Episode 5085: $26 Billion In DEI Payments Still Being Distributed By SBA; How Republicans Need To Approach Jack Smith
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Aired On: 1/21/2026
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It's Wednesday, 21 January in the year of our Lord, 2026.
It is the first day of the second year of President Trump's second term, third time he won the presidency, but second term.
Chris Ruffo, the great Chris Rufo, has joined us.
And Chris, look, naturally, I would want you on here during Davos because Larry Fink, you've so broken Fink on DEI.
Larry Fink, who was kind of the financial guy of it, forcing all the companies to do it because of his immense power on Wall Street.
And he's over at Davos kind of denying, you know, no ESG, no DEI.
We don't need to do that.
We don't need Green New Deal because intermittent power won't work for the data centers of AI.
He's thrown over all of his beliefs.
And you were the leader in the effort to break DEI.
But you came up with something, I think, two days ago that I think may be the biggest story in the country.
And people need to focus on it.
It was this, is it 26, we talk about Samayans in Minneapolis and the ripoff of the learning centers and all this is getting deeper and everybody's telling me this, but you're identifying in the Trump administration.
There's still Congress is approving.
I guess there's $26 billion being spent on this type of scams by the small business administration.
And we kind of know it's out there, but we're not stopping it or not putting our hands on it.
Can you walk people through this, quite frankly, blockbuster story?
Yeah, so this is the small business administration.
It's a $26 billion slush fund that is dedicated to providing government contracts, including many no-bid government contracts, exclusively to firms that are owned by racial minorities and women.
In many cases, these are shell companies where they have a token minority and then a private firm behind them.
But in all cases, for this entire $26 billion slush fund, there's only one identity group that is prohibited from accessing these funds or bidding for these contracts, white men.
And so this is like the epitome of DEI.
It's billions of dollars.
There's all sorts of fraud and corruption.
In the program's 45-year history, there's never been a single audit done.
And the question is simply this.
It's now one year into the Trump administration.
The president came out strong on day one, said, no more DEI.
Why are we still administering billions of dollars for every group except for one?
It seems totally unfair, totally unconstitutional.
And yet it's still something that until now has been surviving in the Trump administration.
So there is a statute in place that says there is racial contracting.
It's called the Section 8A program that is supposed to be for disadvantaged groups.
And, you know, to be fair, Kelly Loeffler, who's the administrator at the SBA, has done some great work in the first year.
She's mandated the first ever audit.
She's reduced the percentage of race-based contracting from 15% to 5%.
But I think what's happened is that she feels hemmed in by legal considerations.
It may not be technically a DEI program.
It's more like an affirmative action contracting program.
The native tribes have sovereignty issues that make them somewhat of an exception to race-based rules.
But the bottom line is that it hasn't got done.
It needs to get done.
And I was fielding calls yesterday from the White House after this story came out.
And look, the White House assures me we're working on it.
It's been stalled.
We're trying to get it done.
We think there's going to be imminent action.
But what I think needs to happen and what could happen is simply to say this program is unconstitutional.
We're going to refuse to administer it.
We'll fight it in the courts where we think we have a pretty good shot.
Because look, the courts have been pretty clear about this stuff.
Race-based contracting, especially a race-based contracting that says, you know, any group in the country can apply except for one, white men, is totally unfair.
It's totally illegal.
It's totally unconstitutional.
So I'd like to see the administration use the nuclear option here and just say, we're blowing up this program.
We're going to give contracts to the best firms.
Doesn't matter what the skin color is.
It doesn't matter where they're from.
And look, the other thing that is kind of crazy, we look through a lot of these contracts.
These are supposed to be for socially disadvantaged or oppressed people.
But you have a firm, for example, that's run almost exclusively by Indian Americans with PhDs that have millions of dollars in assets, to give you one small example.
And you say, wait a minute, this is a group that has the highest education level, the highest income level, run by people who by any measure are part of the American elite now.
Why are we giving them a contract advantage over other groups?
It's indefensible.
And I hope that we see action.
Maybe not today or tomorrow, but I hope we see something by next week at the latest.
And it's not that, hey, maybe you do have some set asides for minorities, like I said, oppressed minorities, not Indian guys with PhDs that are building tech companies or whatever.
But you said there hasn't been an audit.
What I've always heard about this program is that it's actually a company, but they put a woman or they put a minority atop of it and they get the contracts, but it's a complete scam that it's really not a minority company.
They're just doing that so they qualify for the contract itself.
Is it true that it hasn't been audited to that depth to see if there's been criminal activity or fraud in 40 years?
Certainly there are cases of fraud, cases that have been prosecuted, but there's been no comprehensive audit of all of these approved minority contracting firms ever.
And we know it's rife with fraud.
We know this is part of it.
The other dirty detail or wrinkle that I heard from administration officials and others with knowledge, inside knowledge of the program is that a lot of this money goes to Alaska state of Alaska, where there are native Alaskan tribes.
And there are these shell companies where private companies run by people from all different backgrounds use kind of token Alaska native firms to keep this flow of billions of dollars over time, tens of billions of dollars going.
And there are senators in Alaska who are very intent on keeping this spigot open.
These are Republican, at least one Republican senator in Alaska.
And so everyone is in on this scam.
I think everyone knows that it's a dirty business.
It's totally corrupt, totally unjust.
But I think it needed the attention because what's really happened is that it fell under people's radar.
It's not a headline story for many people.
There's a lot of exciting things happening in the news.
But the reason I wanted to draw attention to it is because this should be an easy layup for the administration.
I mean, part of it is just it's an automatic renewable expense.
It takes a lot of political capital to say we're going to take this existing program that is benefiting Native Americans and the children of sharecroppers and all of these kind of this mythology around it.
They don't want to be the big, bad Republican who's cutting minority contracts.
But I think the deeper reason is psychological.
And the psychological reason is this.
A lot of these guys, Republican congressmen, Republican senators, for many years were deathly afraid of being called racist, of being called bigoted, of being called cruel, of facing the scrutiny of the national news media.
And at the end of the day, it really took a figure like President Trump to come in there and say, hey, wait a minute, I don't care what you call me.
I've been through the media ringer.
I'm willing to take the heat.
We're not going to do this.
Get rid of it.
And that's the kind of decisive action that was required.
And my suspicion is that the president, if this were put on his desk, he would be shocked.
And he would ask his people, why haven't we gotten rid of this already?
And look, I think it is totally defensible legally, totally defensible politically, and most important, totally defensible morally.
We can either have a colorblind country where everyone is treated equally, or we can have a racial hierarchy where people are treated, where people are treated unequally according to their race.
So look, after 2020, Larry Fink, he was wealthy, but he wanted to become famous.
He wanted to be beloved in international circles, business circles, philanthropic circles.
And so he became really the poster boy of DEI and ESG.
But, you know, he took a beating for these once the kind of woke hysteria started to subside, once it was really demonstrated that these are forms of corruption and discrimination.
And, you know, from some sources that are even within my network in corporate America, what happened is that when Larry Fink started to realize that this was making him unpopular, he instructed people within the firm to quietly wind down some of these ESG programs and to rehabilitate his image.
And so he has reemerged after 10 years of woke as a kind of neutral corporate, you know, non-ideological figure.
I think it was phony then.
I think it's phony now.
Guys like Larry Fink will do whatever is popular, whatever is expedient in the moment.
And so the big lesson here for conservatives is don't necessarily worry about people's convictions because those are malleable.
Worry about who sets the status incentives.
And so if DEI is perceived as high status, corporate executives will adopt DEI.
If DEI is perceived as low status, corporate executives will abandon DEI.
That's the best way to have an influence.
That's the best way to change perception.
And Larry Fink's kind of new face, new mask, is a sign that conservatives have won on ESG and one on DEI.
I mean, I haven't, I don't even think, I think Elizabeth and Grace and Mo haven even put it all on my Getter account.
Maybe they have, but, you know, we had a conference 10 days ago.
Dr. Thayer's working with me.
There's a bunch of us that are of Irish descent.
We are working with folks in Ireland to help them get stood up a Irish populist nationalist party because, as you know, probably the worst country been sold out by their political elite is our beloved Ireland to the Davos crowd.
Well, there's been a lot of, you know, O'Bannon saying they're going to create a Trump and he's going to bring a nationalist MAGA.
Bring MAGA to Ireland.
And the elite media over there is going crazy.
I mean, they're losing it.
So, Larry Fink today, Dr. Thayer's here.
And Dr. Thayer, I got a cold open for you to get into the heart of what happened at Davos today.
But Larry Fink is the new mayor, he gave, I think, an interview to the Financial Times, and they said, Well, we're thinking of moving Davos around.
And one of the first places we want to stop is Dublin.
So you can tell that the globalists, Larry Fink, the mayor of Davos, they're now concerned enough.
They're getting worked up enough that we're getting a little traction in Ireland.
Well, he's not going to escape nationalism in Dublin, Steve, as you well know, right?
The Irish are maybe have been asleep at the switch for a few years, given their elite, but they're changing their orientation very quickly.
And so, given the history of Irish nationalism, the history of Ireland, what Larry Fink is doing is really jumping from maybe the frying pan into the fire with respect to nationalism.
But it really shows his desperation, right?
He wants to shed the dead hand of Davos, the dead hand of globalism.
Through six decades and 12 American presidents, the United States and Europe have faced monumental challenges and have overcome them together.
Because transatlantic ties held strong against the forces of fascism and imperial communism, our nations have been able to thrive in the pursuit of peace.
Our careful, and I mean careful attention, to building and sustaining a liberal international world order with the United States and Europe at its core was the bedrock of the success the world enjoyed in the second half of the 20th century.
And I wonder if you think this is a moment in which you didn't have to serve in a national security capacity to be scared for United States national security.
Well, I think we're all ashamed of what we saw on the stage in Davos.
I think all of us were quite jealous of seeing the integrity, professionalism, intellect of Prime Minister Carney of Canada, who acquitted himself brilliantly, in many respects, in terms of honoring the transatlantic alliance.
And when we hear Donald Trump talk about history in such a, as you point out, an ignorant way, it really is a period of time where I think all Americans, whether or not they served in the military, diplomatic service, national security, intelligence, really feel that we really have reached this real inflection point where America's leadership on the world stage is not just in question, but also is now being seen as being absent,
And so, again, I think what we saw was a very, very terrible depiction of what Donald Trump 2.0 is going to do one year into a four-year term.
And again, I think many of us are just really not just appalled and ashamed, but also just so puzzled as to how so many individuals within the Republican Party, within Congress, continue to allow Donald Trump to do this.
Because I think people on the world stage, and Europeans in particular, are not just seeing this as Donald Trump's aberrant behavior, which I think they've gotten used to, but he is a reflection of a sentiment in the United States within the Republican Party, as well as maybe 30% of the electorate, that really does agree with him and believe these things and is allowing him to do this again to not just to the detriment of international peace and stability,
Brennan, before you go to prison, it's the first day of the second year of his second term and third victory.
He won the popular vote, every swing state.
I mean, I could go on and do it.
It's a reflection of the will of the American people, sir.
Dr. Bradley Thayer, make it make sense.
We did slide some things in the middle of the way people used to talk at Davos, the Bill Clintons and the Dick Cheneys, all this kind of political mumbo jumbo.
President Trump cut right to the heart of it, sir.
It's time to get out of town, whether it's Dublin or Detroit or Jakarta.
They're going to try to keep the circus a movable feast, right?
Keep the circus going.
But you never, rarely in international politics do you have such a juxtaposition between the old paradigms, right?
Between the old regime of Kearney and then what Trump illuminated today.
So yesterday, Carney's speech was important for three reasons, right?
First, he's the point man.
He was speaking for Starmer.
He's speaking for John Brennan, the Democrats, the EU elite, and the Chinese Communist Party, right?
He wants to sustain the old regime, the old paradigm, which profited the CCP and the elite in the U.S., EU, Canada, and Australia.
But those days are over.
Secondly, Carney said he's balancing against the U.S., right, in favor of the CCP, because Carney is really perverted, right?
He's more comfortable with communist systems.
He's more comfortable with totalitarianism than he is with democracy in Canada, which is telling, Steve, that's true across the board of the EU elite, of Starmer, of Albanese in Australia and others.
And then thirdly, it's important because of what Carney said, his comparison at the outset of his speech of the U.S. with the communist Soviet and the communist Soviet system, right?
He quoted Vasel Havel's The Power of the Powerless, where he said, power comes when you no longer believe the lie.
Well, that's exactly it, right?
But not in the way Carney meant it, right?
We're no longer believing the lies of globalization.
And that's what Trump did today.
No more living lies.
So Trump has introduced really the new paradigm, the new age, where we're not going to believe the lies of globalization.
We're going to believe and we recognize, as Trump said, strong borders.
We're going to have that.
We're going to have strong elections, right?
That hasn't received much attention, but he called it, he called, really underlined the importance of that.
He also described the danger of a bad press, which you could say that's the danger of bad elites and what the harm that they do.
And then very importantly, he talked about the strong ties of Western civilization, right?
What unites the West together?
He said that prosperity and progress that built the West didn't come from tax codes, right?
It came from a shared culture.
It came from a shared civilization and the need to defend that civilization.
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Dr. Thayer, can you wrap up your thoughts about Davos, sir, and then give your social media coordinates and how people get your great writings?
What we witnessed yesterday and today is really a Copernican revolution and a change between what Carney represented, again, as a stalking horse for the EU and the Democrats and Starmer of the old regime, where globalization was the answer to everything.
And if you follow that road, you're not going to end up speaking German or Japanese, but you will end up speaking Chinese versus what Trump illuminated, right?
Which was the path of freedom, which is the path of the ability to recognize reality as it is today in international politics and the need to take some very important steps to secure American security and the security of Western civilization.
So if you follow Kearney, you're dead.
You're in the grip of the CCP, which is where Carney wants you, of course, and the EU.
And if you follow Trump, you're in the path of freedom.
So Trump has given many great speeches.
I think this is his best of all time.
And it really defines a new era in international politics.
And so today is going to be a seminal event.
This was extremely important in terms of defining the future and why.
This is up there with the speech about defense of Western civilization and the Judeo-Christian West he gave in Warsaw and also his first inaugural American Carnage.
We've been talking about populists and nationalism and globalism and President Trump throwing down hard.
But we do have to, and one of the frustrations with the MAGA movement is that, hey, we got so many problems here and President Trump knows what to do about it.
For some reason, it's just not getting done fast enough with enough urgency.
You've highlighted one of the big issues here about the deep state law affair, all of it.
We're going to have a pretty seminal event come up, and that is Jack Smith, right?
Talk to me about this piece you wrote in your substack that I've told everybody.
So tomorrow, ex-special counsel Jack Smith will testify publicly before the House Judiciary Committee.
Now, you'll recall, and you and I have discussed his testimony, closed door testimony.
In December, the House Judiciary Committee released the transcript of that eight-hour interview as well as the video.
But both Jack Smith and President Trump have one thing in common.
I think it's their only point of agreement in, you know, three plus years, is that they want, both wanted to see his testimony in public under oath before this committee.
And that's finally going to happen tomorrow, 10 o'clock Eastern Time.
I will be covering it live on X, Julie underscore Kelly2.
I'm sure you and I will be talking about it tomorrow evening.
But Steve, if anyone better represents the vengeful, reckless, punitive, destructive lawfare against Donald Trump and his associates over the last few years, it is special counsel Jack Smith.
And what I laid out in my piece at Substack Declassified with Julie Kelly, I outlined 10 questions, 10 areas that the Republicans need to hammer the $50 million man, I call him.
He's cost taxpayers $50 million in less than two years as the special counsel.
So when we can get into some of the details about what I talk about here, but it is vital for Republicans to take this opportunity and expose Jack Smith for the degenerate dirtbag that he is so that people can see what the president had to deal with for two years.
As soon as we read it, we got it over to people on the hill.
I know you haven't talked to them, but just go through the couple of three that you think are absolutely, you got 10, the couple of three must-haves that we must do, because I'll be honest, without Gates, I mean, they got a lot of good guys in this, but Gates was our go-to guy.
Without Gates, as of right now, I'm not feeling it.
I'm just not.
So what's your advice to these guys?
What are the ones you load up front as the ones you got to get to?
I mean, they absolutely have to go for the juggular here.
So I would say, and this was the first question that I posed that they need to confront Jack Smith with, with, and this is something that the media, when they covered Jack Smith's testimony last month, completely ignored Steve.
Judge Aileen Cannon in July of 2024 dismissed the documents case after determining that Jack Smith's appointment violated the Constitution, violated the appointments clause, because he was not appointed by the president.
He was not confirmed by the Senate.
He acted as a principal officer, i.e. a U.S. attorney.
So she tossed the indictment.
Up until the time that Jack Smith left office in January 2025, he was still signing his name, special counsel Jack Smith, on motions and briefs filed in the documents case.
Now, compare that, Steve, with what's happening this week, actually yesterday.
Judge David Novak in the Eastern District of Virginia threatening to bring a false statements charge against Lindsay Halligan for also signing her name as U.S. Attorney Lindsey Halligan after a separate judge dismissed the Comey and Tish James indictments finding that her appointment violated the Constitution.
So again, a huge disparity in the rules.
I would also speak to Jack Smith's testimony last week when he made several misrepresentations.
I'll say nicely, I'd rather call them lies.
He said that there were classified documents found in boxes in the ballroom and bathroom of Mar-a-Lago.
He has zero proof of that, absolutely no proof that any of the alleged classified files that eventually ended up in the hands of the special counsel were in any of those boxes that were shown in those photographs off an aid's phone in early 2021, the bathroom and the ballroom.
He has no proof of that.
He also said that the president repeatedly obstructed the investigation into the documents case.
That also a brazen lie.
In fact, I criticized the president and his team for overcooperating with the Department of Justice.
How can you claim that Donald Trump was not cooperating when he let Jay Bratt and three FBI agents into Mar-a-Lago in June of 2022, let them walk around wherever they wanted, including the storage room where some of these boxes were.
The president delayed his summer relocation to Bedminster that day to greet them and told them specifically, we will give you whatever you need.
Two days later, Jay Bratt, that little, I call him degenerate midget, who was head of the documents prosecution in Florida.
Two days later, he starts pushing for an armed raid of Mar-a-Lago.
So Jack Smith is just as recently as last month lying about that.
Abuse of the grand jury process, doctoring and mishandling evidence, misrepresentations to the court, including Judge Cannon.
You know, we can get, there's a whole litany of things, but I would also urge Steve House members to back off a little bit their outrage about Jack Smith seeking their phone records, their toll records, they're called.
We get that you're upset about that, but that is minor compared to what Jack Smith, the constitutional rights that he decimated of this president, the new boundaries that he set.
And that is what House members need to remember.
The real victim here is Donald Trump.
Yes, we're sorry that he got your phone records.
It violates his future debate clause.
It also violates a few statutes.
However, it's relatively harmless, although his misconduct should be punished.
But that pales in comparison with what Jack Smith did for two years to this president.
He needs to be fully exposed to the public and he needs to be held accountable.
I think that the House Judiciary Committee understands what is at risk here, what is important to expose Jack Smith.
I think they got their feet wet a little bit during that eight-hour transcribed interview.
Jack Smith can come across, you know, in this appearance anyway, very earnest, very deliberative.
That is not who he is as a human being.
That's not who he is as a prosecutor.
And one other thing I would love to see them drill down.
Jack Smith, Merrick Garland made it seem like he just plucked Jack Smith out of The Hague.
Here was this tough war crimes prosecutor in The Hague.
We just went and got him to demonstrate the independence of the Department of Justice in this probe.
No, no, no.
What Jack Smith disclosed, and I really credit the House Judiciary Committee and Chairman Jim Jordan for flagging this.
As early as the summer of 2022, Jack Smith was in touch with Lisa Monaco, our favorite, the Deputy Attorney General at the time, her deputy, saying that he wanted to go back to the Department of Justice.
If there was a position there, he would go back.
Of course, he was in the DOJ under the Obama administration.
He was asking for a job there for months.
And what he said is he specifically asked to work in the newly created domestic terror unit, which had been created by Matthew Olson, the head of the National Security Division in the Biden DOJ, a former DOJ colleague of Jack Smith's under the Obama administration.
What did the domestic terror unit do?
Matthew Olson, National Security Division at DOJ, domestic terror unit, did two things.
They helped pursue Jay Sixers, and they were involved in the criminal investigation into the president and deliberations pre- and post-Mar-a-Lago raid.
So just for a backup, so anyone who follows me religiously knows I sparred with these animals for years, and they would help identify or they were really part of the punishment, the process.
So they would post photos and videos of individuals.
They had nicknames for them.
They would identify them by number and then say, please help us find this.
And they were also working with the FBI, which I knew at the time.
Ryan Riley, actually, the reporter, kind of wrote a whole book on this.
So they were instrumental in helping the FBI not just identify these individuals, but torment them, Steve.
I mean, this produced so much online harassment, gave the media fodder to further torment these J6ers.
So, I mean, I knew they were getting paid.
I knew they were working with the FBI.
I knew they were informants.
I didn't know they were being paid that much.
But, you know, what are we going to do about it now?
It looks like a lot of them were overseas, which we suspected at the time as well.
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