How did Donald Trump go from controversial real estate mogul to presidential nominee? After nearly 30 years of reporting on Trump, in his new book Pulitzer Prize-winning investigative reporter David Cay Johnston brings us the entire, meticulously documented story of the man who would be president. Click here now to order your copy of The Making of Donald Trump.
The following is an interview with David Cay Johnston, winner of the George Polk Award for investigative importing.
Mark Karlin: We first began to know each other a little after the turn of this century. You were the Pulitzer Prize-winning New York Times expert on the arcane world of tax law. Before I digress into your current book, what is your reaction to the Times' revelation of Trump's 1995 income tax filing?
David Cay Johnston: Trump says tax returns tell you nothing, yet from just three summary pages, The New York Times revealed a lot. My Daily Beast and Investopedia columns went much further, revealing how Trump got out of another tax bill (about $360 million) and stuck his investors with the costs.
Trump is lying, plain and simple, about his wealth. He knows that people like me could reverse engineer his tax returns and show the financial facade he has built. That's why he hides his tax returns.
There's no evidence Trump is a billionaire, much less worth more than 10 billion.
You covered Trump during his heydays and slide toward insolvency in Atlantic City. What was Trump's relationship between his casinos and the mob, and between his real estate empire and the mob for that matter?
Trump has gone out of his way to do business with the Mafia, the son of the reputed Russian mob boss in New York (the son is both a violent felon and a stock swindler), as well as con artists, swindlers, corrupt union leaders and a major drug trafficker. The last is the most crucial criminal connection and yet, I am almost alone in presenting the known facts and asking the questions Trump dare not answer.
Trump risked his casino license to do business with Joseph Weichselbaum, an embezzler and Mafia associate who supplied Trump with helicopters to fly high rollers to his casinos. Weichselbaum even managed Trump's personal helicopter.
Journalists should ask what prompted Trump to seek mercy (in a criminal trial) for what he called a "diligent" citizen and "credit" to the community? Why did Trump need to demonstrate to Weichselbaum that he was his loyal friend and not his enemy? The obvious question is this: Did Trump invest in Weichselbaum's cocaine business? Did he obtain drugs from Weichselbaum?
The public record shows that the New Jersey Attorney General's Division of Gaming Enforcement (DGE) failed to ask these questions. Two Casino Control Commissioners complained in 1990 that the DGE showed official favoritism to Trump.
Is it true that Trump was a master at luring other people to invest in his "projects," paying himself a high salary, putting up little of his own money, and then blaming the investors if things when belly-up?
Yes. Trump's standard deal was a fee up front to him, no investment by him with one significant exception, borrowed money. Trump never had a penny invested in Atlantic City because he cut fees up front.
Instead of reinvesting, which is how you build a strong enterprise for the long haul, Trump pulled out cash as fast as he could. That starved the casinos and other firms. That's why his casinos went broke -- an astonishing outcome for any casino -- and others in Atlantic City continue to earn solid profits.
Trump stuffed his three casinos into a publicly traded company in 1985 after he had stripped them of their real estate tax benefits. The stock opened at $35 a share in 1995, but never made a profit. Over the years it lost $1.1 billion, while Trump collected $82 million in pay.
The major exception was Trump University, a scam in which Trump put up $1 million and then pocketed about $5 million for information the Texas Attorney General's consumer affairs staff concluded was worthless and in some cases contrary to law.
In your epilogue, you mention that you and Trump actually share some characteristics: living colorful lives (although you've been married to the same woman for nearly 35 years), and preferring not working for other people. However, your life has been about focusing on fairness in public policy and taxation, among other issues appropriate to journalism. Trump has been what you call a world-class narcissist focused on money and women. Does he have any other interests, that is, in addition to power?
Trump and I are alike mostly in that we don't have a boss. At the New York Times, Los Angeles Times, Philadelphia Inquirer and other news organizations I told editors what I would do, they didn't tell me, and I got away with it. Trump is all about his fragile ego. At age 70 he remains emotionally a 13-year-old boy. He makes up stories about his wealth, about how he is a great Don Juan and a genius when it comes to business, investments and taxes. It's all a sham. Trump and I differ in that if offered a choice between money and honor, Trump would choose money because honor, which motivates me, is a concept beyond his self-centered little ego.
Can you discuss a little about the Donald J. Trump Foundation scam and the information that is currently unfolding about it?
The Donald J. Trump charitable foundation is a tiny operation, which at the end of 2014 -- it's tax filing shows -- had less than $1.3 million and not a penny of it came from Donald Trump. The vast majority of money over the last 19 years has come from vendors like the guy who makes Trump's ties in China and the McMahon family who own the World Wrestling Entertainment shows contributing to Trump's foundation.
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Pulitzer winner David Cay Johnston draws on 30 years of reporting to expose the real story of Trump.
By my count, the foundation has committed at least nine illegal acts, including using charitable funds for a campaign contribution for Florida Attorney General Pam Bondi. One of his top campaign people said three years ago that the Bondi campaign was perfectly comfortable receiving a gift from the Trump Foundation. That's an amazing assertion since charities may not be involved in partisan politics. He's also used foundation money to buy two paintings of himself and that infamous Tim Tebow football helmet and to settle legal and other obligations he had, all of which are illegal.
In 2014 the foundation gave away a bit more than a half million dollars and 40 percent of the gifts benefitted Trump. Among them was $50,000 to the prep school attended by his fifth child, his son Barron. Trump provides no audited financials, unlike the Clinton foundation. The New York State Attorney General has ordered Trump to stop soliciting donations and produce audited financial statements. Because of the way the law works the penalties will be minimal. Trump may pay some fines equal to a small share of the money he misused. He might be pressured to replace that money and his foundation is likely to have a chargeable status revoked. That's likely to be it.
I just have to ask. If you were limited to five adjectives to describe Donald J. Trump, what would they be?
Immature. Insecure. Liar. Bully. Phony.