The Making of Donald Trump by David Cay Johnston (Part 1)

Introduction. I have been an investigative reporter since young and have freedom to report on what I want. I also happen to be good at what I do. In 1988, I met Donald Trump in Atlantic City. It turns out that he knew nothing about the casino industry. I have a trove of his documents with me. He first mooted the idea of becoming President in 1988. Trump would make a profit in his 2016 campaign. He is always thinking of how to make profits. Through the book, I hope to expose the things he has done. Trump is smart and can deflect enforcement investigations and threatens to sue others. Sometimes, he can come across as ignorant in the way he conducts himself. This book is a presentation of the facts. Trump even hired people to show up and clap during his campaign.

Family History. His family name was Drumpf and he has German roots. Donald’s grandpa was Friedrich and also flouted some rules in his life. He arrived in the US when he was 16. Friedrich started the Diary Restaurant. Trump did not vote regularly at elections. Friedrich’s foray into mining projects were a flop. He later headed for Yukon Territory and started a bar called the Arctic. The gold rush was present and he made some money. Later on, he met Elizabeth Christ, a 20 year old blonde. Later, the family headed back to Germany. Frederick returned to the US and started new ventures. However, he passed on the 1918 influenza pandemic. Donald’s father was Fred.

Trump men favouring busty blondes would become a family pattern. – David Cay Johnston

Family Values. Fred was charged for battling NYC policemen. However, Donald continuously denies the charge. He pretended that if he heard nothing, it meant there was no charges filed against Fred. The public should not know about crime and its implications. Later, Fred built single family houses and even a supermarket. He was a fast learner and turned in a small profit. Often, his buildings were built using cheap materials. To attract attention, Fred would hire beauties in bikinis etc. Fred was also investigated on whether he was into profiteering. He was a household name. Donald denied that his dad profiteered. Nothing came of the investigation though. Fred borrowed money from Tomasello, who was engaged in illicit businesses. Much of what Donald does is learnt from his father. Fred gave Donald much support when he was younger. Donald’s older brother tried to help with the business but didn’t do well. Donald attended the New York Military Academy as he was ill-disciplined when young. Later, he went to the University of Penn. Fred Jr became a pilot but subsequently had alcoholism problems. Donald claims that he was a good student in the University of Penn. However, he doesn’t know what Net Present Value is and how it is measured.

Personal Values. Trump was giving advice to a crowd on how to succeed in life and business in 2005. He was working with a convicted felon and swindler named Felix Sater. He did not prepare for the presentation. Trump did not show the audience any respect by not preparing for the speech. His mentality is to trust no one, even employees. He has been involved in more than 3,500 lawsuits. He has written more than 12 books. Once, he trusted a female employee and when he wanted her to call her friend at a big bank and she refused, Trump fired her. He hates disloyal people, like Rosie O’Donnell. This act of vengeance is certainly at odds with what the Bible preaches. He can’t remember his favourite Bible verse.

Get even. If somebody screws you, you screw them back 10 times over. At least you can feel good about it. Boy, do I feel good. – Donald Trump

I have to tell you about losers. I love losers because they make me feel so good about myself. – Donald Trump

I love getting even when I get screwed by someone – yes, it is true…Always get even. When you are in business you need to get even with people who screw you. You need to screw them back 15 times harder… go for the jugular, attack them in spades! – Donald Trump

A Sickly Child. His dad died in 1999, at age 93. William Trump had problems at birth and Fred Trump Sr would cover the medical expenses. After he passed on, William Trump’s family knew they were not collecting their anticipated share of the estate. The judge ruled that medical coverage resume until the matter could be resolved. Fred Jr sued Donald Trump’s father. Donald was obviously not pleased when someone sued his father. The will excluded Fred Jr and his children. Donald appears to be very vicious in his motto of vengeance. This caused divisions within his family. He also had a close relationship with the notorious Roy Cohn.

Making Friends. Roy Cohn was a notorious attorney and Donald Trump wanted to get close to him. They had a great relationship. Trump always wanted to join Le Club, a hottest club in the city. However, he didn’t know anyone. He hired Cohn to sue the federal government after Trump was investigated of racial bias when hiring operators. Trump allegedly didn’t hire rent out apartments to blacks. As a result, the Federal Government sued Trump. This was a high profile discrimination case and appeared to violate the Fair Housing Act. Cohn claimed that the government was unfair as they were trying to force Trump to rent to people on welfare. Cohn lost the case and the government could proceed with the investigation. Eventually, Trump folded and settled. When confronted by reporters in future, Trump claimed that the government couldn’t prove its case and that he only had to make a minor settlement. Trump learned to place loyalty over everything else. Trump knew he could count on Cohn. He was also associated with powerful Mafia figures who worked in the demolition and construction industry.

Trump’s Most Important Deals. Trump applied for a casino license in New Jersey in 1981 and his background was not thoroughly checked. The government didn’t want a mob-run casino on Atlantic City. Trump talked to the attorney general and told him there was no need to check his background thoroughly. Trump threatened not to bid for the casino if they wanted to check him in detail. Trump had indeed been under investigation before but there was no mention of it in the DGE report. No charges were filed. There were about 4 cases where Trump was involved in shady dealings but these were not reported. Trump did not tick the box for civil misconduct. Lying in his application would result in disqualification. The concrete he used was controlled by a concrete cartel. Roy Cohn helped to ensure that the Mafia bosses would not have the unions stop work on Trump Tower. Barrett was a reporter who managed to examine some of Trump’s business practices. Cody was another crook who knew Roy Cohn. Trump also took kickbacks from contractors etc. Soon, those contractors who fixed prices for concrete were convicted.

A Great Lawsuit. Football made Trump famous. He bought the New Jersey Generals in 1983. The attendance at the games were decent, but were nowhere that of National Football League. Trump was aiming the NFL league. Dixon started the USFL league to slowly compete with the NFL. USFL could celebrate the scoring of goals whereas for the NFL, players couldn’t. Trump held cheerleader try-outs at the Trump Tower to attract attention. He brought them to sleazy bars and some of the girls were offended. In 1984, Trump, together with the other USFL owners, sued NFL. The lawsuit for that NFL allegedly monopolised the tv contracts. Roy Cohn would represent Trump again. The USFL was awarded damages in $3. This was humiliating to Trump. Trump’s legal strategy backfired. USFL folded after that. The court also dismissed claims that Trump wanted to merge the USFL with NFL. USFL wanted to grow fast, but failed. One cannot disagree with Trump. It is like to be a loser.

Showing Mercy. Trump dealt with a drug trafficker named Joseph Weichselbaum. He did unusual favors for the felon, even putting his casino license at risk. When Trump met him, he was already a twice-convicted felon. He was arrested for grand theft auto and embezzlement previously. Joseph and his brother ran a helicopter service and ferried high rollers to and from casinos. Their main client was Trump. Trump also retained Dillinger Charter Services, whose owner was John Staluppi. The mysterious thing was why did Trump keep supporting Joseph’s team when he could have used other firms? Did Trump finance Joseph’s activities? In 1985, he was convicted of drug trafficking in Florida, Ohio and Kentucky. Trump kept paying $2 million per year for the helicopters. One of Joseph’s court case was also transferred to the state of New Jersey, where Trump’s older sister Maryanne Trump Barry was assigned to the case. When she was eventually replaced, Trump asked for leniency for Joseph. Joseph eventually only served a mere 18 months jail. The DGE did not ask deeper questions on Trump’s relationship with Joseph Weichselbaum. There are still things unknown about Trump’s relationship with Joseph. When asked to recall his relationship with Joseph, Trump said he barely recalled who he was.

Polish Brigade. Trump knocked down Bonwit Department store before he built Trump Tower. It was a really famous store. He promised to give the architectural treasures to the Museum of the Art. However, he didn’t keep this promise. He used a Polish contractor and the men need not wear safety gear. It was primitive. The workers were not paid in accordance with wage laws. They were underpaid and made to work like slaves. The crew had huge numbers and suffered. Trump was also known to delay the payments. Trump was told to fire them if he didn’t want to get into trouble with labour laws. Trump would always want to collect more money and not paid people. He was downright greedy and did not care about the workers’ welfare. Surprising, there was no safety inspection of the demolition. The union was under the main control of Roy Cohn, his lawyer. Only when the men threatened to not work, did Trump start to pay them more regularly. Trump testified that he had no knowledge that any worker was unpaid. The judge found that Trump wanted to cheat workers of their pay. Trump had to settle in the end. He also claimed that removing the art would cause a lot more, hence they would be demolished instead. The museum curators were furious. Yet, Trump claims to be an ardent philanthropist.

Feelings and Net Worth. Trump has given different figures when asked to present his net worth. Sometimes, a different figure could be quoted just within a few days. He sued Tim O’Brien after he quoted wrong net worth figures in his books. Trump’s image is really important to him. A lot of information was not disclosed in the financial statements, making it hard to determine how much Trump earned. Sometimes, Trump might even hide debts and other liabilities. Mortgages were not recorded. When estimating his net worth, values of properties are very high. However, when answering to tax authorities, he quotes very low valuation prices.

I would say when I publicly state my net worth, I base it on my general attitude at the time that the question may be asked. And as I say, it varies. – Donal Trump

Trump’s net worth is central to his public persona as a kind of modern Midas. – David Cay Johnston

My net worth fluctuates, and it goes up and down with markets and with attitudes and with feelings, even my own feelings, but I try. – Donald Trump

Government Rescues Trump. Trump made over $375 million between 1986 and 1990 (not profit). However, in 1990, he could not pay his bills. He lacked the money to pay for the construction for Trump Taj Mahal. His casino also risked being shut because Trump could not pay. Trump was bleeding dry fast. Cash was burning and he still had his private jet. The regulators also did not regularly monitor his finances. Lawyers and accountants started going over his books. The Leventhal report showed his net worth was -295 million. The DGE, despite this, did not ask very difficult questions of Trump. Overall, Trump owed $3.2 billion and it was terrible for his creditors. A deal was planned and Trump had to live on $450,000 per month. The press was not allowed to say the word bankrupt. The commission would approve the deal between Trump and his bankers and Trump would be safe. Many reporters did not know that Trump was on the verge of bankruptcy. Donald Trump was saved by the government. Because of this, Trump had to restructure and sell off stake in some of his enterprises. Investors lost more than $1.5 billion when he shrugged off 4 bankruptcies. He was lucky to have escaped.

Gold and Taxes. Trump gives variable values on his property values. Many civil settlements have resulted and these files are all sealed. He overvalued his Trump National Golf Course at more than $50 million. However, when talking to the tax assessor, he quoted the golf club to be less than $1.4 million. He told a reporter subsequently that the value was $9 million. When the town was flooded and covered in silt because of the golf course, Trump refused to pay. The storm water facilities at his golf course failed. The litigation between the town and Trump remains unresolved. Trump valued the National Golf Club Bedminster at more than $50 million and said it had annual revenue of more than $16 million. He paid lower property tax on it because he had goats on the active farmland. He did the same for another of his golf course. Often, he ends up suing the town.

Income Taxes. Jack Mitnick prepared Trump’s income tax returns. They had a close relationship. In 1978 and 1979, Trump paid no federal income taxes. His tax returns showed negative income because there was a rule in Congress that let big real estate investors offset income from salaries, stock market gains, consulting fees, and other income with losses from depreciation in the value of their buildings. A review by the tax authorities concluded that Trump owed more tax in 1984. Once, Trump’s returns showed zero income from the consulting business. The auditors demanded supporting documents for Trump’s large deductions. Penalties were levied against Trump because he could not substantiate. Mitnick claimed that he did not prepare the tax return. When I questioned Mitnick about it last year, he claimed he could not remember. How did his signature get on the tax return then? Judge Barrie ruled that the penalty be upheld. In 1991 and 1993, Trump paid no taxes too.

Empty Boxes. In 1983, Trump had 2 empty boxes mailed to him from an out-of-state address. This was to evade sales taxes on expensive items. Back then, the law was that under NY law, a visitor who buys good and has them shipped to her home state does not have to pay NY sales tax but then owe an equivalent tax to their home state, known as a use tax. But this was not readily enforced. The tax auditors uncovered this scam. There were other rich people involved in this scam. Adnan Khashoggi was an arms dealer who partied with Trump. He also evaded sales tax. It is amazing why billionaires would want to escape small taxes like these. A criminal charge like this would be sufficient to revoke his casino license. Howard Rubenstein defended Trump throughout this saga. The Bulgari staff and the master-mind would be jailed. Trump was let off.

9781612196329

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s