Tomgram: Nomi Prins, How Trump Became Trump and What That Means for the Rest
of Us
By Nomi Prins
Posted on October 1, 2015, Printed on October 1, 2015
http://www.tomdispatch.com/blog/176051/
Sometimes when I look at the increasingly bizarre, never-ending campaign for
the White House and the staggering fundraising that goes with it, I think to
myself: if we were in Kabul, Afghanistan, we would know what this was. We
would recognize warlord politics. We would understand that (Bernie Sanders
aside) politicians running for the presidency now need patrons -- modern-day
Medicis who can fund the super PACs that are increasingly the heart and soul
of a process leading to the first $10 billion election. Those billionaire
funders are, of course, Americas warlords. In his book No Good Men Among
the Living: America, the Taliban, and the War Through Afghan Eyes, reporter
Anand Gopal offers a riveting up close and personal look at how the process
works far from home. One of the Afghans he follows is a remarkable woman
who, under the patronage of just such a warlord, finds herself a senator in
the Afghan Parliament.
In our system, the candidates now first test their electability not with
voters in primaries, but with a tiny coterie of the super-rich. In the case
of the Koch brothers, for instance, they literally audition for support. In
twenty-first-century America, these should undoubtedly be considered the
real primaries and what happens starting in Iowa and New Hampshire early
next year should be thought of as the secondaries. The increasingly fierce
contests for money are Americas new electoral reality, the one the Supreme
Court let loose on the land with its 2010 Citizens United decision that
freed the voice of money to overwhelm the many voices of this country. The
process of fundraising has only gained momentum since then and yet this new
form of electoral politics is a system still in formation, like molten lava
only now beginning to cool and settle into its future shape.
To give credit where its due, Donald Trump has kept that lava hot in ways
that, under other circumstances, would be amusing indeed. After all, hes
the definition of an American warlord -- and hes also running for the
presidency. Its an unexpected wrinkle in the coalescence of a genuinely
plutocratic electoral system. In other words, The Donald would like to send
himself and, as TomDispatch regular Nomi Prins points out today, his money
directly to the Oval Office in January 2017, while mocking those helpless
peons of the political class who need to turn to people like him to be in
the big time. Despite some public discussion of Trump's many bankruptcies,
Mr. Art of the Deal has had remarkably free sailing when it comes to what it
might mean to put a billionaire in the White House. Conflicts of interest?
Dont even think about it! Prins, author of All the Presidents' Bankers:
The Hidden Alliances That Drive American Power, shifts the focus to where it
should be -- on The Donalds finances and the conflicts that make the man
and would be part and parcel of any Trump presidency. Tom
Trumpocrisy
The Donalds Finances and the Art of Ignoring Conflicts and Contradictions
By Nomi Prins
The 2016 election campaign is certainly a billionaires playground when it
comes to establishment candidates like Hillary Clinton and Jeb Bush who
cater to mega-donors and use their money to try to rally party bases. The
only genuine exception to the rule this time around has been Bernie Sanders,
who has built a solid grassroots following and funding machine, while
shunning what he calls the billionaire class that fuels the super PACs.
Donald Trump, like Ross Perot back in the 1992 and 1996 elections, has
played quite a different trick on the money-saturated American political
system. He has removed the billionaire as middleman between citizen
plebeians and political elites, and created a true .00001% candidate,
because hes... well, a financial elite unto himself, however conveniently
posed as the countrys straight-talking everyman.
Despite his I-can-buy-but-cant-be-bought swagger, Trumps persona has been
carefully constructed to deflect even the most obvious questions of conflict
of interest that his wealth and deal-making history should bring up. He
claims that he would govern (or dictate) as he is, no apologies or bullshit.
But would he?
The billionaire-as-president is a new prospect for America. The only faintly
comparable situation in our history came before the Crash of 1929, when
President Calvin Coolidge, who famously declared that the business of
America is business, reappointed mogul Andrew Mellon as his treasury
secretary, just as President Warren Harding had done before him. A walking
conflict of interest, Mellon left Washington during Herbert Hoovers
administration to avoid Congressional scrutiny of his personal business
endeavors. He was later investigated by the Department of Justice for
falsifying tax information in his own business empire.
Trump is, by his own admission, a dealmaker who has, since the 1970s,
utilized self-promotion and his own growing celebrity to make money.
Nonetheless, he denies the importance of money itself. His
quasi-autobiography, The Art of the Deal, opens with this now-familiar tall
tale: I dont do it for the money. Ive got enough, much more than Ill
ever need. I do it to do it. Deals are my art form.
Today, he asserts that he is worth a cool $10 billion, having long been
cagey about just how much he has. That figure, too, may be more scam than
reality. Forbes pegs Trump's fortune at $4 billion in its 2015 top
billionaires list, where he places 405th in the world and 133rd in the U.S.
In his 92-page Federal Election Committee financial filing, which doesnt
require the disclosure of his total wealth, the value of his global
enterprises, assets, debts, and income sources are listed in ranges, rather
than exact figures. More than 20 items are characterized as worth over $50
million.
He has at least $1.4 billion in assets and $285 million in debt, if we use
just $50 million as a guesstimate on those items; $2.8 billion in assets and
$570 million in debt, if we pick the figure of $100 million instead. In
other words, we still dont know what hes worth. As with so much else, we
just have to take his word for it.
Consider the presidency as Donald Trumps ultimate deal. And dont think for
a second that if he entered the Oval Office his money and deal-making lust
and every conflict of interest that went with them wouldnt follow him
there.
He claims to be an open book -- the definition of the American success
story, as his campaign website puts it. He wants people to believe (as his
acolytes do) that hes just like us -- except for the hair -- only richer,
more successful, and (not to mince words) better. That narrative has, of
course, been carefully constructed for our consumption, which means, if he
succeeds, we are part of his chosen art form, his deal.
Though you might not know it from the incessant media coverage of his
candidacy or his P.T. Barnum-ish self-glorification, there are plenty of
pieces missing from his financial story that call into question both his
skill as a dealmaker and his business acumen. Though theres been much
discussion of how money from the Koch Brothers and other billionaire donors
might influence 2016s candidates, theres been little discussion of how
Trump might be influenced by the billionaire backing him: himself.
Celebrity Apprentice
The Trump phenomenon has delivered ratings to networks and, arguably, the
apolitical to their TV sets. Its probably sold a lot of cars, judging from
the commercials that went with the recent Republican debates. A record 24
million people watched the first one on Fox News. That event was, in fact,
such an obvious triumph for Fox that CNN upped the ante, expanding the
second debate to a full (some would say endless) three hours. As Trump
noted, I guess it was to sell commercials. CNN similarly shattered its
prior election debate records, averaging 23 million viewers.
All of this has been a boon for The Donald, who clearly has a remarkable
ability to glue cameras to him and use the media to his advantage, a skill
he honed starting with his first Manhattan deal in 1973. When Trump went on
ABCs This Week with George Stephanopoulos on August 23rd, he dispatched Jeb
Bush this way: We need a person with a lot of smarts, a lot of cunning, and
a lot of energy. And Jeb doesn't have that, while dissing Scott Walker as a
governor whose state is really in trouble. Walker just left the race. Jeb
continues to falter. Call it Trump magic.
The Donald has long perfected two proven strategies for winning: attack and
deflect. On both counts, he is a TV veteran. Appearing on NBCs Late Night
with David Letterman in 1987 to promote The Art of the Deal, his skill in
deflecting attention from aspects of his life that might otherwise diminish
his aura was already on full display. When Letterman probed the particulars
of Trumps personal wealth multiple times, he dodged effectively, insisting,
Youll never get it out of me. He also deflected his hosts question about
the degree to which his fathers money contributed to his success. He was a
solid guy and a bright guy, I learned a lot was about all Letterman could
dig out of him on Fred Trump.
And heres an irony: for all his edginess, Trumps savvy in avoiding what
might embarrass or confine him makes him much more of a politician that hed
like us to believe. His father, however, provided Trump with far more
guidance and help than that self-made man would care for us to realize.
So lets start with a little tour of his celebrity apprenticeship.
Fred Trump was born in Queens, New York, in 1905. His own father had
emigrated to the United States from Sweden in 1885. He would convert a
business in low-income housing into a $300 million fortune.
A year after leaving high school, Fred built his first home in Woodhaven,
Queens. It cost a little less than $5,000 and he sold it for $7,500, his
son proudly wrote years later.
By 1929, Fred was building larger homes. When the Depression hit, he bought
a bankruptcy mortgage-service company, which he sold for a profit a year
later. In 1934, he returned to building lower-priced homes in the depressed
Flatbush area of Brooklyn. During the next dozen years, he would build 2,500
of them in Brooklyn and Queens.
Trump and his father had an "a relationship that was almost businesslike,
The Donald would later write and from Fred he would, hes testified, learn
toughness, though I also realized that if I ever wanted to be known as more
than Fred Trumps son, I was eventually going to have to go out and make my
own mark.
Think, for instance, of George W. Bushs urge to surpass his fathers record
of political power -- and war making. But dont imagine for a moment that
Trump struck out on his own any more than the young Bush did. Trump recounts
his first major deal as Swifton Village, a foreclosed apartment complex in
Cincinnati that he said he bought with his father in 1969, while still in
college. (Cincinnati Magazine claims the purchase was Freds exclusively.)
The price was $6 million and in 1972, they resold it for $12 million,
according to Trump (and a far more modest $6.75 million according to other
estimates).
But Cincinnati was never The Donalds dream. He wanted Manhattan from the
beginning. His first deal there started in 1973 with a desire to purchase
the old Penn Central rail yards at 34th Street on the West side of the
island.
At that time, New York was a complete financial mess. That summer, Trump
came across a newspaper story about the Penn Central Railroad bankruptcy
filing. Penn Central trustees had hired a small LA-based investment
management company led by Victor Palmieri to sell its assets, including its
long abandoned yards in the West thirties and sixties. Ever the con artist,
Trump recalled, I couldnt sell him on my experience or my accomplishments,
so instead I sold him on my energy and my enthusiasm.
Trump initially proposed building middle-income housing on the site with
government financing. When the city became mired in financial problems and
money for public housing dried up, he switched to Plan B and began
promoting the site as ideal for a convention center.
Trump still did nothing without his fathers involvement. As their
development firm had no official name, they decided to call it the Trump
Organization, which covered them both and, they hoped, had a certain
gravitas. Over the next several years, Trump solicited support from New York
Mayor Abe Beame, who belonged to the same club as his father and to whom his
father and he gave money, as he later wrote, like all developers. Palmieri
would give Trump his virgin credibility with the press as his choice for
developer, swearing to Barrons that hes larger than life.
On July 29, 1974, the New York Times featured a front-page story on how the
Trump Organization secured options to buy the two waterfront sites from Penn
Central for $62 million. However, it was Mayor Ed Koch who, in 1978, gave
Trumps pet project for a future convention center at West 34th Street his
official stamp of approval by agreeing to buy the site. That site would
eventually become the Javits Convention Center.
It was the symbolic, if not financial break The Donald had been waiting for.
As for the West 60th street site, due to numerous problems, he let the
option expire in 1979. In a sense, Donald Trump would never look back, but
he would have to look down often enough.
Trumps Bankruptcies
As Carly Fiorina made crystal clear to almost 23 million Americans in the
second Republican debate (the topic had been broached in the first one),
Trumps companies have officially gone bankrupt four times since 1991, or as
Trump spun it, I used the law four times and made a tremendous thing. Im
in business. I did a very good job.
While thats a small number of bankruptcies relative to the hundreds of
companies that comprise his empire, they represented a fair amount of debt.
There was the Trump Taj Mahal (with $1 billion in debt) in Atlantic City in
1991 and the Trump Plaza Hotel in Atlantic City in 1992 (with $550 million
in debt). Trump Hotels and Casino Resorts, the company created from the
post-bankruptcy ashes of the Taj Mahal, the Trump Plaza, and also Trump
Marina in Atlantic City filed for Chapter 11 bankruptcy protection (with
$1.8 billion of debt) in 2004. Bankruptcy number four, Trump Entertainment
Resorts (the post-bankruptcy company created to take over the remains of
Trump Hotels and Casino Resorts) filed for Chapter 11 bankruptcy protection
(with $1.74 billion of debt) in February 2009.
While Trump owned 28% of its stock, as he told Bloomberg News upon resigning
from the board four days before the $53 million bond payment that forced it
into bankruptcy was due, I have nothing to do with it. Im not in it. Im
not on the board.
He continues to argue that the Atlantic City bankruptcies werent his fault,
but attributable to the casino environment of that moment. Though there is
some truth to that, he glosses over his method of creating new companies to
purchase the bankrupt ones, after shedding their debts, and his convenient
exit timing from management posts to shed blame.
While four of his companies officially went down for the count, he had many
companies that didnt and, as he has repeatedly said, he himself never
declared personal bankruptcy (so his credit score likely remains in fine
shape). Keep in mind, though, that, hard as it is to find consistent basic
information about Trumps various disasters, the count of his unofficial
bankruptcies would undoubtedly run significantly higher. After all, a
number of his companies effectively went bankrupt by closing down or being
bought out at bargain basement prices.
In 1989, for instance, Trump purchased the Eastern Air Shuttle, connecting
New York, Boston, and Washington, D.C. with hourly flights, for roughly $365
million. But the Trump name didnt carry the day and passengers didnt pony
up for the lines fancier seats and gold lavatory fixtures. Instead, in 1990
Trump defaulted on the loans he had taken out to finance the company, and
its ownership reverted to its creditors, led by Citibank. The Trump Shuttle
was then merged into a new corporation, Shuttle Inc., and in April 1992, its
routes were assumed by USAir Shuttle, which is one way the rich make
problems disappear.
In April 2006, at a Trump Tower gala, Trumps son Donald, Jr. promised that
Trump Mortgage would become the nation's number one home-loan lender. In a
CNBC interview shortly afterwards, Trump said, Who knows about financing
better than I do? Eight months later, the company closed down amid the
crashing housing market and negative publicity over an unfortunate hiring
choice. Trumps CEO, E.J. Ridings, had lied on his résumé. His previously
advertised top spot at one of Wall Streets most prestigious banks
turned out to have been as a lowly broker -- for one week. As Trump
continually reminds us, he only has the best people work for him.
Then there was Trump University, active from 2005 to 2010, where, for
$25,000-$35,000, students could assumedly learn how to become real-estate
gods like Trump. According to related lawsuits, they were then enticed to
take out credit cards under phony business names to help pay for the
privilege, and to inflate their income by projecting profits from
non-existing businesses.
Earlier this month, New York Attorney General Eric Schneiderman told the New
York Daily News that approximately 600 former students have filed suit
against the university in Manhattan Supreme Court. Similar suits are
pending in California. Schneiderman claimed Trump banked $5 million
personally from the scam. Trump had also ignored 2005 warnings not to use
the word university in the name.
Of course, if ordinary Americans declare bankruptcy due to unforeseen or
difficult circumstances, they are regularly stigmatized as lazy deadbeats.
The Trumps of our world, however, being rich enough to launch corporate
bankruptcy protection filings, are seen as savvy dealers. In this sense,
Trump couldnt have been savvier, since hes survived one potential
financial catastrophe after another. Unfortunately, his experiences have
absolutely no applicability to ordinary Americans, even though, as David
Dayen wrote at the Intercept, Everyone would have benefited from relieving
primary mortgage debt, the absence of which led to at least six million
foreclosures.
Trump International
Its evident from Trumps recent comments that his foreign policy ideas
havent evolved much since he last seriously thought about running for
president in 2011 when he wrote the first version of a campaign book, Time
to Get Tough (updated for his 2016 bid).
Then, too, he talked about getting China to stop playing currency
charades, while declaring his great respect for the people of China and
blaming our leaders and representatives for making terrible deals with
their leaders that have cost American jobs. What Trump didnt discuss then,
and doesnt discuss now, is how U.S. companies, his own included, produce
and sell in China because they make more money doing that. Though he
regularly complains that we don't manufacture anything here anymore, neither
does he bother to explain his own patriotism shortfall, since he and his
daughter, Ivanka, have clothing lines made in China (and Mexico, that land
of rapists, and Bangladesh, a country continuously in violation of human
rights for garment workers).
Absent any sense of irony, he has blamed Chinese currency manipulation for
making him set up shop in China and claims China is killing us. This,
though the Chinese stock markets have recently been hammered, the Yuan is
weakening, and the countrys growth is slowing, hardly signs of an imminent
threat. Its a great Trumpian combo, though: anti-China anger plays well
with the xenophobic crowd, while a weaker Yuan keeps costs down on Trumps
clothing business. A deal, after all, is a deal.
According to the Trump Organization website and his Federal Election
Commission financial disclosures, he has operations practically worldwide,
but notably not in Russia. Yet Trump has had his eye on doing business
there for a long time. As far back as 1987, when it was still the Soviet
Union, he wanted to erect a Trump Tower in Moscows Red Square. In 2013, he
was still talking about the possibility in Vladimir Putins Russia. Perhaps
because of his ongoing business interests (or their mutual maverick styles),
Trump, unlike his Republican presidential opponents for whom the Russian
president is little short of the devil incarnate, regularly claims that he
will have a great relationship with Putin.
As for Trumps Mexican border wall and the fantasy of getting the Mexican
government to pay for it, Trump has made hay with the immigration issue.
You wouldnt know, listening to him, that the number of illegal immigrants
has dropped significantly since the financial crisis. On the Late Show
recently, Trump doubled down on his wall, comparing it to the Great Wall of
China and suggesting that we can have a great and beautiful wall, we'll
have our border, and guess what, nobody comes in unless they have their
papers." This from the man who has a borderless record of outsourcing jobs
and tax revenues to Mexico and elsewhere.
All of this adds up to a vast set of potential conflicts of interest and
downright deception should Donald Trump ever set foot in the White House, a
subject that is at the heart of what might be called Trumpocrisy in the
present campaign, but seldom part of the debate by or about The Donald
himself.
The Polls
For now, Trump remains the clear GOP frontrunner in terms of composite
polling results. His polling success has been predicated since announcing
his candidacy on a cocktail of bravado, media exposure, tactical hits on
opponents as if they were competitors for one of his casino deals, and the
wholesale avoidance of any serious discussion of the financial baggage he
brings with him into the election season. Can there be any question that,
for the man who wanted to leave his fathers helping hand behind, bagging
the Oval Office would be the ultimate step in outshining Fred Trumps
legacy? Its less clear what the rest of us get out of it.
Trump assures us that he wouldnt let his business dealings interfere with
his politics, but is he really prepared to step away from all Trump
Organization matters globally? Does anyone believe that his deal-making
instincts will die in the Oval Office? Or would building Trump Tower in
Moscow be the touchstone for any future conversation with Putin about
Ukraine and Syria? Would his acts be indicative of what happens -- consider
Bill Clinton netting high speaking fees from countries in which
then-Secretary of State Hillary Clinton was conducting foreign policy --
when you fuse public office and private power? In historical terms, it would
be as if a Morgan or a Rockefeller were running the country and his private
business affairs at the same time, creating the quintessential conflict of
public and private interest.
Unfortunately, we are used to politicians saying whatever they think they
need to say to be elected president, and falling way short of their campaign
promises on the job. Even scarier would be the notion of selling America to
the craftiest bidder. The election may be more than a year away, but isnt
it time to dig beneath the carefully crafted persona that is Trump and
unearth the person and the full spectrum of his business dealings? To see
the real Donald Trump is to plunge into all the conflicts of interest he
denies, the financial tricks he dispenses, the crucial details he
obfuscates, and the flimflam he offers up day in, day out.
Nomi Prins, a TomDispatch regular, is the author of six books, a speaker,
and a distinguished senior fellow at the non-partisan public policy
institute Demos. Her most recent book is All the Presidents' Bankers: The
Hidden Alliances That Drive American Power (Nation Books). She is a former
Wall Street executive.
Follow TomDispatch on Twitter and join us on Facebook. Check out the newest
Dispatch Book, Nick Turses Tomorrows Battlefield: U.S. Proxy Wars and
Secret Ops in Africa, and Tom Engelhardt's latest book, Shadow Government:
Surveillance, Secret Wars, and a Global Security State in a
Single-Superpower World.
Copyright 2015 Nomi Prins
© 2015 TomDispatch. All rights reserved.
View this story online at: http://www.tomdispatch.com/blog/176051
Tomgram: Nomi Prins, How Trump Became Trump and What That Means for the Rest
of Us
By Nomi Prins
Posted on October 1, 2015, Printed on October 1, 2015
http://www.tomdispatch.com/blog/176051/
Sometimes when I look at the increasingly bizarre, never-ending campaign for
the White House and the staggering fundraising that goes with it, I think to
myself: if we were in Kabul, Afghanistan, we would know what this was. We
would recognize warlord politics. We would understand that (Bernie Sanders
aside) politicians running for the presidency now need patrons -- modern-day
Medicis who can fund the super PACs that are increasingly the heart and soul
of a process leading to the first $10 billion election. Those billionaire
funders are, of course, Americas warlords. In his book No Good Men Among
the Living: America, the Taliban, and the War Through Afghan Eyes, reporter
Anand Gopal offers a riveting up close and personal look at how the process
works far from home. One of the Afghans he follows is a remarkable woman
who, under the patronage of just such a warlord, finds herself a senator in
the Afghan Parliament.
In our system, the candidates now first test their electability not with
voters in primaries, but with a tiny coterie of the super-rich. In the case
of the Koch brothers, for instance, they literally audition for support. In
twenty-first-century America, these should undoubtedly be considered the
real primaries and what happens starting in Iowa and New Hampshire early
next year should be thought of as the secondaries. The increasingly fierce
contests for money are Americas new electoral reality, the one the Supreme
Court let loose on the land with its 2010 Citizens United decision that
freed the voice of money to overwhelm the many voices of this country. The
process of fundraising has only gained momentum since then and yet this new
form of electoral politics is a system still in formation, like molten lava
only now beginning to cool and settle into its future shape.
To give credit where its due, Donald Trump has kept that lava hot in ways
that, under other circumstances, would be amusing indeed. After all, hes
the definition of an American warlord -- and hes also running for the
presidency. Its an unexpected wrinkle in the coalescence of a genuinely
plutocratic electoral system. In other words, The Donald would like to send
himself and, as TomDispatch regular Nomi Prins points out today, his money
directly to the Oval Office in January 2017, while mocking those helpless
peons of the political class who need to turn to people like him to be in
the big time. Despite some public discussion of Trump's many bankruptcies,
Mr. Art of the Deal has had remarkably free sailing when it comes to what it
might mean to put a billionaire in the White House. Conflicts of interest?
Dont even think about it! Prins, author of All the Presidents' Bankers: The
Hidden Alliances That Drive American Power, shifts the focus to where it
should be -- on The Donalds finances and the conflicts that make the man
and would be part and parcel of any Trump presidency. Tom
Trumpocrisy
The Donalds Finances and the Art of Ignoring Conflicts and Contradictions
By Nomi Prins
The 2016 election campaign is certainly a billionaires playground when it
comes to establishment candidates like Hillary Clinton and Jeb Bush who
cater to mega-donors and use their money to try to rally party bases. The
only genuine exception to the rule this time around has been Bernie Sanders,
who has built a solid grassroots following and funding machine, while
shunning what he calls the billionaire class that fuels the super PACs.
Donald Trump, like Ross Perot back in the 1992 and 1996 elections, has
played quite a different trick on the money-saturated American political
system. He has removed the billionaire as middleman between citizen
plebeians and political elites, and created a true .00001% candidate,
because hes... well, a financial elite unto himself, however conveniently
posed as the countrys straight-talking everyman.
Despite his I-can-buy-but-cant-be-bought swagger, Trumps persona has been
carefully constructed to deflect even the most obvious questions of conflict
of interest that his wealth and deal-making history should bring up. He
claims that he would govern (or dictate) as he is, no apologies or bullshit.
But would he?
The billionaire-as-president is a new prospect for America. The only faintly
comparable situation in our history came before the Crash of 1929, when
President Calvin Coolidge, who famously declared that the business of
America is business, reappointed mogul Andrew Mellon as his treasury
secretary, just as President Warren Harding had done before him. A walking
conflict of interest, Mellon left Washington during Herbert Hoovers
administration to avoid Congressional scrutiny of his personal business
endeavors. He was later investigated by the Department of Justice for
falsifying tax information in his own business empire.
Trump is, by his own admission, a dealmaker who has, since the 1970s,
utilized self-promotion and his own growing celebrity to make money.
Nonetheless, he denies the importance of money itself. His
quasi-autobiography, The Art of the Deal, opens with this now-familiar tall
tale: I dont do it for the money. Ive got enough, much more than Ill
ever need. I do it to do it. Deals are my art form.
Today, he asserts that he is worth a cool $10 billion, having long been
cagey about just how much he has. That figure, too, may be more scam than
reality. http://www.forbes.com/profile/donald-trump/Forbes pegs Trump's
fortune at $4 billion in its 2015 top billionaires list, where he places
405th in the world and 133rd in the U.S. In his 92-page Federal Election
Committee financial filing, which doesnt require the disclosure of his
total wealth, the value of his global enterprises, assets, debts, and income
sources are listed in ranges, rather than exact figures. More than 20 items
are characterized as worth over $50 million.
He has at least $1.4 billion in assets and $285 million in debt, if we use
just $50 million as a guesstimate on those items; $2.8 billion in assets and
$570 million in debt, if we pick the figure of $100 million instead. In
other words, we still dont know what hes worth. As with so much else, we
just have to take his word for it.
Consider the presidency as Donald Trumps ultimate deal. And dont think for
a second that if he entered the Oval Office his money and deal-making lust
and every conflict of interest that went with them wouldnt follow him
there.
He claims to be an open book -- the definition of the American success
story, as his campaign website puts it. He wants people to believe (as his
acolytes do) that hes just like us -- except for the hair -- only richer,
more successful, and (not to mince words) better. That narrative has, of
course, been carefully constructed for our consumption, which means, if he
succeeds, we are part of his chosen art form, his deal.
Though you might not know it from the incessant media coverage of his
candidacy or his P.T. Barnum-ish self-glorification, there are plenty of
pieces missing from his financial story that call into question both his
skill as a dealmaker and his business acumen. Though theres been much
discussion of how money from the Koch Brothers and other billionaire donors
might influence 2016s candidates, theres been little discussion of how
Trump might be influenced by the billionaire backing him: himself.
Celebrity Apprentice
The Trump phenomenon has delivered ratings to networks and, arguably, the
apolitical to their TV sets. Its probably sold a lot of cars, judging from
the commercials that went with the recent Republican debates. A record 24
million people watched the first one on Fox News. That event was, in fact,
such an obvious triumph for Fox that CNN upped the ante, expanding the
second debate to a full (some would say endless) three hours. As Trump
noted, I guess it was to sell commercials. CNN similarly shattered its
prior election debate records, averaging 23 million viewers.
All of this has been a boon for The Donald, who clearly has a remarkable
ability to glue cameras to him and use the media to his advantage, a skill
he honed starting with his first Manhattan deal in 1973. When Trump went on
ABCs This Week with George Stephanopoulos on August 23rd, he dispatched Jeb
Bush this way: We need a person with a lot of smarts, a lot of cunning, and
a lot of energy. And Jeb doesn't have that, while dissing Scott Walker as a
governor whose state is really in trouble. Walker just left the race. Jeb
continues to falter. Call it Trump magic.
The Donald has long perfected two proven strategies for winning: attack and
deflect. On both counts, he is a TV veteran. Appearing on NBCs Late Night
with David Letterman in 1987 to promote The Art of the Deal, his skill in
deflecting attention from aspects of his life that might otherwise diminish
his aura was already on full display. When Letterman probed the particulars
of Trumps personal wealth multiple times, he dodged effectively, insisting,
Youll never get it out of me. He also deflected his hosts question about
the degree to which his fathers money contributed to his success. He was a
solid guy and a bright guy, I learned a lot was about all Letterman could
dig out of him on Fred Trump.
And heres an irony: for all his edginess, Trumps savvy in avoiding what
might embarrass or confine him makes him much more of a politician that hed
like us to believe. His father, however, provided Trump with far more
guidance and help than that self-made man would care for us to realize. So
lets start with a little tour of his celebrity apprenticeship.
Fred Trump was born in Queens, New York, in 1905. His own father had
emigrated to the United States from Sweden in 1885. He would convert a
business in low-income housing into a $300 million fortune.
A year after leaving high school, Fred built his first home in Woodhaven,
Queens. It cost a little less than $5,000 and he sold it for $7,500, his
son proudly wrote years later.
By 1929, Fred was building larger homes. When the Depression hit, he bought
a bankruptcy mortgage-service company, which he sold for a profit a year
later. In 1934, he returned to building lower-priced homes in the depressed
Flatbush area of Brooklyn. During the next dozen years, he would build 2,500
of them in Brooklyn and Queens.
Trump and his father had an "a relationship that was almost businesslike,
The Donald would later write and from Fred he would, hes
testifiedhttps://books.google.com/books?id=Ye6e_VxM00kC&q=5000 -
v=snippet&q=my%20own%20mark&f=false, learn toughness, though I also
realized that if I ever wanted to be known as more than Fred Trumps son, I
was eventually going to have to go out and make my own mark.
Think, for instance, of George W. Bushs urge to surpass his fathers record
of political power -- and war making. But dont imagine for a moment that
Trump struck out on his own any more than the young Bush did. Trump recounts
his first major deal as Swifton Village, a foreclosed apartment complex in
Cincinnati that he said he
boughthttps://books.google.com/books?id=kR8DAAAAMBAJ&pg=PA96&lpg=PA96&dq=fre
d+trump+buys+swifton+village&source=bl&ots=Wc_HaDpF_R&sig=-iD0DMjAC80cFBTJjy
SMIkBzVgU&hl=en&sa=X&ved=0CEMQ6AEwBmoVChMIqPacod-VyAIVkyqICh04lQyH -
v=onepage&q=fred%20&f=false with his father in 1969, while still in college.
(Cincinnati Magazine claims the purchase was Freds exclusively.) The price
was $6 million and in 1972, they resold it for $12 million, according to
Trump (and a far more modest $6.75 million according to other estimates).
http://www.amazon.com/dp/1568584792/ref=nosim/?tag=tomdispatch-20
http://www.amazon.com/dp/1568584792/ref=nosim/?tag=tomdispatch-20But
Cincinnati was never The Donalds dream. He wanted Manhattan from the
beginning. His first deal there started in 1973 with a desire to purchase
the old Penn Central rail yards at 34th Street on the West side of the
island.
At that time, New York was a complete financial mess. That summer, Trump
came across a newspaper story about the Penn Central Railroad bankruptcy
filing. Penn Central trustees had hired a small LA-based investment
management company led by Victor Palmieri to sell its assets, including its
long abandoned yards in the West thirties and sixties. Ever the con artist,
Trump recalled, I couldnt sell him on my experience or my accomplishments,
so instead I sold him on my energy and my enthusiasm.
Trump initially proposed building middle-income housing on the site with
government financing. When the city became mired in financial problems and
money for public housing dried up, he switched to Plan B and began
promoting the site as ideal for a convention center.
Trump still did nothing without his fathers involvement. As their
development firm had no official name, they decided to call it the Trump
Organization, which covered them both and, they hoped, had a certain
gravitas. Over the next several years, Trump solicited support from New York
Mayor Abe Beame, who belonged to the same club as his father and to whom his
father and he gave money, as he later wrote, like all developers. Palmieri
would give Trump his virgin credibility with the press as his choice for
developer, swearing to Barrons that hes larger than life.
On July 29, 1974, the New York Times featured a front-page story on how the
Trump Organization secured options to buy the two waterfront sites from Penn
Central for $62 million. However, it was Mayor Ed Koch who, in 1978, gave
Trumps pet project for a future convention center at West 34th Street his
official stamp of approval by agreeing to buy the site. That site would
eventually become the Javits Convention Center.
It was the symbolic, if not financial break The Donald had been waiting for.
As for the West 60th street site, due to numerous problems, he let the
option expire in 1979. In a sense, Donald Trump would never look back, but
he would have to look down often enough.
Trumps Bankruptcies
As Carly Fiorina made crystal clear to almost 23 million Americans in the
second Republican debate (the topic had been broached in the first one),
Trumps companies have officially gone bankrupt four times since 1991, or as
Trump spun it, I used the law four times and made a tremendous thing. Im
in business. I did a very good job.
While thats a small number of bankruptcies relative to the hundreds of
companies that comprise his empire, they represented a fair amount of debt.
There was the Trump Taj Mahal (with $1 billion in debt) in Atlantic City in
1991 and the Trump Plaza Hotel in Atlantic City in 1992 (with $550 million
in debt). Trump Hotels and Casino Resorts, the company created from the
post-bankruptcy ashes of the Taj Mahal, the Trump Plaza, and also Trump
Marina in Atlantic City filed for Chapter 11 bankruptcy protection (with
$1.8 billion of debt) in 2004. Bankruptcy number four, Trump Entertainment
Resorts (the post-bankruptcy company created to take over the remains of
Trump Hotels and Casino Resorts) filed for Chapter 11 bankruptcy protection
(with $1.74 billion of debt) in February 2009.
While Trump owned 28% of its stock, as he told Bloomberg News upon resigning
from the board four days before the $53 million bond payment that forced it
into bankruptcy was due, I have nothing to do with it. Im not in it. Im
not on the board.
He continues to argue that the Atlantic City bankruptcies werent his fault,
but attributable to the casino environment of that moment. Though there is
some truth to that, he glosses over his method of creating new companies to
purchase the bankrupt ones, after shedding their debts, and his convenient
exit timing from management posts to shed blame.
While four of his companies officially went down for the count, he had many
companies that didnt and, as he has repeatedly said, he himself never
declared personal bankruptcy (so his credit score likely remains in fine
shape). Keep in mind, though, that, hard as it is to find consistent basic
information about Trumps various disasters, the count of his unofficial
bankruptcies would undoubtedly run significantly higher. After all, a number
of his companies effectively went bankrupt by closing down or being bought
out at bargain basement prices.
In 1989, for instance, Trump purchased the Eastern Air Shuttle, connecting
New York, Boston, and Washington, D.C. with hourly flights, for roughly $365
million. But the Trump name didnt carry the day and passengers didnt pony
up for the lines fancier seats and gold lavatory fixtures. Instead, in 1990
Trump defaulted on the loans he had taken out to finance the company, and
its ownership reverted to its creditors, led by Citibank. The Trump Shuttle
was then merged into a new corporation, Shuttle Inc., and in April 1992, its
routes were assumed by USAir Shuttle, which is one way the rich make
problems disappear.
In April 2006, at a Trump Tower gala, Trumps son Donald, Jr. promised that
Trump Mortgage would become the nation's number one home-loan lender. In a
CNBC interview shortly afterwards, Trump said, Who knows about financing
better than I do? Eight months later, the company closed down amid the
crashing housing market and negative publicity over an unfortunate hiring
choice. Trumps CEO, E.J. Ridings, had lied on his résumé. His previously
advertised top spot at one of Wall Streets most prestigious banks
turned out to have been as a lowly broker -- for one week. As Trump
continually reminds us, he only has the best people work for him.
Then there was Trump University, active from 2005 to 2010, where, for
$25,000-$35,000, students could assumedly learn how to become real-estate
gods like Trump. According to related lawsuits, they were then enticed to
take out credit cards under phony business names to help pay for the
privilege, and to inflate their income by projecting profits from
non-existing businesses.
Earlier this month, New York Attorney General Eric Schneiderman told the New
York Daily News that approximately 600 former students have filed suit
against the university in Manhattan Supreme Court. Similar suits are
pending in California. Schneiderman claimed Trump banked $5 million
personally from the scam. Trump had also ignored 2005 warnings not to use
the word university in the name.
Of course, if ordinary Americans declare bankruptcy due to unforeseen or
difficult circumstances, they are regularly stigmatized as lazy deadbeats.
The Trumps of our world, however, being rich enough to launch corporate
bankruptcy protection filings, are seen as savvy dealers. In this sense,
Trump couldnt have been savvier, since hes survived one potential
financial catastrophe after another. Unfortunately, his experiences have
absolutely no applicability to ordinary Americans, even though, as David
Dayen wrote at the Intercept, Everyone would have benefited from relieving
primary mortgage debt, the absence of which led to at least six million
foreclosures.
Trump International
Its evident from Trumps recent comments that his foreign policy ideas
havent evolved much since he last seriously thought about running for
president in 2011 when he wrote the first version of a campaign book, Time
to Get Tough (updated for his 2016 bid).
Then, too, he talked about getting China to stop playing currency
charades, while declaring his great respect for the people of China and
blaming our leaders and representatives for making terrible deals with
their leaders that have cost American jobs. What Trump didnt discuss then,
and doesnt discuss now, is how U.S. companies, his own included, produce
and sell in China because they make more money doing that. Though he
regularly complains that we don't manufacture anything here anymore, neither
does he bother to explain his own patriotism shortfall, since he and his
daughter, Ivanka, have clothing lines made in China (and Mexico, that land
of rapists, and Bangladesh, a country continuously in violation of human
rights for garment workers).
Absent any sense of irony, he has blamed Chinese currency manipulation for
making him set up shop in China and claims China is killing us. This,
though the Chinese stock markets have recently been hammered, the Yuan is
weakening, and the countrys growth is slowing, hardly signs of an imminent
threat. Its a great Trumpian combo, though: anti-China anger plays well
with the xenophobic crowd, while a weaker Yuan keeps costs down on Trumps
clothing business. A deal, after all, is a deal.
According to the Trump Organization website and his Federal Election
Commission financial disclosures, he has operations practically worldwide,
but notably not in Russia. Yet Trump has had his eye on doing business there
for a long time. As far back as 1987, when it was still the Soviet Union, he
wanted to erect a Trump Tower in Moscows Red Square. In 2013, he was still
talking about the possibility in Vladimir Putins Russia. Perhaps because of
his ongoing business interests (or their mutual maverick styles), Trump,
unlike his Republican presidential opponents for whom the Russian president
is little short of the devil incarnate, regularly claims that he will have a
great relationship with Putin.
As for Trumps Mexican border wall and the fantasy of getting the Mexican
government to pay for it, Trump has made hay with the immigration issue. You
wouldnt know, listening to him, that the number of illegal immigrants has
dropped significantly since the financial crisis. On the Late Show recently,
Trump doubled down on his wall, comparing it to the Great Wall of China and
suggesting that we can have a great and beautiful wall, we'll have our
border, and guess what, nobody comes in unless they have their papers." This
from the man who has a borderless record of outsourcing jobs and tax
revenues to Mexico and elsewhere.
All of this adds up to a vast set of potential conflicts of interest and
downright deception should Donald Trump ever set foot in the White House, a
subject that is at the heart of what might be called Trumpocrisy in the
present campaign, but seldom part of the debate by or about The Donald
himself.
The Polls
For now, Trump remains the clear GOP frontrunner in terms of composite
polling results. His polling success has been predicated since announcing
his candidacy on a cocktail of bravado, media exposure, tactical hits on
opponents as if they were competitors for one of his casino deals, and the
wholesale avoidance of any serious discussion of the financial baggage he
brings with him into the election season. Can there be any question that,
for the man who wanted to leave his fathers helping hand behind, bagging
the Oval Office would be the ultimate step in outshining Fred Trumps
legacy? Its less clear what the rest of us get out of it.
Trump assures us that he wouldnt let his business dealings interfere with
his politics, but is he really prepared to step away from all Trump
Organization matters globally? Does anyone believe that his deal-making
instincts will die in the Oval Office? Or would building Trump Tower in
Moscow be the touchstone for any future conversation with Putin about
Ukraine and Syria? Would his acts be indicative of what happens -- consider
Bill Clinton netting high speaking fees from countries in which
then-Secretary of State Hillary Clinton was conducting foreign policy --
when you fuse public office and private power? In historical terms, it would
be as if a Morgan or a Rockefeller were running the country and his private
business affairs at the same time, creating the quintessential conflict of
public and private interest.
Unfortunately, we are used to politicians saying whatever they think they
need to say to be elected president, and falling way short of their campaign
promises on the job. Even scarier would be the notion of selling America to
the craftiest bidder. The election may be more than a year away, but isnt
it time to dig beneath the carefully crafted persona that is Trump and
unearth the person and the full spectrum of his business dealings? To see
the real Donald Trump is to plunge into all the conflicts of interest he
denies, the financial tricks he dispenses, the crucial details he
obfuscates, and the flimflam he offers up day in, day out.
Nomi Prins, a TomDispatch regular, is the author of six books, a speaker,
and a distinguished senior fellow at the non-partisan public policy
institute Demos. Her most recent book is All the Presidents' Bankers: The
Hidden Alliances That Drive American Power (Nation Books). She is a former
Wall Street executive.
Follow TomDispatch on Twitter and join us on Facebook. Check out the newest
Dispatch Book, Nick Turses Tomorrows Battlefield: U.S. Proxy Wars and
Secret Ops in Africa, and Tom Engelhardt's latest book, Shadow Government:
Surveillance, Secret Wars, and a Global Security State in a
Single-Superpower World.
Copyright 2015 Nomi Prins
© 2015 TomDispatch. All rights reserved.
View this story online at: http://www.tomdispatch.com/blog/176051