Sunday, October 7, 2018

Trump's a Criminal

The New York Times really is like a whole country, in which the White House press corps is just one colorful but tiny Village, with inexhaustibly interesting gossip but maybe a lot less significance than it thinks, as represented in Baker's clueless lede.

Meanwhile, the very same paper really did give nearly two years (that's why it didn't get published before the 2016 election, don't @ me) to this extraordinary investigation by The New York Times bylined by David Barstow, Susanne Craig, and Russ Buettner (now out in the print paper), detailing how the Trump Organization has always been a criminal organization dedicated, like Al Capone's, to hiding its wealth from the tax collectors.

The narrative framing is mostly about how Trump's been lying all these years about being a self-made man—

"My whole life really has been a 'no' and I fought through it," Trump said [26 October 2015] at an NBC-sponsored town hall here. "It has not been easy for me, it has not been easy for me. And you know I started off in Brooklyn, my father gave me a small loan of a million dollars."
—in fact it's well over $400 million, starting by the time he was three years old (he was making $200,000 a year in rent from buildings his father had signed over to him) and culminating in 1997 when Donald and his siblings transformed their now demented father's holdings into "grantor-retained annuity trusts" or GRATs. They were all hugely enriched, but Donald tended to get much more because he was such a terrible businessman who constantly needed Fred to rescue him:
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...
As the 1980s ended, Donald Trump’s big bets began to go bust. Trump Shuttle was failing to make loan payments within 15 months. The Plaza, drowning in debt, was bankrupt in four years. His Atlantic City casinos, also drowning in debt, tumbled one by one into bankruptcy.
What didn’t fail was the Trump safety net. Just as Donald Trump’s finances were crumbling, family partnerships and companies dramatically increased distributions to him and his siblings. Between 1989 and 1992, tax records show, four entities created by Fred Trump to support his children paid Donald Trump today’s equivalent of $8.3 million.
Which wasn't anywhere near enough to bail him out, but he also "used his stakes in [Fred's] mini-empire and the high-rise for the elderly in East Orange as collateral to help secure a $65 million loan."

I love the bit about the laundry revenue—Fred's henchmen collecting quarters from basements all over Queens and Brooklyn to subsidize Donald's bella figura on the Upper East Side.

But it's the criminality that really is the important part: the particular techniques Fred employed to defraud the American people of more than half a billion dollars' worth of taxes on his enterprises, getting the money to his children instead:
The manipulation of values to evade taxes was central to one of the most important financial events in Donald Trump’s life. In an episode never before revealed, Mr. Trump and his siblings gained ownership of most of their father’s empire on Nov. 22, 1997, a year and a half before Fred Trump’s death. Critical to the complex transaction was the value put on the real estate. The lower its value, the lower the gift taxes. 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.
The most overt fraud was All County Building Supply & Maintenance, a company formed by the Trump family in 1992. All County’s ostensible purpose was to be the purchasing agent for Fred Trump’s buildings, buying everything from boilers to cleaning supplies. It did no such thing, records and interviews show. Instead All County siphoned millions of dollars from Fred Trump’s empire by simply marking up purchases already made by his employees. Those millions, effectively untaxed gifts, then flowed to All County’s owners — Donald Trump, his siblings and a cousin. Fred Trump then used the padded All County receipts to justify bigger rent increases for thousands of tenants.
My bolding, that's another lovely detail of contempt for the little people.

Statutes of limitations have run out on these crimes, so Trump's never going to be jailed for them, but there is some hope of recovering some money. New York State is looking into it, I'm happy to note.

Also this:

The main thing is that we can really say confidently he's a criminal now. We've seen the evidence for this phase of his career—we need his tax returns for after Fred's death, and we have a really good idea now why he's refused to make them public—and it's overwhelming.

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