President Trump has made his wealth a big story for his entire life. It’s the very underpinning of his popularity. That story is a lie, the New York Times reveals in a blockbuster story about how he got rich, and, yet, it seems to be lost in the usual noise that surrounds this president.
People have gone to prison for what the Times has uncovered, but it’s just another day in the presidential news cycle.
The Star Tribune, which reprinted the story in this morning’s editions, put it on page five. Page five.
How did he get rich? A rich daddy and a fraudulent series of schemes to evade taxes.
On today’s The Daily, David Barstow, the investigative reporter, gave a tour of a room stacked with tens of thousands of records that prove its assertion. Barstow and his colleagues have been in that room for more than a year, and they found the real story, they say.
“This idea that he’s a self-made guy, when you turn over the rock on that, it’s just wholly untrue,” Barstow said.
But there’s more to the story than that. Barstow uncovered the secret that “Donald Trump has worked very hard for a very long time to keep hidden.”
It started with a single piece of mail from Trump tower, three pages of Donald Trump’s tax returns from 1995.
“As a candidate, Donald Trump broke with 40 years of tradition by declining to release any of his tax returns,” Barstow noted. “That has removed from the public record one of the main tools we use to scrutinize the finances of the president.”
“It was just totally sh**,” Barstow said of his first look at the returns.
Trump lost $1 billion in a single year, they determined from the initial returns. That sent three investigative reporters on the trail.
“It turned out it wasn’t very revelatory or as telling as we would have hoped,” Barstow said. “But it raised interesting questions for us.”
The returns showed he went from losing millions to making millions over the course of two returns. They wanted to know why.
“Then we came across this little snippet that showed Donald Trump and his siblings sold their father’s empire for over $600 million,” he said. But it was actually worth 10 times that.
That sent them on the trail of finding out more about that empire.
They had 15,000 pages and “we called people again and again and we ended up with a detailed view of Fred Trump’s empire that nobody had ever seen before,” Barstow said.
When he was 3 years old, Donald Trump was named Fred Trump’s landlord, making him a millionaire by age 9. The elder Trump kept running his real estate empire, but the tax bill was shifted to his kids, allowing old man Trump to evade millions more in taxes.
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.
The children of Fred Trump didn’t have to do anything to make a fortune but be the children of Fred Trump.
By the 1980s, Donald Trump, now a master of marketing his phony image of being a self-made man, was drowning in debt.
“He made an aggressive play to get more control of his father’s wealth,” says Russ Buettner, an investigative reporter for The Times.
“We found Donald Trump crafted a new will for his father … then he sends lawyers to his father’s house to sign it,” Buettner said.
“And as he read it, what he found this document would do is give Donald Trump enormous control over [the empire]. That was a step too far for Fred Trump,” Barstow said.
“It is this moment, this jolt, that triggers a deeper reckoning within the Trump family. It forces them to come to grips with two things: Fred Trump is starting to get frail. And the kids start to recognize dad has this enormous fortune.”
“If Fred Trump died (they recognized), all of [the empire] is subject to a 55 percent tax,” Barstow said. “So the Trumps came up with a plan; a plan beyond the extent of the law.”
The plan they came up with is fraud.
They created a company with no employees whose sole purpose was to buy things, and submit receipts that were inflated. The Trumps would pocket the difference. And they grossly undervalued the worth of the massive Trump empire.The entire goal was to dodge the tax bill.
“The way the Trumps took this legal thing and twisted it is, in fact, illegal. You’re not allowed to submit bogus appraisals to the IRS,” Barstow said.
That’s illegal. That sends people to prison.
“A lot of it has passed the statute of limitations,” said Susanne Craig, who covers politics, money and government for The Times.