Allegations of business links to organized crime
Journalists
David Cay Johnston and
Wayne Barrett, the latter of whom wrote an unauthorized 1992 Trump biography, have claimed that Trump and his companies did business with New York and Philadelphia families linked to the
Italian-American Mafia.
[198][199] A reporter for
The Washington Post writes, "he was never accused of illegality, and observers of the time say that working with the mob-related figures and politicos came with the territory."
[200]
Trump helped a financier for the
Scarfo family get a casino license, and constructed a casino using firms controlled by Nicodemo Scarfo.
[201] Trump also bought real estate from Philadelphia crime family member
Salvatore Testa, and bought concrete from companies associated with the
Genovese crime family and the
Gambino crime family.
[198][199][200] Trump Plaza paid a $450,000 fine leveled by the Casino Gaming Commission for giving $1.6 million in rare automobiles to Robert LiButti, the acquaintance of
John Gotti already mentioned.
[29]
Starting in 2003, the Trump Organization worked with
Felix Sater, who had a 1998 racketeering conviction for a $40 million stock fraud scheme orchestrated by the Russian mafia, and who had then become an informant against the mafia.
[202][203] Trump's attorney has said that Sater worked with Trump scouting real estate opportunities, but was never formally employed.
[204]
Use of bankruptcy laws
Trump has never filed for
personal bankruptcy, but hotel and casino businesses of his have been declared
bankrupt four times between 1991 and 2009 to re-negotiate debt with banks and owners of stock and bonds.
[205][206] Because the businesses used
Chapter 11 bankruptcy, they were allowed to operate while negotiations proceeded. Trump was quoted by
Newsweek in 2011 saying, "I do play with the bankruptcy laws – they're very good for me" as a tool for trimming debt.
[82][207]
According to a report by
Forbes in 2011, the four bankruptcies were the result of over-leveraged hotel and casino businesses in Atlantic City: Trump's Taj Mahal (1991), Trump Plaza Hotel (1992), Trump Hotels and Casino Resorts (2004), and
Trump Entertainment Resorts (2009).
[208][209] Trump said "I've used the laws of this country to pare debt.... We'll have the company. We'll throw it into a chapter. We'll negotiate with the banks. We'll make a fantastic deal. You know, it's like on
The Apprentice. It's not personal. It's just business."
[210] He indicated that many "great entrepreneurs" do the same.
[208]
1991
In 1991,
Trump Taj Mahal was unable to service its debt and filed
Chapter 11 bankruptcy.
[210] Forbes indicated that this first bankruptcy was the only one where Trump's personal financial resources were involved.
Time, however, maintains that $72 million of his personal money was also involved in a later 2004 bankruptcy.
[211]
1992
On November 2, 1992, the
Trump Plaza Hotel filed
Chapter 11 bankruptcy, and Trump lost his 49 percent stake in the luxury hotel to
Citibank and five other lenders.
[212] In return Trump received more favorable terms on the remaining $550+ million owed to the lenders, and retain his position as chief executive, though he would not be paid and would not have a role in day-to-day operations.
[213]
1994
Trump Plaza Hotel and Casino closed in 2014
By 1994, Trump had eliminated a large portion of his $900 million personal debt through sales of his
Trump Taj Mahal and
Trump Plaza assets,
[214] and significantly reduced his nearly $3.5 billion in business debt. Although he lost the
Trump Princess yacht and the
Trump Shuttle (which he had bought in 1989), he did retain Trump Tower in New York City and control of three casinos in Atlantic City, including
Trump's Castle. Trump sold his ownership of
West Side Yards (now
Riverside South, Manhattan) to
Chinese developers including Hong Kong's
New World Development, receiving a premium price in exchange for the use and display of the name "Trump" on the buildings.
[215]
2004
Donald Trump's third corporate bankruptcy was on October 21, 2004, involving
Trump Hotels & Casino Resorts, the publicly-traded holding company for his three Atlantic City casinos and some others.
[216] Trump lost over half of his 56% ownership and gave bondholders stock in exchange for surrendering part of the debt. No longer CEO, Trump retained a role as chairman of the board. In May 2005
[217] the company emerged from bankruptcy as
Trump Entertainment Resorts Holdings.
[218] In his 2007 book,
Think BIG and Kick Ass in Business and Life, Trump wrote: "I figured it was the bank's problem, not mine. What the hell did I care? I actually told one bank, 'I told you you shouldn't have loaned me that money. I told you the goddamn deal was no good.'"
[219]