Pixel Envy

Written by Nick Heer.

In TikTok Deal, Treasury Won’t Be Taking Illegal ‘Key Money’ Payment Proposed by Trump

The deadline for a deal that allows TikTok to continue operating in the United States is this Sunday. Steve Mnuchin is, therefore, trying to push through an arrangement that would give Oracle hosting rights for U.S. users, but allow ByteDance to remain involved with the company. If it looks like a disorganized rapidly-changing acquisition of uncertain bounds that carries an undertone of corruption, that’s probably because it is.

Georgia Wells, Aaron Tilley, and John D. McKinnon, Wall Street Journal:

Oracle was originally brought into the negotiations to provide an alternative to Microsoft Corp., a rival bidder with Walmart as a partner, said one person familiar with the talks. The U.S. investment firms Sequoia Capital and General Atlantic, which are existing investors in ByteDance, went in search of a tech company with close ties to the administration and settled on Oracle, the person said.

Oracle co-founder Larry Ellison hosted a fundraiser for Mr. Trump this year at his house, and Chief Executive Safra Catz also worked on the executive committee for the Trump transition team in 2016.

For Oracle, the arrangement could give a jolt to its efforts to transform its database business into a major player in cloud computing, one of the most dynamic areas in tech.

ByteDance has used Google and Amazon for its hosting needs. You will note that both companies are frequently the subject of the president’s rants, while Oracle has tight connections to the administration. It sure looks like the president is, for some reason, personally intervening in a business deal to transition a wildly popular app’s lucrative U.S. contracts from companies he doesn’t like to one that he does. At least the kickback he demanded for the U.S. Treasury won’t be happening.

Alex Sherman and Lauren Feiner, CNBC:

Trump on Wednesday also backed off his desire to demand “key money” from allowing the transaction, saying his lawyers told him it was illegal.

“Amazingly I find that you’re not allowed to do that,” Trump said. “I said, ‘What kind of a thing is this?’ If they’re willing to make big payments to the government, they’re not allowed because there’s no way of doing that from a — there’s no legal path to do that.”

This is a blatantly political business deal without any meaningful privacy or security benefit, but with all of the trappings of grift and corruption that you have come to expect from this era of American leadership.