Where Did America’s Biggest Loser Get All That Cash?

The New York Times got ahold of Trump’s official Internal Revenue Service tax transcripts for the years 1985-1994, demonstrating that over the course of a decade, he lost more than $1 billion.

By the time his master-of-the-universe memoir “Trump: The Art of the Deal” hit bookstores in 1987, Donald J. Trump was already in deep financial distress, losing tens of millions of dollars on troubled business deals, according to previously unrevealed figures from his federal income tax returns.

Mr. Trump was propelled to the presidency, in part, by a self-spun narrative of business success and of setbacks triumphantly overcome. He has attributed his first run of reversals and bankruptcies to the recession that took hold in 1990. But 10 years of tax information obtained by The New York Times paints a different, and far bleaker, picture of his deal-making abilities and financial condition.

Far from being a successful business tycoon, the data shows Trump to be America’s biggest loser over that period of time.

[Y]ear after year, Mr. Trump appears to have lost more money than nearly any other individual taxpayer, according to the I.R.S. information on high earners — a publicly available database with taxpayers’ identifying details removed. Indeed, in 1990 and 1991, his core businesses lost more than $250 million each year — more than double those of the nearest taxpayers in the sampling for those years.

For those of us who don’t travel in those circles, it is hard to understand how someone could lose $1 billion over a decade and maintain the lavish lifestyle exhibited by the entire Trump family. Here’s the answer to that question.

Mr. Trump was able to lose all that money without facing the usual consequences — such as a steep drop in his standard of living — in part because most of it belonged to others, to the banks and bond investors who had supplied the cash to fuel his acquisitions. And as The Times’s earlier investigation showed, Mr. Trump secretly leaned on his father’s wealth to continue living like a winner and to stage a comeback.

That is what being born into privilege will do for you. Daddy’s money made it possible for Trump to avoid the consequences of his failures and “continue living like a winner.”

While we don’t have access to tax information from subsequent years, we know that, despite being a colossal business failure, Trump was about to stage a comeback. Twelve years after the time period covered by the New York Times story, he went on a buying spree—this time with cash.

In the nine years before he ran for president, Donald Trump’s company spent more than $400 million in cash on new properties — including 14 transactions paid for in full, without borrowing from banks — during a buying binge that defied real estate industry practices and Trump’s own history as the self-described “King of Debt.”…

The cash purchases began with a $12.6 million estate in Scotland in 2006. In the next two years, he snapped up two homes in Beverly Hills. Then five golf clubs along the East Coast. And a winery in Virginia.

The biggest cash binge came last, in the year before Trump announced his run for president. In 2014, he paid a combined $79.7 million for large golf courses in Scotland and Ireland. Since then, those clubs have lost money while Trump renovated them, requiring him to pump in $164 million in cash to keep them running.

When asked last year where all of the cash came from, Eric Trump said that his father “had incredible cash flow and built incredible wealth.” But that is at odds with the Times story, which reported huge losses of cash a little more than a decade earlier.

So where did all of that cash come from? Matthew Seitlin suggests that it might have come from Daddy.

…Trump kids were able to inherit in 1997 what they told the IRS was $41.4 million worth of properties before selling them for “more than 16 times that amount” over the next 10 years. When Fred Trump died, he had “just $1.9 million in the bank.”

The Trump children were able to get their hands on their parents’ actual estate and eventually sell it in 2004, with Donald Trump getting around $235 million. Almost immediately afterward, Trump’s spending ramped up, the Times reports.

That might be true. But given that the Times reported that it was Fred Trump’s money his son used to maintain his lavish lifestyle, it is not clear that there would have been enough to also fund major cash purchases.

It is also true that, during that cash spending spree, Trump’s sons made it very clear where the money was coming from. In 2008, Don Jr. said that, “Russians make up a pretty disproportionate cross-section of a lot of our assets…We see a lot of money pouring in from Russia.” Then in 2014, Eric told James Dodson that “We have all the funding we need out of Russia.”

It is probably never a good idea to believe what someone named Trump says. So the truth is that we don’t know where the $400 million in cash came from. What we do know from the Times reporting is that Donald Trump was an abject failure in business and relied on his father’s wealth until that money dried up. As Jonathan Chait wrote, “you couldn’t invent a more inviting target for a foreign intelligence service to manipulate.”

Getting answers to the questions about where America’s biggest loser got all of the cash he started throwing around in 2006 is why Congress needs to see the president’s tax returns. Until that happens, questions will remain about whether the president himself poses a threat to national security.

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Nancy LeTourneau

Nancy LeTourneau is a contributing writer for the Washington Monthly. Follow her on Twitter @Smartypants60.