Donald Trump’s real business “genius” was being bailed out by daddy: How Trump blew through $50 million before 35
Trump's infamous $1 million loan from his father was reportedly just the first of many
Topics: Donald Trump, Fred Trump, Kurt Eichenwald, Newsweek, Trump's taxes, Elections News, Media News, News, Politics News
The Wall Street Journal reported last month that the “$1 million” loan Republican presidential nominee Donald Trump has repeatedly claimed to have received from his father to jump start his supposedly “$10 billion” empire was far from the only assistance the business mogul received from Fred Trump:
In September 1980, around the time Mr. Trump was laying the groundwork to build a casino in Atlantic City, New Jersey, his father lent him $7.5 million, a matter previously reported. In 1981, when Mr. Trump applied for a casino license, regulators learned he received a $100,000 salary as an executive vice president at his father’s company, Trump Management Inc., and yearly trust money that varied from around $32,000 a year to more than $200,000.
After the New York Times authenticated Trump tax returns from the 1990s that showed the real estate magnate lost nearly $1 billion dollars in a year, Newsweek financial reporter Kurt Eichenwald reexamined Trump’s early cash problems and found that when all of Trump’s loans and gifts from his father are taken into account his so-called business “genius” appears abysmal.
Using a report from the New Jersey Department of Law and Public Safety that summarizes Trump’s federal tax returns from the late 1970s, previously reported in March by the Washington Post, Eichenwald illustrated the picture of a younger Trump “unable to control his spending,” loading “himself up with debt from the credit line in an apparent belief that he could make enough money through other deals and investments to cover the interest payments.” Eichenwald noted that the report was a result of an application for a casino license Trump filed in the early 1980s:
The application came on almost the exact same day as the opening of the development Trump portrayed as his biggest success—the rebuilding of the Commodore Hotel in Midtown Manhattan into the Grand Hyatt New York. But Trump’s success in that deal—as well as every project that preceded it—came because he was born with a silver shovel in his mouth. His father, a major New York developer named Fred Trump, had personally guaranteed the construction loan from his banker at Chase Manhattan so that his son could do the project. Through that same banker, Fred Trump also arranged for Donald Trump to obtain a personal line of credit of $35 million at Chase Manhattan. In one more bit of evidence that the wealthy are not like you and me, the bank gave Trump the loan without even requiring a written agreement.
[…]
In 1978, the same year that Fred Trump set up the credit line for his son at Chase Manhattan, Trump’s personal finances collapsed. By then, he had borrowed $38 million from his line of credit—the bank adjusted the available amount up by $3 million when Trump exceeded his credit limit.”
