How long will it take for Donald Trump to be our chief con artist?
In recent weeks, the Time has published a series of detailed reports on Donald trumpthe financial affairs of, including a gigantic exposition of its tax records. the last installment is devoted to a single dark starry adventure – the Trump International Hotel & Tower, in Chicago – and, in some ways, this is the most revealing of all. With its publication days before the election, it brings back another reminder, both painful and comical, that Trump may well be the most successful con artist in American history.
To be sure, that’s a bold statement to make in a nation that has long specialized in the production of sharpies and mountebanks. In nominating Trump for the top spot, however, there are a number of unparalleled accomplishments to be highlighted. Unlike many crooks, he has managed to stay within the letter of the law – or, at least, he has not been the subject of any criminal prosecution. Second, like the last Time History makes it clear that he enlisted some of the country’s most astute financial minds to support his businesses. Third, and obviously, he turned the fiction that he is a remarkable businessman into an outrageous presidency, which will hopefully be limited to one term after the vote count.
Chicago’s story began almost twenty years ago, when Trump announced his intention to build a skyscraper on the decrepit Chicago site. Sun-Times Building, where Mike Royko and Ann Landers once wrote their columns. (What did Royko think of Trump? “I finally decided he was totally hateful when, in addition to his other flaws, he turned out to be a cheapo,” the columnist wrote in a 1991 article on Trump’s first divorce.) Trump initially claimed that the new building would be 150 stories high. After September 11, he brought it down to a modest ninety stories. In addition to an upscale hotel, the plan included luxury condos and retail outlets.
The main financier of the project was Deutsche Bank, which was trying to establish itself as a major player on Wall Street. Many American banks had been burned by their experiences with Trump in the 1990s, when two of his indebted properties filed for bankruptcy, leaving their creditors with heavy losses. Deutsche provided a $ 640 million construction loan, some of which was cut into pieces and sold to other banks, many of them foreign. Trump was then starring in “The Apprentice,” a premier reality TV show, and the memories were short. A large hedge fund manager, Fortress Investments, also participated in the transaction. According to Time, she made a loan of $ 130 million, part of which was sold to other private equity firms and hedge funds, including Dune Capital Management, a company co-founded by Steven Mnuchin, which would later become Trump’s Treasury Secretary.
Did Mnuchin or any of those other financial geniuses take the time to call out some of the bankers who had been left out in the 90s? the Time history does not tell. Either way, Trump’s new creditors quickly met a similar fate to their predecessors. In 2008, some of the loans on the Chicago project expired, but many condominiums were still not completed and the project fell far behind its financial forecast. Bankers got stuck with a debtor who couldn’t honor his payments and had no qualms about using his strained finances as leverage. Trump demanded an extension of the loans, which Deutsche refused. Then he sued the bank, accusing it of “abusive lending practices”. (He also sued Fortress.)
Like they say, if you owe the bank a hundred dollars, that’s your problem, but if you owe a million dollars, it’s the bank’s problem. Trump owed hundreds of millions, and he had played the game before. In the 1990s, Trump’s creditors, faced with the prospect of endless legal battles and possibly losing all of the money they loaned , have agreed to cancel huge portions of its loans. Deutsche and Fortress ultimately did the same. “Mr. Trump was released for around $ 270 million,” Time the story says. “It was the type of generous financial cut that few American businesses or individuals could hope to receive, especially without seeking bankruptcy protection.”
You can repeat it. According to Time story, Fortress was repaid forty-eight million dollars, or about one-sixth of what it had planned to receive after the interest payment. Deutsche’s business lending division also suffered a big loss. But, in a remarkable turnaround, another branch of the bank – the wealth management division – then loaned Trump hundreds of millions of additional dollars. These new loans went to the Chicago building; the Doral Golf Resort, in Miami; and the Trump International Hotel in Washington, DC, which Trump built on the site of the old post office building. “At the end of 2018, Mr. Trump and his companies owed the bank $ 330 million,” Time said.
The saga does not end there. In the 90s, according to another scoop in the TimeTrump exploited his huge losses to take a gargantuan tax write-off, which saw him pay virtually nothing in federal income taxes for the next decade. After the Chicago debacle, he again turned the situation to his advantage. Under tax laws, if someone forgives a loan you owe them, the IRS treats the amount as income and you have to pay tax on it. Unless you’re Trump. By exploiting other loopholes in the tax code and making up for losses from elsewhere in the Trump organization, he has “managed to avoid paying taxes on almost all of it.” Time the story says.
It’s a remarkable story, but not at all surprising when you consider its subject matter. After all, it was financier Houdini who rebounded from the wreckage of his early ’90s bust; the former owner of the shameless scam that was Trump University; the self-proclaimed billionaire who got other people to fund his Charitable organisation; the man whose chronic personal affairs as president have spread to such an extent that his resort town of Mar-a-Lago, Fla. once billed the US government three dollars for the water he was given served.
Didn’t you hear that last detail? He’s from David Fahrenthold, the Washington To post journalist who won a Pulitzer Prize in 2017 for his reporting on Trump’s unique philanthropic brand. In a report published On Tuesday, Fahrenthold revealed that since Trump came to power, his properties have billed the federal government at least $ 2.5 million for staging Trump events. This total includes seven thousand dollars for a 2017 dinner in Mar-a-Lago with Xi Jinping, the Chinese leader; six thousand dollars for flowers in Mar-a-Lago during a 2018 visit by Shinzo Abe, the former Prime Minister of Japan; and – yes – three dollars for water served at a press briefing with Trump and Abe at the same event. “The price was $ 3 each including service charge,” notes the Fahrenthold story. “Taxpayers had effectively paid Trump’s company to serve him water.”
Mike Royko would not have been surprised.