A conflict-of-interest controversy is intensifying after the U.S. Department of Defense recently announced a contract worth approximately $9.7 billion (about 14.61 trillion won) with Dell, following revelations that U.S. President Donald Trump made a large purchase of Dell shares earlier this year.
According to The New York Times on Wednesday (local time), President Trump purchased between $1 million and $5 million worth of Dell stock in February. Smaller additional purchases followed over the next several months. According to mandatory disclosure filings, Trump's investment portfolio executed more than 3,600 transactions in the first quarter alone, primarily targeting major banks, manufacturers and Big Tech companies.
Three months later, on the 27th, the U.S. Department of Defense announced that Dell had signed a five-year "blanket purchase agreement" to provide Microsoft (MS) software and services to the Pentagon, the Coast Guard and intelligence agencies. As part of efforts to deploy more artificial intelligence (AI) tools across the military, Dell will consolidate and manage numerous individual contracts from these agencies. The government estimated the contract value at $9.69 billion.
Shortly after his stock purchase, Trump attended a rally in Georgia in February and praised Dell, saying it "makes great products." Dell CEO Michael Dell expressed his support last December by pledging more than $6 billion to the "Trump Account," a tax-exempt investment account for children being promoted by President Trump.
Dell's stock rose 34% at the opening on the 29th and surged about 40% after the close on the 28th, The Wall Street Journal reported. The stock's rise was also influenced by first-quarter sales of $43.8 billion, an 88% increase from a year earlier. Of that, $16.1 billion came from Dell's AI-optimized servers. On top of strength in AI stocks, the guaranteed contract from the U.S. Department of Defense further fueled the gains. That is why the influence of the U.S. federal government on the stock cannot be discounted, as much as Dell's own performance.
The Trump family, however, maintains that the president does not directly control the trades, which are automatically processed by an outside brokerage. The Trump Organization said in a statement earlier this month that "this structure is intentionally designed to clearly separate President Trump from the independent third-party investment manager who oversees the account, and to leave no room for conflicts of interest." White House spokesperson Anna Kelly also stressed in a statement that "(President Trump) acts only in the best interests of the American people."
However, the NYT criticized that "since the start of the second Trump administration, the Trump family has been expanding its business interests in military drone manufacturing, cryptocurrency, mining and prediction markets," adding that "President Trump even oversees policy and government procurement decisions in those very fields." The NYT added that the asset management arrangement through outside advisers is not a traditional "blind trust," and that the structure still allows Trump to be aware of his own investment trends.
Robert Weissman, co-president of Public Citizen, a nonprofit that has criticized the Trump family's business activities, said, "We can't tell where this president's personal pursuit of profit ends and where policymaking begins."
