Donald Trump takes pleasure in getting institutions of all kinds to bend to his will. That includes major corporations. In a move that contradicts the usual deference the public sector in the U.S. shows to big business, Trump has forced a group of large companies to allow the federal government to acquire significant ownership stakes.
These investments are being justified in the name of national security. The Administration is expected to use its holdings to influence the operating and financial decisions of the companies, which operate in areas such as rare earth minerals, semiconductors, steel, and nuclear energy.
It remains to be seen exactly what that influence looks like, but the willingness of Trump to press the private sector to serve his idea of the national interest raises the question of whether he could also get the companies to better serve the public interest.
The companies in the federal portfolio includes some with a significant record of misconduct. Take U.S. Steel, which received approval to be acquired by Japan’s Nippon Steel only after the parties agreed to grant the administration a so-called golden share, giving it extensive power over the company’s policies.
As shown in Violation Tracker, U.S. Steel has racked up over $300 million in fines and settlements since 2000, including $250 million for environmental offenses and $80 million for competition-related offenses. The biggest portions of these came from a 2020 settlement with the Pennsylvania’s Allegheny County Health Department regarding air pollution violations and a 2014 class action suit regarding steel price-fixing.
Or take Intel, which Trump pressured to sell a 10 percent stake to the administration for about $9 billion. Intel has paid out about $112 million in penalties, most of which came from a 2015 settlement of private litigation alleging it conspired with other tech companies not to hire each other’s employees, thus suppressing salary levels. The company also paid $5 million to settle a suit accusing it of denying overtime pay and failing to provide meal and rest breaks.
Then there is Westinghouse Electric, which was pressed to enter into a partnership with the administration to build new nuclear power plants. In exchange for arranging financing and assisting with permits, the federal government would eventually receive a share of profits and would obtain a significant equity stake if Westinghouse, which is now majority-owned by Brookfield Corporation, is spun off.
Westinghouse Electric has received more than $5 million in penalties, including cases involving unfair labor practices, environmental offenses, workplace safety violations, and nuclear safety infractions.
The willingness of Trump to pressure corporations on decisions relating to investment raises the question of whether he would also use his leverage to address these types of misconduct. That is probably unlikely when it comes to environmental offenses, given his tendency to demonize the EPA. But what about practices such as wage theft and workplace safety deficiencies? Trump, after all, likes to portray himself as pro-worker.
There might also be some appeal in attacking price-fixing if it helps Trump given the impression he is addressing the affordability crisis. He has already made noises about cracking down on price-fixing in the beef industry.
Whatever Trump ends up doing, any steps he takes to use federal investments to change corporate behavior would serve as a precedent that a more enlightened president could put to better use.