Donald Trump, destroyer of fortunes

A couple of New York Times reporters who have tracked Donald Trump’s financial shenanigans all the way back to the original story in their paper regarding his supposed real estate acumen — this appeared in 1973, and featured the claim that he finished first in his class at the Wharton business school — have just published a book that details how Trump’s financial career has been an episodic series of disasters. These ultimately illustrate the dictum that if you owe a bank a million dollars you have a problem, but if you owe it $100 million it has a problem:

Two factors complicated the situation [in the early 1990s, when Trump’s businesses were on the verge of going under]. Trump had cross-collateralized some of the loans, using the same assets to back more than one of them. Also, the banks had issued him with some nine hundred million dollars in credit based solely on his personal guarantee. [Ed.: LOL] If the banks had called their loans, “assets would have to be unloaded at fire sale prices, and they would all be fighting for a place in line to collect,” Buettner and Craig write. Rather than pushing Trump under, the banks agreed to keep him afloat in the hope that his businesses would be worth more as going concerns. They suspended some of his debt payments, issued a new line of credit to keep the businesses operating, and gave Trump a personal allowance of four hundred and fifty thousand dollars a month.

As Trump’s financial crisis dragged on, he was eventually obliged to relinquish the Plaza Hotel, the airline shuttle, his personal yacht, and half of his ownership stakes in the Taj Mahal, Castle, and Plaza casinos, which had entered bankruptcy. But these settlements left him in effective control of the Atlantic City properties and some of his other buildings, and allowed him to avoid a personal bankruptcy. On Wall Street, he was widely regarded as a busted flush. Still, he talked a big game to anyone who would listen, and, in the early two-thousands, fortune shone on him again when Mark Burnett, a reality-television producer, cast him as a successful businessman, despite the copious evidence to the contrary, on “The Apprentice.”

This was Trump’s third, and arguably biggest, piece of luck. Between 2004 and 2015, he starred in fourteen seasons of the show, which turned him into a national celebrity, and generated hundreds of million of dollars for him in fees, profit shares, and licensing deals and endorsement fees that resulted from his enhanced public standing. Even this huge windfall wasn’t enough to cover the ongoing losses from his other businesses, including a string of upscale golf courses that he had acquired. In 2009, Buettner and Craig note, the Trump Organization appears to have recorded accumulated tax losses of nearly eight hundred million dollars, which Trump then used to claim a big refund from the I.R.S. for the taxes he had paid since “The Apprentice” had taken off. In accordance with its standard procedure, the tax agency issued the refund—$72.8 million, including interest—and opened an audit. “The IRS audit would remain open for years to come, posing a potential threat if the final decision went against him,” the authors write. “But for the foreseeable future, the cash was his.”

Trump’s restructured casino company, Trump Entertainment Resorts, continued to struggle, and in 2014 it filed for bankruptcy for a third and final time. During his Presidency, red ink flowed at many of his other businesses, and the Trump Organization’s liabilities mounted. On the day he left office, in January, 2021, the company faced the prospect of nine hundred million dollars of debt coming due in the next four years, according to a 2022 article by Dan Alexander, of Forbes. 

Despite all the decades of grifting and associated immunity from normal legal and financial consequences, Trump would be much wealthier today if he had simply been a passive investor of his father’s money, rather than pretending to be a real estate tycoon.

Relatedly, this right here is simply straight up bribery:

The private equity firm run by Jared Kushner, the son-in-law of former President Donald J. Trump, has been paid at least $112 million in fees since 2021 by Saudi Arabia and other foreign investors, even though as of July it had not yet returned any profits to the governments largely bankrolling the firm.

Those are among the findings of a Senate Finance Committee inquiry into the operations of Affinity Partners, the Miami-based firm Mr. Kushner set up.

The committee opened an investigation this spring in response to reporting in The New York Times examining the firm’s first three years of work.

Senator Ron Wyden, Democrat of Oregon, the committee’s chairman, said the new information had only deepened his concerns that Mr. Kushner’s firm creates conflicts of interest, particularly with his father-in-law running for re-election.

Mr. Wyden asked why Affinity Partners had not “distributed a penny of earnings back to clients,” and suggested that perhaps it was set up primarily as a way for foreign entities to pay the Kushners rather than a typical fund in which partners reap the returns of deployed capital.

“Affinity’s investors may not be motivated by commercial considerations but rather the opportunity to funnel foreign government money to members of President Trump’s family, namely Jared Kushner and Ivanka Trump,” Mr. Wyden wrote in a letter to Affinity this week, asking two dozen questions.

Mr. Kushner, in interviews with The Times, acknowledged that his firm had moved slowly at first to invest the $3 billion it had collected from its investors since it formed in 2021. He said that was, in part, because a flood of venture capital moving into markets made it difficult initially to find attractive deals. That meant a delay in generating profits to return money to his investors.

Someday, a real rain’s gonna come.