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Donald Trump Forged His Own Legend

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When the Forbes 400 was first published in 1982, Donald Trump was near the bottom of the list. Ronald Herbst, the reporter who compiled the list, began receiving telephone calls from a John Baron who claimed to be a vice president within the Trump Organization.  He claimed Donald Trump was worth more than $100,000,000. He realized he was trying to conflate the fortunes of father and son together as if they were one and the same person.  Years later, the reporter listened to the tape recordings he had made of his telephone conversations and realized that he had been talking to Donald Trump.  The reporter realized that Donald Trump had inflated his net worth and then sued what Forbes had published to improve his line of credit so he could borrow money for his various projects.

Donald Trump was not the great businessman that he claimed to be.  Analyses by The Economist and The Washington Post concluded Trump’s investments under-performed stock market. He would been better off putting the money into the savings account of a bank than investing in real estate.   Forbes estimate October 2018 value Trump’s personal brand licensing business declined by 88% since 2015, to $3 million.

 Donald Trump often claimed he started with “small loan of one million dollars” from his father, that he asserted he had to pay back with interest. The reality was quite different.   On October 16, 2018, The New York Times published an exposé drawing on more than 100,000 pages of tax returns and financial records from Trump’s businesses, and interviews with former advisers and employees.  The report is based on a financial document mailed to the newspaper by an anonymous source.

The New York Times concluded that Fred’s son Donald “was a millionaire by age 8,” and that he had received $413 million (adjusted for inflation) from Fred’s business empire over his lifetime. According to the Times, Fred Trump loaned at least $60 million to his son Donald, who largely failed to reimburse him. The paper also described a number of purportedly fraudulent tax schemes, for example when Fred Trump sold shares in Trump Palace condos to his son well below their purchase price, thus masking what could be considered a hidden donation, and benefiting from a tax write-off.  Donald Trump’s lawyer denied the allegations of fraud and tax evasion, while the New York tax department stated it would investigate the issue.

The newspaper described a number of purportedly fraudulent tax schemes.  For example, Fred Trump sold shares in Trump Palace condos to his son well below their purchase price, thus masking what could be considered a hidden donation, and benefiting from a tax write-off.  Donald Trump’s lawyer denied the allegations of fraud and tax evasion, while the New York tax department stated they would investigate the issue. Trump amassed a $400 million fortune, which was largely left to his children, forming the bulk of Donald Trump’s wealth. The New York Times reported Trump declared a $916 million loss in 1995 which could have allowed him to legally skip paying federal income taxes for years.

In the end, Donald Trump is not the great businessman that he claimed to be.  His fortune was propped up by his father and business activities were subsidized by his father in various ways.

NYC Walks Blog 79 Donald Trump Forged His Own Legend © 2019 by Dr. Philip Ernest Schoenberg

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