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 fatherwhen 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.
.. 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
.. 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 —
.. 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.
Having heard Trump boast on the tape about groping and kissing women without consent, this man told host Mark Halperin (oh, the irony) that the billionaire is “just like the rest of us: He likes guns, and he likes women. He had the power. He has the prestige. Why wouldn’t you take a little advantage?”
.. They probably don’t care. This adds an unusual twist to media coverage of Trump’s alleged infidelities. Most male politicians — even nonreligious ones — work to project the consummate family-man image. Disclosure of an affair often tarnishes or even shatters that image, revealing that a politician is not the person voters thought he was.
.. For example, Anthony Weiner .. John Edwards’s
.. Trump is different: He had a long history of having affairs before ever seeking political office. His affair with actress Marla Maples when he was married to Ivana Trump was a tabloid sensation. Melania Trump told GQ that Trump first sought her phone number when he was still married to Maples — at a party to which he brought a different woman as his date
.. For most of his public life, Trump’s desired image has been ladies’ man, not family man.
.. Daniels’s and McDougal’s accounts of sexual relationships, even if accurate, don’t expose anything about Trump that voters did not already know.
.. The question is not merely whether he is a cheater, but also whether he is a liar. Sleeping with a porn star and a Playboy Playmate is certainly consistent with Trump’s self-described lifestyle. His supporters might not mind such conduct, but lying — if that is what the president is doing — could be another matter. Trump never pretended to be a Puritan, but he did bill himself as a teller of hard truths and a keeper of promises.
.. Another consideration is whether Trump’s womanizing days are behind him.
.. during a period of national reckoning with sexual misconduct
.. I’ve traveled the country talking about change for America, but my travels have also changed me.”
.. If their stories were to draw out more recent claims, however, then the “changed man” narrative could unravel.
.. Coverage of Trump’s alleged affairs is not only about the president and his supposed partners. It is also about the standards of his backers.
On Wednesday, we learned that during a 2017 background check for the former White House staff secretary Rob Porter, his two ex-wives both told the F.B.I. that he had abused them
- His first wife, Colbie Holderness, gave the F.B.I. a photo of her with a black eye, a result, she said, of Porter punching her in the face during a vacation in 2005.
- Porter’s second wife, Jennifer Willoughby, shared a 2010 emergency protective order she’d received after he punched in the glass on her door while they were separated.
.. The White House chief of staff John Kelly reportedly knew about these allegations, which are said to be the reason the F.B.I. never gave Porter a full security clearance,
.. Porter’s past was apparently not considered a problem inside the White House until it became public. This tells us quite a bit about how seriously this administration takes violence against women.
.. Kelly reportedly urged Porter not to resign
.. President Trump’s press secretary Sarah Sanders read a statement from Porter calling his ex-wives’ accounts “simply false” and part of a “coordinated smear campaign.”
.. In what was perhaps a rare outbreak of candor by omission, she didn’t bother with a pro forma statement that the White House condemns domestic violence.
.. “I was exposed to a far wider array of classified and sensitive information in the White House job than as the top lawyer at the National Security Agency,”
.. It’s hard to see why Kelly, who was supposed to be the disciplined adult in this administration, would cover for Porter. Unless, that is, he genuinely couldn’t grasp that domestic violence is a big deal.
.. the abuse charges were the origin of Trump’s derisive nickname for Bannon: “Bam Bam.”
.. Andy Puzder, the former head of Carl’s Jr. and Trump’s first nominee for labor secretary.
.. Trump himself was accused of domestic assault by his first wife, Ivana Trump
.. Hurt wrote that Donald Trump became enraged after scalp reduction surgery left him in pain, and blamed his then-wife, who had recommended the doctor.
.. Hurt describes Trump pinning back Ivana’s arms and ripping out her hair by the handful “as if he is trying to make her feel the same kind of pain that he is feeling.” Then, she told friends, Trump raped her.
.. Willoughby described confiding in a Mormon official about her husband’s fits of rage. She was told to think about how Porter’s career might suffer if she spoke out. Powerful people in Washington seem to have been similarly worried, first and foremost, about protecting the ambitious and pedigreed young man.
.. Senator Orrin G. Hatch, Republican of Utah, and in The Daily Mail, the senator categorically dismissed the accusations and, whether he meant to or not, the women making them.
.. “Shame on any publication that would print this — and shame on the politically motivated, morally bankrupt character assassins that would attempt to sully a man’s good name,” he said.
.. Later, after the black-eye photograph of Holderness was published, Hatch issued a statement saying that domestic violence is “abhorrent.” But after that, he gave an interview in which he said he hoped Porter would “keep a stiff upper lip” and not resign. “If I could find more people like him, I would hire them,” said Hatch
.. It’s not really a surprise that Hatch, who once said that Trump’s presidency could become the greatest ever, would treat serious allegations of abusing women as a personal foible unrelated to one’s professional capabilities. You basically have to see things that way to support Trump in the first place.
Trump is more consistent. He is a pig in public as well as behind closed doors. In 1992, New York Magazine reported that he said the best way to deal with women is to treat them like excrement, though he used a more vulgar term. He has followed his own advice. His first wife, Ivana Trump, accused him of raping her in a fit of rage. (She later denied that the events she’d recounted were rape “in a literal or criminal sense,” but stuck to the underlying story.)
.. He owned beauty pageants and, by his own admission, would barge into changing rooms to ogle the naked contestants. The makeup artist Jill Harth said that he tried to rape her. Multiple women have accused him of groping and sexual harassment.
.. Somehow, in the wake of the Weinstein revelations, the president’s supporters appear to believe they hold the moral high ground. Donald Trump Jr. — a man who once said that women who can’t handle workplace sexual harassment “should go maybe teach kindergarten” — has been tweeting about Weinstein incessantly.
.. For the past 11 months, many feminists have been reeling from the defeat of the first female major-party presidential candidate by a predatory misogynist. The confirmation that a hugely powerful man who is supposed to be on our side is just as bad as Trump is shattering.
.. Yes, Ailes had to leave Fox News after charges that he’d demanded sexual favors from women in exchange for professional opportunities. But in the aftermath, conservatives did not ostracize him. Instead, Trump defended Ailes and defamed his accusers, then brought him on as an adviser