“There’s no Evidence Trump is a Billionaire”

by Troutfishing –

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During her first 2016 election presidential debate with Donald Trump, Hillary Clinton raised Donald Trump’s record as a businessman : “If your main claim, to be president of the United States, is your business, then I think we should talk about that.”

Clinton cited a few of the many dubious aspects of Trump’s business conduct — including his repeated failure to pay his subcontractors and his multiple bankruptcies.

But there’s another issue at stake.

Why won’t Donald Trump release his tax returns ? Yes, Trump’s returns might reveal financial ties to various countries that are somewhat less than friendly to the U.S., such as Russia.

But there’s another possible reason. In recent statements, Trump has put his fortune variously at $8.7 billion, $10 billion, “more than $10 billion”, and even $11 billion dollars.

How do we know he’s a billionaire at all ? According to Forbes, Trump’s net fortune is $3.7 billion (and dropping fast).

But in 2009 Trump’s lawsuit against an author of a 2005 book — which contradicted Trump’s claims to be worth somewhere between $1.7 and $9.5 billion (quite a spread) and instead put the Trump fortune in the several hundred million range — was dismissed, perhaps in part because of Trump’s court testimony that his wealth fluctuates with his emotional state.

If Trump’s wildly exaggerating his business success, could we reasonably count on his alleged financial acumen, as the businessman-in-chief, to manage the economy ?

Let’s start here:

By most accounts Donald Trump inherited, in the mid-1970s, a sizable amount of money from his father Fred Trump. Donald’s share, split among Fred’s five children, of Fred Trump’s construction firm fortune (estimated to have been worth about $200 million at the time) would have been around $40 million (which is almost $200 million in 2016 dollars, by the way.)

Now, had Donald Trump simply put his share, $40 million in 1975 dollars, into a conservative investment portfolio, running on autopilot, that was pegged to the Standard and Poor Index, and gone off to the South Pacific to live out the next four decades in a grass hut on a desert island, by 2016 he would have been worth — through no effort whatsoever — easily over $3 billion dollars.

Instead, Trump embarked upon a career in business: real estate, construction, casinos. It didn’t end well.

Later, in Donald’s Trump business model 5.0 (after four bankruptcies), Trump would shift to a new business model that included 1) the creative licensing of the Trump name as a brand, to adorn steaks and skyscrapers alike, 2) a fraudulent “university” that charged considerable sums to teach students the supposed business secrets which had allegedly made Trump so hugely successful (or, from a different perspective, caused four bankruptcies in succession.)

But just how hugely successful is Trump ?

Back in 2005, former New York Times editor, now Bloomberg View executive editor, and author Timothy O’Brien publicly suggested, in his book TrumpNation, that Trump might not be a billionaire.

Claiming damage to his reputation, Donald Trump sued O’Brien for the actually huge sum of $5 billion in damages. In 2009 Trump’s case was dismissed. In 2011 his appeal of that dismissal was dismissed too.

Recalls O’Brien, concerning his interviews with Donald Trump as part of the research for TrumpNation,

“he told me his net worth was $4 billion to $5 billion, then revised that later the same day to $1.7 billion. Forbes said at the time he was worth $2.6 billion. A year later Donald told me he was worth $5 billion to $6 billion, but a brochure left on my nightstand at his Palm Beach resort said he was worth $9.5 billion…

My sources at the time – all of whom had worked closely with Donald and had direct knowledge of his finances – believed that his net worth was $150 million to $250 million. Donald attributed those figures to naysayers.”

During the trial, recalls O’Brien, Donald Trump testified under oath that his net worth fluctuated, in part, due to changes in his mood. In other words, Trump claimed thatsubjective changes in his feelings caused objective changes in his net worth. Per O’Brien :

‘When they asked him about how he calculated his net worth, he noted that the figure “goes up and down with markets and with attitudes and with feelings, even my own feelings.” Later he added that “even my own feelings affect my value to myself.” ‘

When O’Brien’s book appeared, Trump sued, “saying that low-balling his riches had damaged his reputation”, according to O’Brien, who reveals,

“My attorneys proceeded to get Donald’s tax, bank and property records. We stood our ground, and the suit was dismissed in 2009. Donald appealed, and in 2011 an appellate court affirmed the earlier ruling.

More recently, Billionaire Mark Cuban has challenged Trump’s billionaire status — and various recent investigations, such as by Forbes and by Vanity Fair, have plumbed Trump’s murky finances and also concluded that he’s probably worth less than he claims.

Now, Pulitzer Prize winning journalist David Cay Johnston has entered the fray, with anew book on Trump and a punchy two-minute video that restates the case O’Brien made in 2005.

Trump’s clearly a wealthy man, observes Johnston, but we don’t have irrefutable, or even strong, evidence that Trump’s a billionaire. “There’s no evidence Donald Trump is a billionaire”, Johnson flatly declares in the video.

Of course, Johnston has book to sell, so he has clear motivation for baiting Donald. But his observations mirror O’Brien’s :

“Within a matter of days last year, Donald Trump said his net worth was 8.7 billion, 10 billion, more than 10 billion, in one case 11 billion dollars — even though there was nothing going on in the economy that would suggest that kind of gyrations of net worth. The reality is that Donald Trump just makes it up. And you don’t have to take my word for it, he’s testified to that effect.”

“What there is evidence of”, notes Johnston, “is how Donald Trump calculates his wealth”. Most of us calculate our net worth according to the following formula : net worth equals financial assets minus financial liabilities. Simple. But it’s not so simple for Trump. Reports Johnston,

“According to Donald Trump, his net worth is determined by his emotional state. He was asked about this under oath jut a few year ago, and he said, ‘Well, it depends on how I’m feeling.’ And the lawyer questioning him under oath pressed this and Donald went on to say, ‘Yes, it’s a function of how I feel.’ ”

Johnston’s knockout punch ? Well, if you were at a bar sitting next to a guy on a stool who was saying that sort of thing, what would you conclude ?

You’d think he was nuts.

 

Reprinted with permission from Daily Kos