During one of the long phone conversations that substitute for actual visits these pandemic days, my mom asked about Trump’s financial (mis)dealings. I have written about them before, but more information has come out in recent days. So here’s another take: Mom, this one’s for you!
Trump has used the presidency to make millions of dollars for his businesses, but that’s just the tip of the iceberg. His suppression of criminal charges against Turkish Halkbank sell out U.S. interests. And his financial dealings with Deutsche Bank and the hundreds of millions of dollars he owes tie in with his business failures, losses, and evasion of income taxes.
Using the Presidency to Make Money
During his presidency, Trump has steered millions of dollars to his businesses. One example, cited by the Washington Post, is a meeting at his Mar-a-Lago resort with Japanese Prime Minister Shinzo Abe in 2018.
“In the next two days, as Trump and Abe talked about trade and North Korea, Trump’s Palm Beach, Fla., club billed the U.S. government $13,700 for guest rooms, $16,500 for food and wine and $6,000 for the roses and other floral arrangements.
“Trump’s club even charged for the smallest of services. When Trump and Abe met alone, with no food served, the government still got a bill for [the water] they drank.”
Every time that Trump goes to Mar-a-Lago or any of his other properties, the taxpayers pay for it.
“When Trump visited Mar-a-Lago for two weeks at Christmas last year, for example, the club charged the Secret Service $32,400 for guest rooms.
“In addition, Trump’s adult children have brought their father’s company another $260,000 in taxpayer revenue on their own, records show, by taking solo trips to Trump properties with their own Secret Service agents in tow.
“And, in some cases, Trump’s properties even got paid on days when no Trumps were present at all.”
And we pay for much more:
“Since 2017, Trump’s company has charged taxpayers for hotel rooms, ballrooms, cottages, rental houses, golf carts, votive candles, floating candles, candelabras, furniture moving, resort fees, decorative palm trees, strip steak, chocolate cake, breakfast buffets, $88 bottles of wine and $1,000 worth of liquor for White House aides. And water.”
There is no official total of the amount paid, though news media have dug up partial information through Freedom of Information Act (FOIA) requests.
Besides the taxpayer payments, Trump’s campaign committee also pumps up Trump business income. Campaign donations have funded at least $5.6 million in payments to Trump companies.
Trump brags about donating his presidential salary. He does donate his salary, but not the other payments: a $50,000 expense account each year, a $100,000 nontaxable travel account, and $19,000 for entertainment. He will get lifetime security and other expenses paid after he leaves office. That’s in addition to his pension, which, as of 2020, will be $219,200 a year—for life. Even adding all of that together, Trump’s salary and benefits. are far less than the taxpayer money he has directed to his businesses during his presidency.
Halkbank is a Turkish bank, under investigation for violation of U.S. sanctions against Iran since the Obama administration. Trump intervened in the U.S. prosecution multiple times, as a favor to Turkish president Recip Tayyip Erdogan. The Trump administration pressured the U.S Attorney to drop the investigation and to dismiss charges. Eventually, the Justice Department fired the lead prosecutor. The New York Times reported in a detailed article:
“The president was discussing an active criminal case with the authoritarian leader of a nation in which Mr. Trump does business; he reported receiving at least $2.6 million in net income from operations in Turkey from 2015 through 2018, according to tax records obtained by The New York Times.
“And Mr. Trump’s sympathetic response to Mr. Erdogan was especially jarring because it involved accusations that the bank had undercut Mr. Trump’s policy of economically isolating Iran, a centerpiece of his Middle East plan.
“Former White House officials said they came to fear that the president was open to swaying the criminal justice system to advance a transactional and ill-defined agenda of his own.”
Trump Towers Chicago, built in 2008, lost millions of dollars. Trump tax returns obtained by the New York Times show that “since 2010, his lenders have forgiven about $287 million in debt that he failed to repay. The vast majority was related to the Chicago project.”
If you borrowed money for your business and didn’t repay it, would your bank just write it off? Not likely. But Trump got special privileges.
Even if your bank did forgive or write off a loan, federal law says that amounts to income and you have to pay taxes on it. Not Trump. He had so many other business losses that he could write off $287 million.
What bank would loan millions to someone who already had a long record of business failures and defaults? The New York Times reports:
“Mr. Trump went to his longtime lender, Deutsche Bank, for the bulk of the money. Since 1998, he had borrowed hundreds of millions of dollars from the German bank. It had been so eager to establish a foothold in the United States that it had overlooked his history of defaults.
“This time, Mr. Trump assured Deutsche Bank officials, including Justin Kennedy, the son of the now-retired Supreme Court justice Anthony Kennedy, that the Chicago development was a guaranteed moneymaker. In a sign of the Trump family’s commitment to the project, Mr. Trump told his bankers that his daughter Ivanka would be in charge.”
The story of Trump business and personal borrowing and default is long and convoluted, but the New York Times investigation lays it all out. Deutsche Bank continues to have a financial relationship with Trump and his businesses.
Trump also still owes money. A lot of it. At this point, Trump personally is on the hook for $421 million, which will come due in the next few years. That’s $421 million that he owes personally, not including amounts that Trump businesses owe.
The New York Times got tax records for Trump and his companies for more than 20 years. The records show creative use of deductions and loopholes to avoid paying any taxes at all for most of that time. In his first year as president, Trump paid $750 in income taxes.
The investigation also revealed a long history of Trump businesses losing money. The New York Times initial report included these highlights:
• “Mr. Trump paid no federal income taxes in 11 of 18 years that The Times examined. In 2017, after he became president, his tax bill was only $750.
• “He has reduced his tax bill with questionable measures, including a $72.9 million tax refund that is the subject of an audit by the Internal Revenue Service.
• “Many of his signature businesses, including his golf courses, report losing large amounts of money — losses that have helped him to lower his taxes.
• “The financial pressure on him is increasing as hundreds of millions of dollars in loans he personally guaranteed are soon coming due.
• “Even while declaring losses, he has managed to enjoy a lavish lifestyle by taking tax deductions on what most people would consider personal expenses, including residences, aircraft and $70,000 in hairstyling for television.
• “Ivanka Trump, while working as an employee of the Trump Organization, appears to have received “consulting fees” that also helped reduce the family’s tax bill.
• “As president, he has received more money from foreign sources and U.S. interest groups than previously known. The records do not reveal any previously unreported connections to Russia.”
Clearly, none of this matters to hardcore Trump supporters, who dismiss it all as fake news. But for the rest of us, who care about facts, what comes next?
All of these actions seem clearly unethical. Some are likely criminal.
Besides the abuse of office, Halkbank, and Deutsche Bank shenanigans described above, Trump is being audited for a $72 million tax refund, and also faces investigations for other phony-sounding tax deductions and campaign finance violations.
As long as Trump is in office, he appoints and fires the chief U.S. law enforcement officer—the Attorney General. That means he will not face federal prosecution as long as he is in office, because he can just fire the prosecutor. .
If he loses the election, he could insulate himself from federal criminal prosecution, in the same way that Nixon did. He could resign, at any time before January 20, and have Pence pardon him. Nixon was pardoned for any federal crimes he might have committed. A pardon can be that broad—it need not specify crimes. In the most egregious scenario, Trump could pardon Pence before resigning, so they would both be immune from federal prosecution.
That’s a key phrase: federal prosecution. New York and New Jersey and Washington DC are already investigating Trump shenanigans. And he can’t pardon his way out of state prosecutions.