One of the strangest phenomena of my life has been the way in which mythology and fantasy have propelled Donald Trump into public life. His public image, carefully cultivated and facilitated by media enablers cynically looking for ratings or clicks or subscribers, is one of a tremendously successful, self-made billionaire, author of a shrewd book on negotiating, television star showing us how a tough boss operates, quintessential rich guy living life with style. We all know this image.
That image is a fraud. It has been meticulously constructed over many decades. Its manifestations remind one of nothing less than the fearsome, booming-voiced Wizard in the film The Wizard of Oz. What I now propose to do is to pull back the curtain and reveal the real "wizard". Trump is the product of America's depraved celebrity-worship and the shocking financial corruption that permeates both American and international life.
A. Is Trump the “Self-Made Man” he claims to be?
Trump boasts that he was at the top of his graduating class at the Wharton School of the University of Pennsylvania. But contrary to Trump's claim, he did not graduate first in his class in 1968, nor did he even graduate with honors. One of Trump's professors, the late William T. Kelly, remembered him distinctly. Frank DiPrima, an attorney in New Jersey who has worked for numerous large firms, knew Kelly very well. Kelly's opinion? “He said he [Donald Trump] came to Wharton thinking he knew everything. He talked about his arrogance,” DiPrima said. “He said, ‘Donald Trump was the dumbest goddamn student I ever had.’”
Trump also has claimed, with no evidence whatsoever, that all he got from his family in the way of assistance was a $1 million loan from his father. This is just another of his pathetic lies. The New York Times reported in October of 2018 that Trump received the equivalent of $413 million from his father, belying Trump's claims to be a "self-made man". Much of this money was used to prop up Trump after his disastrous business failures. Trump's parents cheated the government out of about $500 million in taxes. Trump set up a scam organization to filter and launder the money he was getting. Trump was committing massive tax evasion and fraud throughout the 1990s. The entire blockbuster report is here.
And, as I have noted previously, the young Donald Trump was given considerable help by organized crime. Take a look at Trump and the Mob, Part One and Trump and the Mob, Part Two: The Russians.
No, Trump was not a “self-made man”. Daddy’s money and gangsters, both domestic and foreign, propped him up at every turn. And amazingly, no matter how badly he failed, someone was always there to help him out.
B. Was Trump a great businessman?
Well, let’s put it this way. Donny Boy managed to fail at just about EVERYTHING he tried. He did, however, succeed in skimming money from various enterprises, while ruining his investors.
Trump managed to LOSE MONEY running casinos. And he used bankruptcy as a tool to screw his creditors. This fact-checking excerpt from The Washington Post, 2016, is instructive:
Trump’s companies have filed for Chapter 11 bankruptcy protection, which means a company can remain in business while wiping away many of its debts. The bankruptcy court ultimately approves a corporate budget and a plan to repay remaining debts; often shareholders lose much of their equity.
Trump’s Taj Mahal opened in April 1990 in Atlantic City, but six months later, “defaulted on interest payments to bondholders as his finances went into a tailspin,” The Washington Post’s Robert O’Harrow found. In July 1991, Trump’s Taj Mahal filed for bankruptcy. He could not keep up with debts on two other Atlantic City casinos, and those two properties declared bankruptcy in 1992. A fourth property, the Plaza Hotel in New York, declared bankruptcy in 1992 after amassing debt.
PolitiFact uncovered two more bankruptcies filed after 1992, totaling six. Trump Hotels and Casinos Resorts filed for bankruptcy again in 2004, after accruing about $1.8 billion in debt. Trump Entertainment Resorts also declared bankruptcy in 2009, after being hit hard during the 2008 recession.
Why the discrepancy? Perhaps this will give us an idea: Trump told Washington Post reporters that he counted the first three bankruptcies as just one.
Yes, folks, as recently as 2009, Trump was, at least in his businesses, in rough shape financially. The New York Times explained how the game works:
After narrowly escaping financial ruin in the early 1990s by delaying payments on his debts, Mr. Trump avoided a second potential crisis by taking his casinos public and shifting the risk to stockholders.
And he never was able to draw in enough gamblers to support all of the borrowing. During a decade when other casinos here [Atlantic City] thrived, Mr. Trump’s lagged, posting huge losses year after year. Stock and bondholders lost more than $1.5 billion. [My emphasis]
All the while, Mr. Trump received copious amounts for himself, with the help of a compliant board. In one instance, The Times found, Mr. Trump pulled more than $1 million from his failing public company, describing the transaction in securities filings in ways that may have been illegal, according to legal experts.
Mr. Trump now says that he left Atlantic City at the perfect time. The record, however, shows that he struggled to hang on to his casinos years after the city had peaked, and failed only because his investors no longer wanted him in a management role
At one point, even with the famous Taj Mahal casino $820 million in debt, Trump was extracting money from it for other real estate deals. Trump played complex games with financing in general, and it brought him to financial grief. In the midst of a general slowdown in the casino business in the 1980s, the finances of Trump's casinos could only be called "catastrophic". Trump was losing money on his Manhattan real estate as well. By August 1990 regulators in New Jersey reported that the total debt on Trump's real estate holdings was $3.4 billion. Only a little more than a year after it opened, the Taj Mahal was in bankruptcy court. Fred Trump made an illegal loan to his son in December 1990 to provide some liquidity. Trump himself always took care to extract whatever money he could from what he called his Atlantic City "cash cow".
Oh, by the way, between 1997 and 2002, other casinos were increasing revenues by 18%. Trump's declined by 1%. And then the situation got even worse.
From Market Watch:
From Fortune magazine:
From mid-1995 to early 2009, Trump served as chairman of Trump Hotels and Casino Resorts (renamed Trump Entertainment Resorts in 2004), and held the CEO title for five years (mid-2000 to mid-2005). During Trump’s 13 years as chairman, the casino empire lost a total of $1.1 billion, twice declared bankruptcy, and wrote down or restructured $1.8 billion in debt. Over the same period, the company paid Trump—essentially Trump paying himself—roughly $82 million by Fortune’s estimates, collected from a dizzying variety of sources spelled out in the company’s proxy filings, as varied as payments for use of Trump’s private plane to fees paid directly Trump for access to his name and marketing expertise...
No amount of spin will make Trump’s dozen years at the helm of Trump Hotels, the only public company Trump has ever run, look like anything but a flop that damaged thousands of shareholders, bondholders, and workers. The sole “winner” now packs arenas across America, mesmerizing tens of thousands of cheering fans with tales of his business triumphs.
Trump ran his businesses into the ground, pocketed huge amounts of money for himself, and lost money for his investors. He also stiffed blue collar businesses out of money he legally owed. His record in this regard was appalling. Read about how Trump stiffed contractors in this story here,
USA Today. It’s main reason he’s been involved in thousands of lawsuits. (Roy Cohn taught Trump to use the courts as a weapon.) He drags these things out, financially wearing down his opponents.
Trump’s business failures are part of the reason Trump fights so savagely to keep his tax returns hidden. On his 1995 return, Trump claimed a loss of $916 million. This was "enough to avoid paying income taxes for nearly two decades, according to experts. That near-billion-dollar loss might have been the single biggest net operating loss in the country that year, another expert told the New York Times in a follow-up story Monday, amounting to almost 2 percent of the total “net operating losses” reported by all American taxpayers who used the same tax provision as Trump."
Donald Trump's businesses reported losses of $1.17 billion from 1985 to 1994, The New York Times reported Tuesday, citing information from tax documents from those years.
It appears Trump lost more money than nearly any other individual US taxpayer year after year, the Times reports, according to the 10 years of tax information the newspaper acquired.
Trump ran for president branding himself as a self-made billionaire, touting his financial success, but he has been steadfast in his refusal to release his tax returns to the public, despite mounting pressure from Congress. On Monday,
Treasury Secretary Steven Mnuchin formally denied a request from the House Ways and Means Committee for Trump's last six years of tax returns, a period not covered by the documents reported by The Times on Tuesday.
Gawker has done a wonderful job of pulling Trump’s business failures into one place. This is one of my favorite visuals from the post, highlighting a particularly amusing failure:
Hill Reporter.com has a list as well.
I also gathered info about all this. It’s kind of amazing when you see it one place:
Trump Airlines
Trump Vodka
Trump the Game
Trump Villas, Grenadines
Trump Tower, Tampa, FL
Mississippi Casino
Trump Atlanta
Trump Ocean Resort, Baja
Trump at Cap Cana, Dominican Republic
Trump Financial
Trump Philadelphia
Trump Dubai Tower, United Arab Emirates
Trump on the Ocean
Trump Tower, Batumi, Georgia
Trump Plaza Tower, Israel
GoTrump.com travel booking service
US Pro Golf Tour partnership
Sentient Jet partnership
Running Horse golf, Fresno
Trump animated series
Trump magazine
"Trump Tycoon" mobile app
Trump network
Trump Institute
Trump Steaks by Sharper Image
Trump Office for Staples chairs
Brand licensing in Brazil
To be sure, some of these businesses were merely licensed to use the Trump name. But still, this is a startling record of failure.
Trump also destroyed the league he wanted to go up against the NFL, the USFL. The sad story of how Trump destroyed the possibility of spring football is here.
It’s an oft-cited statistic that Donald Trump “has” 515 companies, but a number of those businesses are only connected to him in tangential ways (e.g., through licensing agreements) and aren’t owned or directly controlled by him. His fan club tries to balance this 515 figure against the number of bankruptcies, claiming that Trump is successful “99% of the time”.
It’s kinda sad and funny at the same time.
And make sure you read this article from The New Yorker:
NEXT: The phony “billionaire”, The Trump Foundation, Trump University, and how The Apprentice and Russian money paved the way for Trump’s “comeback”.