A little-known start-up backed by Donald Trump Jr. just landed a multi-million dollar deal with his father’s administration to increase the domestic industrial supply of magnets.
Vulcan Elements, a tiny rare-earths start-up that received investments from Trump Jr.’s 1789 Capital venture firm in August, is slated for a roughly $620 million Defense Department loan under the deal, the Financial Times reports.
The loan, part of a wider $1.4 billion investment in the sector, appears to represent the largest ever granted by the Pentagon’s Office of Strategic Capital, and only the latest plushy government deal handed to a company backed by Trump Jr.
Four firms within 1789 Capital’s portfolio, which also holds significant investments in other government contractors like SpaceX and Anduril, have reportedly landed contracts worth a combined $735 million since the MAGA leader assumed office for the second time in January.
“Presidents are expected to avoid even the appearance that they are using their office to financially benefit themselves or their family,” Kedric Payne, an ethics attorney, told the FT. “While we do not know for certain if, or how, the president may have influenced this loan, it falls under the cloud of conflicts of interest we have seen throughout his administration.”
Vulcan Elements’ deal with the Pentagon stands out both for the record-breaking size of the loan, and for the nature of services it will provide under the arrangement.
President Donald Trump commented in November on the importance of magnets for new technologies, though he raised eyebrows at the time by going off on a tirade about what he described as the mystical properties of magnets. “Nobody knows what a magnet is,” he told Fox News.
This is false. In the 19th century, physicists Hans Christian Ørsted, André-Marie Ampère, Michael Faraday and James Clerk Maxwell formulated a set of equations explaining the function of magnets in terms of the interactions between electric currents and magnetic fields.
These theories were refined in the 20th century with the advent of quantum mechanics, which revealed that magnetic properties owe to the intrinsic spinning motion of electrons in certain substances, in turn accounting for the force of attraction between positively and negatively charged particles.
Trump’s persistent confusion about magnets has spurred mockery from his detractors, who have noted that his public comments on the matter are uncannily reminiscent of a 2010 song by Insane Clown Posse, “Miracles,” which features rapper Shaggy 2 Dope delivering the immortal lines: “F–king magnets, how do they work?”
The Daily Beast has reached out to Vulcan Elements, the Pentagon and the White House for comment.
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