A New York Times investigation revealed ex-President Trump’s financial woes, amid losing resorts and unpaid debts
Not long after walking through White House grounds on Wednesday morning for the last time as president, Donald J Trump will enter a financial minefield that appears to be unlike anything he faced in his previous crashes.
Tax records he has long struggled to keep under wraps, revealed in a New York Times investigation last September, detail his financial challenges:
Many of its resorts were losing millions of dollars a year even before the pandemic. Hundreds of millions of dollars in loans, personally guaranteed by him, must be repaid within a few years. He has burned much of his money and his easy-to-sell assets. And a ten-year tax audit threatens to cost him more than $ 100 million.
In his early dark times, Trump had been able to bail out the companies he runs with multimillion-dollar infusions from his father or deals stemming from his TV stardom. Those possibilities have disappeared. And his divisive presidency has steadily eroded the marketability of the brand that is at the heart of his business.
This trend only accelerated with his no-evidence campaign to subvert the outcome of the presidential election, which culminated in the assault on the Capitol on January 6. In the wake of him, his latest money lender vowed to cut him off. The PGA canceled an upcoming championship at a Trump golf course, and New York City moved to halt contracts to manage several properties.
Trump’s family described his end of office as opening up new opportunities that were foreclosed when he was president. His son Eric recently told the Times that the company expects significant demand for overseas branding deals involving Trump. The family also considered starting a media company to keep in touch with his supporters.
“There has never been a political figure with more support than my father,” Eric Trump said in a statement. “There will be incredible opportunities in the real estate sector and beyond”.
But without a new entity ready to lend, or a new line of revenue that doesn’t require a large investment of time and money, the former president will likely face tough choices, including being forced to sell cheap golf courses. performers or his hotel in the Old Post Office Building in Washington.
“Trump is so toxic because of his reputation that many financial institutions won’t want to do business with him,” said Adam J. Levitin, a Georgetown University law professor who deals with finance and bankruptcy.
Even in the defeat, Trump raised more than $ 250 million in political donations from the election. Yet while some of that money could be spent in ways that artfully, or aggressively mix political work expenses with personal and business costs, campaign finance laws would not allow Trump to use the campaign. full amount to support its business.
After previous challenges, Trump portrayed himself as a comeback kid, someone who independently rose above financial woes by striking new fabulous deals. What he hid was the extent to which his father’s fortune and a second fortune from entertainment – the combined equivalent of nearly a billion dollars today – provided a reservoir of liquidity that could cover repeated failures.
In the late 1980s, when his empire of casinos, hotels, an airline, and a football team began to collapse under the weight of excessive debt and high spending, Trump’s father secretly intervened, hedging an interest payment. $ 3 million here, a $ 15 million loss on a new condo there.
Later, after the financial crisis that began in 2008, Trump was unable to repay the huge loans on his Chicago tower, much of his commercial space emptied and his casinos approached another bankruptcy. Although disaster loomed for the businesses he ran, Trump grossed more than $ 154 million from 2008 to 2011 from “The Apprentice” and licensed his name for use on projects run by other people.
He received the last multimillion-dollar share of his inheritance about two years ago. And the source of wealth from the entertainment business had nearly dried up by the time he entered politics, going from profits of over $ 50 million in peak years to less than $ 3 million in 2018. of his debts played a significant role).
The Times obtained data on tax refunds for Trump spanning more than two decades, including information on his personal profits through 2017 and his trading profits through 2018. The data shows that many of his assets have rarely, if not, remained. never, standing alone.
Its three golf resorts in Scotland and Ireland, for example, have experienced substantial cash losses. Through 2018, in the years following the reopening of the three resorts, Trump pumped an additional $ 66 million in cash, helping to keep them afloat.
The Trump International Hotel in Washington, which opened in 2016, recorded cash losses every year through 2018. Trump invested an additional $ 17.6 million in the hotel in those years, in addition to his initial investment. And the situation probably got bleaker last year. Since the pandemic broke out, the hotel has opened for night guests, but the bar, a popular meeting place for government officials and Trump supporters, has closed.
As his entertainment fortunes run out, Trump has filled some of the resulting void with a $ 100 million mortgage on Trump Tower commercial space, and with the sale of nearly all of his stocks and bonds. , for a total of more than $ 270 million for the period from 2014 to 2016.
But now he faces maturing loans: $ 100 million on Trump Tower next year, $ 125 million on his Doral golf resort in Florida in 2023 and $ 170 million on the Washington hotel in 2024. Trump has personally secured most of this debt, meaning lenders could pursue his other assets if he can’t pay or refinance.
Its outlook deepened after the violence on the Capitol when Deutsche Bank – the last traditional bank willing to do business with Mr. Trump in recent years and his lender for the Doral and Washington hotel – said he would no longer lend him.
Phillip Braun, a finance professor at Northwestern University, expects Trump to find another lender, but at other prices.
“You will be able to find credit if you are willing to pay higher interest,” said Mr. Braun.
The president’s most profitable and long-term property appears to be one of his earliest projects: the commercial and retail spaces in and around Trump Tower, Manhattan, which for years has reliably supplied more than 20 million dollars a year in profits. But in the current situation, even that key asset to his financial success is in trouble.
And while Trump still has assets he could sell to generate liquidity, he doesn’t have the ability to unilaterally sell what is perhaps the most valuable: a 30% stake in two office buildings controlled by the Vornado Realty Trust. The investment, which Trump has practically stumbled upon and which he does not manage, has proved to be one of his largest and most reliable sources of income, but Trump cannot sell it without Vornado’s consent.
The 10-year tax review by the IRS represents an additional risk. According to documents obtained by the Times, it appears to have started after Trump stated that giving up his stake in his casino business entitled him to a refund of $ 72.9 million – all federal income taxes he had paid. (plus interest) for the period from 2005 to 2008.
The repayment automatically triggered an audit, which remained active at least until last spring. Logs indicate that the matter was put on hold while he was in office, but could resume now. An unfavorable ruling could cost Trump more than $ 100 million, with interest and penalties.
Trump also faces legal threats that could aggravate any financial hardship, including investigations into potential tax fraud prosecuted by the Manhattan District Attorney and the New York Attorney General, as well as civil lawsuits for his role in promoting a scheme. of multilevel marketing.
(Extract from the press review of Eprcomunicazione)
