Once upon a time, there was a country unified by its mythology about the morality and heroism of its founding fathers and elected leaders. We all learned about the first President who chopped down the cherry tree, only to realize he could not lie when confronted with the accusation of cherrycide. We learned about the rail-splitter from Illinois who studied books by candle-light, always trying to better himself despite his poor circumstances. We learned about the bully hero of San Juan Hill, who fearlessly charged against the Spanish lines in order to overcome Spanish resistance. We learned about the Navy Lieutenant, who rescued one of his crewmen by swimming with him for four hours through shark-infested waters in the South Pacific, supporting him through a life jacket strap that he clenched in his teeth.
Someone else tried to add to the mythology of origin stories for our elected leaders. By parlaying a small loan of only $1,000,000 into a vast, world-class fortune and business empire, our current President deliberately encouraged this façade in order to emphasize his business acumen and brilliance. Alas, it now appears this myth-in-progress has been shattered beyond recognition, due to the investigative efforts of a failing representative of the press. It now appears that, despite assertions of penury, our Dear Leader has benefitted from decades of largesse from his wealthy parents. Loans? He’s had a few, including one year (1979) where he borrowed $4.7 million from his father in the first eight months of that year. I remember that year. Inflation was awful. That must have been the reason for needing that degree of cash infusion.
Instead of using his God-given talents to create his empire, our Dear Leader relied upon the fortune of his father to establish his presence in the Manhattan real estate market. And his father was available to bail his son out of innumerable tight situations, especially when the decisions made by the Dear Leader turned out to be, shall we say, less than inspired? Such as the decision to buy and finish building a third extravagant casino at Atlantic City where he already owned two other casinos that were funded on a pyramid of debt. The Dear Leader continually talks about his business acumen, and how he knows how to use debt better than anyone else. What the Atlantic City debacles (multiple bankruptcies, casino closures, an ever-shrinking percentage of equity) show is that when properties are leveraged far beyond their carrying capabilities, external factors can cause the collapse of the enterprise. Especially when you yourself create the external factor by cannibalizing demand for existing casinos by opening the Taj Mahal. Far from the wise use of debt to build useful assets, his companies continually tried to grow via the public debt market. Not even the father could rescue his son from his series of follies, although he did try that one time when he sent a messenger with a check for $3.35 million to buy casino chips the day before a loan payment was due, then the messenger left with the chips. The family obviously wanted the chips to fall where they would, preferably outside of the casino premises and unspent, enabling the loan payment to go through. It was telling that this blatant scheme caught the attention of New Jersey gaming authorities, who levied a $65,000 fine for the illegal loan.
It was also telling that Federal and State tax personnel were never able to penetrate and discern the degree of deception and deceit that girded the Trump family business empire. It was indeed a brilliant strategy born of a desire to minimize taxes by illicitly undervaluing properties when ownership passed within the Trump family. The failing media source describes multiple times when Trump tax documents show a relatively small value is declared for a property, only to have the same property sell for orders of magnitude more money within a few years of the ownership transition. Amazing how those things work. And always in the favor of the Trump family? The odds of that happening naturally (like if oil were discovered underneath the apartment buildings after the Trump siblings gained ownership) was astronomically small. But the Trump family is correct when it states that all of the transactions passed tax audit muster. For that, we must express our gratitude to the apparently understaffed tax compliance offices of New York and the IRS, since they were unable to detect any systematic bias in the values assigned to the transferred properties, thus reducing the tax due from the family by hundreds of millions of dollars.
The one single example that best demonstrates the venality and greed of the Trump family was the creation of a fictional entity whose sole purpose was to inflate the value of supplies and capital goods used to maintain the Trump family properties. This fictional entity, All County Building Supply and Maintenance, was equally owned by the Trump siblings and the manager of this entity, who was a nephew of Donald Trump. It’s sole purpose was to pay the vendors who supplied the Trump real estate empire with boilers, stoves, refrigerators, all manner of goods, and in turn provide invoices to Fred Trump’s businesses that overstated the value of the procured goods. The excess dollars from the inflated invoices went to the owners of All County, and over the course of a decade, managed to strip millions and millions of dollars out of the cash cache that Fred Trump accumulated over his career and transfer it to his children, free from gift or estate tax limitations. It would be very instructive to see if the monies thus transferred ever were declared as income, but since I am sure that the tax returns in question during the 1990’s are still being audited, we the people will never know if yet another layer of tax avoidance occurred.
The business practices of the Trump family, and thus the true facts behind the myth that the Dear Leader has fostered, show a complete disdain for the laws of this country. Almost as if the laws were never intended to apply to those of a certain wealth level and status. Almost as if a member of this family could act with impunity for any and all actions that he takes. It is certainly informative that in the first two years of his administration, the Dear Leader has shown zero concern for the fiscal realities of the Federal Government. Cut tax revenues by hundreds of billions of dollars per year, and shower the richest with the benefits of these reduced taxes? That’s great for America! (Please note that corporate tax reduction is a separate concern than the misguided transfer of tax benefits to individuals and pass-through businesses, such as the ones that the Trumps use.) Spend hundreds of billions more for defense? Great! More contracts for my friends, both corporate and personal. Kill regulations that improve the health of citizens and workers? Well, if it means that corporations can spend less and make more money, that is surely good for the nation. Spend money on those who need assistance due to the bifurcation of the income distribution in this nation? Bah! Humbug! Those takers need to take responsibility for their own situation, and go back to school in quantum physics instead of living the life of luxury on the public dole.
As an observer of society, I marvel at the ability of the wizard to keep the projection of competence and brilliance alive within his steadfast believers. Those of us who have peered behind the curtain, know with certainty that this empty shell of a human cares nothing for the population of this nation, nor of any other nation. No, the only thing that motivates this simulacrum of a human is adulation, since his delusions have shown to himself that no one has ever done so many good things in his short time in office. And we’d all better pay homage to him for his magnificence, since he will punish his naysayers. Unfortunately, my opinion of the intelligence of the American public does not bode well for a repudiation of this charlatan. I hope beyond hope to be proven wrong in November.
Source materials: This week’s NYT expose on Trump family finances; The Rise and Fall of Donald Trump’s Atlantic City Empire from Philly Mag.