A shocking report from The New York Times set off alarm bells in Washington when it reported on a tangled web of two deals among the Trump administration, the United Arab Emirates, and a cryptocurrency firm co-owned by the Trump and Witkoff families. The one deal was an investment of $2 billion in the cryptocurrency firm, while the second was a sale of sensitive AI technology. Ethics watchdogs and political opponents of the Trump administration have characterized the relationship as a possible, never-before-seen scope of public corruption which raises serious questions about the intersection of personal enrichment with foreign policy.
While the White House insists the two deals are unrelated, critics contend that the timing and the players suggest an outright breach of the accepted ethics standards that have existed throughout the history of the Republic. The scandal has been compared to the notorious Teapot Dome scandal of the 1920s, with some experts believing bilateral arrangements of this kind could be more significant than that and effectively be considered a multi-billion-dollar bribe.
A “Coincidental” Windfall
The scandal centers on two transactions that occurred within a short time frame in May. The first involved a company owned by a prominent Emirati royal Sheikh Tahnoon bin Zayed Al Nahyan investing $2 billion into World Liberty Financial. This large investment immediately turned the cryptocurrency company, which is owned by both the family of Donald Trump and Steve Witkoff, who is Trump’s envoy in the Middle East, into a major player in the digital asset industry.
Two weeks later, with some of the same officials involved in the first deal still involved in the second, the White House approved the sale of hundreds of thousands of cutting-edge artificial intelligence chips to the UAE. This sale, approved despite serious national security concerns within the administration over the UAE’s close ties to China and the possibility of sensitive technology posing a national security risk, would also probably benefit UAE’s China relationships.
Silencing Internal Dissent
Approval of the chip sale had (allegedly) an uncertain path; the Times report noted that senior officials in the National Security Council (NSC) were uncomfortable with the chip deal, and one official, David Feith, was essentially removed from the involvement before the final authorization. Feith was one of five NSC officials targeted by MAGA provocateur Laura Loomer, who expressed doubts about their loyalty to the president. These officials were then removed from their positions following Loomer’s accusations, which allowed supporters of the deal to advance their interests with less opposition from inside the administration—a detail that critics say demonstrates an organized effort to push the sale through despite national security considerations.
The AI Czar and the Ethics Waiver
With dissent no longer a concern, Silicon Valley investor David Sacks, a Trump adviser on AI and crypto, became the lead negotiator on the chip deal. In managing the obvious ethical quandary of an adviser with strong connections to the tech and crypto world advancing a significant tech and crypto-related deal, Sacks was provided with a White House ethics waiver.
While such waivers are legal tools, their use in this context has drawn sharp criticism. Ethics lawyers cited in the report argue that the situation—where an adviser is shaping policy that could benefit industries and individuals with whom he is closely associated—tramples on the established norms designed to prevent government officials from using their public office for private gain.
Bigger Than Teapot Dome?
The sheer scale of the money involved has led to startling historical comparisons. Economist Ryan Cummings, who served in the Biden administration, stated on social media that if the deals were proven to be a quid pro quo, they would represent “by far, the largest public corruption scandal in the history of the United States.”
To illustrate the point, Cummings likened it to the Teapot Dome scandal, which was a well-known bribery scheme during the Harding administration and featured about $10 million in bribes, based on today’s dollars. The UAE investment was for $2 billion, an order of magnitude greater than the Teapot Dome scandal, and it raises the question of whether it was truly an investment, or whether it was a bribe for a policy decision on AI chips.
Accusations of “Straight-Up Kleptocracy”
The controversy has broadens to criticizing the way this administration governs. Georgetown University political scientist Dan Nexon observed that U.S. foreign policy under Trump is “much easier to understand once you accept that the main ‘grand strategy’… is straight-up kleptocracy.”
This sentiment was echoed by Senator Elizabeth Warren, who wrote on X (formerly Twitter), “The Trump Administration is cashing in on foreign crypto deals—and weakening guardrails that protect our advanced technology.” As the particulars of the deals come under increasing examination, the issue has become a focal point in the ongoing discourse surrounding issues of ethics and transparency, as well as the potential for foreign interference at the highest levels of the U.S. government.
