Trump's fabulism

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TPM's Nicole Lafond reminds us that Trump tried to dupe Forbes about his wealth:

In 1984, when President Donald Trump was a 38-year-old budding real estate mogul, a Trump Organization aide called the reporter who was developing the annual Forbes 400 list to try to convince him that Trump was a billionaire, not a $200 millionaire, as the magazine had suggested the year before

That aide, according to an op-ed from the former Forbes reporter in the Washington Post Friday, was actually Trump himself.

The WaPo piece, by investigative journalist Jonathan Greenberg, even brags that we have the tapes:

In May 1984, an official from the Trump Organization called to tell me how rich Donald J. Trump was. I was reporting for the Forbes 400, the magazine's annual ranking of America's richest people, for the third year. In the previous edition, we'd valued Trump's holdings at $200 million, only one-fifth of what he claimed to own in our interviews. This time, his aide urged me on the phone, I needed to understand just how loaded Trump really was.

The official was John Barron -- a name we now know as an alter ego of Trump himself. When I recently rediscovered and listened, for first time since that year, to the tapes I made of this and other phone calls, I was amazed that I didn't see through the ruse: Although Trump altered some cadences and affected a slightly stronger New York accent, it was clearly him. "Barron" told me that Trump had taken possession of the business he ran with his father, Fred. "Most of the assets have been consolidated to Mr. Trump," he said. "You have down Fred Trump [as half owner] . . . but I think you can really use Donald Trump now." Trump, through this sockpuppet, was telling me he owned "in excess of 90 percent" of his family's business. With all the home runs Trump was hitting in real estate, Barron told me, he should be called a billionaire.

"This was a model Trump would use for the rest of his career," writes Greenberg, "telling a lie so cosmic that people believed that some kernel of it had to be real:"

The tactic landed him a place he hadn't earned on the Forbes list -- and led to future accolades, press coverage and deals. It eventually paved a path toward the presidency. [...]

Although Trump, posing as Barron, asked Forbes to conduct the conversation off the record, I am publishing it here. I believe an intent to deceive -- both with the made-up persona and the content of the call -- released me from my good-faith pledge. In a 1990 court case, Trump testified that he had used false names in phone calls to reporters. In 2016, when The Washington Post published a similar recording, Trump denied it was him.

"It would be decades," Greenberg continues, "before I learned that Forbes had been conned:"

In the early 1980s, Trump had zero equity in his father's company. According to Fred's will (portions of which appeared in a lawsuit), the father retained legal ownership of his residential empire until his death in 1999, at which point he left it to be divided between his four surviving children and some of his grandchildren. That explains why, after Trump went bankrupt in the early 1990s, he borrowed $30 million from his siblings, secured by an estimated $35 million share of his future inheritance, according to three sources in Tim O'Brien's 2005 biography, "TrumpNation." He could have used his own assets as collateral if he'd had any worth that amount, but he didn't.

The most revelatory document describing Trump's true net worth in the early '80s was a 1981 report from the New Jersey Casino Control Commission. O'Brien obtained a copy for his book. Trump had applied for an Atlantic City casino license, and regulators were able to review his tax returns and personal and corporate debt, giving them the most accurate picture of his finances. They found that he had an income of about $100,000 a year, while his 1979 tax returns showed a $3.4 million taxable loss. Trump's personal assets consisted of a $1 million trust fund that Fred Trump provided to each of his children and grandchildren, a few checking accounts with about $400,000 in them and a 1977 Mercedes 450SL. Nowhere did the report list an ownership stake in the Trump Organization's residential apartments. Trump also possessed a few parcels of valuable but highly leveraged real estate, financed with $22.5 million in debt, all of it secured by his father's assets. He did not own a safe deposit box or stocks in publicly traded companies. In sum, Trump was worth less than $5 million, not the $100 million that I reported in the first Forbes 400.

"Later attempts by Trump to paint himself as fantastically wealthy were also duplicitous," Greenberg writes, "according to the New Jersey Casino Commission, which issued another report in 1991:"

His net worth, the commission estimated, was $205 million -- less than 6 percent of what he'd told Forbes. In 1990, the magazine dropped Trump from the list and kept him off it for five years.

To summarize, "Trump's fabrications provided the basis for a vastly inflated wealth assessment for the Forbes 400 that would give him cachet for decades as a triumphant businessman:"

In his book, O'Brien criticized Forbes for rewarding Trump's fabrications, citing interviews with "three people with direct knowledge of Donald's finances" who estimated his true net worth after debts to be "somewhere between $150 million and $250 million." Trump, who had told O'Brien he was worth $6 billion, sued for libel -- and lost. When he lost his appeal in 2011, a New Jersey appellate judge wrote, "The largest portion of Mr. Trump's fortune, according to three people who had had direct knowledge of his holdings, apparently comes from his lucrative inheritance. These people estimated that Mr. Trump's wealth, presuming that it is not encumbered by heavy debt, may amount to about $200 million to $300 million. That is an enviably large sum of money by most people's standards but far short of the billionaires club."

The opacity persists. In 2016, Trump's presidential campaign put out a statement saying the candidate had a net worth "in excess of TEN BILLION DOLLARS." But he has never released his tax returns, and he has said that the core Trump Organization asset is the ownership of his brand -- an ineffable marketing claim that is impossible to substantiate or refute.

If Trump hadn't been able to dupe Forbes so easily, we might have been spared the sad spectacle of him conning a substantial minority of the electorate.

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This page contains a single entry by cognitivedissident published on April 20, 2018 11:39 AM.

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