Timothy Mellon is the top donor to both Donald Trump and RFK Jr., two competing presidential candidates, which is just one reason he is unlike any political donor in history.
Forbes Reporters Phoebe Liu And Zach Everson talk about their recent daily cover story and sign into who Timothy Mellon is.
Read the full story on Forbes: https://www.forbes.com/sites/phoebeliu/2024/07/09/the-true-story-of-trumps-75-million-backer/
0:00 Intro
0:20 Who Is Timothy Mellon?
3:42 How Is He Able To Give So Much Money?
8:45 Is It Common For People To Deny Being A Billionaire?
12:58 Mellon's Foundation
14:46 Mellon's Search For Amelia Earhart
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Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.
Forbes Reporters Phoebe Liu And Zach Everson talk about their recent daily cover story and sign into who Timothy Mellon is.
Read the full story on Forbes: https://www.forbes.com/sites/phoebeliu/2024/07/09/the-true-story-of-trumps-75-million-backer/
0:00 Intro
0:20 Who Is Timothy Mellon?
3:42 How Is He Able To Give So Much Money?
8:45 Is It Common For People To Deny Being A Billionaire?
12:58 Mellon's Foundation
14:46 Mellon's Search For Amelia Earhart
Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1
Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:
https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript
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More From Forbes: http://forbes.com
Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.
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LifestyleTranscript
00:00Hi, everyone. I'm Phoebe Liu, and I'm a reporter here at Forbes. Recently, I teamed up with my colleague, staff writer, Zach Everson, to write an article about Timothy Mellon, a top donor during this election cycle. Zach, it's great to have you here. So yeah, to get things started, can you say a little bit more about who Tim Mellon is and why he's so important during this current election cycle?
00:27Yeah, gladly. So most of the people who are big political donors are names people have heard of. They've made their name in industry. On the Democratic side, you have Reid Hoffman. On Michael Bloomberg these days, on the Republican side, you've got Lyndon McMahon. You've got Sheldon Adelson.
00:46But all of a sudden, in the last campaign, this guy, Timothy Mellon, popped up. And it was like, who the heck is he? When he made a massive donation to a pro-Trump super PAC. And that's one of the things we should say up front. When we talk about them backing candidates, it's going to super PACs, which can accept an unlimited amount of funds, versus the campaign, which is capped at just a few thousand.
01:08So Mellon really came to people's attention during the last campaign when he made a sizable contribution to the pro-Trump PAC. And then he did it again this campaign, where so far he has dropped, I think, $75 million plus to a pro-Trump super PAC, $50 million of which came the day after Trump was convicted on those 34 felony charges.
01:29But wait, there's more. He also donated $25 million to Robert F. Kennedy Jr., which is largely unheard of for anybody to make massive donations like this. You hear about it a little bit where, you know, one of Clarence Thomas's friends made a little bit of a donation to Cornel West. And it's like, oh, is he trying to boost his candidacy to help the Republicans? But to come in this heavy for two candidates is unheard of.
01:52Yeah, that's really amazing. And I think what's even crazier about this is that he insisted to me multiple times over email that he's not a billionaire, despite donating some $300 million to federal political committees, state candidates, and another, I think, $53 million to fund the Texas border wall, which is just a massive amount of money compared to, I guess, what he claims to have.
02:22And I guess to say a little bit more about where he's getting all of this money, obviously, his last name is Mellon. So he is a fourth, I believe, generation descendant of the Mellon Bank people.
02:36His grandfather was Andrew Mellon, who served as Treasury Secretary under three Republican presidents and was a major steward to really grow the Mellon Banking fortune in Pittsburgh into one of the largest institutions in the country.
02:52He notably invested in Gulf Oil, which is the predecessor to Chevron now, and left, I think, $23 million in private company stock, basically at book value. So probably worth a lot more than that. Adjusted by inflation alone, that amount is worth about $500 million today.
03:12He left that to his three grandchildren, of which Timothy Mellon was one. So he was always, like, very comfortable financially, but also decided to make a lot of money, or decided, like, worked really hard, probably took advantage of a lot of rank and file workers to build a railroad empire that he sold two years ago for $600 million to a public railroad company.
03:36And I assume that a lot of the proceeds from that went into his political giving as well.
03:43Yeah, that would make sense, because we saw that spike in political giving start around that time. He had been giving for a long time. I think his first political contribution that we can track back in the FEC was to Senator Ted Kennedy of Massachusetts.
03:57So not exactly somebody you'd expect a major Trump donor to be funding, but we definitely did see that spike around then. And before he went into Trump, he started donating $10 million, $5 million here and there to groups that were trying to help Republicans take control of both chambers of the House.
04:15One of the things working on this with you that I found very interesting was just the valuation. I do money in politics. I've done a couple of valuations for Joe Biden, Marianne Williamson, Cornel West. It's never anybody who's worth this much money, though.
04:31And so the whole process was fascinating to me, because I'm coming at it from a money in politics angle, where my thought is, of course this guy's worth a billion dollars. He's donated $300 million to political campaigns. But can you talk a little bit more about the process, how you guys went through this, trying to come up with a valuation, and what his response to that, what that had you rethinking?
04:53Yeah, for sure. So I don't know. I do a lot of valuations of billionaires, the richest people in the world, like the Zuckerbergs and Ellisons and Bezoses. And still, even considering that, I looked at how much money he's given to political causes and was like, there's no way he's not a billionaire.
05:11But what's really interesting is that the Mellon family has kept their fortune so private for so many, I guess, for two or three centuries, and have never really put any of that money into public companies or anything that has to be disclosed in a way that us nosy journalists who want to know what they're worth can actually find out.
05:34And over the years, various Forbes reporters trying to estimate the value of the Mellon family fortune have called Mellon family members, and none of them seem to know what their family is worth either. So it's very difficult to actually figure out.
05:51I drew from this fantastic book by David Cannadine about Andrew Mellon, which was produced in cooperation with the Mellon family. They gave him full access to all of his tax documents, estate papers, all of that. And from that book, I learned that he had put the $23 million gift into a bunch of trusts for his grandchildren.
06:14And basically from that initial inheritance, so they, I guess, to give a little bit of context, the Mellon family was known to pass down money in like generation skipping trusts for tax reasons.
06:28So we were guessing that most of Timothy Mellon's money came from his grandfather, Andrew, because his father, Paul, was mostly racing horses. He won the Kentucky Derby, donated hundreds and hundreds of millions of dollars to like art museums and various other philanthropic causes.
06:47So he wasn't really making a lot of money for himself. So Timothy Mellon's money came from Andrew, and this was $23 million in like mid 1930s US dollars.
07:00And if we kind of think about how that could have been invested over the years within these trusts, a benchmark that we like to use is the S&P 500.
07:11If you assume that this investment performed to 75% of the S&P 500, so not as good as the stock market, but kind of close, it would be worth $3.6 billion today.
07:24And if you assume that that was divided evenly between his three grandchildren, of which Timothy was one, they would each have around $1.2 billion.
07:36But when I ran this by Tim Mellon, he responded back, basically, billionaire not, never have been, never will be, and didn't answer any of my other questions about like how he stewarded his railroad and grew his fortune further from that.
07:52With the $600 million sale, where we also assume that he was a majority owner in the railroad, because he co-founded it.
07:59And there were documents we found from, I don't know, the 1980s that showed that he and his co-founder were the only shareholders in the company, and they never took outside investment.
08:10It was financed in part by a loan from his family's bank, and we assume in part by his inheritance.
08:17So, based on all of those things, and then subtracting out the, I think, $296 million in total, sorry, not philanthropic, like political donations, we're estimating that even though he insists he's not a billionaire, there's kind of no way he isn't close unless his investment from his inheritance performed super poorly, which is also possible.
08:41Yeah, that is just fascinating.
08:43I mean, looking at the swings when you guys were looking at that valuation.
08:46Is it common for a billionaire to push back?
08:49You know, when we think somebody's a billionaire, for them to push back on that?
08:52And if so, are they usually as succinct as Timothy Mellon was in pushing back on that?
08:58Yeah, I think it depends on the billionaire.
09:01I work with a lot of tech people.
09:03They usually just like to say nothing at all and let us come to our own conclusions and our own estimates.
09:10Timothy Mellon is kind of known to be kind of a private.
09:14People have called him reclusive for decades, but he hates it when people call him that.
09:19But he did move to the middle of nowhere, bought 6,700 acres of land in Wyoming to get away from, like, noisy Connecticut, I guess, or the Northeast, where his railroads were based, all the way back in 2005, because he just didn't want to be around people anymore.
09:37So he's a man of few words from everything that I can tell.
09:42So I wasn't expecting him to respond to me when I reached out, running all of these things by him, asking him if he wanted to tell me more about his railroad company and how he forged a career in an industry that was really not doing well at the time he decided to enter into it.
10:00So the first email he was just basically saying he's not a billionaire, one sentence, warmly to him.
10:07And then I followed up asking him if he'd be willing to talk to me again.
10:12And he sent back a New York Post article.
10:15This was the weekend after Biden didn't do so well in the debate.
10:21So it was an article of basically a plane flying over Biden's post-debate fundraiser saying, buy done.
10:29And in the article, it said it was funded by, like, an anonymous Republican megadonor.
10:34We don't know if that's him or not.
10:36And then I followed up a third time asking again about the net worth, saying, like, here's what we're going to print and the reasoning why.
10:44We're going to include the fact that you said that you're not a billionaire.
10:47What do you think?
10:48And he sent back, I think, two minutes later from his BlackBerry 10, just no period, no period.
10:57And that was the last thing I heard from him.
10:59Would have loved to hear more about his story because it seems like he has such a fascinating narrative.
11:05Like, licensed pilot, thousands of acres of land in Wyoming, built a 4,000 mile railroad empire over four decades.
11:14Like, from a really famous banking family, I guess.
11:19And I don't know, would have loved to hear more from him.
11:23But that was all we got, unfortunately.
11:26Yeah, we had to settle for the memoir, which he published in 2015.
11:30Say more about that, yeah.
11:32Yeah, you did a phenomenal job tracking it down.
11:34It's been out of print shortly after one of his donations was public in the last campaign.
11:40It was reported, I think, by The Washington Post that he had a chapter in there called Slavery Redo, which he produced,
11:46which he basically compared a lot of social programs to slavery.
11:49And the book was pulled from the market shortly thereafter.
11:53And you did a great job of tracking that down.
11:55That certainly had some insights, especially about his shifting politics.
12:00So he mentioned that early on, in the, I guess, 60s or 70s, he started a foundation called the Sajan Fund.
12:06And it backed groups that were supported by people like Ralph Nader and Gloria Steinem.
12:11Not exactly MAGA type people.
12:14But it sounded like by the end of that, he was a little bit disheartened with the results, blamed it on not having, maybe underestimating human nature in that regard.
12:25So that was some pretty interesting stuff.
12:27The book itself had, I mean, there was an appendix there on some of his favorite deals.
12:31There was one on his illnesses.
12:34It was interesting.
12:36I thought there was a lot of it that was spent on, I would have liked to have learned a lot more about that foundation versus the new home he was building.
12:43But, you know, hey, he's the author.
12:45It's self-published.
12:46He can get away with that.
12:47And there was a second edition of that coming out in just a couple weeks.
12:51So for whatever reason, they decided to pull it, but it is coming back on the market later on in July.
12:57Yeah, that's really amazing.
12:59And to add to what you were saying about the Sajan Fund, the funny thing is that it was headquartered on the same block that I live in in Connecticut right now.
13:08And out of that fund, he and his first wife used to go to all of these like social progressive cause type events.
13:17And he actually met the partner that he ended up running this railroad with for four decades at a League of Women Voters event.
13:26And he claims in the memoir that in addition to kind of being disillusioned with him throwing money at all these causes and them, I guess, not being solved immediately, to put it bluntly, I guess,
13:38he said that working in the railroad industry and dealing with like the bureaucracy and the government regulations and trying to make this railroad that could have gone bankrupt and easily would have if he didn't like lay off half the workforce, for example,
13:55or fly around the country looking for non-union employees when they went on strike in 1987, like personally with his private jet, picking up employees one by one to fly to wherever he needed them.
14:09If he didn't take all of these extreme measures, those companies would have gone bankrupt.
14:13So he got really frustrated with big government. And he says that that was a major force in shifting his politics to something that was more in line with like his family's Republican roots, which was super interesting.
14:28Also transitioning to something. Yeah, go ahead.
14:32Those were fascinating details when I was reading your part of the copy, you know, when I was going through that and I'm like, wait, they met at a League of Women Voters?
14:38Yeah, it's wild.
14:40He was flying in stabs on a private jet. Like those are that was fascinating stuff that you were able to pick up there.
14:47Yeah. And part of your copy that I was reading when we were going through the draft that really fascinated me with was with all of his work with Amelia Earhart and trying to find like the wreckage of her plane.
14:59Can you say more about that?
15:02Yeah, it does. And it sort of makes sense in that one of our art team did an amazing job with this with the photos for this for the article.
15:13And one of the things that really struck me is they had a picture of Andrew Mellon with Amelia Earhart, which was just fascinating seeing that.
15:19So Timothy Mellon got involved in it.
15:24The appeal was that Earhart at some point had been involved with a company that was one of the predecessors to the train company that he ended up owning.
15:33They briefly dabbled in airways. So he was interested in that part. He was also a pilot.
15:37I think he says it was by 2015. He had over 10,000 hours flying.
15:42So he funded an expedition to the South Pacific to go look for the wreckage.
15:48And he gave him over a million dollars. And he later on sued, saying that he this group found the wreckage before it accepted his donation.
15:58The suit ended up getting tossed. The judge had to weigh in saying, you know, that is not definitively that they found the wreckage.
16:04That's your opinion. And the group got to the case was just tossed. Mellon appealed it.
16:10And that was that was tossed as well. But it was a really interesting charitable donation there because I think it is a it was a nonprofit.
16:19Yeah, that's really amazing. But yeah, he just seems like such a fascinating guy and we wish we could have heard from him more.
16:26But it was really interesting to get to read his memoir and read all these books about him and learn about how he got to this place where he is today, where we don't think he has any heirs.
16:37So it seems like he's just throwing a very large portion of his wealth that he's inherited and earned over the years to this cause that he thinks is going to save the United States,
16:51which I guess at this moment is president or former President Trump. So, yeah, super fascinating.
16:57Thank you so much for joining me and talking about this. It was wonderful working on this article with you, Zach.
17:04Likewise. Good chatting with you, Phoebe. Thanks.