I find the feature story rolling out the New York Times‘ investigation into Donald Trump’s tax returns, “LONG-CONCEALED RECORDS SHOW TRUMP’S CHRONIC LOSSES AND YEARS OF TAX AVOIDANCE,” frustrating. While I understand that destroying the image of Trump as a hugely successful businessman is likely to sell more papers, it buries the lede on the far more important story: the President of the United States is leveraged to the hilt and is profiting from his office.
Granted, this is a rollout—and a successful one from a marketing standpoint—of what promises to be a weeks-long series. Still, it seems more designed to goad Trump into reaction than focusing on the true news story. The write-offs and the like strike me as salacious gossip designed to influence an ongoing re-election bid more than truly newsworthy. The double-dealing and the fact that the sitting President owes a lot of people a lot of money is, by contrast, something that the American people legitimately ought to know.
Similarly, while the infographic “CHARTING AN EMPIRE: A TIMELINE OF TRUMP’S FINANCES” is beautiful and intricately crafted, it seems designed to be time-consuming rather than useful. I finally gave up scrolling down in hopes of finding evidence of corruption.
That said, I slogged through the former to buttress the information contained in David Leonhardt’s snapshot that I chronicled here about the public policy implications. They are not all that surprising, frankly, but damning nonetheless.
As the president wages a re-election campaign that polls say he is in danger of losing, his finances are under stress, beset by losses and hundreds of millions of dollars in debt coming due that he has personally guaranteed. Also hanging over him is a decade-long audit battle with the Internal Revenue Service over the legitimacy of a $72.9 million tax refund that he claimed, and received, after declaring huge losses. An adverse ruling could cost him more than $100 million.
The longstanding audit is the ostensible reason why Trump has not released his tax returns. Why it has taken this long to complete is a matter of conjecture.
Now, with his financial challenges mounting, the records show that he depends more and more on making money from businesses that put him in potential and often direct conflict of interest with his job as president.
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And within the next four years, more than $300 million in loans — obligations for which he is personally responsible — will come due.
While the conflicts of interest have long been obvious to those paying even casual attention, the fact of massive loan obligations is, I believe, new news. Granting that he was at one point making some $400 million annually from The Apprentice and related marketing ventures, that seems to have largely dried up.
Against that backdrop, the records go much further toward revealing the actual and potential conflicts of interest created by Mr. Trump’s refusal to divest himself of his business interests while in the White House. His properties have become bazaars for collecting money directly from lobbyists, foreign officials and others seeking face time, access or favor; the records for the first time put precise dollar figures on those transactions.
Again, this has been obvious going back at least to his time as President-Elect. For reasons that escape me, these potential conflicts were hardly mentioned during the campaign and weren’t something I gave much thought to ahead of time. (Presumably, this was at least partly a function of outrage saturation of a like we’ve never seen before with so many seemingly game-over scandals bouncing off him.)
Still, the numbers are interesting:
At the Mar-a-Lago club in Palm Beach, Fla., a flood of new members starting in 2015 allowed him to pocket an additional $5 million a year from the business. In 2017, the Billy Graham Evangelistic Association paid at least $397,602 to the Washington hotel, where the group held at least one event during its four-day World Summit in Defense of Persecuted Christians.
That’s not illicit per se but certainly raises red flags. It’s why we made Jimmy Carter divest his peanut farm. Granting that Trump’s party controlled both the House and Senate the first two years of his presidency, it’s remarkable to me that Democrats haven’t banged the drum harder on this. It’s the sort of scandal that requires little sophistication to understand: it’s garden variety corruption on a large scale.
The Times was also able to take the fullest measure to date of the president’s income from overseas, where he holds ultimate sway over American diplomacy. When he took office, Mr. Trump said he would pursue no new foreign deals as president. Even so, in his first two years in the White House, his revenue from abroad totaled $73 million. And while much of that money was from his golf properties in Scotland and Ireland, some came from licensing deals in countries with authoritarian-leaning leaders or thorny geopolitics — for example, $3 million from the Philippines, $2.3 million from India and $1 million from Turkey.
Again, it’s impossible to know whether and how much these amounts differed from what they would have been had Trump not been elected. But they’re obvious conflicts of interest that simply shouldn’t exist.
No subject has provoked more intense speculation about Mr. Trump’s finances than his connection to Russia. While the tax records revealed no previously unknown financial connection — and, for the most part, lack the specificity required to do so — they did shed new light on the money behind the 2013 Miss Universe pageant in Moscow, a subject of enduring intrigue because of subsequent investigations into Russia’s interference in the 2016 election.
The records show that the pageant was the most profitable Miss Universe during Mr. Trump’s time as co-owner, and that it generated a personal payday of $2.3 million — made possible, at least in part, by the Agalarov family, who would later help set up the infamous 2016 meeting between Trump campaign officials seeking “dirt” on Mrs. Clinton and a Russian lawyer connected to the Kremlin.
In August, the Senate Intelligence Committee released a report that looked extensively into the circumstances of the Moscow pageant, and revealed that as recently as February, investigators subpoenaed the Russian singer Emin Agalarov, who was involved in planning it. Mr. Agalarov’s father, Aras, a billionaire who boasts of close ties to Mr. Putin, was Mr. Trump’s partner in the event.
Now, 2013 was before Trump’s candidacy, much less his presidency. I’m not sure this tells us anything new. But that’s only because the level of known corruption and foreign entanglement was already so high.
In May, the chairman of a trade group representing Turkish business interests wrote to Commerce Secretary Wilbur Ross urging support for increased trade between the United States and Turkey. The ultimate goal was nothing less than “reorienting the U.S. supply chain away from China.”
The letter was among three sent to cabinet secretaries by Mehmet Ali Yalcindag, chairman of the Turkey-U.S. Business Council, who noted that he had copied each one to Mr. Trump.
The president needed no introduction to Mr. Yalcindag: The Turkish businessman helped negotiate a licensing deal in 2008 for his family’s company to develop two Trump towers in Istanbul. The tax records show the deal has earned Mr. Trump at least $13 million — far more than previously known — including more than $1 million since he entered the White House, even as his onetime associate now lobbies on behalf of Turkish interests.
Mr. Yalcindag said he had “remained friendly” with Mr. Trump since their work together years ago, but that all communications between his trade group and the administration “go through formal channels and are properly disclosed.”
The ethical quandaries created by Mr. Trump’s decision to keep his business while in the White House have been documented. But the full financial measure of his extraordinary confluence of interests — a president with a wealth of business entanglements at home and in myriad geopolitical hot spots — has remained elusive.
Again, that he’s made $13 million since 2008, only $1 million of which has been since 2017, tells us very little. Hell, he might have lost money on the deal as a result of taking office. But, again, the fact that there’s an ongoing business relationship in a country with an increasingly autocratic country with which the US has major foreign relations issues raises ethical questions that simply shouldn’t exist.
Based on the financial disclosures, which report much of his income in broad ranges, Mr. Trump’s earnings from the Istanbul towers could have been as low as $3.2 million. In the Philippines, where he licensed his name to a Manila tower nearly a decade ago, the low end of the range was $4.1 million — less than half of the $9.3 million he actually made. In Azerbaijan, he collected more than $5 million for the failed hotel project, about twice what appeared on his public filings.
It did not take long for conflicts to emerge when Mr. Trump ran for president and won. The Philippines’ strongman leader, Rodrigo Duterte, chose as a special trade envoy to Washington the businessman behind the Trump tower in Manila. In Argentina, a key person who had been involved in a Uruguayan licensing deal that earned Mr. Trump $2.3 million was appointed to a cabinet post.
The president’s conflicts have been most evident with Turkey, where the business community and the authoritarian government of President Recep Tayyip Erdogan have not hesitated to leverage various Trump enterprises to their advantage. When Turkish-American relations were at a low point, a Turkish business group canceled a conference at Mr. Trump’s Washington hotel; six months later, when the two countries were on better terms, the rescheduled event was attended by Turkish government officials. Turkish Airlines also chose the Trump National Golf Club in suburban Virginia to host an event.
These sort of conflicts appeared as soon as Trump was elected. Even as President-Elect, foreign leaders, businesses, and various lobbying interests started staying in Trump properties and otherwise courting favor through this venue. It’s exceedingly problematic.
This, too, is simply more data for an old story:
More broadly, the tax records suggest other ways in which Mr. Trump’s presidency has propped up his sagging bottom line. Monthly credit card receipts, reported to the I.R.S. by third-party card processing firms, reflect the way certain of his resorts, golf courses and hotels became favored stomping grounds, if not venues for influence-trading, beginning in 2015 and continuing into his time in the White House.
The credit card data does not reflect total revenue, and is useful mainly for showing short-term ups and downs of consumer interest in a business. While two of Mr. Trump’s marquee draws — the Washington hotel in the Old Post Office and the Doral golf resort — are loaded with debt and continue to lose money, both have seen credit card transactions rise markedly with his political ascent.
At the hotel, the monthly receipts grew from $3.7 million in December 2016 shortly after it opened, to $5.4 million in January 2017 and $6 million by May 2018. At Doral, after Mr. Trump declared his candidacy in June 2015, credit card revenue more than doubled, to $13 million, for the three months through August, compared with the same period the year before.
One Trump enterprise that has been regularly profitable, and is a persistent source of concern about ethical conflicts and national security lapses, is the Mar-a-Lago club. Profits there rose sharply after Mr. Trump declared his candidacy, as courtiers eagerly joining up brought a tenfold rise in cash from initiation fees — from $664,000 in 2014 to just under $6 million in 2016, even before Mr. Trump doubled the cost of initiation in January 2017. The membership rush allowed the president to take $26 million out of the business from 2015 through 2018, nearly triple the rate at which he had paid himself in the prior two years.
Some of the largest payments from business groups for events or conferences at Mar-a-Lago and other Trump properties have come since Mr. Trump became president, the tax records show.
At Doral, Mr. Trump collected a total of at least $7 million in 2015 and 2016 from Bank of America, and at least $1.2 million in 2017 and 2018 from a trade association representing food retailers and wholesalers. The U.S. Chamber of Commerce paid Doral at least $406,599 in 2018.
The Times fully admits that tax records tell an incomplete story. But, while Trump and company contend that the financial disclosure records he files every year paint the true picture, the Times is right that they don’t. The tax returns show details that can be hidden in the disclosure forms.
With the exception of the fact that Trump owes a lot of money that’s coming due soon—and the extent of what’s at stake in the IRS audit—all of this is merely detail for what we already knew. But putting numbers to the story is nonetheless illuminating. And, of course, the average voter is almost certainly paying less attention on a day in, day out basis than OTB readers and me.
