Scott Bessent, Donald Trump’s Secretary of the Treasury, appears to have lost six figures in a quick-turnaround real estate transaction earlier this year. Money in politics reporter Kyle Khan-Mullins joined "Forbes Newsroom" to discuss.
Category
🗞
NewsTranscript
00:00Hi everybody, I'm Brittany Lewis, a breaking news reporter here at Forbes. Joining me now is my
00:08Forbes colleague, money and politics reporter, Kyle Conmullins. Kyle, thanks so much for joining
00:12me. Always great to be here, Brittany. Thanks for having me. You were combing through some
00:17South Carolina real estate records and you found that it seems like Treasury Secretary Scott Besson
00:23lost six figures in one month. What documents specifically did you find to lead you to that
00:28conclusion? Yeah, so I've been working for a little bit of time now on a net worth valuation
00:34for Treasury Secretary Scott Besson. We do this for all the cabinet nominees and for all the cabinet
00:38members. So we're working our way down the list. There seems to be a lot of news these days. It
00:43keeps pulling me off the path, but I keep coming back to it. And while I was looking at some other
00:48South Carolina real estate for Scott Besson, I noticed that he, the one LLC that's controlled by
00:55him seems to have bought and then sold a house within about a month of each other. And it's just
01:02that one house that was bought and then sold for $100,000 less the second time. So in other words,
01:08it looks like he lost $100,000 in that very quick turnaround real estate transaction. That's our
01:13preliminary read of the situation at least. So first, let's talk about the house in question.
01:19What details are known about that? So the house in question, it is in a really nice neighborhood
01:25in Charleston. It's a, it's a lake view, lakefront house, 7,100 square feet. It's got a pool. It's got
01:31a bath house. The real estate listing talks about Gothic architecture, a mix of English and Italian
01:39Gothic architecture. I'm not an architecture buff. I don't know the difference, but I'm sure,
01:43I'm sure someone does. And this was a house that it looked like, presumably the Besson, Besson and
01:50his husband, John Freeman would be moving into after they sold their previous home in Charleston
01:56in for over $18 million in February. And so they listed that one a couple months before, presumably
02:03they were looking for a place, a smaller place to go. And they had also just bought a house in DC
02:08so Besson could commute to work as the treasury secretary. And I'm no architecture buff either,
02:14but it sounds like a beautiful house and the price tag. I mean, I would hope it's a beautiful
02:19house. It's a multimillion dollar home, but it lost about $100,000 in value from January to February.
02:26Talk to us about that. How much was it worth in January when it was bought and how much was it
02:30sold for in February? Yeah. So we see this, this entity that Besson declares on his disclosure.
02:36It's called Palmetto 2020 Trust LLC. And we see that this entity, this LLC, the Shell Corporation,
02:43bought this house on January 13th. And it was for $4.85 million. So this is a nice house.
02:54And then on February 25th, so a little over a month later, that same LLC turns around and sells the
03:00house to a different LLC, which we're not naming because it contains the address of the hall and
03:04we're not, we're not in the business of publishing people's addresses. But they would turn around and
03:09sold the house to that other LLC for $4.75 million. In other words, $100,000 less.
03:16And I'm imagining for you, this is what kind of made it tricky, right? Seeing one LLC sell it to
03:22another, another LLC buy it. Is it normal to buy and sell homes via Shell company? In your previous
03:29reporting, have you ever run into this? Yeah, this is actually really, really common,
03:34especially in the line of reporting that I do. So I report on money in politics and a lot of political
03:39figures, a lot of high net worth individuals. Basically, if you are somebody who exists in some
03:44sort of prominent space, or you know, you're some sort of public figure, there's a good chance you
03:49probably bought your house through an LLC instead. The reason why is it kind of adds one layer of
03:55potential anonymity to these real estate records. Most real estate records in the United States are
03:59public and reasonably easily accessible. And so if someone is able to see the current owner of the
04:04home as an LLC, well, some people are just going to stop there. Now, some people like reporters are
04:09going to keep digging and try to figure out who's the owner of the LLC. And when you have a public
04:14disclosure like Scott Besson does, then we can figure that out. But the short answer is there's
04:18nothing particularly nefarious about this. It's just a sort of one layer of separation, one layer of
04:23privacy that a lot of public figures try to take advantage of. For sure, an added layer of privacy.
04:27But we're glad that you did the digging. And after you did the digging, you figured that there are two
04:33potential reasons as to why the flip happened in such a short amount of time. And one possibility
04:38you lay out in your reporting is that he suffered virtually no loss because it was essentially a
04:43transfer. So walk us through down that possibility. Yeah, so this second LLC that Palmetto 2020 Trust
04:51LLC sold the house to in February, it was only incorporated in February in South Carolina.
04:58And so there's a chance, we don't know, but there's a chance this LLC is just also owned by
05:06Besant and Freeman. And this transfer between these two LLCs didn't actually mean anything.
05:13It's just a nominal transfer, just moving money between different accounts. It's like moving money
05:18between your checking and savings account, moving a home between two different LLCs that you own.
05:21It's the rich people version. That's the first possibility. And so maybe they still own the home,
05:28and this is where they're planning on living in Charleston, as they also have a second home in DC that
05:32Besant will be living and working from while he's structure secretary.
05:36In this rich person version of moving money from your checking and savings,
05:40he didn't lose any money. He didn't lose that $100,000 in this transfer, correct?
05:46No, but it's kind of unclear because if you're moving the house between LLCs that you own,
05:52which I have seen other folks do before, normally there's not a sale price that's associated with
05:58that. And I'm not sure why the sale price, even if there were a sale price, I'm not sure why it would
06:02have differed between the two periods. That's odd. So that's why we're not 100% sure that that's what
06:09happened here. And then what's the other possibility? So one, he transferred it. The
06:13other possibility is he flipped it. Explain. Yeah, absolutely. The second possibility is that
06:19he and his husband bought the house and then got cold feet for whatever reason. They decided they
06:24didn't like it. I'm not sure why. And they turned around and sold it to somebody else who was also a
06:31buy net worth individual who was conscious about privacy. That other person found it in LLC,
06:36purchased it through that LLC and bada bing, bada boom, they got a $100,000 deal on a house,
06:42it seems. And so usually for the everyday American, if you lost six figures in one month,
06:49I mean, that's a pretty devastating blow. But what about in Scott Besson's case? Will this impact his
06:54bottom line? What does that look like? Yes, median American net worth is around $193,000. So if you just
07:00lost $100,000 in a month, that would be a pretty rough hit for most American families. That's not
07:07the case for Scott Besson, though. Besson is a former hedge fund manager, he declares hundreds of
07:12millions of dollars worth of assets on his financial disclosures. You know, no one likes to lose $100,000,
07:20but I don't think he's gonna sweat it too much. Put it that way. And has he flipped real estate before?
07:25What does his portfolio look like? Absolutely. The Wall Street Journal actually had a really good
07:31exploration of a lot of his real estate transactions in the past. He's bought and sold
07:35over $100 million worth of real estate in the last 30 years. And what they found is that he has taken
07:42losses all the time. Sometimes he's made money, sometimes he's lost money, but he does not shy
07:49away from taking a loss. Just recently, he sold a Manhattan condo back in 2021. He sold it at a $4
07:57million loss compared to what he bought it for just a couple years before. So that should show you,
08:02yeah, he may have lost $100,000 on the South Carolina property. He's lost 40 times that on a
08:08Manhattan condo just a couple years ago. So again, not sure this is gonna be a really big hit to his
08:15bottom line. Sounds like just a drop in the bucket, but I appreciate your reporting. Nonetheless,
08:21Kyle Conn Mullins, thanks for joining me. Always great to be here, Brittany. Thanks.