43so usd1 it is a stable coin which is crypto it means it is backed one-to-one by reserves so think of it as a bank loan only going the opposite way you are giving money to world liberty financial you're giving us dollars and they are giving you this virtual currency and the whole time that they're sitting on your U.S. dollars, they are investing it in treasuries and they are keeping the interest. So this made news. It would have been spring of 2025 when it was announced that an investment firm backed by the National Security Advisor of the UAE had purchased two billion dollars of these magic beans using U.S.

19:29dollars and was investing them in Binance. So it essentially creates its own currency here. And you've got it went from nothing to all of a sudden being one of the most popular stable coins out there by way of the UAE National Security Advisor directing this money towards him. Nearly half of the Trump family crypto company World Liberty Financial was purchased for$500 million by Sheikh Tanun Bin Zayed Al-Nayan, who heads the United Arab Emirates State Investment Fund and serves as national security advisor, sometimes referred to as the spy sheikh. There's been some direct conflicts, especially with a big deal that came through the United Arab Emirates.

20:09They decided to use a Trump cryptocurrency to pay for a$2 billion investment. So that put them really on the map there. And that's a lot of what this banking trust license would have to do. It would allow them to do. Right now, if the reserves have to be held someplace else. They can't hold their own reserves. Similarly, they can't issue their own coin in the United States. It has to be done elsewhere. If this trust gets approved, which we believe it's going to be soon, that would allow them to essentially collect more fees in direct transactions and take out some middlemen in transactions they already have going on.

20:51And Binance is, of course, I think, the most popular crypto exchange? It is. It is. And Binance is not allowed to operate in the United States. So when we say 80 to 85 percent of USD1 is held at Binance, if the law is being followed, that means that 80 to 85 percent of Donald Trump's stable coins is in the hands of people overseas, which is a huge problem for the United States president to be so beholden. If all those foreigners just started dumping, that would really crash this currency he's got there, cut away from the interest he can make. And that is a lot of financial power that foreigners have over the United States president right now.

21:35OK, so Donald Trump has World Liberty Financial, this token. He's got this stablecoin. He's got business with Binance. Help us understand this transition that's going on right now in the United States to help World Liberty Financial essentially become more of a bank. Yeah. So we at Public Citizen and other groups have long been concerned about regulatory capture. You know, that's when the lobbyists or the business interests come into government and they take control of the agency that oversees their former employer. This is regulatory capture to the extreme where they are applying for a banking license from the office of the controller of the currency.

22:19And that is part of the Treasury, which is under Donald Trump's administration. So here you have World Liberty Financial is going to be regulated by an agency of the U.S. government that is under Donald Trump's control. And someone who answers to the president of the United States will decide whether his financial firm, World Liberty Financial, gets to essentially have these banking privileges. Exactly. Exactly. And another benefit of this that ties into the administration is if this does get approved for this license, it will fall under federal regulators, not state regulators as much. So that, you know, we've seen a lot of efforts from the states for all sorts of areas combating Donald Trump and his administration that states are filing lawsuits.

23:04This puts his world liberty financial in the preview of a federal agency, which appears that it would make it a lot harder for states to try to get in there and push back on this. What are the potential conflicts of interest here? Everything. Everything. You know, you've got an issue where we have a foreign government investing in this. Another firm backed by the UAE's national security advisor also owns 49 percent of World Liberty Financial, something the American people didn't find out about until like a year after it took place. He bought this share right before Trump was inaugurated. You know, we heard a lot in the first term about foreign emoluments.

23:45There were all sorts of concerns about foreign governments buying rooms and drinks at his hotel, holding banquets. an annual meeting on U.S.-Turkey relations. Most years, a standard event. But not this year. Because this year, it was at the Trump International Hotel in D.C., ground zero for President Trump's conflicts of interest. NBC News has obtained receipts showing Saudi Arabia, the UAE, Qatar, Turkey, China, and Malaysia spent hundreds of thousands of dollars at the Trump International Hotel in Washington. At the very same time, they were seeking to influence U.S. foreign policy in their favor.

24:23Sometimes, you know, there are accusations that were never proven to the best of my knowledge, but that they would buy rooms and not even use them as an easy way to get money to the president. You know, if that was the case, we're talking, you know, hundreds of thousands of dollars, maybe a little millions if that was going to be the case. Here, you've got, you know, hundreds of millions of dollars going to Donald Trump and his business partners right before he became president. You know, a time where he's already announced who his cabinet's largely going to be. And according to The Wall Street Journal, it looks like the payments didn't even go through until after he was inaugurated.