Prediction markets, pardons spark questions over who’s profiting from Trump’s presidency

[0:00] The Pentagon today is strongly denying a report by The Financial Times that Defense Secretary [0:05] Pete Hegseth's stockbroker was seeking to make large investments in major defense companies [0:11] in the days right before the U.S. and Israel first struck Iran. [0:16] That report is raising yet more concern about the many people in and around the Trump administration [0:22] who seem to be profiting in unusual ways. [0:25] White House correspondent Liz Landers takes a closer look. [0:28] LIZ LANDERS, CNN CORRESPONDENT, EARLY LAST WEEK, AS THE UNITED STATES AND IRAN CONTINUE [0:34] TO EXCHANGE STRIKES IN THE MIDDLE EAST, THERE WAS A SPIKE IN THE CRUDE OIL FUTURES TRADING [0:39] VOLUME AROUND 6.49 A.M. EASTERN TIME. [0:43] A FEW MINUTES LATER, AT 7.05 A.M., THE PRESIDENT POSTED ON HIS SOCIAL MEDIA PLATFORM THAT HE [0:47] WAS SUSPENDING STRIKES ON IRANIAN POWER PLANTS AND ENERGY INFRASTRUCTURE FOR FIVE DAYS. [0:52] THE STOCK MARKET OPENED UP, AND OIL PRICES WENT DOWN. [0:56] A COMBINED $800 MILLION IN TRADES WAS MADE. [0:59] THE TIMING OF THE MARKET MOVEMENT COULD BE COINCIDENTAL, BUT IT PRODUCED A WINDFALL ALL [1:04] THE SAME. [1:05] AND TRADERS AREN'T JUST GETTING RICH IN TRADITIONAL MARKETPLACES. [1:09] POLYMARKET, A PREDICTION MARKETPLACE WHERE INDIVIDUALS CAN BET ON ANYTHING FROM SPORTS [1:13] TO POLITICS, HAS SEEN SEVERAL USERS BET SPECIFICALLY ON U.S. [1:16] MILITARY ACTION RELATED TO IRAN AND RAKE IN MONEY. [1:20] BEFORE THE PRESIDENT'S LATEST ANNOUNCEMENT CLAIMING THE U.S. [1:23] AND IRAN WERE ACTIVELY ENGAGED IN PRODUCTIVE TALKS, SEVERAL NEWLY CREATED ACCOUNTS BET [1:28] NEARLY $160,000 THAT A CEASEFIRE WILL HAPPEN BY MARCH 31ST OR APRIL 15TH. [1:35] AFTER THE PRESIDENT'S COMMENTS, THE VALUE OF THOSE BETS DOUBLED AND STAND TO PAY OUT [1:39] TO $1 MILLION IF THE CEASEFIRE HAPPENS BY APRIL 15TH. [1:44] WHO'S BEHIND THESE BETS? [1:46] POLYMARKET AND OTHER ONLINE PREDICTION MARKET SITES LIKE KALSHI ALLOW USERS TO PLACE BETS [1:51] ANONYMOUSLY, SO THE IDENTITY OF THE BETTER REMAINS UNKNOWN. [1:55] BUT POTENTIALLY LUCRATIVE PAYOUTS LIKE THESE HAVE RAISED CONCERNS [1:58] ABOUT THE POSSIBILITY OF INSIDER TRADING, SAYS DAVID HILL, A JOURNALIST WHO WRITES ABOUT [2:03] GAMBLING FOR ROLLING STONE AND HOSTS THE PODCAST, AMERICAN GAMBLER BOOK CLUB. [2:07] DAVID HILL, I THINK THAT IT'S RIGHT FOR US TO ASSUME THAT THERE IS A LOT OF INSIDER TRADING [2:10] THAT GOES ON ON PREDICTION MARKETS, JUST AS THERE'S A LOT OF INSIDER TRADING THAT GOES ON [2:14] IN THE STOCK MARKET. LOTS OF PEOPLE KNOW THE OUTCOMES OF THESE THINGS PRIOR TO THE [2:18] PUBLIC KNOWING THEM, AND SO SOME PEOPLE ARE GOING TO BE OPPORTUNISTIC ABOUT THAT AND TAKE [2:22] ADVANTAGE OF IT. [2:23] POLYMARKET, WHICH CALLS ITSELF THE WORLD'S LARGEST PREDICTION MARKET, [2:27] ANNOUNCED NEW RULES LAST WEEK CLARIFYING THREE CATEGORIES OF PROHIBITED INSIDER TRADING CONDUCT, [2:33] BANNING TRADING THAT INVOLVES STOLEN CONFIDENTIAL INFORMATION, [2:36] ILLEGAL TIPS, AND TRADING BY PEOPLE WHO CAN INFLUENCE OUTCOMES. [2:41] THEY EVEN SPECIFICALLY GIVE AN EXAMPLE ABOUT MILITARY MEMBERS [2:44] BETTING ON MILITARY OPERATIONS, ADVISING THAT'S BANNED. [2:48] IT'S RAISING QUESTIONS ABOUT THE MORALITY OF BETTING ON THESE ACTIONS, [2:52] WHICH INEVITABLY INVOLVE LIFE OR DEATH SITUATIONS. [2:55] I PERSONALLY WOULD NOT WANT TO MAKE A BET ON WHETHER OR NOT SOMEBODY WOULD LIVE OR DIE. [3:00] I THINK THAT ONE OF THE THINGS THAT'S A CONCERN HERE IS THAT IF THERE IS A MARKET ON SOMETHING [3:05] LIKE DEATH, THAT THERE IS SORT OF MORAL HAZARD INVOLVED, RIGHT, AND THAT PEOPLE SHOULDN'T BE [3:09] ALLOWED TO WAGER ON PREDICTING SOMEBODY'S DEATH, NOT JUST BECAUSE IT'S MORAL, BUT ALSO BECAUSE [3:14] THERE MAY BE, YOU KNOW, THAT IT CREATES THESE SORT OF PERVERSE INCENTIVES, AND THAT PEOPLE'S [3:19] LIVES ARE INVOLVED AND ARE AT STAKE. [3:21] AMNA NAWAZ KAUSHI TOLD US THAT GOVERNMENT EMPLOYEES ARE NOT PERMITTED TO PLACE [3:24] PREDICTIONS ON GEOPOLITICAL MARKETS AND SAID IT DOES NOT COMMENT ON POTENTIAL INVESTIGATIONS. [3:30] POLYMARKET DID NOT RESPOND TO QUESTIONS FROM PBS NEWS. [3:33] THERE ARE AT LEAST EIGHT BILLS IN CONGRESS SEEKING TO REGULATE PREDICTION MARKETS, [3:37] INCLUDING A BIPARTISAN HOUSE BILL THAT WOULD BAR ELECTED GOVERNMENT OFFICIALS, [3:41] SENIOR FEDERAL STAFFERS, AND THEIR FAMILIES FROM TRADING IN PREDICTION MARKETS. [3:46] BUT THESE PLATFORMS AREN'T THE ONLY WAY THAT PEOPLE ARE PROFITING OFF OF POLITICS THESE DAYS. [3:51] FOR OTHERS WITH TIES TO THE PRESIDENT OR WHO CLAIM TO HAVE CONNECTIONS TO HIM, [3:56] THERE'S ANOTHER LUCRATIVE BUSINESS OPPORTUNITY THAT'S EMERGED, LOBBYING FOR PRESIDENTIAL PARDONS. [4:02] TRUMP'S PROLIFIC USE OF HIS CLEMENCY POWERS HAS BEEN CONTROVERSIAL FROM THE BEGINNING. [4:08] HOURS AFTER HE WAS SWORN IN FOR A SECOND TERM, HE PARDONED MORE THAN [4:12] 1,500 DEFENDANTS INVOLVED IN THE JANUARY 6TH CAPITOL ATTACK. [4:16] DOZENS OF OTHER HIGH-PROTECTION [4:17] PROFILE PARDONS HAVE FOLLOWED, INVOLVING POLITICAL FIGURES, [4:20] BUSINESS LEADERS, AND PEOPLE WITH PERSONAL CONNECTIONS TO THE PRESIDENT OR HIS ALLIES. [4:25] AND LOBBYISTS HAVE STEPPED IN TO HELP FACILITATE WHO CAN GET THROUGH TO THE ADMINISTRATION, [4:29] EARNING MILLIONS. [4:31] KEN VOEGEL IS A REPORTER FOR THE NEW YORK TIMES. [4:33] KEN VOEGEL, New York Times Reporter, New York Times, In the first year of Trump, 2.0, [4:37] we saw $5.2 million in lobbying fees disclosed for pardon-related or clemency-related lobbying [4:44] efforts, and that was eight times more than what we saw. [4:46] KEN VOEGEL, New York Times, In the final year of the Biden administration. [4:49] ALI ROGIN, New York Times, Google says this has created a sort of pay-for-play [4:53] mentality during the Trump administration, [4:55] where people with money and connections can skip to the front of the pardon line. [4:58] KEN VOEGEL, New York Times, It's created this sort of pardon-industrial complex [5:03] that in some ways seems to turn on its head the idea that the people who are most deserving [5:09] are the ones who are going to get clemency, and instead sort of reward people who either [5:14] have connections or the ability to pay people who have connections. [5:17] KEN VOEGEL, New York Times, And while President Trump in his speeches [5:22] says attacking fraud is a major priority... [5:24] DONALD TRUMP, President of the United States, We're cracking down on the Somali scams, [5:27] ending the brazen and shameless theft of taxpayer dollars. [5:31] KEN VOEGEL, New York Times, His decisions about who gets a pardon seem to be at odds with that. [5:37] More than 50 of the pardons and commutations he has made in his second term are for fraud. White [5:42] collar offenses such as money laundering, bank fraud and wire fraud are among the most frequent [5:48] he has wiped clean. In a statement, the White House press secretary, Caroline Levitt, said, [5:52] quote, President Trump exercises his constitutional authority to issue [5:56] pardons and commutations at his discretion. Anyone spending money to lobby for pardons [6:01] is foolishly wasting their money. The Trump administration has a robust pardon review process, [6:06] which includes White House counsel, the Department of Justice and, ultimately, [6:10] the president himself as the final decider. [6:13] Many of the people granted clemency by Trump had their financial penalties and restitution forgiven. [6:18] Totaling tens of millions of dollars. But, for their victims... [6:22] JOHN KERRY, White House Press Secretary, New York Times, They're appalled. To them, [6:24] this is sort of like insult to injury. And these pardons and, in some cases, [6:29] even the commutations wipe away those obligations, those financial obligations. So, this is sort of [6:35] taking money out of the victims' pockets or at least stopping an avenue that might otherwise [6:41] result in them getting at least like some compensation for the financial losses that [6:47] they have incurred at the hands of these people. [6:48] LIZ LANDERS, For people in the White House orbit, there is potentially big money to be [6:53] made trading in the currency of access to either information or to the ear of the president. [6:59] For the PBS NewsHour, I'm Liz Landers. [7:01] NICK SCHIFRIN, Support journalism you trust. Support PBS News. [7:17] Donate now, or even better, start a monthly contribution today.