There’s so much telling detail in the Times investigation into the Trump gang’s systematic frauds Paul mentioned yesterday it’s hard to know where to begin. But I think this is a good summary:
The manipulation of values to evade taxes was central to one of the most important financial events in Donald Trump’s life. In an episode never before revealed, Mr. Trump and his siblings gained ownership of most of their father’s empire on Nov. 22, 1997, a year and a half before Fred Trump’s death. Critical to the complex transaction was the value put on the real estate. The lower its value, the lower the gift taxes. The Trumps dodged hundreds of millions in gift taxes by submitting tax returns that grossly undervalued the properties, claiming they were worth just $41.4 million.
The same set of buildings would be sold off over the next decade for more than 16 times that amount.
The most overt fraud was All County Building Supply & Maintenance, a company formed by the Trump family in 1992. All County’s ostensible purpose was to be the purchasing agent for Fred Trump’s buildings, buying everything from boilers to cleaning supplies. It did no such thing, records and interviews show. Instead All County siphoned millions of dollars from Fred Trump’s empire by simply marking up purchases already made by his employees. Those millions, effectively untaxed gifts, then flowed to All County’s owners — Donald Trump, his siblings and a cousin. Fred Trump then used the padded All County receipts to justify bigger rent increases for thousands of tenants.
Fred Trump was determined to not to pay gift or estate taxes, he worked all kinds of frauds to accomplish this, and at the same time these frauds allowed him to justify substantial rent increases based on spending that didn’t actually represent improvements to his properties.
And given the state of American politics and law enforcement, it wasn’t even particularly challenging:
Emblematic of their audacity was Park Briar, a 150-unit building in Queens. As it happened, 18 days before Fred Trump Jr.’s death, the Trump siblings had submitted Park Briar’s co-op conversion plan, stating under oath that the building was worth $17.1 million. Yet as Fred Trump Jr.’s executors, Donald Trump and his father claimed on the tax return that Park Briar was worth $2.9 million when Fred Trump Jr. died.
This fantastical claim — that Park Briar should be taxed as if its value had fallen 83 percent in 18 days — slid past the I.R.S. with barely a protest. An auditor insisted the value should be increased by $100,000, to $3 million.
The big winner of the Trump administration is Critical Legal Studies.
And the black fly in the Chardonnay is that Donald Trump is president in large measure because his fellow plutocrats believe they are taxed too heavily and treated too harshly by federal authorities.