[Rushtalk] The myth and the reality of Donald Trump’s business empire - The Washington Post

Carl Spitzer lynux at keepandbeararms.com
Mon Jun 13 10:32:41 MDT 2016


Usually democrats just talk trash but there seems to be some meat on the
bones of the skelten in the Trump closet.
  






By Ana Swanson February 29 Follow @anaswanson 

(Rachel Orr/The Washington Post; iStock; Reuters) 
So many claims have been made about Donald Trump's business career
during the presidential campaign — from Trump’s dramatic statements
about his own success, to Marco Rubio’s fiery attacks during the
Republican debate Thursday night. The questions remain: Is Trump really
a titan of American business, a model of entrepreneurial success and
self-invention? Or is he a reality TV star who has spent his career
playing around with businesses built with inherited money, while
ceaselessly courting celebrity along the way?

The truth appears to be somewhere in between. His business
decisions over the years show that Trump is a mix of braggadocio,
business failures, and real success.

Trump has dabbled in everything from real estate to steak, casinos and
beauty queens, and he serves as an executive for more than 500
companies. Yet on top of his real business success, he has built an
architecture of self-aggrandizement. “I play to people’s fantasies,”
Trump wrote in his 1987 book “The Art of the Deal.” “I call it truthful
hyperbole. It’s an innocent form of exaggeration — and a very effective
form of promotion.”

Given all the “truthful hyperbole” out there about Trump, it’s hard to
know what to believe. Here are five of the most important things to know
about Trump’s business career.



1) He has a talent for real estate, but that hasn’t always translated
well to other industries.


(Rachel Orr/The Washington Post; iStock) 
Trump has forged a successful real estate career over 45 years,
profiting from flagship buildings like the Trump Tower on Fifth Avenue
in Manhattan, the Trump Tower Chicago, and Mar-a-Lago, a private club in
Palm Beach, Fla. His Trump Organization owns a portfolio of buildings,
hotels and golf courses around the world.

Yet his real estate business isn’t exactly the dominant force he
suggests. Despite a national reputation as a New York property mogul,
Trump doesn’t make it into top 10 lists of the city’s real estate
players.

While his dealings in hotels and golf courses around the world appear to
be success — his companies are privately held, so details are scarce —
forays into casinos, airlines, professional football and other
industries have ended badly.

[The Trump Network sought to make people rich, but left behind
disappointment] 

His casino business, which produced the four bankruptcies that political
opponents often hammer him about, is probably his most infamous flop.
Though Trump paints these Chapter 11 bankruptcies as if they were a good
deal, saying they allowed him to get out of a failing Atlantic City
business at a strategic time, the 1991 bankruptcy proceedings brought
him close to losing much of his personal fortune. As Drew Harwell and
Jacob Bogage wrote for the Post, Trump had to put millions of dollars of
his own money into struggling companies, sold his yacht and his airline,
gave up substantial ownership stakes and decision making roles, and even
agreed to limits on his own personal spending.

Today, Trump describes these bankruptcies as if no one was hurt in the
process, except high rollers and sharks. He says that he has started
hundreds of companies, but only used bankruptcy proceedings four times.
And he claims that Atlantic City has been a losing proposition for most
entrepreneurs. "Almost every hotel in Atlantic City has either been in
bankruptcy or will be in bankruptcy," Trump said during the third
Republican debate.

Michael d’Antonio, who wrote a recent biography of Trump, says that is
an incomplete assessment.

“But there were many people who weren’t wealthy who lost money on those
bankruptcies,” he said. “Anyone who invested in a bond fund or who
bought individual securities that were linked to his casinos lost
money.”

According to the New York Times, Wall Street banks remain hesitant to
deal with Trump, due to the previous bankruptcies and his litigious
nature. Federal Election Commission disclosures have shown that 15
companies associated with Trump owe more than $270 million to banks.
Trump responds to these critiques by saying that he doesn't use Wall
Street because he doesn't need the money — he's rich enough to do his
own financing.

Another long and strange story is Trump’s involvement with professional
football in the 1980s. In 1984, Trump bought the New Jersey Generals, a
team in the nascent and briefly-lived United States Football League,
which played its games in the spring, after the Super Bowl.

In New York Times writer Joe Nocera’s account, Trump’s aim was in large
part to have the league acquired by the National Football League, in the
same way that the American Football League merged with the NFL in
1966. Trump led a charge to move the league's games from the spring to
the fall, when they would go head-to-head with the NFL. Instead of
merging with the NFL, the USFL simply flopped.


“I think he’s very good at real estate, I don’t think he’s very good at
other things,” says biographer D'Antonio. “He tried to run an airline
and failed at that. He tried to run casinos and failed four times.
That’s not evidence of brilliance when it comes to operating a complex
business.”

Trump has acknowledged a tendency to get bored easily with business
ventures. “The same assets that excite me in the chase, often, once they
are acquired, leave me bored,” Trump wrote in one of his books. “For me,
you see, the important thing is the getting, not the having.”



2) Trump is not a self-made man.


(Rachel Orr/The Washington Post; iStock; Getty) 
One of Marco Rubio’s top zingers in the debate last week was that if
Trump hadn’t gotten an inheritance of $200 million from his father, he’d
be “selling watches” in the streets of Manhattan. Rubio got the figures
about Trump’s inheritance wrong — $200 million is actually what Trump’s
dad’s fortune was estimated at in the 1970s, not Trump’s inheritance —
but Trump clearly benefited from the wealth and connections of his
father, Fred Trump.

One of the richest people in America in the 1970s, Fred Trump built
a real estate empire developing apartments for middle-class families in
Brooklyn, Queens and Staten Island after World War II. After the younger
Trump graduated from the University of Pennsylvania's Wharton School in
1968, he joined his dad’s firm and, in 1971, took over the business. He
built on his dad’s success, deploying leveraged capital on risky
ventures that paid off: the Grand Hyatt Hotel on East 42nd Street, the
Trump Tower on Fifth Avenue, and Trump Plaza on 61st and Third Avenue.

What Trump benefited most from initially was his dad’s
credit-worthiness, says D’Antonio. “When he wanted to go into business
on his own, his father’s credit was available to him, and that was worth
tens of millions of dollars.”

Still, there are questions over how much wealth Trump created. In the
debate last week, Trump claimed that he took a loan of $1 million from
his father and he turned it into a fortune of $10 billion. But
The Post's fact checkers say that neither claim is quite right.

The $1 million loan doesn’t include any of the benefits Trump received
from his family’s connections and joining his father’s real estate
business after he graduated from college, and it doesn’t count an
estimated $40 million inheritance in 1974. The $10 billion figure, which
is what Trump claims as his current net worth, is also disputed.
Bloomberg News has estimated Trump's net worth at only $2.9 billion,
while Forbes put it at $4.1 billion. Since Trump’s businesses aren’t
public, the true figure isn’t clear.

As my colleague Max Ehrenfreund has argued, even if Trump has many
billions of dollars, there's an open question over whether that reflects
true business acumen.

Business Week estimated Trump’s net worth at $100 million in 1978. If
Trump had merely put that money in an index fund based on the Standard &
Poor's 500 index — the kind many Americans use to save for retirement —
he would be worth $6 billion today.



3) Everything Trump touches turns to "Trump." 


(Rachel Orr/The Washington Post; iStock) 
Trump has a kind of Midas touch: Many of the businesses he comes in
contact with end up with his last name on them, often in large, gilded
capital letters. Of the 515 companies that Trump has a part in running,
268 bear his last name, according to a filing with the Federal Election
Commission. Yet not all of the buildings emblazoned with Trump's last
name are owned by him; for many properties, he merely licenses his name
to other developers.

D’Antonio says the strategy of branding and franchising is unusual for a
businessperson, and more reminiscent of a professional athlete. “Donald
is brilliant about turning himself into a walking brand, and he seized
that opportunity pretty early,” he says.

Trump’s penchant for deploying his name has been a successful marketing
strategy, but it also appears to satisfy a deeper desire for fame and
accomplishment.

In addition to the Trump hotels and casinos, there are Trump-branded
steaks (developed for the Sharper Image catalogue, but still served in
Trump hotel restaurants), a Trump board game, the now-defunct Trump
magazine and Trump Airlines, and a line of shirts and ties called the
Donald J. Trump Signature Collection. Trump has put his name on water,
Israeli energy drinks, cologne, Virginian wine, vodka, furniture –
“almost anything that might be sold as high quality, high cost, and
high-class,” D'Antonio writes.


The Trump brand family also includes the strange saga of Trump
University, which has been the subject of intense criticism by his
political rivals. As the Post’s Emma Brown wrote in September, Trump
University was not a university at all, but a series of motivational
workshops and real estate industry tips that were held in hotel
ballrooms beginning in 2004.

Students paid several thousand dollars for a three-day course, and up to
$35,000 for more extensive mentoring and workshop packages. Some were
under the impression that they would be mentored by Trump himself, but
in the end the closest they got was a cardboard cutout of Trump they
could take a picture with.


Marco Rubio accused Donald Trump of starting a "fake university" at the
Feb. 25 GOP debate in Houston. Here's what you need to know about Trump
University. (Peter Stevenson/The Washington Post) 
Trump still faces lawsuits from the venture, including a $40 million
suit from the New York attorney general for defrauding students and
operating an unlicensed university.

Trump responded to comments about Trump University in Thursday's debate
by calling the lawsuits "nonsense."

"It's something I could have settled many times. I could settle it right
now for very little money, but I don't want to do it out of principle,"
he said. "The people that took the course all signed -- most -- many --
many signed report cards saying it was fantastic, it was wonderful, it
was beautiful."



4) Trump’s record includes some unsavory episodes.


(Rachel Orr/The Washington Post; iStock; Getty) 
While Trump was never accused of doing anything illegal, he worked
extensively with companies controlled by the mafia on properties in New
York and Atlantic City, including Trump Tower and Trump Plaza.

Some would say that was the only way to develop property in New York in
the 1970s and 1980s – the mob controlled many parts of the city’s
construction industry, including concrete, labor unions and trash
disposal. Still, the extent of Trump's involvement is certainly
unique. “No serious presidential candidate has ever had Trump’s depth of
documented business relationships with mob-controlled entities,” The
Post’s Robert O’Hara Jr. wrote.

Trump has said that he did not know these companies' mafia
connections, adding that they were "unbelievably good contractors in
terms of doing the work."

As Republican opponents have pointed out, Trump’s businesses may have
hired undocumented and guest workers — allegations that now prove
awkward for a presidential candidate running on an anti-immigration
platform.

Construction workers at Trump’s new D.C. hotel told The Washington
Post that some workers were undocumented, while the New York Times
reported that Trump’s Mar-a-Lago Club in Palm Beach rejected hundreds of
applications from Americans only to bring in hundreds of Romanian guest
workers.

[The Trump Network sought to make people rich, but left behind
disappointment] 

As Rubio recounted in the debate Thursday night, Trump also faced a
long-running lawsuit over the use of undocumented workers at the Trump
Tower on Fifth Avenue in Manhattan. The building was allegedly built by
undocumented Polish workers who were paid $5 an hour or less, when they
were paid at all. The case dragged on for decades. The judged ruled that
Trump knew that Polish workers were working off the books and were paid
illegally and sub-standardly. Trump appealed, and the case was
ultimately settled in 1999.

There were other strange incidents. The lawyer who represented the
Polish workers claimed that someone named "John Baron" had called to
threaten him with a lawsuit if he kept causing trouble, as Michael Daly
writes for The Daily Beast. Trump denied making the call, but he used
the pseudonym John Baron throughout his career. He suggested the name
“John Barron” for the main character in a never-produced TV show called
“The Tower” that was loosely based on Trump’s life, and he and Melania
later named their son Barron.

When Rubio brought up the Polish workers in Thursday's debate, Trump
responded by saying he had hired tens of thousands of people in his
lifetime, and that, at the time, "the laws were totally different. That
was a whole different world."



5) Trump's genius is building a brand, even a mythology.


(Rachel Orr/The Washington Post; Jabin Botsford; The Washington Post;
iStock) 
In the 1980s, Donald Trump was short on cash but eager to get Holiday
Inn involved in a new casino project in Atlantic City. The construction
wasn’t far along, but the Holiday Inn executives were coming to town,
and Trump wanted to impress them. So he ordered a construction crew to
dig up piles of dirt and drive them around on the site as energetically
as possible. When the Holiday Inn executives arrived, they were
impressed and agreed to invest, Trump recalls in “The Art of the Deal.”

Trump's greatest talent turns out to be not building businesses, but
constructing a larger-than-life public figure. D’Antonio says he thinks
Trump has worked to create a strong brand mostly because his ego "needed
the attention." However, Trump also figured out how to make the
attention profitable as well.

Trump's personal brand got a huge boost from “The Apprentice,” the
reality TV show in which Trump came off as a straight-talking
truth-teller – “a decider who insisted on standards in a country that
had somehow slipped into handing out trophies just for showing up,” as
The Post’s Mark Fisher writes. In a recent book, Trump wrote that he
didn’t do the show for money, but rather because of the “brand
presence.”

Through his career, Trump has had a knack for converting his
outrageousness into profit. Now, says D’Antonio, Trump is trying to
convert it into votes.

https://www.washingtonpost.com/news/wonk/wp/2016/02/29/the-myth-and-the-reality-of-donald-trumps-business-empire/

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