Micah Loewinger: Defense Secretary Pete Hegseth shared detailed plans for bombing Houthi militants.

Brooke Gladstone: A spectacular security breach was uncovered this week. According to the right-wing media, there's nothing to see here.

Will Sommer: More feigned phony outrage. This is now the scandal of the week that you will see nonstop, 24/7, that nobody will care about.

Brooke Gladstone: From WNYC in New York, this is On the Media. I'm Brooke Gladstone. President Trump has declared he's sending education back to the states, but there's some tension in the ranks of MAGA.

Jennifer Berkshire: The voters who were the most emphatic about sending him back to the White House were also the most opposed to these voucher programs.

Brooke Gladstone: Plus, Trump is all in on crypto. What could possibly go wrong?

Jacob Silverman: The next Bob Menendez is not going to be paid in gold bars and watches. He's going to be paid in crypto. Probably already is.

Brooke Gladstone: It's all coming up after this.

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Brooke Gladstone: From WNYC in New York, this is On the Media. I'm Brooke Gladstone.

Micah Loewinger: I'm Micah Loewinger. [clears throat]

Brooke Gladstone: Step away from the mic, Micah. I'll read your intros this week. Go back to the wellness room.

Micah Loewinger: Okay. All right.

Brooke Gladstone: The Atlantic reporter mistakenly added to a text chain with top security officials just released the messages that have started a massive national security controversy.

Micah Loewinger: Top intelligence officials were in a group on an app called Signal.

Speaker 6: The White House has been repeatedly saying that there were no classified information, there were no war plans discussed within those text messages.

Speaker 7: Take a look for yourself. I'll read a little bit of it here. These are texts from Pete Hegseth, Secretary of Defense, talking about, at 11:44 Eastern that day, "Weather is favorable. Just confirmed with CENTCOM, we are a go for mission launch." 12:15, texts in this chat, "F18's launch declares this the first strike package." Just simply a stunning lack of operational security.

Brooke Gladstone: The Atlantic story quickly became the biggest story of 2025 so far, according to social media engagement data collected by Axios. To think it just landed in Jeffrey Goldberg's pocket.

Jeffrey Goldberg: I've been asked this question a few times today. It's why did you have such a hard time believing this? The answer is because it's unbelievable.

Brooke Gladstone: In the chat, Secretary of Defense Pete Hegseth celebrated the group's clean OPSEC, or operational security, which is not the kind of thing you get to say in a war planning text thread with a journalist watching on a commercial app installed to personal devices while one of your guys is traveling in Moscow. Naturally, members of the press and probably half of the World's intelligence agencies went looking for other OPSEC failures.

Wired tracked down several Venmo accounts belonging to officials in that signal chat. In some cases, those public profiles revealed contact lists and transactions. Meanwhile, reporters at the German outlet Der Spiegel used search engines and combed hacked data floating around on the Internet to find emails and phone numbers belonging to National Security Advisor Mike Waltz, National Intelligence Director Tulsi Gabbard, and Defense Secretary Pete Hegseth.

Speaker 8: Most of these numbers are apparently still in use. Some of them link to profiles on Instagram, LinkedIn, WhatsApp. Hostile intelligence services could use this publicly available data to hack the communications of those affected by installing spyware on their devices.

Brooke Gladstone: Suffice to say Signalgate is a bombshell and a half. According to America's most-watched cable network, not so much.

Will Sommer: The very people that covered up their president's severe cognitive decline lied about wide open borders, both of which are clear and present dangers to our country. Now, I want you to believe that they actually give a damn and care about national security. More feigned phony outrage. This is now the scandal of the week that you will see nonstop, 24/7, that nobody will care about.

Brooke Gladstone: Will Sommer, senior reporter at The Bulwark, has been covering the response from the administration and the conservative media.

Will Sommer: Initially, The Gateway pundit, which is one of the main pro-Trump websites, said, yes, it's real, and thank goodness they called it a masterclass in leadership.

Micah Loewinger: Also on Monday, Fox host, Will Cain, said--

Will Cain: If you look at how they discuss potential strikes on Houthis in Yemen, what you will see is dialogue. If you read the content of these messages, I think you'll come away proud that these are the leaders making these decisions.

Will Sommer: Then it becomes shoot the messenger. Let's tar Jeffrey Goldberg.

Micah Loewinger: Yes. Defense Secretary Pete Hegseth, who, of course, has an interest in this story minimizing or going away, just said--

Defense Secretary Pete Hegseth: You're talking about a deceitful and highly discredited so-called journalist who's made a profession of peddling hoaxes time and time again to include the, I don't know, the hoaxes of Russia, Russia, Russia, or the fine people.

Will Sommer: They were effectively within the first 12 hours of the story coming out, the line from the White House was basically daring Jeffrey Goldberg to come out with this. When he didn't immediately, within the same day, publish the classified material, they were saying Jeffrey Goldberg doesn't really have this. He made it up or he drastically exaggerated the contents of what he didn't include in the initial story. It was a typically Trumpian total denial.

Micah Loewinger: Of course, claiming it was a hoax was an uphill battle, to say the least, because, in Jeffrey Goldberg's initial article for The Atlantic, he quoted a spokesperson for the National Security Council saying, "Yes, this looks pretty real to us."

Will Sommer: Right. Well, that's a great point. That confirmation from the National Security Council is apparently how he came to believe it was real in the first place.

Micah Loewinger: Here's a fun piece of spin. On Monday, the day that the first article from The Atlantic was released, Primetime host Jesse Watters mostly ignored the story but did deliver this defense.

Jesse Watters: Did you ever try to start a group text, you're adding people and you accidentally add the wrong person? All of a sudden your Aunt Mary knows all your raunchy plans for the bachelor party. Well, that kind of happened today with the Trump administration.

Micah Loewinger: By the way, when he was saying this, the chyron under his face read, "We've all texted the wrong person before."

Will Sommer: I believe there was also a stock photo of an old lady going, "Oh, no," holding a phone. It is these efforts to be like, "Well, look, the group chat, it gets a little crazy." Obviously, in the average person's case, the group chat doesn't include information that could be used to shoot down American planes. The various efforts to either slime Jeffrey Goldberg or just to downplay this. You would think that Jeffrey Goldberg, he's like out of the weather underground, the way they treat him. This is a guy who is like the most sober milquetoast DC reporter type.

I saw Benny Johnson, who's like a MAGA podcaster, calling him a gremlin, a minion, something like that. It's like, "Are we talking about the same guy?" Jeffrey Goldberg was on The Bulwark Podcast. My colleague Tim Miller said, "They're saying you're lying. Are you going to release these texts?" He seemed so reluctant. It was almost like he had never even considered that possibility of releasing classified information. Yet, that is what the administration ultimately pushed him to do.

Micah Loewinger: Mike Waltz would be the first head to roll. You would think he's probably the only one who really knows how Jeffrey Goldberg made it into that chat in the first place since he's the one who created the Signal chat and invited him. Here he is speaking with Laura Ingraham on Fox News this week.

Laura Ingraham: How did a Trump-hating editor of The Atlantic end up on your Signal chat?

Mike Waltz: Laura, I'm not a conspiracy theorist, but of all the people out there, somehow this guy who has lied about the President, who has lied to gold star families, lied to their attorneys, and gone to Russia hoax, gone to just all kinds of lengths to lie and smear the President of the United States. He's the one that somehow gets on somebody's contact and then gets sucked into this group.

Micah Loewinger: What exactly is the implication here that Goldberg hacked Michael Waltz's phone or tricked him into getting an invite? What's the logic?

Will Sommer: This is one of the fascinating subplots here that Michael Waltz has to explain why he has Jeffrey Goldberg in his phone. Jeffrey Goldberg is a guy who writes pretty regularly about very high-level national security stuff. The mind initially jumps to the idea that Michael Waltz has been leaking to Jeffrey Goldberg in the past, or at least knows him enough in a way that the very anti-press Trump administration that would put a stigma on Mike Waltz.

Look, these are guys who have been in DC for a long time. It's not unreasonable that they would have each other's phone number, even in a way that wouldn't be underhanded on Waltz's part. If he's going to explain, "Well, I called Jeffrey Goldberg up every so often, and that's why he's in my phone," that's not going to look great at the White House. He has to do things like, "You all know how people can inject your phones in a way that puts a contact in there." Even in the most--

Micah Loewinger: We've all been there. [laughs]

Will Sommer: Right. The most charitable way of seeing that. I was just like, "I cannot--" Look, we all have phones, and that's in part why this story is so damaging, that people know how phones work. You think, number one, I don't understand that explanation. Number two, if the phone is that insecure, that people can dupe you into adding people to the group chat about the airstrike, probably you shouldn't be discussing the airstrike on there in the first place.

Micah Loewinger: It's a great point. Michael Waltz also said that he'd never met Jeffrey Goldberg, sort of suggesting, "Oh, I don't even know who this guy is." Yet they've been photographed together and stuff.

Will Sommer: Right. I mean, "Who? What?" Like this idea that this very nationally security-minded Congressman in a previous life, this idea that he would know Jeffrey Goldberg is not that crazy. Now, of course, you have given the drain, the swamp ethos. He has to act like, "I've never seen that guy before in my life."

Micah Loewinger: Okay. Getting back to the contents of the Signal chat, one of the narratives that we heard emerge from right-wing media and from the Trump administration and its allies was, "Okay, well, maybe it is real, but what was leaked to The Atlantic just isn't that important." We heard this line repeated in one form or another from CIA Director John Ratcliffe, President Donald Trump, and Tulsi Gabbard, Director of National Intelligence. During a Senate Intelligence Committee hearing on Tuesday, March 25th, Senator Mark Warner put this question to Tulsi Gabbard.

Senator Mark Warner: Then if there's no classified material, share it with the committee. You can't have it both ways. These are important jobs. This is our national security.

Will Sommer: A day after the initial Atlantic story comes out, after the White House has been saying, "Oh," and Pete Hegseth said all this stuff saying there was no classified information, or this is entirely a hoax, Jeffrey Goldberg has to then come out and say, "Okay, well, here's the material." He publishes the strike information that Pete Hegseth put in the chat, which is very specific, and an American enemy had access to it. They could conceivably have used it to shoot down American planes. That comes out and then it becomes such a semantic game. They said, "Well, The Atlantic initially said these were war plans." Then in the second article, they called them attack plans. They're kind of downplaying it.

Micah Loewinger: Yes, it looks like Goldberg overpromised. This is how Fox & Friends co-host Lawrence Jones characterized it on Wednesday after The Atlantic released its follow-up story.

Lawrence Jones: There's not war plans on it. At one point, it talks about a target. It doesn't even say his name, doesn't say locations, coordinate. This is probably sensitive information, but I'm not sure this is classified.

Micah Loewinger: After the second Atlantic article came out, this was Trump at the White House when asked if he still believed the information was not classified.

Reporter: Believe nothing classified was shared.

President Trump: Well, that's what I've heard. I don't know. I'm not sure. You have to ask the various people involved. I really don't know.

Micah Loewinger: It seems like the President had a kind of change of tune.

Will Sommer: I think that after The Atlantic finally releases the classified information, then they have to change it a little bit and say, "Well, maybe it was real, but is it really that big a deal?" Trump does a little bit of throwing Mike Waltz under the bus, although apparently not enough to fire him, and saying, "Well, I think that was Mike's thing." I think we're seeing the hierarchy here is protect Pete Hegseth at all costs. There is this kind of acknowledgment, but they say, "Well, it's not really that big a deal."

Micah Loewinger: Then on Thursday, Attorney General Pam Bondi, who's mostly avoided dipping her toes into this, was asked about the nature of the documents and she said this.

Attorney General Pam Bondi: Our world is now safer because of that mission. We're not going to comment any further on that. If you want to talk about classified information, talk about what was at Hillary Clinton's home that she was trying to bleach, talk about classified documents in Joe Biden's garage that Hunter Biden had access to.

Will Sommer: I saw someone on Twitter quipping that that Bondi thing really is symbolic of how so many members of the Cabinet see themselves as doing Fox News talking head work for Trump. That quick pivot there to like, "When are we going to talk about Hillary Clinton and the bleach bit on the server and so on?" That, I think, is such a classic conservative media move and not really what you would expect from an attorney general.

Micah Loewinger: Earlier, we heard a bit from Laura Ingraham's interview with Michael Waltz, in which she seemed to at least express some basic incredulity and concern over the leak. Are there other examples of right-wing commentators breaking away from the pack, or have they mostly banded together to just offer damage control?

Will Sommer: We're seeing some people who are saying, "Look, people who perhaps would give the administration a lot of the benefit of the doubt who are saying this is getting a bit much even for me." We saw Dave Portnoy at Barstool Sports, one of these bro podcaster types who said, "This is crazy. How has no one been fired for this?"

Dave Portnoy: Trump, you may love Michael Waltz, you love Pete Heskin. Somebody has to go down. To me, it's Michael Waltz. You can't poo-poo it. You can't downplay it. You have to sit up there and be like, "Holy [bleeps]".

Will Sommer: We saw Tomi Lahren of the Fox News-iverse. She said--

Tomi Lahren: Oh, boy. The debacle involving a group chat gone awry is such a gift to the rabid Democrats, and I hate that for us.

Will Sommer: I even saw, and this is a much more minor figure, but a guy who works for the podcaster Steven Crowder just saying, "Hey, the administration clearly lied to us about what was in these text messages." I thought that was interesting. This isn't a guy with a huge audience himself, but just to have someone break the pose that they're so often in that anything Democrats in the media are complaining about is a hoax. Just to say almost personally they lied to us about this. I thought that was interesting

Micah Loewinger: What are you seeing from conservative audiences about their temperature on this story?

Will Sommer: There is more disquiet on the right about this and there is a sense that this definitely was a screw-up. At the same time, I think the Trump administration's policy of never admitting fault and trying to outrun the news cycle, I don't know, at this point, it seems to be working because absent an investigation and, obviously, Democrats can't do an investigation because they don't control any parts of Congress that it seems like we've hit the end of the new revelations in this story. It seems to be quieting down. I think a lot of Trump supporters and Trump media outlets are settling on, yes, mistakes were made, but it wasn't that big a deal.

Micah Loewinger: That's pretty upsetting to hear because I had seen from one of the leaders at The Atlantic posting to the effect that so far, this ranked as the number one news story of 2025. I don't think just for The Atlantic, I think based on traffic. It really seemed for a moment that some accountability might be on the horizon.

Will Sommer: It is interesting because the Trump administration already in just a few months has had so many screw-ups with the DOGE things. Laying off the people who handle nuclear security is just one example. All of these things that really have failed to break through, I think, to the broader public as serious issues. This one, whether it be because I guess the group chat aspect of it is so relatable to people that this one seemed to break through. I think the Trump administration has done such a good job of having a force field in Republican media and also cowing members of Congress in the GOP that it seems like even this won't really shake it up.

Micah Loewinger: Will, thank you very much.

Will Sommer: I'm always happy to come on and help chronicle all this craziness.

Micah Loewinger: Will Sommer is a senior reporter at The Bulwark.

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Brooke Gladstone: Coming up, as goes the DOE, so goes the long-standing American belief, if not the attainment, in true equality and a level playing field. This is On the Media.

[music]

Brooke Gladstone: This is On the Media. I'm Brooke Gladstone. This week, the NAACP and several teachers unions filed lawsuits against the Trump administration over its campaign to dismantle the Department of Education. A few days prior, the president declared in an executive order that he'd eliminate the Department once and for all, even though Congress would need to approve such a measure.

President Trump: We want to return our students to the states where just some of the governors here are so happy about this. They want education to come back to them, to come back to the states, and they're going to do a phenomenal job.

Brooke Gladstone: Some of these MAGA-approved education policies have met with fierce opposition, even in red states like Nebraska, Kentucky, Tennessee, Texas, Colorado, particularly the school voucher programs which allow parents to use public funds to pay for private schools, and in some states, homeschooling.

Jennifer Berkshire: People are probably not aware of how much backlash those proposed programs are getting from the right.

Brooke Gladstone: Jennifer Berkshire is the author of The Education Wars and co-host of the education podcast Have You Heard. She says this impassioned pushback by conservative voters isn't getting much media coverage because it's so at odds with what we think we know about politics.

Jennifer Berkshire: We're so used to seeing teachers unions, public school advocates, et cetera, oppose school vouchers. What we're seeing right now in Tennessee, where a voucher program was recently enacted, they've run into this buzz-saw of opposition from conservative groups who are saying, basically, "Hey, wait a second, I thought we were against entitlements, and now you're saying that you want to just hand a pile of cash to parents and let them do whatever they want with it?"

Brooke Gladstone: In November in Kentucky, voters from every single county rejected an amendment to the state constitution that would have allowed public dollars to fund private religious education.

Jennifer Berkshire: There were actually three voucher questions on different ballots in Kentucky, in Nebraska, and in Colorado. Kentucky and Nebraska are the most interesting because those are states that went for Trump by considerable margins. What you saw was that the voters who were the most emphatic about sending him back to the White House were also the most opposed to these voucher programs. You had counties where you would see 80% of the Republican voters cast their vote for Trump and more than 65% vote against vouchers.

Brooke Gladstone: You've met a number of Trump supporters who've soured on the president due to the White House stance on vouchers. Kelly Jackson in Tennessee had participated in the insurrection on January 6th. She was so convinced that the election had been stolen, but now?

Jennifer Berkshire: I would put her in the camp of Trump supporters who think that he's just getting bad information. She really sees what's happening with respect to vouchers as an all-out civil war within the Republican Party. On the one hand, you have the establishment, and those are basically the Republicans who run state government. Then you have the grassroots movement on the right. These would be the folks who were absolutely furious about school closures, about vaccine mandates, et cetera.

If you were in a red state, well, those orders were coming from your elected Republican officials. Now, those are the same officials who are backing vouchers in a big way. Some of the folks, they're not convinced that Trump really supports vouchers and that if he just had better information, then he might change his tune. I'm also talking to other folks who see vouchers as the big red flag that's causing them to have buyer's remorse.

Brooke Gladstone: Even despite ads like this.

President Trump: We will give all parents the right to choose another school for their children if they want, called school choice.

Speaker: President Trump is right. Kentucky parents deserve a voice in what their children learn.

Jennifer Berkshire: I think we have to think about this in terms of what the MAGA movement claims to be, and it really does claim to be a populist movement. We see tensions in all kinds of areas between this self-styled populist movement and the influence of billionaires. School vouchers is really at the top of that list. In a state like Texas, you have a billionaire like Jeff Yass, hedge funder, richest man in Pennsylvania, big stake in TikTok, and he basically works with the governor to engineer an effort to knock out all of the Republicans in the state House who were opposed to vouchers. A lot of these were rural Republicans.

Some Trump supporters are looking at that and saying, "This is money talking. We don't like that." Now, somebody like Brett Guillory, who's a welding teacher in Houston, says, "This is enough to make me question my support for Trump."

Brooke Gladstone: Trump says we're returning education back to the states. What's he mean? How does that relate to what we think the DOE actually does?

Jennifer Berkshire: Well, it's right there in that initial act that established the federal Department of Education all those decades ago. I'm going to read it to you. It was to strengthen the federal commitment to ensuring access to equal education opportunity for every individual. Now, when we back up and we think about what these guys are really talking about when they go after woke, when they complain about DEI, it's anything that the government does to help us realize that elusive goal of equality. That, I think, is why both the Department of Education is so vulnerable, but also public education as an institution.

Brooke Gladstone: You weren't thrilled with some of the media coverage because of what you call it's "how could this be happening" tone. You weren't surprised. You say that the 1776 Commission that Trump set up in 2020 made clear that getting rid of the DOE was the plan all along. Kevin Roberts from the Heritage Foundation has been saying for a long time he wants to scrap the DOE. Here's tape just from January.

Kevin Roberts: I think public schools are one of the noble promises of the United States, but they're rotten. We have to have the same verve and spirit of recapturing those local institutions or figuratively applying a controlled burn and starting new institutions. I've done that myself in starting a K through 12 school and running an upstart college.

Jennifer Berkshire: If you read Kevin Roberts' new book, Dawn's Early Light, or Pete Hegseth's book, Battle for the American Mind, they're making an argument about religion being booted out of the schools. You have Christopher Rufo, who I'm sure your listeners will be familiar with.

Brooke Gladstone: He was very much into mischaracterizing critical race theory, that kind of thing?

Jennifer Berkshire: That kind of thing. He'd like to see the number of students who attend college drop by half. That's something that he told the Wall Street Journal. He just did a big interview with Ross Douthat from The New York Times.

Christopher Rufo: By spinning off, privatizing, and then reforming the student loan programs, you could put the university sector as a whole into a significant recession. I think that putting the universities into declining budgets, into a greater competitive market pressure would discipline them in a way.

Jennifer Berkshire: Another person on this issue is a guy named Scott Yenor, who wants college admissions numbers reduced to less than 10% and has argued repeatedly that too many women attend college. He called colleges and universities the citadels of our gynocracy. That's a form of government run by women.

Scott Yenor: Every effort must be made not to recruit women into engineering, but rather to recruit and demand more of men who become engineers. Ditto for med school and the law and every trade. Young men must be respectable and responsible to inspire young women to be secure with feminine goals of homemaking and having children.

Jennifer Berkshire: My advice is always pay attention to how does what they're saying relate to larger intellectual currents around the Trump movement. We're hearing a lot of concern in all these different parts of the Trump administration about the falling birth rate. Well, now you're starting to hear very influential folks from these think tanks, Claremont, Heritage, say, "It's a big mistake that we're encouraging so many young women to go to college during their most fertile period, and maybe we should make college harder to access and then they'll stay at home and do what God intended them to do."

Brooke Gladstone: You say that the far right both wildly overstates the power of federal education and understates what it means to get rid of it.

Jennifer Berkshire: If you're getting a non-stop outrage diet fed to you through, say, Fox News or online, then in your mind, not only are kids being indoctrinated, but the blame lies at the feet of the federal Department of Education. Actually, the federal Department of Education has absolutely nothing to do with curriculum. In fact, they're banned from having anything to do with curriculum.

What the federal Department of Education does is provide funding in order to equal out divides that exist between urban and rural, between rich and poor. The vast majority of the money goes to low-income kids in what are called Title 1 schools. Money goes to rural kids. Then a lot of what the federal department does is enforce student civil rights because those civil rights are federal. They come from the 14th Amendment. Whether that has to with race or with special education, which is another program, that's the Individuals with Disabilities Education Act, it is the federal Department of Education through which those rights are enforced.

When you hear Trump say we're going to return education to the states, it's important to look at what education looked like prior to the 1970s when there wasn't a mechanism for enforcing civil rights. In fact, kids with disabilities were not entitled to an education at all.

Brooke Gladstone: Another thing that the Department of Education has done for a long time is to collect data to help understand the disparities in learning across demographics, like race and location. I guess that's over.

Jennifer Berkshire: We actually had a federal Department of Education that lasted for one year after the Civil War. The idea was that we were going to look at how education was faring in all the different states and that the federal government would now be paying particular attention to the literacy levels of former slaves. You can imagine how that went down in the states of the Confederacy. You fast forward to today. The chainsaw that came for the Department of Education landed heavily on the folks who measure how are the different, what they call subgroups in education faring?

Just to give you one case, what we call the nation's report card. There are only three people left now who oversee it. If we don't have any data, what's to stop President Trump from just declaring victory and saying, "We did it. We dismantled the department. We sent education back to the states. Now we're number one." The aforementioned Scott Yenor, who's terrified of our gynocracy, he said he wants to see states criminalize the collection of data on the basis of race or sex as "the country's corrupting civil rights regime."

You've suggested that woven all through this is race science, the belief that a hierarchy is good and natural and that a cognitive elite with the highest of the high IQs deserve to rule over the rest of us all in our natural place. If you listen closely, you'll notice that a lot of the folks around Trump, including a Chris Rufo or an Elon Musk, they're always talking about IQ. If your view of the world is that there are certain very high IQ individuals and certain very low IQ individuals, then why bother with something like public education at all, where the goal is to try to take kids who come from all kinds of backgrounds and deliver them to the same aspiring place. You're messing up the natural order of things.

Brooke Gladstone: In considering the consequences of the wrecking of the DOE, you looked to Horace Mann, who's often been called the father of American education. What wisdom did he provide?

Jennifer Berkshire: Well, his famous quote about education being the great equalizer is it's really been reduced to the stuff of coffee mugs and inspirational office art. If you go back and you read the essay that that quote came from, what's so fascinating is what a warning it is. We're back in the late 1840s, and he's looking across to Europe, which is in the throes of populist revolt. There's a lot of concern on the other side of the pond that it's only a matter of time before the populists come for America.

Brooke Gladstone: The populace, meaning the people?

Jennifer Berkshire: The people are going to rise up in the way their European counterparts are. Revolution is on its way. Horace Mann is basically warning the wealthy. He's saying, "You may not have any interest in funding education, but I'm going to tell you, here's why you should care about it. Because if the gaps between the haves and the have-nots continue to widen, these folks are coming for you. They're going to smash up your farm equipment. They're going to pour acid on your wife's dresses. They're going to set fire to your Tesla lots."

It is not a coincidence that somebody like a Bernie Sanders who's out on a tour trying to wake people up about the dangers of oligarchy right now is attracting overflow crowds and you are seeing people across party lines stand up and say, "I'm really worried about the future. I'm really worried that we're headed towards a world where the wealthy get theirs and. more and I get scraps."

Brooke Gladstone: Jennifer, thank you so much.

Jennifer Berkshire: Thank you so much for having me.

Brooke Gladstone: Jennifer Berkshire is the co-author of The Education Wars. Coming up, tracing the cryptogrift to and from the White House. This is On the Media.

[MUSIC - Starr Parodi: When Doves Cry]

Brooke Gladstone: This is On the Media. I'm Brooke Gladstone. Back in 2021, President Trump took to Fox News to blast the crypto industry.

Interviewer: Do you ever dabble in Bitcoin or cryptos?

President Trump: I don't. I like the currency of the United States. I think it's potentially a disaster waiting to happen. Bitcoin, it just seems like a scam.

Brooke Gladstone: Just one year later, Trump's Truth Social account posted a video with an animated image of the then-candidate in a superhero suit with lasers shooting out of his eyes.

President Trump: Hello, everyone. This is Donald Trump. Hopefully, your favorite president of all time, better than Lincoln. I'm doing my first official Donald J. Trump NFT collection right here and right now. My official Trump digital trading cards are $99, which doesn't sound like very much for what you're getting.

Brooke Gladstone: The president's card drop made about $4.5 million, but apparently, he was just getting started. Last July, he took to the stage of a Bitcoin conference in Nashville, Tennessee.

President Trump: This afternoon, I'm laying out my plan to ensure that the United States will be the crypto capital of the planet and the Bitcoin superpower of the world, and we'll get it done. Those who say that Bitcoin is a threat to the dollar have the story exactly backwards. I believe it is exactly--

Brooke Gladstone: Ever since he re-entered the White House house, the president has worked energetically to earn the mantle of crypto president, which he anointed himself last June. In early March, he took it all a step further by announcing that the government would keep a stockpile of Bitcoin and other tokens in a reserve. Why the about-face?

Jacob Silverman: The simple answer is money.

Brooke Gladstone: This week, Micah, with what little was left of his voice, spoke to Jacob Silverman, who reports on tech, crypto, politics, and corruption and co-authored the book Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of Fraud.

Jacob Silverman: Trump changed his mind because his sons and the venture capitalists around him in the 2024 election cycle showed him the light that if you are on the inside of crypto, if you are someone issuing tokens or running an exchange, you can make money from nothing. There was also, of course, the self-interest in terms of campaign finance donations. The crypto industry was, by some measures, the top donor of any industry to the Trump campaign and the Republican party. More than $200 million raised.

They went really all in for Trump in a way that was really out of proportion to the role that crypto plays in the larger economy. I mean, this isn't pharma, this isn't the energy sector. This is actually a very niche industry. They managed to flood politics with so much of their own cash.

Micah Loewinger: President Trump's first official foray into the crypto business was in December when he launched World Liberty Financial, a crypto bank that we still don't really know that much about. In January, just days before his inauguration, he announced he'd be launching the Trump meme coin. For those of us who don't know anything about meme coins, what are they?

Jacob Silverman: A meme coin is worthless. This is less than a penny stock. It's really just a digital token that someone creates online in response to a meme, an event in the news, or something like that. Some people may be familiar with the hawk tuah lady who had a meme coin, Pepe The Frog coins.

Micah Loewinger: Anyone can make one.

Jacob Silverman: Yes. Most of these have a lifespan of really seconds. The Trump coin, of course, benefited from being Trump. This is a meme coin at the highest levels of publicity. That's all a meme coin operates on, is publicity and hype. People pour into it, they see the price rising based on all this hype, and they try to buy in early and then sell pretty much as soon as they can. That's when you get the dump. This is a classic pump and dump.

Micah Loewinger: From what I understand with these meme coin pump and dumps, if you think that you're early to the dump, you're just another sucker. Because there's always somebody who's behind the scenes, knows when the coin is going to be on sale and when it's going to be dumped, right?

Jacob Silverman: Yes. Frankly, this happens in every case like this. There's always someone on the inside or a group who have the tokens, who know the launch schedule. Those are the people doing the dumping on the poor retail suckers who may genuinely think that they have a chance of making some money here.

Micah Loewinger: According to analysis from The New York Times, blockchain records show that the account behind the first large purchase of Trump coin, nearly $1.1 million worth, was created three hours before the president launched the coin. Another trader who made $2.7 million in profit, started buying the coin just two minutes after it launched. The Times has said that these well-timed trades immediately drew skepticism from crypto analysts who said, "Yes, this reeks of insider trading." Who made money off of this exactly? What do we know?

Jacob Silverman: Trump and his team, who control the waltz, who initially distributed the coins. Something like 70%, I believe, of the tokens were set aside for insiders for Trump and its team. Insiders have been able to cash out for probably tens or hundreds of millions of dollars.

Micah Loewinger: You were recently interviewed for a piece in Wired arguing that meme coins are "channels for influence and leverage of a kind we haven't really seen before." Break that down for me.

Jacob Silverman: Sure. There are a couple ways now in which Trump can essentially be paid off with bribes. There's the Trump token, which we've talked about, but there's also the World Liberty Financial token, WLFI. It's what's called a governance token. You buy it and you don't trade it, but you supposedly get to vote on things that happen on the platform. Right now, there's not much to vote on and you can't sell this token either. You're really just giving a donation to Trump. It is in any country's direct interest to buy Trump tokens or to buy the World Liberty Financial governance tokens and inflate the value of his own holdings.

What we've seen is that Justin Sun, a rather notorious Chinese crypto entrepreneur who operates in various jurisdictions overseas, he initially bought about $30 million worth of this World Liberty Financial token, then later, another $45 million. Then recently, the SEC dropped its fraud case against Sun.

Micah Loewinger: Let's talk about another example of this. Changpeng Zhao. He was the former CEO of Binance. He was also in hot water with the SEC for money laundering, among other violations. He pled guilty and spent four months in federal prison. Binance agreed to pay $4.1 billion, which was the largest fine in US corporate history. Then this ongoing case was also put on hold by Trump's SEC. What happens there?

Jacob Silverman: Changpeng Zhao, or CZ, as he's widely known, is probably the most powerful person in the crypto industry. After Sam Bankman-Fried went to prison, CZ saw the writing on the wall and took a deal that resulted in him only going to prison for four months. This is a very unusual company. Binance is the biggest crypto exchange in the world. It doesn't have an official headquarters. They are now unofficially based in the UAE. For years, they have obfuscated where they are based, where they're registered, where their employees are, where the money goes. This is the shadiest crypto company there is. It was still under investigation by the SEC. According to the Wall Street Journal and Bloomberg, I believe, Binance and CZ saw the Justin Sun deal as a potential model for CZ.

Micah Loewinger: Yes, as you mentioned, on March 13th, the Wall Street Journal reported that the Trump family had held talks with Binance in which the idea was floated that Trump would pardon CZ and invest in Binance's US division. From what I understand, people from Binance have denied this, but that seems pretty sketchy.

Jacob Silverman: Binance, it's changed a little bit, but it was the Wild West of crypto platforms. I mean, its employees joked that people were on the platform for crime. There's a notorious line about that. They knew how much an AK-47 went for in markets in the Middle East because terrorists and militias laundered money through Binance that they used to buy AK-47s. This is stuff that's in SEC filings. You can read all about how lawless and corrupt this company was.

Micah Loewinger: The SEC under Trump has now dropped its other major crypto cases, like the one against Ripple and Coinbase. What are the consequences of our government just turning its back on this kind of enforcement?

Jacob Silverman: The Trump administration has basically said the crypto industry is right. All these enforcement obligations are over. We're not only going to not subject the crypto industry to existing financial laws, but we're going to start pulling away at what is there. This system, imperfect as it is, has been trying to protect consumers against the kind of instability that crypto can introduce into markets because it's extraordinarily volatile and because it's so associated with fraud.

Whether we like it or not, crypto is going to creep more into mainstream finance and everyday people will have exposure to crypto through their retirement accounts, even if they don't directly buy into it. That's really the fear that once crypto blows up again, because it has this rapid boom and bust cycle cyclone, that this time, the contagion will infect the larger financial market and really hurt the larger economy.

Micah Loewinger: One way that ordinary people, as you say, whether they like it or not, will be exposed to crypto's volatility is through a couple new crypto reserves created by Trump executive orders. You say that these crypto reserves amount to a bailout for the crypto industry. How is it a bailout and not like some kind of subsidy?

Jacob Silverman: Well, it's a bailout because some of these venture capitalists might be underwater and because these investments, so to speak, aren't necessarily like normal investments. They basically operate on hype and on the greater fool theory, which is that you have to find ways to drive the price up in order to offload your bag of tokens to someone who thinks that they're worth more than you do. That's the greater fool theory in economics.

That's what happens when the government gets involved in crypto markets, whether it's just by talking about those tokens, buying them, promising to hold them. This would raise the price, but also just show the government's commitment to maintaining crypto prices and the Bitcoin market. We're not there yet, but there is this movement towards the government buying the tokens and providing a price floor for speculators and for these VC investors. That's why I call it a bailout and a way of just paying back his donors.

Micah Loewinger: This is so confusing to me because I thought the whole point of cryptocurrency was so that you could have these financial assets outside of the government's reach and view, right?

Jacob Silverman: This is a sign of how crypto has changed its story and its search for a use case and purpose. Of course, crypto started as a rather libertarian, fairly right-wing, anti-state effort. It was supposed to be about decentralization, disentanglement from the state. One thing that crypto's found over the years as an industry is that you can't have a separate hived-off crypto economy. You need infusions of real money, of regular cash because the world still runs on fiat, on state-issued dollars. Crypto is always looking for new sources of real dollars.

Two to four years ago, they were getting it from retail investors and from venture capitalists. Now, the new source of real money is the state and Wall Street. That's why they want the government to start stockpiling crypto because they still need that fresh cash coming in to float the value of these digital assets.

Micah Loewinger: These two actions from the Trump administration that we've discussed, Trump's various meme coins and his proposed crypto reserves have incited polarized reactions from the crypto community. What are the conflicting narratives that you're hearing about Trump and crypto?

Jacob Silverman: They got a little bit more than they bargained for. They expected Trump to be their friend and ally on a policy and personnel level, but not to be, frankly, one of the country's leading crypto entrepreneurs. We saw this especially at inauguration weekend when the Trump coin was released. First of all, it was released during a crypto ball when a lot of crypto people weren't looking at their phones and later complained that they weren't able to get in early on it.

Micah Loewinger: They couldn't cash in.

Jacob Silverman: Exactly. They were at this event celebrating David Sacks and others. More than that, you have people who, again, are committed Trump supporters who said, "Look, we know what this is. This is a meme coin." There's a more derogatory term for it too, that's probably not suitable for radio.

Micah Loewinger: S-coin?

Jacob Silverman: Yes. This is kind of unseemly. A major concern for the crypto industry is, "Hey, how do we onboard the next billion users?" If people FOMO in because Trump releases a token and then a day later they lose their $500, they're not going to want to stick around. Some haven't liked the idea of the crypto reserve because it does go against some of the original spirit of crypto. It's the government getting involved. It's also the government choosing winners and losers and kind of picking favorites.

Someone like Joe Lonsdale, who's a very prominent venture capitalist, co-founder of Palantir, big Trump supporter, he posted publicly on X that he doesn't like his money being used for lefty griffs and he doesn't like it being used for crypto griffs.

Micah Loewinger: We've talked about the Trump administration's SEC pausing some of its investigations into well-known sketchy characters in the crypto world. This administration has also been dismantling the guardrails that safeguard against financial crime. In February, Trump paused the Foreign Corporate Practices Act, which makes it illegal for American individuals or companies to bribe foreign officials for the purpose of obtaining business. Earlier this month, Trump suspended enforcement of the Corporate Transparency Act, which requires companies to divulge ownership information. What kind of financial world is this teeing up?

Jacob Silverman: It's one in which you don't know where money is coming from or where it's going. Shell companies rule the world because they don't have to report their beneficial owners to the US government. I think it's very disturbing and I think it's one in which financial crime is essentially legalized. It makes sense that some of this comes from the crypto world, because crypto, it benefits a lot from what's called regulatory arbitrage, which is where these crypto companies go between, say, from Hong Kong to the Caribbean, like FTX did, to take advantage of limited rule of law.

What we're seeing is the US is becoming one of those regulatory arbitrage opportunities because the rule of law is eroding here, and that's going to create opportunities for corrupt financial actors, whether it's crypto scammers or foreign governments trying to bribe American officials. The next Bob Menendez is not going to be paid in gold bars and watches. The senator from New Jersey, who was bribed by Egyptian intelligence, he's going to be paid in crypto, probably already is. We are moving away from a world in which we can control or even understand how that kind of crime is happening.

Micah Loewinger: Jacob Silverman is a journalist and co-author of Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of Fraud. Jacob, thank you very much.

Jacob Silverman: Thank you.

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Brooke Gladstone: That's the show. On the Media is produced by Molly Rosen, Rebecca Clark-Callender, and Candice Wang. Our technical director is Jennifer Munson with engineering from Jared Paul. Eloise Blondiau is our senior producer, and our executive producer is Katya Rogers. On the Media is a production of WNYC Studios. Micah Loewinger should be all the way back next week. I'm Brooke Gladstone.

 

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