The Trump administration awarded a small biosecurity company nearly $40 million to screen for Ebola and other infectious diseases just months after an investment firm linked to President Donald Trump's elder sons put money into its parent company, according to records and interviews.

The two contracts — one to screen for Ebola at several U.S. airports and the other to respond to disease outbreaks in the Democratic Republic of Congo — are worth seven times the total value of the government contracts the company had directly received before.

The company, XpresTest, has years of experience monitoring for COVID-19 and other diseases for the government at U.S. airports. That makes its parent, XWELL, an unusual hybrid that sells both spa treatments and biosecurity services. Last year, most of its revenue came from waxing salons and airport spas offering manicures, massages and "chakra beds."

The awards are the latest example of the president's family benefiting financially from his administration's actions, and the stakes in these deals are particularly high. In the Democratic Republic of Congo, an Ebola outbreak has killed more than 5,000 people this year, and the federal government is trying to stop the pathogen from reaching the United States.

XpresTest has never worked on Ebola or provided biosecurity services abroad, let alone in the kind of volatile locales where it is now expected to operate. Ezra Ernst, CEO of the parent company, said XpresTest won both contracts through a competitive bidding process and pointed to its years of experience screening for COVID-19 and other pathogens at American airports. Even so, he acknowledged that working internationally is "a new thing for us" and expressed uncertainty about being able to complete the work in the Democratic Republic of Congo.

"This is a risky contract. I'm not sure we can do it," Ernst said in an interview.

Jeremy Konyndyk, who helped oversee the U.S. government's response to the 2014 Ebola outbreak in West Africa, said there are some parallels between monitoring for COVID-19 and Ebola at airports, but he found it concerning that the government would award such a lucrative contract to a company with no experience in Africa.

"There are countless organizations in the world that have decades of experience doing this work," Konyndyk said. "I have to wonder why the hell they're not going with someone who has actually done this before."

Under previous administrations, the U.S. government addressed international disease outbreaks in partnership with the World Health Organization. Trump withdrew from the WHO last year, dismantled the U.S. Agency for International Development, which handled much of that work, and dramatically scaled back the global presence of the Centers for Disease Control and Prevention. Together, those moves hollowed out the machinery that had long routed U.S. outbreak-response funding overseas.

At the same time, the State Department launched the America First Global Health Strategy, which calls for the U.S. to use foreign aid to "promote American companies and American innovations abroad." In March, the department announced up to $4.5 billion in funding for various purposes, including responding to infectious disease outbreaks.

Under that program, XpresTest received $20 million. Other funding went to better-known global aid nonprofits, including International Medical Corps, Save the Children and the International Federation of Red Cross and Red Crescent Societies, whose awards ranged from $25 million to $35 million. The CDC also awarded XpresTest an $18.8 million contract.

Responding to questions from ProPublica about XpresTest and XWELL, the State Department pointed to the firm's previous disease-screening work at airports under a CDC contract and said its own award was made "through a competitive process that builds on this successful model." The CDC did not respond to a request for comment.

A spokesperson for the president's sons Donald Trump Jr. and Eric Trump said the two are "merely passive, minority investors in a fund that invested in this company" and had no "involvement in or knowledge regarding the negotiation or procurement of any of its contracts, including any government contracts."

"Both are private citizens who hold no government positions, broken no laws and who have every right to pursue lawful business and investment opportunities," the spokesperson said.

The Trump sons' connection to XWELL was established in February, when a fund called American Ventures invested in the company. The fund was launched by Dominari Holdings, a small financial firm with offices inside Trump Tower in New York. Dominari's leaders hired the Trump sons as advisers after their father was elected to a second term and granted them a stake of more than 10 percent in the firm.

"We have never seen or even heard of Don or Eric using their family name to influence the granting of a government contract," Anthony Hayes, CEO of Dominari Holdings, told ProPublica.

American Ventures has taken stakes in other companies that have benefited from Trump administration actions. Powerus, a Florida-based drone company, received a contract worth up to $90 million from the U.S. Air Force five months after the Trumps' involvement was announced. Through American Ventures, Donald Trump Jr. and Eric Trump are also acquiring a stake in a critical minerals group that has received U.S. government support to mine for tungsten in Kazakhstan. The Trumps have described themselves as passive investors who do not advocate for the companies they hold stakes in before their father's government.

XWELL was founded in 2006 as a line of airport-based spas offering massages and facials. During the pandemic, when it was known as XpresSpa Group, the company received $5.5 million from the CDC to provide travelers with COVID-19 testing, and it also collected waste from airplane toilets to check for new viral strains. It has done similar work for at least one other company that holds government contracts.

In January, XWELL announced it was hiring a former senior CDC adviser who created and led the agency's traveler surveillance program, describing the move as part of a plan to expand "its traveler-based pathogen surveillance capabilities to support international travel hubs and large-scale mass gathering events worldwide."

The following month, American Ventures invested about $30 million in XWELL, which had lost money the previous year. "We were so cash-strapped, close to bankrupt," Ernst said. The company's valuation before the cash infusion was just $3 million. In other words, the fund put in roughly ten times what the entire company had been worth before the deal. In exchange, American Ventures received a roughly 10 percent stake to start, along with an option to essentially print and sell millions of additional shares in the future.

Why American Ventures would invest so heavily in XWELL is unclear. In other cases, when the fund has invested in similarly tiny publicly traded companies, some of those firms have moved into hot new sectors, drawn publicity for their Trump connections and then seen Dominari offload shares. In XWELL's case, there is no indication that Dominari has sold any of its stake.

In June, XpresTest was awarded the CDC contract for what a public notice described as "Ebola entry screening services." It then received the State Department grant for "rapid, effective, and coordinated outbreak response" to infectious disease threats in the Democratic Republic of Congo, a program that began in September, according to a government database. The company is also planning to work in Kenya and Morocco, and XWELL's website shows it is hiring specialists in Ebola response training and biosecurity in the U.S.

In July, after the CDC award, XWELL announced plans to sell XpresTest, along with its line of spas, to a private facial spa company. Ernst said the government contracts played a role in the $13 million sale price and will follow XpresTest to the new owner. That means XWELL — the company in which the Trump-linked investment fund took a stake — will benefit financially from the Trump administration's contracts if the sale closes, even though it will not be involved in performing the government work.

XWELL said in a public filing that the sale was part of an effort "to pursue a new direction in the national security sector." Ernst said he did not know the exact plans but believed the parent company may be looking to work with the Department of Defense.

XWELL did not announce either of XpresTest's biosecurity contracts, which only recently became public through federal contracting disclosures. Public companies like XWELL are required to report so-called material events — developments that could affect their share price, such as a large government contract. XWELL has publicized earlier work for the federal government, including a $2 million, eight-week COVID-19 testing pilot program in 2021.

Asked why his firm did not announce the awards, Ernst gave various reasons, including the possibility that XpresTest might wind up unable to do the work — either because of its own inexperience internationally or because the Trump administration could shift priorities and pay for only a fraction of the contract.

"None of these contracts are guaranteed," he said.

The biosecurity awards add to the questions surrounding the Trump family's enrichment during his second term. The family's business activities extend far beyond Dominari and American Ventures. The president himself has made more than $1 billion from cryptocurrency ventures whose value has ballooned as his administration has taken a friendly stance toward the industry, and other companies backed by Donald Trump Jr. and Eric Trump have received billions of dollars in federal deals. Earlier this year, ProPublica reported that the Pentagon granted a $620 million loan to a small North Carolina startup linked to Trump Jr. after a top aide to the president intervened on the company's behalf. The Pentagon denied preferential treatment, and a spokesperson for Trump Jr. said he played no role.

The Trumps' financial ties to government deals and actions are expected to be a primary focus of Congress in the coming months, after Democrats won control of both the Senate and the House in last week's midterm elections. Among the threads likely to draw that scrutiny: whether the $13 million sale of XpresTest closes and the contracts transfer with it, whether the company can carry out work it has never attempted abroad, and how much of the nearly $40 million is ultimately disbursed.

"When the government is corrupted for personal gain over the public interest, Americans lose trust and taxpayer dollars are wasted," Robert Garcia, the top Democrat on the House Oversight Committee, wrote in a letter to colleagues last week.

Source: Alternet