“As far as the lawsuit, yes, when I was very young, I went into my father’s company, had a real estate company in Brooklyn and Queens, and we, along with many, many other companies throughout the country — it was a federal lawsuit — were sued. We settled the suit with zero — with no admission of guilt. It was very easy to do. . . . That was a lawsuit brought against many real estate firms, and it’s just one of those things.”
— Donald Trump, remarks in the first presidential debate, Sept. 26, 2016
When Hillary Clinton raised a 1973 racial discrimination lawsuit brought by the U.S. Justice Department against Trump’s company, Trump dismissed it as a run-of-the-mill action that also affected “many, many other companies throughout the country.” He also claimed that the settlement was “very easy to do.”
He added: “I settled that lawsuit with no admission of guilt, but that was a lawsuit brought against many real estate firms, and it’s just one of those things.”
But this is a highly misleading account, as documented in the book, “Trump Revealed,” by our Washington Post colleagues Michael Kranish and Marc Fisher. Let’s review the record.
The Facts
The Justice Department lawsuit against Donald Trump, his father, Fred Trump, and the Trump company, which owned 39 buildings with 15,000 apartments, actually marks the first mention of Donald J. Trump in The New York Times. The front page headline on Oct. 16, 1973, said: “Major Landlord Accused of Antiblack Bias in City.” Regarding the charges, Trump was quoted: “They are absolutely ridiculous.”
According to Kranish and Fisher, the Justice Department lawsuit was “one of the most significant racial bias cases of the era.” It was based on evidence gathered by testers for the New York City Human Rights Commission, who documented that black people were told no apartments were available in Trump properties while white testers at the same time were immediately offered apartments. In a sampling of 10 Trump buildings, only 1 to 3.5 percent of the occupants were minorities, making it one of the strongest cases the Justice Department had ever seen for violations of the Fair Housing Act.
All the Justice Department wanted was to obtain a settlement in which Trump and his father would promise not to discriminate. But Trump instead hired Roy Cohn, a notoriously combative attorney, and countersued the Justice Department for $100 million ($500 million in today’s dollars) for making false and misleading statements. But his allegations were dismissed by the courts, and two years of litigation later, Trump decided in 1975 to settle before the case went to trial.
“The settlement was much like what the Trumps could initially have gotten,” the book says. As part of the deal, the Trumps were required to place ads assuring minorities that they would have equal access to housing. Trump initially balked at paying for the ads but ultimately was forced to do so.
Newspapers at the time declared it was a victory for the government, with headlines such as “Minorities Win Housing Suit.” The Justice Department said the decree was “one of the most far-reaching ever negotiated.” A New York Times article determined that the agreement had “stronger teeth” than a settlement reached with another real estate firm, the Lefrak Organization, in 1971.
The book notes that Trump, in an interview, falsely claimed “there were many, many landlords that were sued under that case.” Similarly, in the debate, Trump claimed “that was a lawsuit brought against many real estate firms.” But the suit was squarely aimed at the Trumps and their company; it was titled: United States of America v. Fred C. Trump, Donald Trump and Trump Management, Inc.
In a transcript of the April 21, 2016, interview, one can see how Kranish called out Trump when he tried to claim the lawsuit was against many landlords.
Donald Trump: Yeah, that was, yeah. But I meant that was one of many cases.
Michael Kranish: What other cases? The LeFrak case was settled, and you were upset about the Lefrak case being settled, the Sam Lefrak case.
Donald Trump: Oh, I see. You mean they settled it sooner?
Michael Kranish: He settled previously, and you had cited in your book that, you know, this other landlord, Sam Lefrak, settled the case. You didn’t want to do that.
Moreover, the Trumps were back in court three years later, as the Justice Department in 1978 alleged that they had reneged on the agreement to allow minorities to rent properties. The case was not formally closed until 1982.
The Pinocchio Test
On several levels, Trump’s debate answer was misleading. This was not a case brought against many real estate firms; it was brought against Trump and his father. Trump did not get a better deal; he got essentially the same deal, or possibly worse, than the deal he would have gotten if he had settled before spending legal fees for two years. He also failed to live up to the deal and found himself back in court. While Trump touts there was no admission of guilt, that’s rather typical in these sorts of settlements. The Justice Department simply wanted to get the Trumps to agree to rent to African American tenants — which they failed to do even after agreeing to settle the case.
Four Pinocchios
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