Home / General / The $713 Million Dollar (and then some) Man [update]

The $713 Million Dollar (and then some) Man [update]

Comments
/
/
/
560 Views

More proof of Trump’s anti-elitism: like many un Joe ordinaire he’s up to his eyebrows in debt.

According to his own public disclosure, Trump, as of May, was on the hook for 16 loans worth at least $713 million. This list does not include an estimated $2 billion in debt amassed by real estate partnerships that include Trump. One of those loans is a $950 million deal that was cobbled together by Goldman Sachs and the state-owned Bank of China—an arrangement that ethics experts believe violates the Constitution’s emolument clause, which prohibits foreign governments from providing financial benefits to federal officials.

Sure it might violate the emolument clause now, but give Trump and his Concerned Conservative Congress a few minutes and it will be legal to shoot anyone who says the words emolument clause.

All of Trump’s top properties—including Trump Tower, the Trump National Doral golf course, and his brand new luxury hotel in Washington, DC—are heavily mortgaged. That means Trump maintains critical financial relationships with his creditors. These interactions pose a significant set of potential conflicts because his creditors are large financial institutions (domestic and foreign) with their own interests and policy needs. Each one could be greatly affected by presidential decisions, and Trump certainly has a financial interest in their well-being.

However, congratulations to Deutsche Bank are in order. It looks like the bank will dodge a $14 billion bullet.

Trump has an enormous conflict of interest on his hands with Deutsche Bank. As Trump himself noted in his 2008 lawsuit against the bank, Deutsche played a prominent role in the run-up to the 2008 financial crisis. The Obama administration has targeted Deutsche Bank and other banks for creating and repackaging bad mortgage products, and earlier this fall the Justice Department announced it was seeking to settle claims against the bank for about $14 billion. That was much more than Deutsche Bank was expecting to pay, and the news sent the bank into a tailspin. Its stock price plummeted amid speculation that it could not remain afloat if the Justice Department pressed the bank for such a big settlement.

Negotiations between the bank and the Justice Department over the size of the settlement are underway. But if they are not resolved by January 20, Trump’s administration will be in charge of handling this case. So a federal government run by Trump will have to decide how hard to push the bank that Trump owes so much to and that has been critical to Trump’s personal fortune.

If you have not already clicked the link, do so for a list of what he owes to who.

Related – I predict this plan will feature so many superlatives describing the plan and feints in the direction of other topics that there will be no room for an actual plan. Update: Will never get off the ground because “You can do anything you want!” is the new IOKIYAR!

Donald Trump has announced that on December 15 he will hold a press conference to reveal to the world his plan to address the many conflicts of interest between his vast business empire and his new role as president. Trump has indicated that he will remove himself from the daily “business operations” of the Trump Organization—but not sell off his holdings or create a truly blind trust.

Ethics experts have criticized this approach because … he would not be separating his presidential decision-making from his own personal financial circumstances. Yet, arguably, the biggest conflicts he faces aren’t related to what he owns. Rather, they relate to what he owes.

Unless he plans to spend 10 minutes screaming at the press.

FacebookTwitterGoogle+Share
  • Facebook
  • Twitter
  • Google+
  • Linkedin
  • Pinterest
  • tsam

    Everyone else who has unmanageable or unaccountable debt gets no security clearance. It makes them a security risk.

    • ema

      Who has the authority to deny clearance to POTUS?

      • tsam

        Nobody, but I assume the governing body can deny a candidate based on his business dealings that leave him vulnerable to blackmail and indebted to foreign banks.

        • Sentient AI from the Future

          this seems like it should get more press: if he were applying for a security clearance, it would have been circular-filed or laughed at long ago. i imagine the same could not be said for hillary.

      • janitor_of_lunacy

        The POTUS by definition has access to any information he needs to know. This includes sources and methods. Likewise members of Congress (who do not get clearances, because of separation of powers.)

        • Dilan Esper

          Not sure about Congress. Some secrets get shared only with the ranking members of intelligence committees.

          • tsam

            Right–it’s a matter of best practices to only issue security clearances at the level and to people who demonstrate an actual need for them.

    • Brad Nailer

      That of course used to be the reason given for homosexuals to be banned from sensitive government assignments. Too easy to be blackmailed.

      • MAJeff

        Actually, beginning with Eisenhower’s E.O. 10,450, queer folk were excluded from any and all government employment. Shit, we were banned from entering the country.

  • Domino

    Seriously – how likely is it within 2 years we find blatant evidence of handling a situation in way to clearly enrich either himself or his children? I say 50%.

    Would the public outrage be enough to force even the Repubs in the House and Senate to actually do something about it? I personally doubt it – Paul Ryan’s passion is taking away Social Security and Medicare from people, everything else can fall by the wayside.

    As for McConnell, I’m partly convinced hiring his wife was political payback for him running interference about the Russian interference into our election.

    This is end-of-the-republic stuff, no?

    • malraux

      I mean, Trump DC Hotel (whatever the name) raised its rates after he won.

      Or the Tiawan hotel thing (provoking china to get a hotel placed there),etc.

      There have already been blatant things. He can’t loot the us treasury yet, but he also hasn’t been quiet about his obvious bribeablity yet.

    • BiloSagdiyev

      Would the public outrage be enough to force even the Repubs in the House and Senate to actually do something about it? I personally doubt it

      I doubt it, too. Republicans don’t respond to liberal and leftist outrage. And the GOP is chock full of people who don’t understand what corruption is – be it public or private sector, as long as it’s in the public sphere, anything goes when it comes more money, more money, and more money. (Waiting for the Christian right to object to such Mammon-riffic attitudes… waiting…waiting… I’m going to bed now, I’ll resume waiting tomorrow.)

      • rea

        Corruption? He doesn’t even use e-mail!

        • StellaB

          And he’s never been involved in any land deals!

  • Hogan

    I have a dim memory of proceedings in the ’80s where Ed Meese was accused of using his public office to do favors for his friends, and Meese didn’t understand that that was an accusation. Why else does anyone assume public office? But maybe I’m imagining things.

    • TheoLib

      My also dim memory is that Meese was also the recipient of favors from rich friends, including free loans. Not much of a moral compass–he had that mindset that you ably point out. And 30 years later he’s advising Trump.

      • BiloSagdiyev

        My fuzzy memory says the loan in question was $10,000.

        Hey boys and girls, do you know what “quaint” means?

    • Bill Murray

      this was probably the Wedtech scandal

      • Hogan

        The independent counsel McKay never prosecuted or sought indictment of Meese, but in his official report, which is still confidential, he was highly critical of Meese’s ethics and urged further investigation of Meese’s role in that scandal and others

        Compare and contrast with Comey.

  • MilitantlyAardvark

    Hasn’t Trump just cancelled the December 15th press conference because.. reasons?

    • Warren Terra

      Wasn’t it originally scheduled for this week? And isn’t it now “scheduled” for January (some January), possibly some time after the inauguration?

    • science_goy

      He’ll host the press conference just as soon as he releases those tax returns.

    • CrunchyFrog

      I’m so old I can remember when major American newspapers had counters every day counting the number of days since Hillary Clinton’s last press conference.

      IOKIYAR is no longer a meme, it’s now a media operating principle.

      Does anyone doubt that if someone released hacked emails from the RNC that the main thrust of the news coverage would be how unfair that was and why hasn’t the Obama administration arrested the perpetrators? That any actual details of the emails would be buried on page B43? That Fox would call it “Hackgate” and the rest of the press would adopt the term?

      • CrunchyFrog

        It’s not like this is new. Democrat Gary Condit had his career ruined by 24×7 press coverage when an intern in his Congressional office was murdered. But in the same year when an intern in a GOP Congresscritter’s office was murdered the press hushed it up. Then he was given a prominent 3 hour show on a cable news network.

        If this doesn’t ring a bell google “joe scarborough office intern”.

  • keta

    I’m of the opinion that Trump’s self-dealing will be what ultimately sinks his presidency.

    It’s crystal-clear that Trump cares not a whit about propriety in these matters, and he sure-as-shit doesn’t care about optics. His marketing the oval office has already begun, and elected Republicans will mumble and burble and fart rationalizations until the day all their designs are well in train (fucking the have-nots into beggary) and then, and only then, will they discover a spine and turn on Trump in concert.

    Of course, by that time Trump will have enriched himself beyond measure and will sail out of office bigger bolder brighter and much, much wealthier.

    The Republicans will then market the ousting of Trump as a sure sign they know what’s best for the country and ferociously campaign behind this idea to re-install now-president Pence. And a sizable portion of America will scratch their slack jaws, dab at the drool collected on their shirt fronts and say to themselves, “thank God Republicans are looking out for me. I always knew that Trump fella’ was really a crooked Democrat.”

    • efgoldman

      It’s crystal-clear that Trump cares not a whit about propriety in these matters, and he sure-as-shit doesn’t care about optics. His marketing the oval office has already begun

      Remember what a huge scandal it was when Bill Clinton may have been offering a night in the Lincoln bedroom to big contributors?
      Weren’t we innocent then!

      • CrunchyFrog

        I’m so old I can remember when Joe Biden was considered disqualified for running for president because he plagarized part of a speech.

    • Juicy_Joel

      I’m of the opinion that Trump’s self-dealing will be what ultimately sinks his presidency.

      I agree wholeheartedly, although he may be able to loot enough in four years that he packs it up and spares the Republicans the trouble of having to get rid of him.

      • Sentient AI from the Future

        if you think trump has a clear idea of what “enough loot” means, then i have a bridge i might be able to sell you. if you’re looking to make a lot of money, anyway.

        • Jameson Quinn

          Don’t your kind traditionally just offer to simulate a copy of us in ecstasy, rather than selling a bridge?

    • joel hanes

      Trump cares not a whit about propriety in these matters

      It’s clear that he has no concept of propriety at all, in any matter.

      “There is no limit to desire but desire’s needs”
      John Gardner, _Grendel_

  • junker

    I hadn’t seen anyone mention this before but Josh Marshall was speculating that Trump refuses to divest because he can’t – he owes too much to sell off everything.

    • Warren Terra

      The caveat to that is that a purchaser could help out by overpaying, in order to ingratiate themselves with Trump – but he’s so obviously an unreliable and ungrateful cad you’d be a fool to wind up with him metaphorically in your debt. Risky enough having him actually indebted to you.

      • Joe Bob the III

        As President, Trump may be exempt from government ethics laws but he’s not immune from criminal statutes for public corruption nor would the people giving him money be immune from bribery charges. If he were paid a gratuitous sum of money for an asset this would become known and open to questions.

        Therefore, the question becomes: how much tolerance will there be in Congress and federal law enforcement for Trump to engage in in-your-face public corruption? Republicans could turn a blind eye to it all, or they could decide it’s not worth it to piss away every last bit of their political legitimacy to prop up a President many of them never liked to begin with.

        • cpinva

          “Republicans could turn a blind eye to it all, or they could decide it’s not worth it to piss away every last bit of their political legitimacy to prop up a President many of them never liked to begin with.”

          as long as he’s getting his beak wet, Mitch McConnell couldn’t care less what Trump does, or doesn’t do. this will be McConnell’s golden opportunity to finally make enough of a killing to finally retire in the manner to which he’d like to become accustomed to.

          once the rest of the Congressional Republicans see Gertie McTurtle enriching himself, with zero repercussions, the gravytrain will leave the station in a flash, every republican on it with carpet bags wide open, to catch the dumptrucks full of cash that will be flying their way. they’ll leave congress just as soon as they too, stash enough away to live a life of ease upon retirement.

          on a positive note, most of them will finally be gone from congress.

          • Brad Nailer

            I don’t think I would care so much about the money. There’s always more of it and the theft of a few billion dollars wouldn’t have really too much of an effect on the budget or the treasury. But it’s of course the lasting damage to the government itself, to our society and to the national–and international–infrastructure that these people are likely to do that is the real problem.

            Which is to say: Why can’t we just tell them right now to name their price? We could pay them off, send them away and then get some real leaders in to take care of the actual business.

            • Bill Murray

              There’s always more of it and the theft of a few billion dollars wouldn’t have really too much of an effect on the budget or the treasury.

              yeah, the Republicans test bedded this in Iraq, and are now likely to bring it on home again

        • malraux

          I suspect that it will depend entirely on if congressional republicans are getting helped or hurt by it. If they start getting hurt, then I could see them taking action but not before.

        • Sentient AI from the Future
          • cpinva

            the problem with that deal is that an unrelated party made it. absent any proof to the contrary, presumably it was at fair market value.

    • keta

      Yeah, that was an interesting take and well worth exploring.

      The other huge question mark regarding Trump’s finances are his Russian debts. The Tillerson nomination is all of a part, of course, and if he is seated as SoS then it will be a huge win for Putin. And Trump.

      The only thing Trump cares about is making Trump richer. Anybody who thinks he’s motivated in any other way is a fucking fool.

    • Joe Bob the III

      Yes, I read the TPM posts about this. Part of the hypothesis is that not only does Trump have a lot of debt but that keeping current on that debt relies on a cash flow scheme that is a house of cards. The thought is that: Trump doesn’t have enough liquidity to sell off income-generating assets, keep the rest of the business afloat, and stay in compliance with other contracts that probably require him to maintain a certain level of income-generating assets. Put another way, maybe he could divest but it would leave him with next to nothing.

      • cpinva

        in other words, as I’ve been saying for years now, my cats probably have a higher net worth than Trump does. it’s a house of cards, built on a shifting foundation of sand. all that’s required to cause the whole thing to come crashing down to the earth, is a small economic wave. as inept as Trump is, he’ll self-generate that wave in short order, once he’s the president.

  • Schadenboner

    It is a matter of some comfort to me that I still possess the ability to have my breath taken away by the scope, scale, and pure brazenness of the sort of thing Trump does as a matter of course.

    That I still expect some eventual justice to come out of this all is an extension of the above naivete which gives me no such comfort.

    • efgoldman

      I still expect some eventual justice to come out of this

      Not against the old man. He’ll either be dead or in the throes of dementia.
      But the kids will find, one of these days, that their inheritance is a bowl of pottage.

      • Juicy_Joel

        But the kids will find, one of these days, that their inheritance is a bowl of pottage.

        Nah.

        • petesh

          Split the difference — they may be quite notably wealthy, but they were looking for a couple of orders of magnitude more.

          • efgoldman

            they may be quite notably wealthy, but they were looking for a couple of orders of magnitude more.

            All that debt in all those LLCs isn’t going to repay itself.

            • That’s why they’re grifting so hard now; they know that after Pops pops a blood vessel there’ll be nothing left but orange bones when the financial piranhas are finished w/ the Trump Organization.

              • cpinva

                this. absent some torrid grifting for however long he remains in office, once that house starts collapsing, nothing will stop it, until it lies flat on the ground, a small cloud of dust surrounding it.

  • Murc

    Negotiations between the bank and the Justice Department over the size of the settlement are underway. But if they are not resolved by January 20, Trump’s administration will be in charge of handling this case. So a federal government run by Trump will have to decide how hard to push the bank that Trump owes so much to and that has been critical to Trump’s personal fortune.

    Given Trump’s vindictiveness, I actually expect him to put the screws to Deutsche and hard.

    This is why I’m not too worried about Putin having “kompromat” on Trump. Trump has proven he can do nearly anything and people don’t care. They would literally need to have him raping someone on-camera, and honestly even that would probably just enhance his stature. Anything else and he just won’t care.

    • petesh

      Not sure about how either side plays this one. Trump could say “gee sorry but I cant afford to intervene” and Deutsche could quietly start to point out some of the fine print … or … Trump could cut the settlement and Deutsche could say, glad to leave you on good terms but you do understand that for reasons of ethics we cannot be carrying your loan …. or … Anyway, as a spectator I’m just rooting for injuries. As a connoisseur, I think Trump is out of his depth here, too, and the bank will come out of it just fine, but I wouldn’t bet my house on it. (He probably would.)

  • Mart

    That was some good MJ’s reporting. I let my subscription lapse, need to get on that. My wife and I visited the coal union advocates’ grave. Mother Jones is buried in south central Mount Vernon, Illinois. Drove by the I-55 sign hundreds of times and never ventured. Was I inspired by one of Eric’s cemetary visits? It is a bit hard to find, but an awesome tribute to the woman. Definetly worth a 1/2 hour detour if passing by mile marker 44 (I think).

  • MacK

    I do not know if many people here have read big real-estate loan documents – the sort that you have when tens or hundreds of millions of dollars are at stake. So let me explain a few key aspects.

    Loan covenants – these types of loan agreements are packed with “covenants” from the borrower – that they will maintain certain turnover, that they will pay all sorts of bills on time, that they will stand-on-their-head-naked. It’s quite common for the borrower to be in breach of a few of the loan covenants at any given moment in time, but the lender normally ignores any breaches that do not impact the key issue of getting the loan repaid – as long as the payments are being made, on time …

    Acceleration clauses – these go by lots of titles, but they basically allow the lender to call the loan in, demand immediate repayment for breach of any covenant at all, including the silly one about standing-on-your-head-naked. Because there are often many separate loans, and all the lenders had to work together, and the effect of calling a loan is often bad for some of the other lenders, the ones who have a lower security (they get paid after the primary lenders) – lenders tend to avoid calling loans – it can be worse than working them out.

    No waiver clause that provides that the failure of a contract party to exercise a right under a contract when an opportunity to do so first arises, does not preclude the invoking of that right at a later date, because of claimed acquiescence. For example, a clause that says that should the other party breach the terms of the agreement and the holder of the right does not sue, cancel the agreement or use any other remedies, it can still at any point choose to do so (i.e. it has not waived its rights.) The ones in loan agreements tend to be really strict – so any breach of a covenant at any time, even in the past, that would have allowed a lender to “call the loan” never goes away.

    There is an interesting aspect of Trump’s recent business that has come out in a few collapsed projects. Trump licenses his name for a fee, which may include cash upfront, but also includes a share (at not cost) in the project that bears his name. So Trump ends up owning a percentage stake in all of these buildings and resorts – a capital asset that he can count towards his wealth, and perhaps use as security for his own loans. But those projects that he has a piece of will have borrowed huge amounts from various lenders.

    In practice, since loan covenant breaches, even “technical” ones are so common, a lot of real estate loans can be called anytime. Now consider what that means for Donald Trump, a lot of whose net worth consists of his participation in big real estate projects. Trump has a bad reputation with lenders (they got burned 4 times) – Deutsche Bank was odd in that it was a major bank prepared to lend to Trump – but who knows the details, how the loan was syndicated.

    Trump’s wealth may very much depend on lenders on his projects, but also projects that just have his name on them, not “calling their loans.” Consider the leverage that may give the lenders over Trump.

    • CaptainBringdown

      Good to know, thanks for posting this info.

    • cpinva

      “Consider the leverage that may give the lenders over Trump.”

      or conversely, the leverage that gives Trump over the banks. in fact, he’s even boasted of his ability to restructure loans, because they’re such a large part of the bank’s loan portfolio, calling it would be potentially catastrophic for the bank. it’s hard to sell unfinished developments, especially once it gets a “troubled asset” reputation. it’s easier to restructure, and hope the development gets completed to the point it starts generating revenue.

      • MacK

        Not really. There are tiers of loans, each secured after another. So the basic loan might simply be secured by the land that the building sits on, the next might be say the first 40% of the assessed value, and so on. The lender who is holding the last 5-20% might get burned in a foreclosure, acceleration, but not the senior creditors. A senior creditor thus could easily call a note. Deutsche Bank is pretty certain to be a senior note holder – it would have a hard time being a junior note holder for regulatory reasons.

        And remember, Putin could say to his oligarch friend, I want you to call that note in – and it would be very unwise for the oligarch to refuse to; Trump may say mean things abut him, but Putin’s guys can and will cause you to mysteriously die, or end up in jail.

      • Little Chak

        Yep, and this has been Trump’s M.O. his entire career. He would have been ruined (just another failed business mogul and exhibit A in What Not To Do) by the nightmare that was the Trump Taj Mahal, if not for the fact that he convinced his creditors that he was, in effect, “too big to fail”.

        And then, two and a half decades later, a movement built on the outrage of bailing out “too big to fail” institutions helps to elect Mr. Too-Big-To-Fail himself.

  • These interactions pose a significant set of potential conflicts because his creditors are large financial institutions (domestic and foreign) with their own interests and policy needs.

    The president can’t have conflicts. So there.

    • Hogan

      Because for Trump there’s no such thing as “public interest.”

      • furikawari

        “L’etat, c’est moi.”

  • Well, at least we know what state he’ll leave the country’s finances once he leaves. But hey, at least he’ll be billions of dollars richer because presidents can’t have conflicts. No siree.

    • cpinva

      he’ll be the only ex-president with a private, secret, off-shore bank account.

      • Hogan

        As far as we know.

  • Deutsche Bank is in dire trouble and will have to be bailed out by the German government. It’s not just Putin who has financial leverage over Trump, Merkel has too. And her interests are opposed to Putin’s.

    • Hogan

      So where shall we start the bidding?

  • leftwingfox

    Looks like Turkey is already using Trump’s business empire to blackmail him:

    http://www.patheos.com/blogs/dispatches/2016/12/13/turkey-already-blackmailing-trump/

  • Bitter Scribe

    “Why do rich guys always owe a billion?”

    —Lenny Briscoe on “Law & Order”

  • BiloSagdiyev

    Thanks for the Flying Lizards, Shake! I hadn’t thought of them in a long time.

  • Pingback: Trump’s German debt bomb()

It is main inner container footer text