Nomi Prins: Trump’s Art of the Con – Busted Businesses and Conflicts of Interest

By Nomi Prins, TomDispatch regularthe 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. Originally published at TomDispatch

The 2016 election campaign is certainly a billionaire’s 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 he’s… well, a financial elite unto himself, however conveniently posed as the country’s straight-talking “everyman.”

Despite his I-can-buy-but-can’t-be-bought swagger, Trump’s 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 Hoover’s 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 don’t do it for the money. I’ve got enough, much more than I’ll 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 doesn’t 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 don’t know what he’s worth. As with so much else, we just have to take his word for it.

Consider the presidency as Donald Trump’s ultimate deal. And don’t 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 wouldn’t 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 he’s 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 there’s been much discussion of how money from the Koch Brothers and other billionaire donors might influence 2016’s candidates, there’s 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. It’s 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 ABC’s 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 NBC’s 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 Trump’s personal wealth multiple times, he dodged effectively, insisting, “You’ll never get it out of me.” He also deflected his host’s question about the degree to which his father’s 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 here’s an irony: for all his edginess, Trump’s savvy in avoiding what might embarrass or confine him makes him much more of a politician that he’d 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 let’s 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, he’s testified, learn toughness, though “I also realized that if I ever wanted to be known as more than Fred Trump’s son, I was eventually going to have to go out and make my own mark.”

Think, for instance, of George W. Bush’s urge to surpass his father’s record of political power — and war making. But don’t 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 Fred’s 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 Donald’s 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 couldn’t 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 father’s 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 Barron’s that “he’s 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 Trump’s 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.

Trump’s 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), Trump’s 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. I’m in business. I did a very good job.”

While that’s 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. I’m not in it. I’m not on the board.”

He continues to argue that the Atlantic City bankruptcies weren’t 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 didn’t 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 Trump’s 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 didn’t carry the day and passengers didn’t pony up for the line’s 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, Trump’s 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. Trump’s CEO, E.J. Ridings, had lied on his résumé. His previously advertised “top” spot at one of Wall Street’s “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 couldn’t have been savvier, since he’s 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

It’s evident from Trump’s recent comments that his foreign policy ideas haven’t 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 didn’t discuss then, and doesn’t 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 country’s growth is slowing, hardly signs of an imminent threat. It’s a great Trumpian combo, though: anti-China anger plays well with the xenophobic crowd, while a weaker Yuan keeps costs down on Trump’s 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 Moscow’s Red Square. In 2013, he was still talking about the possibility in Vladimir Putin’s 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 Trump’s Mexican border wall and the fantasy of getting the Mexican government to pay for it, Trump has made hay with the immigration issue.  You wouldn’t 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 father’s helping hand behind, bagging the Oval Office would be the ultimate step in outshining Fred Trump’s legacy? It’s less clear what the rest of us get out of it.

Trump assures us that he wouldn’t 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 isn’t 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 deflects obfuscates, and the flimflam he offers up day in, day out. 

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  1. jgordon

    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.

    That’s exactly the point. A very well-off friend of mine recently told me that it’s impossible that Trump will be elected, because he’s crazy. I chuckled and then informed her that it was very possible that Trump could be elected president, precisely because he is crazy.

    People are fed up past the breaking point with the constant stream of lying hypocrites who’ll say anything to get elected to office being proffered to them by the two parties. It’s getting about time where people are willing to support someone who is completely demented just for a change of pace. Unfortunately the way this works in reality is that the more unsavory stuff about Trump is “exposed” (come on, finding detailed opposition research on Trump that makes him look absolutely awful is as easy as googling his name for God’s sake), the more people are going to find him to be an attractive candidate. I’m not sure how many votes the above post garnered for him just now, but I’m certain that it’s above 0.

    1. Yves Smith Post author

      I don’t agree at all that posts like this help Trump. He’s actually not gotten serious scrutiny. No one started releasing meaningful oppo until this month. It takes a while for stuff like that to get traction. And the more Trump gives really vague and silly answers when pressed for details on any of his bumper-sticker ideas, the more his brashness is going to start being seen for what it is, grandiosity.

      I think the Republican establishment is still figuring out what to do with him. Plus the fact that Jeb is such a pale candidate means they might prefer to keep Trump in the fore so that the Dems are shooting at Trump (and Trump thins the Republican field) before they put more effort into sidelining him. And if they let Trump go long enough, he’s sure to score some (more) own goals. I guarantee that in another month, it would not be hard to pull together a damning commercial from recent Trump remarks. There’s already stuff he’s said that has only been weakly exploited.

      1. cwaltz

        Sadly, I’d say at least half of the GOP party wouldn’t know serious scrutiny if it bit them in the butt. They’re quite content when it comes to making crap up when it comes to the other side of the aisle and ignoring the most glaring of inconsistencies from their own. There ability to twist themselves into pretzels to justify their world view never ceases to amaze me.

        *shrugs* If they want Donald to be their nominee I say let them have him. The numbers for Independent continue to climb as both parties are seen as charlatans. Hopefully he’ll be up against Sanders and it’ll make things that much easier and the contrast between the two even starker(one a person who readily admits he’s bought both sides for his own personal gain and another who from what I can tell can’t be bought and wants to get rid of the idea that corporations are extra special people)

        I can’t wait to see how the party of fiscal responsibility explains to Independants that personal bankruptcy is a personal failing but Donald’s bankruptcies were savvy capitalist business deals where his employees reward for hard work was getting laid off while Donald got to reside in his gaudy high rise. It’s a shining example of exactly how unfair capitalism can be. Fun, fun, fun!

        1. Yves Smith Post author

          Oh, I agree it’s possible that Trump could be the nominee, but jgordon was contending that articles pointing out what a fraud Trump is actually help his case and that he will be elected. And your point is key: the longer the Republican clown show goes on, the more it will turn off independents.

          1. EoinW

            However it isn’t only the political establishment which lacks credibility. The mainstream media is also no longer trusted. How many people will view more scrutiny on Trump to simply be another hit job on the “anti-establishment” candidate? Trump can also spin the narrative into being about the take down of the only “populous candidate.

          2. jgordon

            I say that because I’m pretty well keyed into to the feelings of anger and disgust the electorate is harboring. I can personally see the attractiveness of voting in a crazy demagogue just on the off chance that he’ll get the mass lynchings started just a bit sooner. That’s a very real undercurrent of this political cycle.

          3. Oregoncharles

            “the longer the Republican clown show goes on, the more it will turn off independents.”

            Uuuuhm – that depends on just how “fed up” they are. You and I think the anger is driving them toward Bernie, which it is some of them, but I wonder about that.

            I also assume that, rather than start the lynchings, Trump would about-face and defend his class. That might depend on how they’ve treated him personally, though.

        2. ex-PFC Chuck

          “Sadly, I’d say at least half of the GOP party wouldn’t know serious scrutiny if it bit them in the butt. They’re quite content when it comes to making crap up when it comes to the other side of the aisle and ignoring the most glaring of inconsistencies from their own. There ability to twist themselves into pretzels to justify their world view never ceases to amaze me.”

          Bingo! And even more sadly, education is not necessarily a counter indication. An acquaintance I see fairly frequently (husband of the long-time friend of the wife of one of my closest friends) who’s a graduate of the U of MN law school, practiced for 20 or so years then made a successful full-time thing of his theretofore side business of investing in and managing apartment buildings. All of his outside information comes via Murdoch media and blogs like Powerline. He is utterly impervious to information from any other source. Jovial about it, but impervious nevertheless. His view on climate change is typical. He’s totally convinced there is a conspiracy among climate scientists to sing a concocted song solely to keep the grants flowing to their work from gubment funding agencies. He regards as ludicrous the suggestion that he might have fallen for the misdirection-by-projection op that’s been run by energy interests for decades. Sigh.

      2. Johnnygl

        I remember wincing when he said he gets his info on foreign policy from the sunday morning talk shows.

        I still think he’s getting a lot of his traction from talking tough on trade, especially. Other candidates beat the same anti-immigrant drum.

        1. Uahsenaa

          I think there’s a difference between the dog whistle politics of immigration, which is what most on the right engage in, since their corporate donors actually want more immigration in order to suppress wages, and the balls-to-the-wall invective that Trump spews. As yourself, if you were a nativist, which would appeal to you more, a wink and a nudge or fire and brimstone? Trump’s appeal, in part, lies in signaling to those who are used to speaking in euphemism that they are now free to express themselves as openly and as vilely as they want.

    2. Oregoncharles

      Unless there are silent Republicans reading NC and Tomdispatch, I doubt that posting this will have the slightest effect on Trump’s chances. It’s an interesting glimpse into the reality behind the bluster, and makes me wonder even more where his populism is really coming from. He’s outspoken, but did anyone say he’s honest?

      The important part of your post is in 3 words: “people are fed up.” Let’s hope so.

  2. JohnnyGL

    Forgot to mention, good piece, Yves. Thanks for posting. I’m wide awake way too early this morning and had something decent to read to kill the time!

  3. craazyman

    This is all a bit disillusioning. Wow. It’s hard to process all of this so early in the a.m. There’s a lot here to consider.

    But I can’t help thinking, if he built the wall — why not make it a full real estate project with apartments and shops and parks?

    Once they got there, there’d be no reason to leave! It would stop the immigration problem in it track and it might be so good, Americans would go south for housing and jobs.

    Creative thinking is the ticket. People thiink of the wall as sterile barrier, but it has potential far beyond that.

    Trump may be too flamboyant and controversial to pull this off by himself. That’ why he needs to team up with Sanders for a Sanders/Trump ticket. Too bad he signed “The Pledge” but deals can be broken. That’s for sure. Just something for the whiteboard in the next strategy brainstorming session.

    1. JohnnyGL

      craazyman might be onto something here. You could pitch high rise apartments in the desert as having a great viewing point to watch real, live, hunger-games-style entertainment.

      I’m thinking you could get an observation deck and start selling tickets whenever the “regime change” express gets underway in and puts a junta in charge that has a real taste for blood. That’s what usually gets a good wave of people running in our direction, poverty alone often doesn’t cut it.

  4. Paul Tioxon

    The petty tyrant’s vindictive qualities were revealed during the opening of his 3rd casino, the Taj Mahal way back in 1990. A local brokerage in Philly with a long standing reputation, Janney Montgomery Scott bowed to threats by the Donald demanding an apology or a dismissal of an analyst who revealed that the Atlantic City Emperor had no clothes, or profits, or much of anything else to invest in.

    The analyst, Mr. Rothman lost his job for telling the truth about the financial instability of Trumps’s casinos which simply could not carry the debt service for the bonds sold to finance the construction. The Bible says: “Blessed are those persecuted for righteousness sake, for theirs is the Kingdom Of Heaven.”
    Perhaps the Pope should have had a 2nd secret meeting with Mr Rothman, thanking him for his courage. As the jobs lost from the Atlantic City Casino collapse exceeded 8,000, Mr Trump bears all of the responsibility for building a castle of sand as his casinos sit empty, shells of fraud from the very beginning.

    “Roffman, 50, was a vice president at Janney when he was fired March 23 over statements he made in a March 20 article in the Wall Street Journal.

    The story quoted Roffman as saying that Trump’s newest Atlantic City casino resort “will break every record in the books in April, June and July . . .

    but once the cold winds blow from October to February, it (the Taj Majal) won’t make it. The market just isn’t there.”

    Trump was furious with Roffman’s remarks. In a letter sent by facsimile that same day to Wilde, Trump characterized Roffman as someone who was ”somewhat unstable” with “a hair trigger.” He threatened legal action unless Roffman was either dismissed or offered “a major public apology,” according to a copy of Trump’s letter, which is filed as an exhibit in Roffman’s suit.

    The next day, Janney sent a letter of apology to Trump, signed by Roffman, in which Roffman asked Trump to forgive him and to “let me continue to cover your companies.”

    Roffman’s suit says he signed that letter under pressure from James Meyer, a senior vice president at Janney, and Edgar Scott Jr., chairman of the firm. On March 22, Roffman sent a letter to Trump retracting his apology of the day before. And on March 23, Roffman was fired.

    In the suit, Roffman says Trump defamed him in the March 20 letter to Wilde and in subsequent interviews with Fortune magazine and Barron’s, the financial weekly, in which Trump is quoted as calling Roffman “a bad analyst,” “a man with little talent” and an “unguided missile.”

    Gregory M. Harvey, a Center City attorney for Janney, said Roffman was fired not for his negative comments about Trump but because he violated company policy when he sent the second letter to Trump repudiating his apology.

    So far, the Taj Mahal has set records for the amount won from gamblers in Atlantic City. But its win of $1.16 million per day in June was short of the $1.5 million that it must win each day in the summer months to cover costs of building and operating the Taj, according to an Inquirer analysis of gaming data.”



    A Philadelphia securities analyst who refused to retract negative comments about a casino owned by Donald J. Trump and was subsequently dismissed won a $750,000 award from his former firm yesterday.

    The award to the analyst, Marvin B. Roffman, which was ordered by a three-member arbitration panel of the New York Stock Exchange, was announced by his former brokerage firm, Janney Montgomery Scott Inc.

    When Mr. Roffman was dismissed last March, the firm denied that its move had been prompted by Mr. Trump, who had threatened to sue unless it forced the analyst to retract and apologize, or dismissed him.

    Norman T. Wilde Jr., Janney’s president, said then that the firm had received a threatening letter from Mr. Trump but insisted that the dismissal had been motivated instead by statements Mr. Roffman had made that had not been cleared by the firm.

    “This is a vindication for Marvin Roffman, but it is also a vindication for the investing public,” said Scott L. Vernick, a lawyer for the Philadelphia firm of Fox, Rothschild, O’Brien & Frankel, which represented Mr. Roffman. “He was fired because he refused to compromise the rules of the stock exchange and the code of ethics of his own profession.”


  5. mikeW

    Let’s not over complicate things. Trump will neither get the nomination, the establishment has the tools it needs to stop him, nor be elected president. In my view his position in the polls is easy to understand. There is a significant percentage, in the range of 25 – 40%, of Republicans whose primary drive is anger at any range of things and what they really want is a candidate that will “punch the Democratic nominee in the face”.

    The fact that at one point Newt ruled the polls, until nuked by Romney in the FL primary, was the same phenomena. And, the fact that Romney would’t/couldn’t do it to Obama also explains much of the dissatisfaction with his campaign.

    It is hard to attribute where all this comes from. Certainly major contributing factors are the rise of advocacy media (talk radio and Fox “News”) that promote an aggressive stance (as a business model, in order to get coverage and as a political strategy), the general changes in our society, the failure of the middle class to experience a rising standard of living for decades, etc.

  6. Woodrow

    Ideally, longtime crony Democrats and Republicans would never be able to stay in CONgress for 20 years or more. As an Independent who leans libertarian, all the top candidates are all war mongering authoritarians, Clinton and Trump are the worst of the bunch, with Fiorina a close second. Secondly, there is no question as to whether Trump or Clinton will take care of their friends on Wall Street, or any other crony capitalistic entity.

    The “elections” are lose-lose at this point, as more money gets poured into them and ridiculously few voters actually end up voting for the “winner” who will enslave them further. I don’t know what it will take for this paradigm to shift, but for the sake of my young children, I hope whatever it is, happens in my lifetime.

    What we have now isn’t working, while not a full-blown “Elysium” styled dystopia, we’re certainly making good headway.

  7. EoinW

    Either the US political process is completely controlled and manipulated(which means Trump can only win with the blessing of the establishment) or it’s still kind of a free election and Trump can win against the establishment’s wishes. A bit like the argument that the global economy will be either crashed on purpose or because the central banks lose control.

    Even if it is controlled(or a combination of both the above) Trump could end up approved as the next president. The system needs changed(and not just in America) and the establishment must fight any change. Therefore the solution is a simple one: create the illusion of change to buy more time in power. A black president bought them eight years. A woman president could buy them eight more. But hey! what about this Trump character? The illusion of change strikes gold! Thus, in 2024, they can still give voters their superficial change with a woman president. Plus they’ll have eight years to groom a pretty lady who doesn’t have Clinton’s baggage. Even better, if Trump is too extreme they can fall back on a new Obama, a moderate Washington insider who will look like reform because he isn’t Trump. They can save their Catherine Medici for 2032.

    From 2000-08 the USA had its first imperial president. After Augustus came the insider Emperor Tiberius. Next comes…Gaius Ceasar – Caligula

  8. fritter

    The billionaire-as-president is a new prospect for America.
    I’m not so sure about this. Wasn’t Washington quite wealthy, so was FDR? They might not all have been in the 0.001% but they weren’t starving haberdashers either.

    Its popular to focus on wealth in times of inequality, but it doesn’t really matter. They are all either trying to get rich, stay rich, help some group, or leave behind some kind of legacy. The kevin spacey character from House of Cards can do good as a side effect of his plots on occasion.

  9. Carolinian

    It’s worth pointing out that George W. Bush had plenty of shady financial and personal skeletons–that stadium in Texas for example–but that didn’t stop him from getting elected (or selected). I don’t think the people who are likely to support Trump really care about this sort of expose. And of course the people who do care are never going to vote for him anyway.

    It’s certainly too early to say whether Trump will fade or advance but if he does fade it’s more likely to be because short attention span America (and their media) have gotten bored with his shtick. But if nothing else, he has shown that there is a tremendous appetite for a politician who is not cut from the current, technocratic, cookie cutter mold. And I, at least, think that’s a good thing even if many of his ideas are zany. Our fading empire has become so terribly inbred–it’s time for a change and an outsider. Sanders could be that change although it’s unclear just how much he is an outsider. But we need a change.

  10. MikeInNaples

    This article seems weak to me. Trump has filed for bankruptcy. That isn’t news the article itself says he admitted to that on TV during the debate. Last I check there is nothing wrong with doing that. He got a head start by means of his father having achieved a high level of success and the two of them working together. This isn’t news either and is also very common. Is there something wrong with a father and son working together and doing deals together? Happens all the time. Was his father a billionaire? I don’t know but I haven’t seen that written anywhere that he was. So If Trump is even worth 2 billion, that is a very impressive financial accomplishment, notwithstanding his father’s help in getting started. The article goes on to say that because he would rather have some diplomacy with Putin rather than sabre rattler and war monger, then Trump must have some ulterior motive for doing so. Seems like a bunch of old news and conjecture to me. If this is the most disturbing news about Trump, then he may very well get the GOP nod, since nothing in this article would be enough to sink his ship.

    1. Yves Smith Post author

      It appears that you did not read the article carefully. The point Prins makes is he had MORE business failures than his bankruptcies. And Trump’s “I’ll make a deal” with Putin is not how diplomacy is done. The big rule of financial deals is “everything can be solved by price” and the transaction is a one-off. It’s as if Trump is a very good checkers player and therefore assumes he can play chess on the same level as Putin, who has proven himself to be a grand master (you can disapprove of Putin’s methods and aims, but he’d done a remarkable job of stymieing the US and advancing Russia’s aims despite being in a weaker position on multiple fronts).

      1. MikeInNaples

        Yves, I appreciate the response. I’m flattered actually. I’ve been an almost daily reader of your blog for over 5 years. I’ve learned a great deal here. Thank You.

        I did read the article. My point is that while he may have had other failures, he appears to have had more winners than losers, or he would not be a billionaire. That is a level of wealth very few achieve. Seems odd to me to say he is a checkers player in a chess match, when at this point he appears to be playing 3 dimensional chess when everyone else in the GOP field is playing checkers. I am not anti Putin or anti Russia, and do think Putin has shown remarkable instincts on the world stage. But its conjecture to say that Trump could not play on his level. I admit that I have no idea weather he can or not, but to say he can’t seems biased.

        BTW, I’m no Trump lover, but sadly so many of the other GOP candidates are so far to the right and or just brain dead, that Trump stands out. On the left, Bernie Sanders is the only candidate worth talking about since Hillary is a crook and Biden, give me a break. My dream would be a Trump/Sanders ticket, but that’s dreaming. It really stinks the voters are stuck with left or right policies, when after years of reading your site, I’ve come to ask the question of why left or right. Aren’t the issues human and/or American issues and not just left/right. Isn’t every American effected by the environment? By corporate fraud? By inequality? By over and under regulation depending on the industry?
        Thanks again.

        1. Yves Smith Post author

          Trump is not playing anything more sophisticated than checkers. He has perfected a style of bullying that plays well on TV these days when all he has to engage in are soundbites. When he has been interviewed one on one by reporters and pressed on his policies, he’s done very badly. If he can’t handle reporters, pray tell how can he handle geopolitical matters, or deal with Congress? He’s a one-note Nellie.

          And Trump was lucky enough to inherit a family business in New York City at the dead bottom of the real estate market. He had a monster tailwind with the stunning rise in prices. In the fiscal crisis, people were trying to give away co-ops in good locations if someone would take over their maintenance!

          A better benchmark is to compare The Donald to a real self made man in NYC real estate, Steve Ross at The Related Companies (full disclosure: Ross was once a client). Related, among other things, developed the Time Warner Center. Ross never understood Trump’s insistent self promotion. He paid way more than he needed to for everything he bought because when Trump showed up, the seller’s price expectations would go way up. Ross kept Related as little known as possible (hence the plain unrevealing name).

          Ross, according to the latest Forbes 400 list, has a net worth of $6.7 billion versus Trump’s $4.5 billion.

          The only reasons he’s doing well is that the Republican field is so terrible and that Roger Ailes at Fox has decided, for whatever reason, to play ball right now.

          1. MikeInNaples

            Your instinct on other issues has been remarkable, like Greece. So I look forward to seeing how this all plays out and seeing if once again your instincts are correct. But I think most are underestimating Trump. For that matter I think all conservatives are underestimating Bernie Sanders. So with that said I look forward to a very interesting election and will continue to look for knowledge on your site.

            PS I love the water cooler. I hate TPP, would never have even known about it if not for Naked capitalism. I’ve enjoyed the MMT discussions immensely. And the many other topics such as Greece, bank fraud, etc. Ty

            1. MikeInNaples

              I looked up Steven M Ross. He appears to have had a very successful Uncle and a father who invented vending machines and fuel additives and his mom was able to lend him $10,000 in the 70’s. Probably more self made than Trump, but he certainly didn’t come from rags.

  11. Left in Wisconsin

    I appreciate the post and I like Prins. But I don’t think Trump is hurt by pointing out his business failings or his lies.

    Trump is a salesman, pure and simple; in my view, a very good salesman. “The Art of the Deal” says it all in the title. In this case, the deal is the presidency, though I believe him when he says he wins even if he isn’t ultimately elected because merely running as successfully as he has increases the value of the Trump brand. (I guess that makes his run a win-win.)

    Like any salesperson, he tells the customer what he thinks they want to hear. Some people recoil at inconsistency but a good salesperson learns how to adjust, refine, and tailor the message depending on feedback from the customer. Or just tell whopping lies that hopefully won’t be found out until after the deal is cinched. (A deal is a “one-off” sale. No need to worry about repeat customers or long-term credibility.) Not too different from most politicians. It’s just that Trump seems better at it than the rest of the R’s.

    On the other hand, if he thinks he is damaging the Trump brand, he will get out.

    1. Carolinian

      A perceptive comment IMO. Presidential elections are all about personalities. They are not about competence and perhaps not even about honesty (although this may be Trump’s biggest achilles heel). I forget who said that FDR had “a second rate mind but a first rate personality.”

      And for those on the left who scoff at the above I present one Barack Obama. What’s their excuse for voting for him? He was a sales job, just like Trump.

  12. Oregoncharles

    “In other words, we still don’t know what he’s worth. ”
    And neither does he. He’s primarily in real estate; the value of real estate assets isn’t known unless they’ve sold recently. Everything is estimated, based on comparables that may not exist. If you’re an optimist or self-promoter, you’re “worth” far more than if you aren’t. Which might explain some of Trump’s attitude.

    I just read Yves’ comment above, comparing Trump to another developer she knows. Makes sense – within business. But Trump is also a showman, a TV personality. And that’s how he’s campaigning; again, I suspect his support corresponds roughly with his TV fan base. Since presidential politics is mostly a TV show these days, it’s worked pretty well so far. If his base is really that narrow, he’ll fade away. If not…

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