I was quoted in a short article in Newsweek, offering an assessment on just how much of a radical break Trump’s seizure of effective control of several major American industrial corporations is, historically.
Dael Norwood, an associate professor of history at the University of Delaware, told Newsweek a key difference between the Intel deal and those bailouts made during the Great Recession is that those programs were “quickly unwound.”
Another key difference from these historical deals is that those of Trump seem to be “arbitrary exercises of personal power, very directly tied to Trump himself,” Norwood said.
“A ruler seizing direct, personal control of large corporations (though various means) and using public policy to directly benefit his family’s enterprises is a massive break with the history of US capitalism, at least as since the American Revolution,” he said.
“In no case did the executive branch seek to exercise either strategic or tactical control over the business, much less extort them for personal gain,” he said.
…
Dael Norwood, an associate professor of history at the University of Delaware, told Newsweek: “I think these ‘deals’ suggest we’re witnessing a profound break with the historical patterns of American capitalism. American capitalism has always been deeply and inescapably intertwined with government – markets and private property exist only insofar as the law creates, legitimates, and regulates them; corporations are all literally creations of state and federal governments; government funding through grants or purchases has always been critical to the development and marketing of new technologies; and so on.”
Per the article, this take puts me in some agreement with a VP of the Cato Institute and Rand Paul, apparently – though I disagree that any of this is “socialism – but firmly on the other side from a corporate governance scholar at the University of Chicago, who advances a shockingly imaginative retelling of U.S. business history.
Strange days!
You can see more of what I have to say on this topic on my post on the US Steel “deal,” “Autocracy, Incorporated.”
For a while now on social media (Bluesky, mainly), I’ve taken to making short threads about the ways that Delaware’s corporate franchise hooks into the headlines about the (alleged) crimes, frauds, and scams that fill our daily feeds.
My tag for this bit – the title of this post – is an overly-wordy riff on an oft-paraphrased line from Balzac’s 1835 novel, Le Père Goriot: “Behind every great fortune is a great crime.”
Balzac’s actual language is a bit different. For one, it’s more clearly coming from the perspective of a scheming character, Vautrin:
“Le secret des grandes fortunes sans cause apparente est un crime oublié, parce qu’il a été proprement fait.” ~Honoré de Balzac, Le Père Goriot (Paris: Calmann-Lévy, 1875), p. 137
“The secret of a great success for which you are at a loss to account is a crime that has never been found out, because it was properly executed.” ~ Honoré de Balzac, Old Goriot / Le Père Goriot, trans. Ellen Marriage, with George Saintsbury (London:J.M. Dent , 1896), p. 124
Balzac’s venturesome villain is an operator. In context of the novel, he isn’t simply offering us a read on the world’s decadence. He’s explaining to the protagonist (whom he is trying to recruit) that white collar crime kills no less surely than basic assaults do – but you can get away with it, because the law is such that “properly executed” crimes go unpunished.
(Six decades later, another French novelist, Anatole France, would offer a similarly cynical bon mot. But instead putting in the voice of the villain, France puts the sentiment in an animated monologue delivered by anarchist mystic character, the slightly comic Choulette:
“Cela consiste pour les pauvres à soutenir et à conserver les riches dans leur puissance et leur oisiveté. Ils y doivent travailler devant la majestueuse égalité des lois, qui interdit au riche comme au pauvre de coucher sous les ponts, de mendier dans les rues et de voler du pain.”
“For the poor it consists in supporting and maintaining the rich in their power and their idleness. At this task they must labour in the face of the majestic equality of the laws, which forbid rich and poor alike to sleep under bridges, to beg in the streets, and to steal their bread.”
Anatole France, Le Lys Rouge (Paris: Calmann-Lévy, 1894) p.118 / France, The Red Lily, tras. Winifred Stephens (New York, Dodd, Mead and Company, 1925), p. 91.
Such is the softening effect of time, I suppose. The once-powerful villain becomes a harmless eccentric.)
In my series-slash-recurring-bit, I’ve taken upon myself the small task of making connections between the various moral, social, or actually legal offenses that crest to notice in the waves of the news cycle, and the various tools that Delaware’s lawmakers, jurists, and advocates have put at the public’s disposal (and especially the publicly rich and powerful). These links are usually manifest Division of Corporations business entity search results – bare bones listings anyone can pull – but sometimes more verbose sources, like SEC filings. (Some of data is replicated elsewhere, with a small lag – notably at Open Corporates).
~
That’s all too much introduction to the (alleged) crime I dug into today, a new (alleged) bribery platform being set up by the President of the United States’s family under the corporate name “ALT5 Sigma Corporation.”
“World Liberty Financial, the cryptocurrency start-up founded last year by the Trump family, announced on Monday that a publicly traded technology firm would begin buying large quantities of its signature digital coin.
The firm, a little-known tech company called ALT5 Sigma, is planning to sell $1.5 billion worth of shares, using the proceeds to buy $WLFI, a cryptocurrency created by World Liberty, the announcement said.
Similar initiatives have become wildly popular in the crypto world this year, after the success of Strategy, a public tech company formerly known as MicroStrategy that has built a Bitcoin stockpile worth billions of dollars. Strategy’s stock price has soared in sync with the price of Bitcoin, which has set a series of record highs in recent months.
As part of the deal, World Liberty will receive shares in ALT5, according to securities filings, in return for $750 million worth of $WLFI coins. Eric Trump, the president’s middle son, will join ALT5’s board, and Zach Witkoff, a World Liberty founder and the son of President Trump’s Middle East adviser, will serve as chairman of the board.”
ALT5 started life in 1983 as a Minneapolis household appliance retailer & recycler. In 2018 it reincorporated in NV, then “broadened its business perspectives,” going into biotech, buying & merging w/ JanOne Inc., researching “non-opioid painkillers” made out of sodium nitrite.
(FYI, the 10-K this company filed for 2019 is truly a WILD ride. Other filings indicate that while the company has historic roots in Minnesota and a present presence in Las Vegas, Nevada, it also has had ties to New York, Delaware, and Ontario and Quebec. Reading quickly, it seems like the company’s SEC filings started to be sparse and chronically late in the 2000s. It seems like the original appliance retailing and recycling company – Appliance Recycling Centers of America Inc. – started faltering, and that sputtering is what led to the move to Nevada, and a concomitant shift in core business model from safe appliance disposal to more … imaginative assets.)
The Delaware connection to the latest Trump bribery deal came more recently. In May 2024, JanOne acquired ALT5 Sigma, Inc., a DE fintech corporation (file no. 6782648) founded in 2018 and operated out of a Lexington Avenue, New York address. After the acquisition, JanOne merged the DE corp into the Nevada entity, and then renamed the parent company to ALT5 Sigma Corporation. (JanOne Inc. then became the name of a subsidiary).
ALT5 Sigma, Inc. remains integrated into ALT5 Sigma Corporation’s rat’s nest of subsidiaries and holding companies in a manner so obscure the image of their org chart they include in their SEC filings is blurry as bigfoot. (Unlike the pictures of mouse surgeries, also included in the 10-K, high are all-too-crisp).
Yes, it’s that blurry in the original. Yes, that’s on the nose.
So, to recap: a Minnesota appliance recycling company hit hard times in the 2010s, moved to Nevada to become a vehicle for biopharmaceutical investments, and then pivoted again in 2018, buying a Delaware corporation and adopting its name (but not its domicile) to become a crypto trading platform. And then this week, the extended Trump family took out a controlling stake in that crypto firm. Trump et al. managed the simultaneous takeover and bribe through their memecoin vehicle, World Liberty Financial, Inc. (also DE-registered) – and they seem to be interested in using ALT5 as a platform to provide themselves a percentage on their own bribes, by charging a vig on sales of their own cryptocurrency.
~
To further tie some threads together:
In the 8-K ALT5 filed Aug 11th, ALT5 announced they’re swapping their shares to World Liberty Financial in exchange for $750m in $WLFI coins. It’s in some ways a standard “equity for assets” swap – though the assets in this question are presidential bribery tokens.
In that same filing, ALT 5 notes the exchanged shares “will not be, and are not, registered under the Securities Act of 1933” – because the deal falls under the “accredited investor” exemption.
No registration, no disclosures needed in this $750m deal involving POTUS.
the highlighted portion is where the magic happens.
Untangling this kind of mess, and making all the connections clearer, is the justification for the bit. It also illustrates how and why I insist that Delaware law and Delaware lawmakers are often directly implicated in the vast corruption that’s turned the US into an autocracy. Neither POTUS nor his family would be able to sell their office this way – or plan to sell even more – without the First State’s say-so.
Or, The Road to Hell is Paved With Private Offerings
Bipartisan Comity
I have a brief opinion piece in the Bay to Bay News today, that puts a new, bad bill in historical context – and explains why I think it will harm a lot of people.
Here’s a teaser:
It’s 2025: Do you feel like you aren’t getting scammed enough? Are you tired of not being cheated, ripped off and defrauded? Probably not. We’re drowning in spam calls, phishing emails and junk mail, all pitching shady deals. It seems like we’re under constant siege by an army of con artists — and they’re winning.
Most people would prefer that government stop these financial predators — not lead more wolves to the door.
Unfortunately, Congress has taken the side of the wolves. Led by Rep. Sarah McBride, D-Del., the House of Representatives just unanimously passed the Equal Opportunity for All Investors Act of 2025. The bill smashes down guardrails that, for almost a century, kept Wall Street sharpers from picking the pockets of regular people. Together with the Trump administration’s rush to eradicate limits on private equity’s access to your retirement savings, this legislation sets the stage for a new financial crisis.
Or, a New Deal Democrat describes a Delaware Senator as … unbought?
Sen. John G. Townsend, Jr., of Delaware. Apparently not fully owned by corporate interests!
In the course of researching the political history of the Securities Act of 1933, I encountered a rather surprising description of a Delaware politician. In 1959, “Dean” James M. Landis, one of the aides primarily responsible for drafting the bill and shepherding it through Congress, published a close account of his experience getting this critical New Deal legislation off the drawing board and into the law books.
His article is a brief but quite detailed play-by-play of the political process – an Aaron Sorkin narrative, but with substance – and includes a number of deft character sketches of the various politicos and operators he dealt with as he hustled the most important federal financial regulation ever written over the finish line.
At the moment of high drama of his narrative (the House-Senate bill reconciliation conference meetings) he characterizes Senator John G. Townsend, Jr. (R-DE) this way:
“The tenseness of the first day’s session became relieved as [Rep. Sam] Rayburn made it plain that any suggestion of any Senator would receive the most careful consideration. A goodly number of suggestions came from Senator Townsend of Delaware, a Republican, who was in close touch with the financial world but who under no circumstances would take their suggestions as commands or as ideas to hold on to in the face of a compelling argument to the contrary.” [emphasis mine]
~James M. Landis, “Legislative History of the Securities Act of 1933,” George Washington Law Review 28, no. 1 (1959): 45-46
FDR’s man on the ground, a Felix Frankfurter student and Louis Brandeis protégé, a future chair of the SEC, Landis was impressed with how uncorrupted a Delaware Senator was by corporate financiers. As far as I know, that makes Townsend the first – and perhaps only – senator thusly described (certainly that differentiates him from other Delaware (state) senators who share his name…)
Or, Delaware Stands Ready To Perpetrate Any Sort of Corporate Enormity (Again)
Stock certificate, 30 shares @ $50 par, Kennebec Ice and Coal Company, January 26, 1884, Artisans’ Savings Bank of Wilmington, Delaware records, 1861-1960 (1099), Box 164, Item 31, Hagley Library & Museum (Wilmington, DE).
Mark Twain never said that “history never repeats itself, but it rhymes.”(1) But if he had taken time out to consider the past, present, and future of corporate corruption, with particular attention to the the diminution of shareholder rights, I put it to you, dear reader – he might’ve done.*
The author of the Gilded Age came to mind recently when I ran across more evidence that our simulation is caught in a loop, repeating the obvious mistakes of the past, again. William Z. Ripley (believe it or not) was who caught my attention.
In the mid-1920s, Ripley, an Ivy League social scientist and popular Progressive railroad reformer, took aim at corporate governance; or rather, the startling lack thereof. In a series of Atlantic articles and then in a 1927 book, Ripley catalogued the recent legal and financial innovations that had put “Main Street” at the mercy of “Wall Street” in new and destructive ways.(2) Though he claimed to not be any kind of muckraker (or, horrors, a socialist), Ripley still wanted to get down to the “root of things” – to diagnose how “property” and been “allowed to degenerate into an instrument of oppression” in America.(3)
Delaware, in part, was to blame. (But you knew that already.)
For Ripley, private property turned into a tool of tyranny when corporations severed ownership from control. Ripley argued that this wicked wound had first been cut by the proliferation of corporations across all lines of business – a tendency, he noted, that was peculiarly well advanced in the US, but not in Europe. That laceration was deepened by the widespread practice of watering-down corporate shareholder rights. He was particularly disturbed by two phenomena: the advent of “no-par” stock issuances, and the rise of non-voting tiers of stock.
Of the two, no-par stock bothered him more. Prior to its invention, corporations assigned each unit of stock a face-value, and printed that value (say $50) on the certificate; that amount was “par.” The buyer and holder would then know they had contributed $50 to the capital of the Kennebec Ice and Coal Company, Inc. – say – and that that amount was their claim on a particular percentage of the firm’s equity; secondary traders would also have a clear sense of how the current price of the stock compared to its initial value. If a corporation later decided to accumulate more capital by selling additional equity, common law practice before the late nineteenth century made it unlawful to offer new shares at less than the original par value – and existing shareholders had a preferred right to buy in to the new issuance, and thus keep the size of their stake equal with other shareholders.
The advent of no-par stock changed all that. In practice, no-par stock issuances meant “much below par” and sometimes “zero cost.” And for Ripley, they destroyed the moral relationship between investors and the corporation. He decried them as an “egregious malversation of the rights of shareholders and of the public generally” because they allowed companies to dilute stock, effectively robbing earlier investors of value and future buyers of much-needed information. They could also inflate the control of well-positioned insiders, like members of the board of directors, who could load up on new no-par shares to acquire more dominant voting rights.(4)
For similar reasons, Ripley opposed the proliferation of corporations issuing non-voting stock. Rooted in the deep Anglo-American legal tradition, he considered corporations to be voluntary commonwealths, premised, like all republican polities, on equality among members to function (municipalities are also a form of corporation, one might here recall…). Tiered stock structures separated equity into classes with different voting rights – building in inequality. A corporation might issue 100,000 shares, divided between 1,000 Class A shares, with rights to vote for the board of directors, and the remaining 99,000 as non-voting Class B shares – securities with no controlling powers, just vague claims to a portion (“aliquot”) of the corporation’s wealth.
Ripley thought both methods were perversions of the “essence of corporate democracy” – the premise that “all members of the company shall stand upon an even footing with one another.”(5) This posed a problem for corporate investors, internally – an inside group had means to gain control without matching their stake, and therefore the means to steal from other stockholders, by arranging sweetheart contracts for themselves, or simply by voting special dividends. It also posed a dilemma for society, at large, because in combination with holding companies and trusts, it accelerated the dispersal of responsibility for corporate actions beyond any readily identifiable individuals – common stock holders didn’t have any say on corporate decisions! –while, paradoxically, concentrating control of corporate wealth into an ever-smaller number of hands (again via holding companies). In a moment where corporations had become not just one form of economic entity among many, but the default choice for *any* and *every* form of business, Ripley saw an invitation for un-remediable theft and fraud – and documented dozens and dozens of actual instances of it.
And wouldn’t you know it, Delaware shows up as one of the authors of this disaster! Ripley traces the spread of these terrible innovations to competition between states for “chartermongering.” The race-to-the-bottom between sovereign states for charter revenue opened the door for ever-looser laws, making insider dealing between directors and controlling stockholders not only legal, but a core business strategy for modern corporations. “The little state of Delaware has always been forward in this chartermongering business,” he noted – and led in this laxity, too. (Though unlike many later Delaware lawyers and state officials, Ripley in 1927 doesn’t credit Delaware with dominating the chartermongering business; the First State is one of several mean jurisdictions, like Maine, Arizona, and New Jersey, making life worse for all Americans).(6)
Ripley is worth quoting at length about how this corrupt legislative process proceeds, partly because he really decides to go for the gusto in his language:
“But it is the evidence of an unholy alliance between private profit and the exercise of this supposedly sovereign function which is at times the most debasing in its influence. The system tends to create a horde of shysters, ready to perpetrate any sort of corporate enormity, provided only that the fees are sufficiently ample. And attorneys, on their part, as one of them writes me, ‘pick their states of incorporation as you or I would pick out a department store at which to trade.’
Another shameful angle to this business is that it tends to envelop our state legislative chambers in a noisome atmosphere of political honeyfugling, if not of downright corruption. A minor modification of a state statute may be worth large sums of money, because of its effect either upon plans in contemplation, or else as affording possible relief from the untoward results of acts already committed. And just because these amendments are seemingly so insignificant, they may be slipped through without arousing comment and perhaps almost entirely without notice. The temptation to spend money in what amounts to bribery, in order to attain such results, may upon occasion be very great. Nor need the immediate accountability for such corruption necessarily rest upon the corporations themselves. The system gives rise to a considerable body of irresponsible intermediaries — henchmen, lobbyists if you please — specialists in such branches of the law, hangers on about the state capital. The great corporation merely whispers its need. Subservient agents hasten to bring about the desired result, and perhaps no questions are asked. …”(7)
Now, if “political honeyfugling, if not downright corruption” doesn’t describe the ugly process of passing SB 21 (and its recent predecessor “reforms”), I don’t know what does.
But beyond the remarkable resemblance between Ripley’s description of how legislative corruption works at the state level – the “henchmen” and other “subservient agents” who rush a bill through are extremely familiar figures in Delaware – the substance of Ripley’s complaints about the evils of insider string-pulling toll quite recognizable tones. He’s lamenting the structural abuse of what today’s corporate legal specialists call “private ordering.” And easing the rules on private ordering for controllers is what current Delaware legislators, and their affiliated henchmen, have been gunning for, over these last few years.
There’s another thread that links Ripley’s century-old critique to today’s miseries. Ripley was an acknowledged influence on Adolf Berle and Gardiner Means, his contemporaries and the major (if constantly misread) theorists of structural problems in corporate governance. Like Berle and Means, Ripley’s concern was about the problem of control in corporations – not the divide between professional managers and stockholders owners, per se, as is usually claimed, but the one between any stakeholders in the control of the business itself.(8) Ripley, like his colleagues Berle and Means, cared about any mechanism that produced a power imbalance between members of a corporation – and in the 1920s, as now, that threat came most clearly from controlling minority shareholders, not the managers they hired.
Berle and Means are now the more famous writers – but a century ago, Ripley was a much louder and more well-known voice.(9) Over the next decade his profile only grew in prominence, because, among other things, he predicted the Great Depression (which … other famous economists quite infamously did not). Ripley’s concerns with corporate opacity, controlling shareholders, and insider dealing contributed directly to the New Deal reforms that came less than a decade later, after the crash (and specifically the federal Securities Exchange Act of 1934). It’s not a stretch to say that the Ripley’s specific complaints shaped the specifics of financial regulation in the United States, at least until recently.
Which leads me back to my sense of chronological vertigo. In the last few years, the Delaware General Assembly has taken a hacksaw to shareholder rights, reversing judicial rulings that had curtailed the amount of insider dealing (“private ordering”) that corporate boards could do. Alongside this strangling of the main venue for private redress of corporate wrongs, federal regulatory agencies, most notably the SEC and CFPB (but increasingly the Federal Reserve, too), have been captured or closed outright – eliminating the public arm of corporate regulation. The nation’s feeble protections against the same corporate fraud and thefts Ripley decried are now dead letters in their state and federal forms – and controlling shareholders are free, once again, from any restraints that bound them from freely picking the pockets of fellow shareholders, and citizens.
Thus, the unbound and unaccountable corporate immorality that Ripley decried in his own time – the oppressive property of corporate property – is back again, a boot pressing on all of our necks. Which makes it all a bit rich – or perhaps a bit ironic? – that the group of Delaware legal professionals, academics, jurists, and defense attorneys, who are – putatively – among most familiar with Berle and Means (and, thus Ripley, one step removed) should have been the intellectual architects of this repeat disaster.(10)
One can only hope that long dead Progressives like Ripley retain the capacity to haunt their traitorous professional descendants, even as the rest of us are horrified by the specter of what Delaware has, once again, wrought.
——
A brief note: This is not a William Zebina Ripley fan account. He was one of the most influential writers on modern scientific racism. He came to national prominence first, not for his scholarship on colonial finance, railroad management, or corporate governance, but for his 1899 book, The Races of Europe. Originally developed as a lecture series at Columbia University and at the Lowell Institute, it’s a fantastically stupid piece of work, exemplary of the time, filled with tedious ethnic and racial stereotypes “proven” by tendentious skull measurements. It was, of course, a huge hit with eugenicists, white supremacists, and other evil, awful people, both in the US and abroad – including Madison “Hitler’s My No. 1 Fan” Grant. Ripley’s intellectual legacy has a body count in the hundreds of millions – and one that grows by the day, as his theories persist through the AI-“trained” ideas drug-addled billionaires and quack failsons have used to justify horrific revisions in US federal policy. He’s also from Medford, MA (derogatory).
1. As far as I know, Twain never used the phrase, exactly – though in his 1873 co-written novel, The Gilded Age, a character quotes a newspaper offering a similar sentiment:
“History never repeats itself, but the Kaleidoscopic combinations of the pictured present often seem to be constructed out of the broken fragments of antique legends.”
Quote Investigator finds the closest instance of this phrasing in a poem by John Robert Colombo – in the text, the phrase is attributed to Twain. John Robert Colombo, “A Said Poem,”Neo Poems, p. 46.
8. As historians Ken Lipartito and Yumiko Morrii note, “[t]he conflict that Berle and Means emphasized was not between managers and owners, but between owners and owners.”Kenneth Lipartito and Yumiko Morii, “Rethinking the Separation of Ownership from Management in American History,”University of Seattle Law Review 33, no. 4 (2010):1048; on Berle and Means’ relationship to Ripley, see p. 1045-46 (though note that Lipartito and Morrii misdate the publication of Ripley’s “exposé” in the text to 1928; it was 1927).
9. He got a lot of positive press, and was recognized as sufficiently prominent to scare the NYSE in to pretending to act to prevent no-par stock issuances. Ralph W. Barnes, “A Professor Who Jarred Wall Street,”Brooklyn Eagle (New York), April 18, 1926; S. T. Williamson, “William Z. Ripley –and Some Others,”The New York Times, December 29, 1929. (He also made the news wires when he was injured in a car accident in Manhattan, riding with a woman who wasn’t his wife. See, for ex: “Prof. Ripley in N.Y. Taxi Crash,”Transcript-Telegram (Holyoke, Massachusetts), January 20, 1927; “Noted Economist Hurt in Crash,”The Herald Statesman (Yonkers, NY), January 20, 1927.
Dael A. Norwood 