There’s likely no price to pay for Donald Trump’s fraud

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.

Except:

“A lot of it has passed the statute of limitations,” said Susanne Craig, who covers politics, money and government for The Times.

  • jon

    Unless ALL of it has passed the statute of limitations we should have a formal criminal investigation…

    We won’t, because the folks running the IRS and the justice department have already sworn allegiance to glorious leader…

    This is how dictatorships are formed.

    • The mid-terms will determine what happens. If Democrats win the House, its expected that while legislating will stop, it will return to its oversight role. If GOP retains control,it won’t.

      • jon

        I fear that even if dems take the house we won’t get much oversight, just the dog and pony show, and even if a censure is legitimately issued against the administration, they’ll wear it as a badge of pride to show the right wing base that they are doing what they sent them to do… piss of the liberals.

        • Mike

          Bingo. The people who fund the Republicans are often the same people who fund the Democrats. “Oversight” is theater for the masses. It’s all about D v. R, but never the substance underneath.

          • What’s your plan, fellas?

          • jon

            Fatalism.

            A dog and pony show is going to be the better option rather than support for outright corruption… We can move the needle in 2018, and should, but the change will come after 2020… hopefully with new district maps that aren’t as gerrymandered, that’ll carry the house for a decade… and a senate map that favors the democrats in 2020… and a new administration…

            Hopefully there will be an effort from that new administration to limit the ability of future presidents to create a dictatorship (it’s always been a weakness how the constitution was written.)

          • Mike

            The only viable plan for the long term is to stop voting for anyone the establishment wants, and to look at who’s funding the candidates (often not easy due to incomplete disclosure laws). Stop paying lip service to the notion that the mainstream of either major party is going to fundamentally change anything. Stop being invested in the charade of Democrats v. Republicans.

            Start speaking out against the military-industrial complex and the oligarchy that rules the country. Start paying attention to the (bipartisan) brutality and violence of U.S. foreign policy, and its detrimental impacts to domestic policy and our civic culture. Start to understand how unregulated campaign finance undermines the democratic process, and how the obsessive focus on social issues works to the advantage of the powers that be. They’d rather talk about anything than economics.

            This is not a short term proposition, obviously, but the short term stuff doesn’t work.

          • Chris

            You are helping Trump. Third parties don’t work at the federal level. Voting for democrats will help restrain Trump. Declaring yourself above the establishment and not voting for dems or republicans only helps republicans.

          • QuietBlue

            To be fair, he did say “long term”. And yes, voting to restrain Trump is a good thing. Depending on the candidate, it’s also possible to do so while weakening the establishment too. But this is a larger problem that is not going to go away once he is out of office.

    • RBHolb

      The criminal statute of limitations has passed. According to the story in the Times, the IRS could still pursue a civil action.

  • AL287

    No one should be surprised.

    Donald Trump has built his entire life on a foundation of lies and fraud and continues to lie through his teeth.

    He has managed to convince a lot of the public to trust him and not the media.

    Is anarchy far behind?

    • Rob

      Anarchy is here.

  • MrE85

    You’re likely correct in your assertion that no one named Trump will ever face justice for the sins of the past. Still there is a price to pay.

    What that price will cost us all in the end is yet to be known.

  • Barton

    None of this is surprising. What is surprising to me is the fact that fiscal conservatives don’t seem to care about this at all.

    • Mike

      In my opinion, there’s no rarer creature in politics these days than a true fiscal conservative. Reagan made fiscal conservatism unfashionable in the ’80s, and it’s been a downhill slide ever since. He never shut up about it, of course, but he never practiced it.

      Today, every faction wants more money for their pet projects (or to reward their campaign donors), while denigrating the projects of those who don’t contribute. Then they claim they’re fiscally conservative due to the latter.

  • Matt

    Only concern with this excellent reporting is for not calling POTUS’s prior statements lies or falsehoods up-front. “POTUS claims to have been a self-made man, benefiting only from a $1M loan from his father. That claim is false. Based on a Times investigation and [detail your work here], [state the truth].”

    Infuriates me when language is couched. Public figure says X. That is false. [Proof of falsehood]. [Rest of story].

    • On the Daily they pretty much did exactly what you wanted.

  • Mike

    So why didn’t the IRS go after them decades ago? Might it be because these sorts of fraudulent arrangements are all too common among very wealthy people?

    I don’t expect anyone to answer these questions, and I’m glad reporters are digging into this. All I’m saying is that I doubt very much the Trumps are unique in this regard.

    Meanwhile, the IRS will pay lots of attention to that extra deduction that you probably shouldn’t have taken on your very middle-income tax return. Situations like this reveal a lot about the type of society we live in.

    • Erik Petersen

      A lot of the Trumps’ estate gamesmanship described in the article is quite normal and legal. I don’t think it is properly characterized as so shady when that is in fact the state of the big time estate planning ecosystem, ie, accepted practice that passes the IRS’ muster.

      The fraudulent gifting is not ‘normal’, but it is the kind of thing that has been gotten away with for a long time by a lot of big $ estates.

      • lindblomeagles

        Yes, and no. Typically, it depends on who the public and elected officials want to go after that determines who gets caught. For example, the Republicans believed President Obama was doing something illegal with funds for ACORN. They insisted an investigation be launched into that, and found nothing. Several Republicans accused the IRS of impropriety during the 2010 and 2014 elections, and had THEM investigated. That investigation found nothing. Trump has left his tax returns swinging in the wind since 2016. If he had simply provided 1 tax return, or 5, no journalist would have pursued this. But he didn’t. He did what a lot of people who cover the truth do – he kept hiding and giving lame excuses for hiding. It was a matter of time before some press corp. department would have found this given the fact Trump didn’t close the door on it. That’s what journalists do. They smell coverup, and for the public’s sake, they go find it. Don’t believe me? Ask Nixon.

  • kevins

    This is unsurprising to me, but it saddens me that trump’s supporters will find a way to excuse and rationalize what is clearly a life of entitlement, lies and fraud. As usual, the average person is the one adversely affected, and the average person has little power to do much about it, except for vote that is. Republicans have endorsed this type of immoral use of financial (and political) power for decades, and sadly, many people buy the assertion that it will all trickle down to benefit the little guy and gal. It never does.

    • lindblomeagles

      Yep. And they’ve used this same message since Nixon, but Republican voters keep, as Jesse Jackson, a Democrat once said, “hope alive.”

  • Gary F

    Kinda makes you wonder why CNN and the other media outlets gave him so much free air time back in 2016.

    • Cuz otherwise your talking point would be “why is CNN ignoring the GOP candidate running for president”. Just guessing.

      pretty clumsy attempt at distraction, Gary.

    • Joe

      No matter who does what, only the media is at fault in your eyes. It’s kind of impressive really.

      If David Ortiz shot someone tomorrow, it feels like your only response would be: “I wonder why Bob Collins talked about Ortiz all those years. Really makes you think how the media are the real bad guys in this story.”

      The next day, when Joe Schmo shoots someone, it’ll be:
      “Why didn’t the media report on this story *before* it happened? Such fraudsters.”

      • Kellpa07

        That’s quite an extrapolation on a comment there.

        • Bottom line: The comment is irrelevant to the facts of the story.

          Read the story. Comment on the story. Don’t bother me with nonsensical distractions.

          Go now: This is a space for serious people.

    • Rob

      Focus. Did you read the NYT article?

      • Move along. I’m tired of this nonsense. I don’t have time for it. If you folks want the ability to comment, bring something to the table that’s worth reading.

  • Sonny T

    Partisan. Silly. Untrue. Just more of the same from the opposition, which seems to be the entire media.

    Trump has been under the microscope for forty years. He has a host of powerful NY enemies dating back to the Ed Koch era. This was always available. If they could have got him on something, doncha think they would have?

    • jon

      //If they could have got him on something, doncha think they would have?

      Sounds like a logical fallacy…

      What would Mr. Wright Say? (wwmws?)

      • Sonny T

        name the fallacy

        here I’ll help you out

        https://thebestschools.org/magazine/15-logical-fallacies-know/

        • jon

          You are exaggerating a Slippery slope.

          You say saying action X would lead to action Y (going even further and saying it would happen in a short period of time, and that we’d even know that a clandestine action X happened at all).

          There is no indication it would happen, and even more so there is actually factual evidence that many people who commit tax fraud aren’t caught.

          wwmws?

    • I’ll bet everything in my pocket against everything in yours that you didn’t even bother to read the story.

      Go troll somewhere else today, OK?

      • Sonny T

        Read yours and the Stribs. What are you talking about?

        • No you didn’t.

          The Strib’s story IS the Times story and if you’d actually read BOTH , you would’ve known that. You didn’t read the story.

          Go now. Take a trolling time out.

    • Rob

      He hasn’t been under the microscope for forty years. Much of the media – including NYT – were complicit for decades in helping him develop and advance his sham narrative as a glittering playboy/business savant master of the universe, culminating in his totally fictional “reality” TV show.

      So cut back on the Kool-aid, please.

    • The Resistance

      What is your proof that it is untrue?

      • Move along. Everyone’s responsible for elevating the conversation . Do it.

  • Erick

    “The Star Tribune, which reprinted the story in this morning’s editions, put it on page five. Page five.” A coincidence given that a one percenter named Taylor bought the Strib? I don’t think so.

    • I doubt that’s true. Taylor’s been pretty hands off. And those editors are pretty professional over there and wouldn’t stand publisher interference.

      • Erick

        I will defer to your better knowledge of the biz, but what is your theory for page 5?

        • I don’t have one.

          [update] the only thing I can think is they thought the story was so important they didn’t want to have a jump page and break it up. They put a short blurb on A1 to highlight it.

          • Rob

            WTF? Heaven forfend that the Strib would start the story above the fold on page one, and force their readers to expend energy by turning to another page or two to read the entire story.

            Journalism 101 failure, IMHO.

          • There was a box above the fold on page one

          • Rob

            Yes. Not a story

          • X.A. Smith

            Maybe they already had their front page blocked before the Times story came out, so it was just a time crunch thing?

          • Could be, although the story was out yesterday afternoon.

          • X.A. Smith

            Yikes. They probably deserve a little shade for that.

      • Just posted on the Strib website, first story at the top: “New York Times: Trump engaged in suspect tax schemes, reaping father’s riches”. This was approximately 10 minutes ago.

    • Kellpa07

      The story is fairly prominent on the website fwiw

  • Erik Petersen

    I did not vote for Trump and know the reality is this notion of his self made success is a fraud, and that also within his career he was also felonious swindler plain and simple.

    But the Trumps’ estate planning gamesmanship with the absurd valuations and gifting strikes me as rather mundane for billionaire families. That’s how its done. The Pohlad’s estate was challenged by the IRS for low valuations.

    • RBHolb

      And no one should let them get away with it. The point is not whether other machers have done the same, or worse. The point is, what has Trump and his family done?

  • The most important takeaways for me are the culture of fraudulent scheming practiced and passed on to his kids, the fact that Donald tried to game Fred’s will, and the breathtaking lack of oversight by the taxing institutions while this was going on. Also there is a podcast today from the NYT for those who are reading-challenged: https://www.nytimes.com/2018/10/03/podcasts/the-daily/donald-trump-fred-trump-tax-money.html?rref=collection%2Fcolumn%2Fthe-daily&action=click&contentCollection=podcasts&region=stream&module=stream_unit&version=latest&contentPlacement=1&pgtype=collection

  • The Resistance

    I encourage everyone to take a five minute break from posting here and instead send a message to their representatives encouraging them to back legislation requiring candidates for President and vice president to be required to disclose their tax returns. Maryland Senate bill 256 was a good start, but this needs to be done on a federal level to amend US Code 26/F/61/B/6103 so that presidential candidates can’t hide behind confidentiality laws. Surprisingly, Democrats like Jerry Brown are among the most resistant to this effort. He calls efforts like Maryland’s a slippery slope for what individuals states could require of candidates. I call it transparency and the disinfecting power of sunshine.

    • RBHolb

      Yes, this needs to be done at the federal level. I believe that it can only be done at the federal level, since the qualifications for being President are set by the Constitution.

  • Rob

    We’re all paying the price for the enabling, kid glove treatment of T.Rump by most of the media lo these past several decades, which helped put him in position to become the lawbreaker in chief. T.Rump and the Quisling Party have taken us into a horrific clusterf<]k from which we will never return.

  • Brian Simon

    I’m shocked; SHOCKED – that a wealthy family would abuse the system to avoid taxes.

    • Needs more Captain Renaud.

      ;D

      • Brian Simon

        Exactly. When I was a young & impressionable college kid, The Art of the Deal was on our reading list for Freshman year. Like so many others, I gobbled it up. Then, over the subsequent years we saw all of the ventures he described in the book fail, miserably. Trump airlines, the new jersey generals & the taj mahal, all broke, defunct, failed. Trump, himself bankrupt, more than once.

        Anybody that’s been paying attention can see his brilliance is not in dealmaking, or running a business, but self promotion, breaking rules & sticking it to others. He bragged during the campaign that paying lower taxes isn’t criminal, or unethical, but a sign of his intellect, at gaming the system in his favor.

        So, yes, we shouled all be shocked, in the most Renaud way possible, that the Trump family may not have played it straight when splitting the loot.

        • Rob

          Gods bless our P.T. Barnum-in-Chief.

  • AmiSchwab

    the worst is all those trumpies who think he’s the greatest man on earth. america is very screwed up.

    • lindblomeagles

      To understand why Trumpies think he’s the greatest man on earth, you have to really understand what he said in 2015 and 2016. He said Mexicans were criminals, drug dealers, and rapists. In other words, “I don’t like culturally racial change in America anymore than you white people do.” He said, “I’m not going to be politically correct.” In other words, “Hey, I like saying insensitively racist and sexist things, and I’m going to keep saying them. If you agree with that join me.” He said, “She had blood coming from you know what.” In other words, “And you women who want to be taken seriously, go back home, look pretty, and let men do their jobs.” He said, “Obama was the worst president.” In other words, “We should never let any person of color run this country because they lack the intelligence to do so.” All of Trump’s support IS WHOLLY ABOUT stopping cultural change in the 21st century. Now, I should mention, he’s not the only person in American politics to do this, now, or in the past; and we’ve seen these ugly, racist, sexist, platforms run in this country before, whether it’s been about Native Americans in the West, freedom for slaves in the South, women’s right to vote across the country, or ending segregation. He’s not new, and neither is the response he’s getting. What IS NEW is there is no way to stop this cultural change. The size of the country is different. Our economy is different. The size of the minorities here are different. America is not some up and coming, non-tech, largely agrarian enterprise anymore. So the change is coming no matter what Trump does. But, the Trumpies are holding out one last hope that they can stave off that change.