We were somewhere around Donald Trump’s third Truth Social rant on Tuesday morning, on the edge of his court-ordered deadline to secure a $464 million bond, when I remember saying, “I feel a bit lightheaded; I think Trump really is broke.” I’m no Hunter S. Thompson, but I smell fear and loathing in Mar-a-Lago. To wit:
Judge Engoron actually wants me to put up Hundreds of Millions of Dollars for the Right to Appeal his ridiculous decision. . . Nobody has ever heard of anything like this before. I would be forced to mortgage or sell Great Assets, perhaps at Fire Sale prices, and if and when I win the Appeal, they would be gone. Does that make sense? WITCH HUNT. ELECTION INTERFERENCE!
The Tuesday fusillade came just a day after the former president’s lawyers wrote to Arthur Engoron, the New York judge who presided over the civil fraud case brought by New York Attorney General Letitia James, where the 45th president, his businesses, and several others, including his eldest sons, were found liable for lying to banks and insurers about the value of his assets. In the filing, Trump’s lawyers told Engoron that it was “a practical impossibility” for Trump to post the bond, insisting that 30 bond underwriters had spurned his pleas. Just weeks earlier, one of his attorneys, Alina Habba, bragged that her client was worth “billions and billions” and “happens to have a lot of cash” and could post the bond.
We’ll soon find out what Trump has in the way of assets, and that seems to be his biggest fear—the public learning that he’s not a master of the universe with a short-term liquidity problem but that he’s worth substantially less than he has claimed, a lot less. All indications are that he may not even be a billionaire anymore—if he ever was. Trump has fought those questioning his finances for years but has not succeeded. He sued journalist Tim O’Brien, author of Trump Nation, for claiming that he had a net worth in the low hundreds of millions of dollars, but the judge dismissed the case.
Soon, the public will find out if the mogul has no clothes. As Warren Buffet wrote in 2001 in his annual letter to shareholders, “After all, you only find out who is swimming naked when the tide goes out.”
The billionaire from Omaha, whose asceticism is almost as famous as Trump’s garish spending, used this metaphor after 9/11 for a reason. He was comparing his insurance businesses to weaker competitors that had passed off their risks through reinsurance, creating potential dire exposures. Lawrence A. Cunningham, publisher of The Essays of Warren Buffett, explained this to me by email this week when I reached out to confirm that the quote was indeed from the co-founder, chairman, and CEO of Berkshire Hathaway. Cunningham knows the difference between the frugal Buffett and spendthrift Trump: “I know Warren well and have met Trump several times and clerked for his sister Maryanne [Trump, a recently deceased federal appeals court judge.]” They are polar opposites. “Buffett shuns debt and borrows little, Trump leverages to the hilt.” Buffett has accumulated tens of billions of dollars in wealth and lives modestly, while Trump has accumulated perhaps $3 billion and lives flamboyantly,” he added. “Buffett is widely read, and a thoughtful writer and careful speaker, whereas Trump does not appear to have read much, is a terrible writer and a carnival barker.”
Since that 2001 letter to shareholders, Buffett’s “naked” quote has often been invoked to describe what happens after debt-fueled financial bubbles burst, as was the case when the Financial Crisis of 2008 and related Great Recession exposed overleveraged financial institutions and Ponzi schemers like Bernard Madoff.
This brings us back to Trump, who, like the banks in 2008, has piled on debt and seemingly, like Madoff, has been running a scam. The shock that is stripping him bare is not a terrorist attack or flight to safety after a global financial meltdown. Instead, it’s a court-ordered demand for payment of an amount that his attorney just said he had at the ready.
No wonder this demand to pay up unsettles the man from Queens whose father built a real estate empire. Boasting about wealth is central to Donald’s identity. “I’m really rich,” he has insisted, claiming a net worth of $9 billion when he announced his presidential bid in 2015. Trump is famously a teetotaler, but his addiction to bragging about wealth has a junkie’s desperation. Going cold turkey is going to be painful.
No amount of loathing or Truth Social barbs directed at Judge Engoron, the legal system, the Deep State, or “Sleepy Joe” will make a difference this time.
My friend, the author and psychologist Mary Trump, says of her uncle, “It’s always been smoke and mirrors.” She added, “People, starting with his father, have been throwing money at him since he was a toddler, and he’s squandered every penny of it.” According to a magisterial 2018 New York Times article, as a young adult, beginning in around 1976, Donald Trump “simply appropriated his father’s empire as his own.”
A famous disciplinarian, Fred Trump, was happy to indulge in the charade that Donald was as rich as Croesus. As the Times explained, “Fred Trump and his companies also began extending large loans and lines of credit to Donald Trump. . . the flow so constant at times that it was as if Donald Trump had his own Money Store.” His niece underscores the point, “The only shocking thing is how many people have continued to prop him up, almost always to their detriment, and how long it’s taken to get to this point.”
If an appellate judge denies the former president’s request to put the judgment on hold or reduce the bond, the tide will be out for Trump, and we will all see if he’s bluffing or in the buff… If so, then by Monday, March 25, if Trump does not find a third party to post the bond or place the total amount in escrow, Attorney General James can begin to collect and seize his assets. She has many choices to target, including properties in New York, Florida, and even Mar-a-Lago.
And she’s ready to roll. On Thursday, news reports had James had begun filing notices of judgment for the properties owned by his businesses in Westchester County, including a golf course and the Seven Springs estate. This is a preliminary step before seizing them. In addition to his exposure, Judge Engoron issued an order on Thursday to expand the powers of Barbara Jones, the monitor appointed to maintain controls and transparency in Trump’s businesses. Whatever Trump financing Trump can find to avert an asset seizure must be shared with Jones before he files. So, she, and hopefully, we won’t be in the dark as to whom he is beholden.
“He will do anything, anything” not to be exposed for being less rich than he’s wanted us to believe, Trump’s niece Mary told me.
It’s not hard to imagine the former president will reach out to foreign interests to loan him the money, leaving him indebted to them, which is one more horrifying thing to add to the list of horrifying things should he win in November.
