The president has long sold himself as a self-made billionaire, but a Times investigation found that he received at least $413 million in today’s dollars from his father’s real estate empire, much of it through tax dodges in the 1990s.
.. Fred and Mary Trump, transferred well over $1 billion in wealth to their children, which could have produced a tax bill of at least $550 million under the 55 percent tax rate then imposed on gifts and inheritances.
The Trumps paid a total of $52.2 million, or about 5 percent, tax records show.
.. The Times’s findings raise new questions about Mr. Trump’s refusal to release his income tax returns, breaking with decades of practice by past presidents. According to tax experts, it is unlikely that Mr. Trump would be vulnerable to criminal prosecution for helping his parents evade taxes, because the acts happened too long ago and are past the statute of limitations. There is no time limit, however, on civil fines for tax fraud.
.. Most notably, the documents include more than 200 tax returns from Fred Trump, his companies and various Trump partnerships and trusts.
.. What emerges from this body of evidence is a financial biography of the 45th president fundamentally at odds with the story Mr. Trump has sold in his books, his TV shows and his political life. In Mr. Trump’s version of how he got rich, he was the master dealmaker who broke free of his father’s “tiny” outer-borough operation and parlayed a single $1 million loan from his father (“I had to pay him back with interest!”) into a $10 billion empire
.. In Mr. Trump’s version, it was always his guts and gumption that overcame setbacks. Fred Trump was simply a cheerleader.
.. “I built what I built myself,” Mr. Trump has said, a narrative that was long amplified by often-credulous coverage from news organizations, including The Times.
.. They described how Mr. Trump piggybacked off his father’s banking connections to gain a foothold in Manhattan real estate. They poked holes in his go-to talking point about the $1 million loan, citing evidence that he actually got $14 million. They told how Fred Trump once helped his son make a bond payment on an Atlantic City casino by buying $3.5 million in casino chips.
.. The reporting makes clear that in every era of Mr. Trump’s life, his finances were deeply intertwined with, and dependent on, his father’s wealth.
.. By age 3, Mr. Trump was earning $200,000 a year in today’s dollars from his father’s empire. He was a millionaire by age 8. By the time he was 17, his father had given him part ownership of a 52-unit apartment building. Soon after Mr. Trump graduated from college, he was receiving the equivalent of $1 million a year from his father. The money increased with the years, to more than $5 million annually in his 40s and 50s.
.. In one six-year span, from 1988 through 1993, Fred Trump reported $109.7 million in total income, now equivalent to $210.7 million. It was not unusual for tens of millions in Treasury bills and certificates of deposit to flow through his personal bank accounts each month.
.. Fred Trump was relentless and creative in finding ways to channel this wealth to his children. He made Donald not just his salaried employee but also his property manager, landlord, banker and consultant. He gave him loan after loan, many never repaid. He provided money for his car, money for his employees, money to buy stocks, money for his first Manhattan offices and money to renovate those offices. He gave him three trust funds. He gave him shares in multiple partnerships. He gave him $10,000 Christmas checks. He gave him laundry revenue from his buildings.
.. Much of his giving was structured to sidestep gift and inheritance taxes using methods tax experts described to The Times as improper or possibly illegal. Although Fred Trump became wealthy with help from federal housing subsidies, he insisted that it was manifestly unfair for the government to tax his fortune as it passed to his children.
When he was in his 80s and beginning to slide into dementia, evading gift and estate taxes became a family affair, with Donald Trump playing a crucial role, interviews and newly obtained documents show.
.. There is no shortage of clever tax avoidance tricks that have been blessed by either the courts or the I.R.S. itself. The richest Americans almost never pay anything close to full freight. But tax experts briefed on The Times’s findings said the Trumps appeared to have done more than exploit legal loopholes. They said the conduct described here represented a pattern of deception and obfuscation, particularly about the value of Fred Trump’s real estate, that repeatedly prevented the I.R.S. from taxing large transfers of wealth to his children.
“The theme I see here through all of this is valuations: They play around with valuations in extreme ways,” said Lee-Ford Tritt, a University of Florida law professor and a leading expert in gift and estate tax law. “There are dramatic fluctuations depending on their purpose.”
.. The Trumps dodged hundreds of millions in gift taxes by submitting tax returns that grossly undervalued the properties, claiming they were worth just $41.4 million.
The same set of buildings would be sold off over the next decade for more than 16 times that amount.
.. All told, The Times documented 295 streams of revenue that Fred Trump created over five decades to enrich his son.
.. as Donald Trump careened from one financial disaster to the next, his father found ways to give him substantially more money, records show. Even so, in 1990, according to previously secret depositions, Mr. Trump tried to have his father’s will rewritten in a way that Fred Trump, alarmed and angered, feared could result in his empire’s being used to bail out his son’s failing businesses.
Of course, the story of how Donald Trump got rich cannot be reduced to handouts from his father. Before he became president, his singular achievement was building the brand of Donald J. Trump, Self-Made Billionaire, a brand so potent it generated hundreds of millions of dollars in revenue through TV shows, books and licensing deals.
Constructing that image required more than Fred Trump’s money. Just as important were his son’s preternatural marketing skills and always-be-closing competitive hustle. While Fred Trump helped finance the accouterments of wealth, Donald Trump, master self-promoter, spun them into a seductive narrative. Fred Trump’s money, for example, helped build Trump Tower, the talisman of privilege that established his son as a major player in New York. But Donald Trump recognized and exploited the iconic power of Trump Tower as a primary stage for both “The Apprentice” and his presidential campaign.
.. on May 4, 2004, when Mr. Trump and his siblings sold off the empire their father had spent 70 years assembling with the dream that it would never leave his family.
Donald Trump’s cut: $177.3 million, or $236.2 million in today’s dollars.
They were both fluent in the language of half-truths and lies, interviews and records show. They both delighted in transgressing without getting caught. They were both wizards at manipulating the value of their assets, making them appear worth a lot or a little depending on their needs.
.. Emblematic of their audacity was Park Briar, a 150-unit building in Queens. As it happened, 18 days before Fred Trump Jr.’s death, the Trump siblings had submitted Park Briar’s co-op conversion plan, stating under oath that the building was worth $17.1 million. Yet as Fred Trump Jr.’s executors, Donald Trump and his father when Fred Trump Jr. died.
.. This fantastical claim — that Park Briar should be taxed as if its value had fallen 83 percent in 18 days — slid past the I.R.S. with barely a protest. An auditor insisted the value should be increased by $100,000, to $3 million.
.. During the 1980s, Donald Trump became notorious for leaking word that he was taking positions in stocks, hinting of a possible takeover, and then either selling on the run-up or trying to extract lucrative concessions from the target company to make him go away. It was a form of stock manipulation with an unsavory label: “greenmailing.” The Times unearthed evidence that Mr. Trump enlisted his father as his greenmailing wingman.
On Jan. 26, 1989, Fred Trump bought 8,600 shares of Time Inc. for $934,854, his tax returns show. Seven days later, Dan Dorfman, a financial columnist known to be chatty with Donald Trump, broke the news that the younger Trump had “taken a sizable stake” in Time. Sure enough, Time’s shares jumped, allowing Fred Trump to make a $41,614 profit in two weeks.
.. Later that year, Fred Trump bought $5 million worth of American Airlines stock. Based on the share price — $81.74 — it appears he made the purchase shortly before Mr. Dorfman reported that Donald Trump was taking a stake in the company. Within weeks, the stock was over $100 a share.
.. Fred Trump could be cantankerous and cruel, according to sworn testimony by his relatives. “This is the stupidest thing I ever heard of,” he’d snap when someone disappointed him. He was different with his son Donald. He might chide him — “Finish this job before you start that job,” he’d counsel — but more often, he looked for ways to forgive and accommodate.
.. By 1987, for example, Donald Trump’s loan debt to his father had grown to at least $11 million. Yet canceling the debt would have required Donald Trump to pay millions in taxes on the amount forgiven. Father and son found another solution, one never before disclosed, that appears to constitute both an unreported multimillion-dollar gift and a potentially illegal tax write-off.
.. Most, if not all, of his investment, which totaled $15.5 million, was made by exchanging his son’s unpaid debts for Trump Palace shares, records show.
.. Under I.R.S. rules, selling shares worth $15.5 million to your son for $10,000 is tantamount to giving him a $15.49 million taxable gift. Fred Trump reported no such gift.
.. Fred Trump evaded the 55 percent tax on gifts, saving about $8 million. At the same time, he declared to the I.R.S. that Trump Palace was almost a complete loss — that he had walked away from a $15.5 million investment with just $10,000 to show for it.
Federal tax law prohibits deducting any loss from the sale of property between members of the same family, because of the potential for abuse. Yet Fred Trump appears to have done exactly that, dodging roughly $5 million more in income taxes.
.. At its heart lay a more ambitious project, executed to perfection over decades — to create that origin story, the myth of Donald J. Trump, Self-Made Billionaire.
.. Donald Trump built the foundation for the myth in the 1970s by appropriating his father’s empire as his own.
.. Through it all, Fred Trump played along. Never once did he publicly question his son’s claim about the $1 million loan.
.. Fred Trump believed that the document potentially put his life’s work at risk.
.. he document, known as a codicil, did many things. It protected Donald Trump’s portion of the inheritance from his creditors and from his impending divorce settlement with his first wife, Ivana Trump. It strengthened provisions in the existing will making him the sole executor of his father’s estate. But more than any of the particulars, it was the entirety of the codicil and its presentation as a fait accompli that alarmed Fred Trump
.. He confided to family members that he viewed the codicil as an attempt to go behind his back and give his son total control over his affairs. He said he feared that it could let Donald Trump denude his empire, even using it as collateral to rescue his failing businesses. (It was, in fact, the very month of the $3.5 million casino rescue.)
.. The lawyers quickly drafted a new codicil stripping Donald Trump of sole control over his father’s estate. Fred Trump signed it immediately.
.. Yet for all the financial support he had lavished on his children, for all his abhorrence of taxes, Fred Trump had stubbornly resisted his advisers’ recommendations to transfer ownership of his empire to the children to minimize estate taxes.
.. With every passing year, the actuarial odds increased that Fred Trump would die owning apartment buildings worth many hundreds of millions of dollars, all of it exposed to the 55 percent estate tax. Just as exposed was the mountain of cash he was sitting on.
.. Even after he paid himself $109.7 million from 1988 through 1993, his companies were holding $50 million in cash and investments
‘A DISGUISED GIFT’
A family company let Fred Trump funnel money to his children by effectively overcharging himself for repairs and improvements on his properties.
.. All County’s main purpose, The Times found, was to enable Fred Trump to make large cash gifts to his children and disguise them as legitimate business transactions, thus evading the 55 percent tax.
.. All County’s invoices were padded, marked up by 20 percent, or 50 percent, or even more, records show.
.. Years later, in his deposition during the dispute over Fred Trump’s estate, Robert Trump would say that All County actually saved Fred Trump money by negotiating better deals. Given Fred Trump’s long experience expertly squeezing better prices out of contractors, it was a surprising claim. It was also not true.
.. In 1991 and 1992, Fred Trump bought 78 refrigerator-stove combinations for Beach Haven from Long Island Appliance Wholesalers. The average price was $642.69. But in 1993, when he began paying All County for refrigerator-stove combinations, the price jumped by 46 percent.
.. Likewise, the price he paid for trash-compacting services at Beach Haven increased 64 percent. Janitorial supplies went up more than 100 percent. Plumbing repairs and supplies rose 122 percent.
.. While All County was all upside for Donald Trump and his siblings, it had an insidious downside for Fred Trump’s tenants.
.. One way to justify a rent increase was to make a major capital improvement. It did not take much to get approval; an invoice or canceled check would do if the expense seemed reasonable.
.. As Robert Trump acknowledged in his deposition, “The higher the markup would be, the higher the rent that might be charged.”
.. the Trumps got approval to raise rents on thousands of apartments by claiming more than $30 million in major capital improvements.
.. By 1998, records show, All County and Apartment Management were generating today’s equivalent of $2.2 million a year for each of the Trump children.
.. According to Fred Trump’s 1995 gift tax return, obtained by The Times, the Trumps claimed that properties including 25 apartment complexes with 6,988 apartments — and twice the floor space of the Empire State Building — were worth just $41.4 million.
.. The Trumps used Robert Von Ancken, a favorite of New York City’s big real estate families. Over a 45-year career, Mr. Von Ancken has appraised many of the city’s landmarks
.. buildings in the same neighborhood as Trump buildings sold for two to four times as much per square foot as Mr. Von Ancken’s appraisals
.. Of all Fred Trump’s properties, Patio Gardens was one of the least profitable, which may be why he decided to use it as a tax deduction. In 1992, he donated Patio Gardens to the National Kidney Foundation of New York/New Jersey, one of the largest charitable donations he ever made. The greater the value of Patio Gardens, the bigger his deduction. The appraisal cited in Fred Trump’s 1992 tax return valued Patio Gardens at $34 million, or $61.90 a square foot.
By contrast, Mr. Von Ancken’s GRAT appraisals found that the crown jewels of Fred Trump’s empire, Beach Haven and Shore Haven, with five times as many apartments as Patio Gardens, were together worth just $23 million, or $11.01 per square foot.
.. Mr. Von Ancken claimed that they were worth less than nothing — negative $5.9 million, to be exact.
.. a bank would value at $106.6 million in 2004.
..The I.R.S. has long accepted the idea that ownership with control is more valuable than ownership without control. Someone with a controlling interest in a building can decide if and when the building is sold, how it is marketed and what price to accept
.. the Trumps set out to create the fiction that Fred Trump was a minority owner. All it took was splitting the ownership structure of his empire. Fred and Mary Trump each ended up with 49.8 percent of the corporate entities that owned his buildings. The other 0.4 percent was split among their four children.
.. That enabled the Trumps to slash Mr. Von Ancken’s valuation in a way that was legally dubious. They claimed that Fred and Mary Trump’s status as minority owners, plus the fact that a building couldn’t be sold as easily as a share of stock, entitled them to lop 45 percent off Mr. Von Ancken’s $93.9 million valuation. This claim, combined with $18.3 million more in standard deductions, completed the alchemy of turning real estate that would soon be valued at nearly $900 million into $41.4 million.
.. The I.R.S. determined that the Trumps’ assets were worth $57.1 million, 38 percent more than the couple had claimed. From the perspective of an I.R.S. auditor, pulling in nearly $5 million in additional revenue could be considered a good day’s work. For the Trumps, getting the I.R.S. to agree that Fred Trump’s properties were worth only $57.1 million was a triumph.
.. The next year, 1998, Donald Trump’s share amounted to today’s equivalent of $9.6 million, The Times found.
This sudden influx of wealth came only weeks after he had published “The Art of the Comeback.”
.. “I learned a lot about myself during these hard times,” he wrote. “I learned about handling pressure. I was able to home in, buckle down, get back to the basics, and make things work. I worked much harder, I focused, and I got myself out of a box.”
Over 244 pages he did not mention that he was being handed nearly 25 percent of his father’s empire.
.. The man who paid himself $50 million in 1990 died with just $1.9 million in the bank.
.. According to his estate tax return, his most valuable asset was a $10.3 million I.O.U. from Donald Trump, money his son appears to have borrowed the year before Fred Trump died.
..In 2003, the Trump siblings gathered at Trump Tower for one of their periodic updates on their inherited empire.
.. Donald Trump insisted that the real estate market had peaked and that the time was right
.. He was also, once again, in financial trouble. His Atlantic City casinos were veering toward another bankruptcy. His creditors would soon threaten to oust him unless he committed to invest $55 million of his own money.
.. Schron paid $705.6 million for most of the empire, which included paying off the Trumps’ mortgages.
.. Within a year of the sale, Mr. Trump spent $149 million in cash on a rapid series of transactions that bolstered his billionaire bona fides. In June 2004 he agreed to pay $73 million to buy out his partner in the planned Trump International Hotel & Tower in Chicago.
.. The first season of “The Apprentice” was broadcast in 2004, just as Donald Trump was wrapping up the sale of his father’s empire.
.. Had Mr. Trump done nothing but invest the money his father gave him in an index fund that tracks the Standard & Poor’s 500, he would be worth $1.96 billion today.
Mike Pence, Holy Terror
Are you sure you want to get rid of Donald Trump?
There are problems with impeaching Donald Trump. A big one is the holy terror waiting in the wings.
That would be Mike Pence, who mirrors the boss more than you realize. He’s also self-infatuated. Also a bigot. Also a liar. Also cruel.
To that brimming potpourri he adds two ingredients that Trump doesn’t genuinely possess: the conviction that he’s on a mission from God and a determination to mold the entire nation in the shape of his own faith, a regressive, repressive version of Christianity. Trade Trump for Pence and you go from kleptocracy to theocracy.
.. The book persuasively illustrates what an ineffectual congressman he was, apart from cozying up to the Koch brothers, Betsy DeVos and other rich Republican donors
.. the strong possibility that he wouldn’t have won re-election; his luck in being spared that humiliation by the summons from Trump, who needed an outwardly bland, intensely religious character witness to muffle his madness and launder his sins; and the alacrity with which he says whatever Trump needs him to regardless of the truth.
.. In Pence’s view, any bite marks in his tongue are divinely ordained. Trump wouldn’t be president if God didn’t want that; Pence wouldn’t be vice president if he weren’t supposed to sanctify Trump. And his obsequiousness is his own best route to the Oval Office, which may very well be God’s grand plan.
.. “I don’t think he’s as resilient, politically, as Bill Clinton was,” D’Antonio said. “He doesn’t relish a partisan fight in the same way. He loves to go to rallies where people adore him.”
There’s no deeply felt policy vision or sense of duty to sustain him through the investigations and accusations. “If the pain is great enough,” D’Antonio said, “I think he’d be disposed not to run again.”
.. It suggests callousness at best toward African-Americans. As governor, Pence refused to pardon a black man who had spent almost a decade in prison for a crime that he clearly hadn’t committed. He also ignored a crisis — similar to the one in Flint, Mich. — in which people in a poor, largely black Indiana city were exposed to dangerously high levels of lead. D’Antonio told me: “I think he’s just as driven by prejudice as Trump is.”.. he rallied behind the unhinged former Arizona sheriff Joe Arpaio. In a speech he called Arpaio a “tireless champion” of the “rule of law.” This was after Arpaio’s contempt-of-court conviction for ignoring a federal judge’s order to stop using illegal tactics to torment immigrants. The conservative columnist George Will seized on Pence’s speech to write that Pence had dethroned Trump as “America’s most repulsive public figure.”.. You can thank Pence for DeVos. They are longtime allies, going back decades, who bonded over such shared passions as making it O.K. for students to use government money, in the form of vouchers, at religious schools.Pence cast the tiebreaking vote in the Senate to confirm her as education secretary... Pence once spoke positively on the House floor about historical figures who “actually placed it beyond doubt that the offense of abortion was a capital offense, punishable even by death.” He seemed to back federal funds for anti-gay conversion therapy. He promoted a constitutional amendment to ban same-sex marriage.“He is absolutely certain that his moral view should govern public policy,” D’Antonio told me.
.. Pence sees himself and fellow Christian warriors as a blessed but oppressed group, and his “hope for the future resided in his faith that, as chosen people, conservative evangelicals would eventually be served by a leader whom God would enable to defeat their enemies and create a Christian nation.”
.. Is America worse off with Trump or Pence?
“I have to say that I prefer Donald Trump, because I think that Trump is more obvious in his intent,” he said, while Pence tends to “disguise his agenda.”
By Separating Families at the Border, the Trump Administration Enforces the “Rule by Nobody”
- Donald Trump said that the Democrats made him do it.
- Jeff Sessions, the Attorney General, said it was the Bible.
- Kirstjen Nielsen, the Secretary of Homeland Security, said it was the law.
They all said it wasn’t them. In their unified defense of the policy of separating children from their families at the border, Administration officials have adopted a technique of deflection that renders victims and critics powerless: they have depersonalized the violence.
.. This is how violence works in the world’s most cruel and terrifying societies. The victims of genocide, ethnic cleansing, mass deportations, mass incarceration, man-made famines, and other disasters that humans intentionally visit on the “other” are always anonymous. The perpetrators portray their victims as a mass—the “animals” of Trump’s imagination, or the enemies and criminals that Sessions and Nielsen conjure up when they talk about asylum seekers
.. it’s not only the victims who are anonymous—it is also the perpetrators.
.. when Nielsen claims, in effect, to be just following orders, the nation’s top officials are not merely lying; they are de-personifying the perpetrators. They are not merely refusing to be held accountable but are saying that no one will account for the violence.
.. Vladimir Putin, has perfected it over the years. He has denied knowledge of arrests, trials, or even people of whom he was doubtless aware. He has shrugged his shoulders and spread his arms in a gesture of helplessness while claiming that the Russian judiciary is independent from the executive branch
.. Writing about the relationship between violence and bureaucracy, Hannah Arendt said, “In a fully developed bureaucracy there is nobody left with whom one could argue, to whom one could present grievances, on whom the pressures of power could be exerted.” She called bureaucracy the “rule by Nobody.”
.. What may be new, however, is a Presidency that explicitly cedes authority to that bureaucracy. Faced with widespread criticism of the family separations, the Administration is not exactly doubling down in defense of it. It is not trying to bring voters, journalists, or politicians around to supporting its policies.
.. one can observe “if not shame, then at least chagrin.” But I don’t think it’s chagrin that’s causing officials to shift the responsibility onto anonymous others.
.. The kind of state that Trump would like to run—and apparently the kind of state of which Sessions would like to be Attorney General and Kirstjen Nielsen would like to be Secretary of Homeland Security—is one that can subject its enemies to what Arendt called “administrative massacres.”
.. The logic of such a state demands an all-powerful bureaucratic machine; it demands the terrifying spectre of the rule by Nobody. So they are retrofitting the United States with such a bureaucracy—cruel, senseless, and accountable to no one.
The Cruelty of Barack Obama
On immigration, the ex-president isn’t what he says he is.
What gets almost zero press attention is the sneakier folks, Mr. Obama included. Truth is, no man has done more to poison the possibilities for fixing America’s broken immigration system than our 44th president.
.. Mr. Obama’s double-dealing begins with his time as junior senator from Illinois, when he helped sabotage a bipartisan immigration package supported by George W. Bush and Ted Kennedy. Mr. Obama’s dissembling continued during the first two years of his own presidency, when he had the votes to pass an immigration bill if he had chosen to push one. It was all topped off by his decision, late in his first term, to institute the policy on DACA that he himself had previously admitted was beyond his constitutional powers.
.. For all his big talk about how much he’s wanted an immigration bill, whenever he’s had the opportunity to back one, he’s either declined or actively worked to scuttle it... Sen. Obama opted to back 11th-hour amendments that Kennedy rightly complained were really intended as deal-breakers. At a critical point, Kennedy urged that President Bush ask then-Senate Majority Leader Harry Reid to keep the Senate in session to get the last few votes the bill needed. Mr. Reid opted for the Obama approach: Concluding he’d rather have the political issue than actual reform, he adjourned the Senate for the July 4 recess... Mr. Obama frequently noted the limits on his powers. “I know some here wish that I could just bypass Congress and change the law myself. But that’s not how democracy works,” he said. Then in 2012 he decided he would indeed change the law himself. A June 2012 Journal editorial captures the cynicism built into the DACA memo.The president’s move, the Journal predicted, “will further poison the debate and make Republicans more reluctant to come to the negotiating table and cut a deal.” The editorial went on: “One begins to wonder if anything this President does is about anything larger than his re-election.”