As The New York Times has unveiled Donald Trump’s taxes (or lack thereof) from the past decade-and-a-half, one story stands out. Trump, fresh off the triple failure of his Atlantic City casinos and deeply in debt, was rescued when TV producer Mark Burnett dusted off the jobless failure and propped him up as a supposed business genius on the NBC show The Apprentice. This unwarranted fame generated more money than Trump had ever made from his real estate deals: a sweet $427 million in direct payments from MGM and in sponsorships of everything from pizza to detergent.
Trump then took this injection of cash and spent it on high-end golf resorts and vacation properties—an investment that is extremely shaky under the best of circumstances. The financial reports from those clubs show just what might be expected: Trump is losing money in Scotland. He’s losing money in Florida. He’s even losing money at Mar-a-Lago.
But something even more peculiar has happened. As these properties have been consistently bleeding cash, Trump has been reporting that their worth is skyrocketing. Then he has used these ever increasing valuations to borrow still more money. And he borrowed that money from himself … or so he claims.
As author and podcaster Adam Davidson points out, this process has been going on for years. Trump reports a loss, inflates the value, and borrows money. Strangest of all, in many cases Trump reports that he sometimes fills every role in this little play: He’s the stockholder losing cash, he’s the property owner reporting a growing investment, he’s the borrower accepting a loan, and he’s the lender forking over the money. And in many years, he supposedly takes that money and invests it into the same property he just “borrowed” from.
Trump’s Turnberry golf property in Scotland is a particularly good example. Despite Trump’s attempts to inflate his revenue by having the Air Force stage at least 40 stopovers at his property, and despite relentless self-promotion both before and after Trump moved from The Apprentice to the White House, the Aberdeen resort has continued to lose millions each year.
At the same time, the tumbling price of North Sea oil has sparked a sell-off in the local real estate market and sent prices in the area tumbling. This combination of factors might have been expected to drop the listed value of Trump’s course through the floor. Instead, Trump continued to tack millions onto his appraisal of the club, even in years when he did little to improve the property. Then Trump loaned that “new” money to himself, year after year.
After that, something happens that almost seems to make sense: In many years, Trump spends that same money in the place he just borrowed it. So, for example, he declares that the value of the Turnberry resort has gone up by $2 million, loans himself $2 million, then reports that he invested that borrowed money back into the same course. The next year, Trump reports that the property’s value has gone up by even more, loans that amount to himself, reports almost all of that amount spent at the resort and … lather, rinse, repeat.
As Davidson point out, this seems the opposite of what someone would do if they were committing tax fraud. After all, constantly reporting an inflated value means that Trump’s assessment for property taxes was also increasing. Not even Donald Trump could always get away with filing one set of documents to show the value of his property was increasing, then filing another set to show that the value was plummeting (though Trump apparently did exactly this when valuing his father’s properties for inheritance tax).
So how does any of this make sense? It doesn’t. Not if the system actually worked as listed on paper. Trump is reporting that he is taking money from one pocket, then putting it back. And not even into a different investment. Trump would only be cycling the same money round and round unnecessarily, and he would be driving up the on-paper values of properties that were actually 18-hole money pits. If Trump is telling the truth about loaning himself the money, then spending it at the property, it makes no sense at all.
But if Trump was getting this money from someone else, then it does make sense. Because in that case, this becomes … a cover for money laundering. As Davidson notes: “These financials are clear: this is not a golf business, it's a money disappearing business.” Trump’s golf resorts aren’t making money. They’re not even designed to make money. They’re meant to lose money, and constructed so that they can make larger amounts of money vanish every year.
This isn’t the first time it’s been suggested that Trump is laundering money through his golf resorts. In February, the leader of the Scottish Green Party called on First Minister Nicola Sturgeon to investigate what was happening at Trump’s property. This came after a series of transactions in which Trump apparently paid out large sums of cash for additional property. The source of that cash remains unknown … but should not be unknowable.