Federal records place the awards after a Trump-sons-linked fund invested in XWELL
ProPublica reported, based on records and interviews, that XpresTest received nearly $40 million in two federal awards. The Centers for Disease Control and Prevention awarded $18.8 million in June for what a public notice called “Ebola entry screening services” at several U.S. airports. The State Department awarded $20 million for “rapid, effective, and coordinated outbreak response” to infectious-disease threats in the Democratic Republic of Congo, and a government database showed that the work began in September. Together, the awards were seven times the total value of government contracts XpresTest had directly received before.
XpresTest has years of experience monitoring for COVID-19 and other diseases for the government at U.S. airports. That made its parent, XWELL, an unusual hybrid selling spa treatments and biosecurity services; last year, XWELL made most of its money from waxing salons and airport spas offering manicures, massages and “chakra beds.” ProPublica described the awards as the latest example of the president’s family benefiting financially from his administration’s actions and wrote that “the stakes for these deals are particularly high.” An Ebola outbreak in the Democratic Republic of Congo has killed more than 5,000 people this year, and the federal government is trying to stop the pathogen from reaching the United States.
ProPublica reported that under previous administrations, the U.S. government addressed international disease outbreaks in partnership with the World Health Organization. Trump withdrew from the organization 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.
At the same time, the State Department launched the America First Global Health Strategy, which calls for the United States to use foreign aid to “promote American companies and American innovations abroad.” This March, the department announced up to $4.5 billion in funding for various purposes, including responses to infectious-disease outbreaks. XpresTest received $20 million under the program. 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 grants ranged from $25 million to $35 million.
In response to ProPublica, the State Department noted XpresTest’s previous work screening for diseases at airports under a CDC contract and said its award was made “through a competitive process that builds on this successful model.” The CDC did not respond to a request for comment. XWELL CEO Ezra Ernst said XpresTest won both contracts through competitive bidding and cited its experience screening for COVID-19 and other pathogens at American airports.
XWELL was founded in 2006 as a line of airport-based spas offering massages and facials. During the pandemic, the company, then called XpresSpa Group, received $5.5 million from the CDC to provide COVID-19 testing to travelers. It also collected waste from airplane toilets to check for new viral strains and performed similar work for at least one other company that had received government contracts. In January, XWELL announced that it was hiring a former senior adviser at the CDC who created and led the agency’s traveler-surveillance program. The firm said the move was 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, establishing the Trump sons’ connection to the company. American Ventures was launched by Dominari Holdings, a small financial firm with offices inside Trump Tower in New York. After President Donald Trump was elected to a second term, Dominari’s leaders hired Donald Trump Jr. and Eric Trump as advisers and granted them a stake of more than 10% in Dominari. XWELL had lost money the previous year, and Ernst said, “We were so cash-strapped, close to bankrupt.” Its valuation before the cash infusion was $3 million. American Ventures received a roughly 10% stake to start and an option to “essentially print and sell millions of shares in the future.”
A spokesperson for Donald Trump Jr. and Eric Trump described them as “merely passive, minority investors in a fund that invested in this company” and said they had no “involvement in or knowledge regarding the negotiation or procurement of any of its contracts, including any government contracts.” The spokesperson said, “Both are private citizens who hold no government positions, broken no laws and who have every right to pursue lawful business and investment opportunities.”
Dominari CEO Anthony Hayes said, “We have never seen or even heard of Don or Eric using their family name to influence the granting of a government contract.” American Ventures has taken stakes in other companies that have benefited from Trump administration actions. The Florida-based drone company Powerus received an Air Force contract worth up to $90 million five months after the Trumps’ involvement was announced. Through American Ventures, Donald Trump Jr. and Eric Trump also were acquiring a stake in a critical minerals group that had received U.S. government support to mine for tungsten in Kazakhstan. The sons have described themselves as passive investors who do not advocate for the companies in which they hold stakes before their father’s government.
In July, after XpresTest received the CDC contract, XWELL announced plans to sell XpresTest together with its line of spas to a private facial-spa company. Ernst said the government contracts played a role in the $13 million price for the combined sale and would follow XpresTest to the buyer. ProPublica said XWELL, the company in which the Trump-linked investment fund took a stake, would benefit financially from the administration contracts if the sale closed, even though the company would no longer perform the 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 parent company’s exact plans but thought it might work with the Department of Defense.
XWELL did not announce either biosecurity contract before the awards became public through federal contracting disclosures. Public companies such as XWELL are required to report material events that could affect their share price, such as a large government contract, and XWELL had publicized previous federal work, including a $2 million, eight-week COVID-19 testing pilot in 2021. Ernst said XpresTest might not complete the work because of its inexperience internationally or because administration priorities could shift, leaving only a fraction of a contract payable. “None of these contracts are guaranteed,” he said.
ProPublica said it was unclear why American Ventures had invested so much in XWELL. In other investments involving similar tiny publicly traded companies, some firms moved into hot new sectors and drew publicity for their connections to the Trumps before Dominari sold shares. In this case, there was no indication American Ventures had sold its XWELL stake.
XpresTest had never worked with Ebola or provided biosecurity services abroad, let alone in the kind of volatile locales where it was expected to work. Ernst said working internationally was “a new thing for us” and expressed uncertainty about completing the work in the Democratic Republic of Congo: “This is a risky contract. I’m not sure we can do it.” The company is also planning work in Kenya and Morocco, and XWELL’s website shows the company hiring specialists in Ebola-response training and biosecurity in the United States. Jeremy Konyndyk, who helped oversee the U.S. government’s response to a 2014 Ebola outbreak in West Africa, said airport monitoring for COVID-19 and Ebola has some parallels but that it was 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.”
ProPublica said the biosecurity awards added to questions about Trump family enrichment during President Trump’s second term and that the family’s business activities extended beyond Dominari and American Ventures. ProPublica reported that President Trump had made more than $1 billion from cryptocurrency ventures whose value had ballooned as his administration adopted a friendly stance toward the industry. Other companies backed by Donald Trump Jr. and Eric Trump had received billions of dollars in federal deals, ProPublica reported. Earlier in the 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.
ProPublica reported that the Trumps’ financial ties to government deals and actions were 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. “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 to colleagues last week.