This article comes from DCReport and is used with permission.
By David Cay Johnston*
For decades Donald Trump, his parents and siblings cheated on taxes in numerous ways, The New York Times reported in an extraordinarily thorough and well documented expose published on Tuesday, Oct. 2.
In a meticulously reported, 14,000-word article, the paper also demolishes Donald’s claims that he is a self-made billionaire who started out with a $1 million loan from his father Fred who Donald paid back with interest. Donald got at least $413 million, in today’s money, from his father and never fully repaid his loans.
The Times obtained access to more than 100,000 pages of Trump documents including “bank statements, financial audits, accounting ledgers, cash disbursement reports, invoices, and canceled checks. Most notably, the documents include more than 200 tax returns from Fred Trump, his companies and various Trump partnerships and trusts.” It did not get any of the president’s personal tax returns.
The arcane and difficult subjects of both tax and accounting are masterfully explained in plain English. As the paper’s former tax reporter, and the journalist who has covered Trump the longest, I’m in a solid position to judge the depth and quality of this work. It is masterful.
The Times expose is exactly what it purports to be: “unprecedented in scope and precision.” And it shows in vivid detail how egregious the tax cheating was – not chiseling here and there, but gigantic lies to escape lawful burdens. The piece goes far beyond the two civil income tax fraud trials Trump lost, news I broke in The Daily Beast two years ago.
Most if not all of the transactions detailed in The Times can be pursued as civil tax fraud by both the federal and New York state governments. Neither the federal or state governments have statutes of limitations on civil fraud. Generally, criminal tax cases are limited to returns filed in the past six years.
State tax authorities said Tuesday night they were looking into the facts reported by The Times. Since June 15, DCReport has been calling for a criminal investigation of Trump’s taxes. After our readers flooded N.Y. Gov. Andrew Cuomo with phone calls he signaled approval of such an inquiry.
The documents and interviews with former family retainers show the Trumps lied again and again on documents to enrich themselves and underpay the government.
Here are some of the most revealing aspects of the main article by reporters David Barstow, Susanne Craig and Ross Buettner:
- In deals to transfer wealth from Fred Trump to his children, transfers subject to a 55% gift tax, the Trumps drastically undervalued properties. When more than a thousand apartment units in eight buildings were transferred from Fred Trump to his children decades ago no taxes were paid on seven of the buildings and a token sum on the eighth building.
- Purchases and re-sales within the family were used to evade taxes and create tax losses. In one 1987 scheme, Fred Trump paid $15.5 million for a stake in Donald’s Trump Palace condos in Manhattan in 1987. Four years later Fred dumped his holdings, collecting just $10,000. That created, on paper, a big tax loss while transferring wealth from father Fred to favored son Donald. This disguised gift allowed the family to evade income and gift taxes totaling about $8 million. Similarly, the family told tax authorities were worth only about 6% of their actual value. While discounts on transfers made by parents with more than one child are common, a 94% discount is, in a word, egregious. “The Trumps dodged hundreds of millions in gift taxes,” The Times reported, “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.”
- Donald Trump has always claimed his fortune grew from a single $1 million loan from his father that was paid back with interest. The documents show Donald received loans and gifts worth in today’s money $413 million and failed to pay back many loans. Among the loans was one I reported on in 1990 – a scheme to evade New Jersey casino rules on capital invested in gambling halls. Fred Trump’s lawyer deposited $3.5 million cash to pay for gambling chips, but left without playing. The cash infusion saved Trump from missing a payment to Trump Castle bondholders. Casino regulators fined Donald $30,000, a slap on the wrist.
- In 1995, the elder Trump used a tax avoidance device known as a GRAT – grantor-retained annuity trust – to pass almost all of his wealth to the children while paying no gift taxes. For the tax dodge to work, the Fred and his wife only had to live for two years, which they did. Over the years, the paper reported, with Donald’s share of revenue from the family grew, which meant his three surviving siblings got less.
- The Trumps used invoicing schemes to reduce taxes and transfer wealth. On 78 refrigerator-stove combinations bought for rental apartments at a cost of $642 each, financial records inflated the cost by $300 through a company the family-controlled, documents obtained by The Times showed. That allowed the Trumps to take 46% more in tax deductions than the law allows. This was not a one-off, either. The newspaper said it found 295 separate schemes that made money flow to the children using invoicing schemes. That many schemes suggest that, as I have said many times, the Trump family is a white-collar criminal enterprise with the added benefit of one Donald’s siblings being a sitting federal judge.
- The Trumps cheated poor tenants in rent-controlled apartment by fooling housing authorities. Robert Trump, Donald’s younger brother, also testified under oath to inflating expenses on rent-controlled apartments, which means the Trumps cheated the poor to add to their fortunes. “The higher the markup would be, the higher the rent that might be charged,” Robert testified.
- Donald Trump manipulated the prices of stocks, including Time Inc., the magazine publisher, claiming he bought big stakes in the firm. In fact, his father bought shares, selling them two weeks later for a tidy profit after Trump planted his fake news with Don Dorfman, a financial columnist. There is no indication that Dorfman had any role in the scheme other than reporting what Donald said. Keep in mind that there is not a scintilla of verifiable evidence that Trump is or ever was worth a billion dollars.
While candidate Trump claimed to worth more than $10 billion, as president he filed a financial statement showing a net worth of just $1.4 billion. That document used highly inflated values for many assets. Also, because of loopholes on reporting requirements that Trump himself cited in 2015, it does not list all of the debts he owes.
What we need now are serious investigations by Congress, by the IRS and by New York state and city tax authorities. Trump’s sister, a senior judge on the federal Third Circuit Court of Appeals, should remove herself from the bench immediately.
There are no circumstances under which it is good for America to have a tax cheat in the White House or on the federal bench.
*David Cay Johnston is Editor-in-Chief of DCReport and a Pulitzer Prize winning US investigative journalist. He featured in this interest.co.nz video interview earlier this year.
79 Comments
Sadly, among Trump's constituency these revelations will just add to the notion that Trump is a really great man that is unjustifiably and unfairly being persecuted.
While we shake our heads in wonder, the 49% of the country's population who are Trump supporters will just become more entrenched in their support for him and very likely we will see a return him to power in 2020. After all, these ongoing revaluations about his integrity, his attitude to women, and his dubious financial and tax issues were well known prior to the last election.
While we can be very concerned about Trump, we also need to be very very concerned about the 49% of the American population.
You know in the old days when it was about if MAD magazine had featured the current state of affairs of The President and The White House it would have been one of their most uproarious editions and they likely would have been accused of being seditious in so far as undermining the stature and dignity of “Presidential” power.
As a human he is horrible. As a businessman able, but not great. And certainly he has a lifetime of fraud and flim-flammery and screwing people over. He is massively overconfident in his abilities, but good at talking confidently without making much sense. A bullshit artiste.
My question is: is he helping or hurting USA as a president? His risk taking approach seems to be genuinely trying something different to status quo and is perhaps overall helpful to the US economy (high employment, strong GDP growth ~4% is close to size of deficit, but with debt of ~105% of GDP that means deficit as proportion of GDP barely growing) and he is fighting some international battles that really do need fighting (Chinese hegemonic ambition).
Will history judge his administrations achievements harshly or approvingly? I think it is still too early to tell.
"he is fighting some international battles that really do need fighting (Chinese hegemonic ambition)."
Well, you know NZ (the first western country) signed a MOU with China on your so called Chinese hegemonic ambition - the Belt and Road Initiative.
The US is all about America First while China is on Community of Shared future for mankind.
The US is bombing around and destroying countries while China is building much needed infrastructure in Central Asia, Eastern Europe and Africa to improve locals living standard.
The US is now having a president that causes oil price soar and NZer about to pay $3 per liter of petrol while China has a president to minimize political risks and uncertainties both locally and internationally.
So, do use the same standard when judging on issues.
The US is bombing around and destroying countries while China is building much needed infrastructure in Central Asia, Eastern Europe and Africa to improve locals living standard.
Hey, let's be honest and realistic about this, though. It's debt trap diplomacy aimed at taking control of assets in these countries, and it's already happened in some of them.
Has anyone checked whether the above commentator is acting directly on behalf of a government?
China is, of course, a budding Empire like any other. Tienanmen Square and Guantanamo Bay are representations of the same thing. There' isn't enough planet to go around, and you don't build ocean islets into redoubts for friendly reasons, any more than you intrude into Vietnam or Iraq.
And China is burning near-record amounts of coal, and has record amounts of forward bets (debt) as does the US.
Kettle calling the dixie black, methinks....
Here we go...
"China is on Community of Shared future for mankind." Ha ha. Yes the dictatorship has proven itself to be very thoughtful of mankind, with their freedom to vote (oops), freedom of speech (oops) and amazing history of human rights (oops).
And I forgot how much effort China has made to reign in the North Korean regime (oops again). Sorry that was US making all the moves there, while China has only ever enabled the little dictator.
And yes of course China has a long history of helping countries to deliver freedom and democracy against tyrants (oops again).
Oh boy wouldn't it be nice to indebt ourselves to the Chinese mob to get some infrastructure. They only have our best interests at heart...
Please tell me how President Trump is causing oil prices to soar? Last I heard oil prices are very low compared to all-time highs?
Nothing is new under the (rising) sun, of course....
https://en.wikipedia.org/wiki/Greater_East_Asia_Co-Prosperity_Sphere
:)
I really don't think the comment merits being reported. When you analyze it sensibly it's not such a bad comment. The Chinese haven't done anything particularly awful. Recently the US Navy called itself "A global force for good", which the cynics amongst us also thought was laughable.
Let Ximowang have his say!
Please check his past comments, this is not a one time incidence. He often spurts pro CCP propaganda and when ever anyone calls him outs he says that person must be a CIA agent or something nuts. I feel commenters with such obvious ulterior motives do not belong on this site. If, however, he adds something genuine to the argument he is of course welcome to stay.
And as awful as Trump is the US is still the country people see as a beacon of lawfulness and freedom, not the People's Republic.
While China was butchering its own people with its Great Leaps or beating up on its neighbours who dared to challenge the Christ-like figure of Mao - Vietnam, Tibet, South Korea, Taiwan and non-Han & Muslim minorities internally, the US with all its flaws was the country that guarded the seas, paid for the UN & showed up with aid when there were natural disasters.
The only "giving" China does is the back-handed kind where all those countries who have receive new roads & bridges & ports today will be expected to sell their soul at some future point when the money-lender comes calling.
I wonder what the debt will be - cash? UN votes? looking the other way on Taiwan? puppet control of the Belt countries? wives for all the single men?
Well, you know NZ (the first western country) signed a MOU with China on your so called Chinese hegemonic ambition - the Belt and Road Initiative.
That was the previous government that signed that. I suspect we'll know more about this government's position on it once this international investigation is concluded;
https://www.nytimes.com/2018/09/21/world/asia/new-zealand-break-ins-aca…
xingmowang,
I have no wish to shut you down,as some on this site would do. This is a parliamentary democracy,unlike China,which is a totalitarian state. You are by and large,free to say what you want here,unlike your own country. Just try saying that you thought the mass killing of your own citizens in Tienenman Square was wrong,or that that Tibet was forcibly occupied and see what happens to you.
China is doing what all empires do,flexing its military and economic muscles.have a good look at waht is happening in the South China Sea.
Ok.
I presume all you know about on Tiananmen Square, Tibet, Taiwan, South China sea are no more than those sound bytes fed to you from western medias.
Do you know any history, causes and results on them or you are too lazy or trustful on those one-sided medias to dig out more by yourself?
Don't worry, I'm fully aware the CCP's version of events will differ from everyone else's.
Heck, the CCP was very angry that an international court did not accept their preferred made-up history: https://www.theguardian.com/world/2016/jul/13/china-damns-international…
The CCP needs to stop asking for alternative facts to be accepted just because they stamp their feet in anger.
Well, as for today, the US just announced that she will exit any international treaties/rules/court/arbitration ect as long as she is not happy.
https://www.reuters.com/article/us-usa-diplomacy-treaty/u-s-reviewing-a…
The British were quite bad.
https://www.abc.net.au/news/2018-09-02/modern-china-and-the-legacy-of-t…
"That page of Chinese history was one of humiliation and sorrow," China's president Xi Jinping said in 2017.
So it is still very fresh in his mind.
he's not the only one cheating on Tax
https://www.michaelwest.com.au/tax-dodgers/glencore-investment-pty-limi…
It's a bit off topic, but my god Glencore are evil.
This documentary blew my mind. "Stealing Africa".
https://www.youtube.com/watch?v=WNYemuiAOfU
but journalists are making it worse.
https://www.amazon.com/Suicide-West-Tribalism-Nationalism-Destroying/dp…
Even the left wing MSNBC refers to him
Appearing on MSNBC’s 9:00 a.m. ET hour on Wednesday to sell his latest Trump-trashing book, left-wing author David Cay Johnston compared the current administration to an insect infestation that was “eating away at the structure of our government.”
Colin,
I have read enough to have some understanding of why Trump got elected-books like Glass House and Hillbilly Elegy give an insight to what made Ohio,a state that used be solidly Democratic,turn to him.
What I simply cannot understand is why anyone outside the US doesn't see him for what he is;a pathological liar,extreme narcissist,racist and self-confessed abuser of women. He is incapable of reading briefing papers more an a page in length and never reads books. he is a nightmare.
I reckon the man is out there just to serve a key purpose for the Republican party: act as their decoy.
American liberals have been caught up in unnecessary details about Trump's personality, speeches, history, etc. since he first announced his presidency. Meanwhile the GOP is getting 'meaningful' work done in Congress for their patrons, and will continue to do so. These past couple of years could very well be one of the most successful runs for American conservatives and capitalists in recent times.
Did see a book out there suggesting Trump is the useful fool and Pence is really in charge. Didn't read it.
I wouldn't think Pence would necessarily be in charge at all. More what you're suggesting, ultimately regulatory capture and oligarchy / coporatocracy taking over the republic.
Would have been great to have the likes of Thomas Paine or Christopher Hitchens around at the moment.
Agreed - that's my reading of it also. A transition to true republic controlled by the oligarchs with a thin veneer of universal suffrage shaped by a redundant media. A shame really - looks waaaay too much like the banana-republics we see with modern Russia, Turkey and indeed China under Xi.
A simple fact is if you want to make this World equal, make it "Tax Wise" first.
A simple fact is ...follow the money...top down....if you want/need more tax money.
A simple fact is, the people who made the rules, left big gaps in equal policies. An elephant in the room is the multi-Billion/Millionaires who have never been taxed accordingly, or they would never have made it to this level.
The simple fact is. people who make the rules, need to abide by the new consensus...Top down pays. us poor Bottom up ...people have had enuff of being screwed, whilst people like a certain Bent President, sets a New Precedent. ......"Me First."
This Country is not free from Corruption....never has been.
But then a Whitewash and a Laundry Basket can be used in many ways. In a Flash. Especially if you made the rules to be bent, a line needs to be made, where all Flash products are open to view...especially large sums of money, flitting around the World from one "Safe Haven" to a little outpost with no limit on it....taxwise, law wise and run by Bwankers.
Simple fact is Follow the munny..Daddy would be so proud....don't ya thunk.
By highlighting the main points, these should be very specific and damning, given that this came from a 14,000 word report. They should be obvious and self evidently bad. But I have some questions:
Point 1: Who undervalued the properties? What were the rules around valuations - did they have to be from a registered valuer? Or were people allowed to write whatever value they wanted in their tax returns? What values are the investigators using now and why? Did any IRS agents investigate the values at the time? Why not?
Point 2: What does "dumped his holdings" mean? Surely this is the relevant point that needs to be more specific.
Point 3: Firstly, who cares? But let's say this actually matters - when is the point that Trump believes he had made a fortune, compared to when the investigators believes he had made a fortune? It is possible to have made a fortune with a $1m loan (not that I really care) and then also to have received loans and gifts for other ventures from then.
Point 4: Was GRAT an illegal method? Was its purpose exactly what it was used for? Was it commonly accepted as such? Or was this something that only Fred Trump did? How should this reflect on Donald Trump?
Point 5: This sounds illegal, and the writer suggests that it is. This should go to court. I'm not sure if 'the Trumps" means specifically Donald Trump, or just his father?
Point 6: With no other information, this sounds like something that has already gone to court. Trump's younger brother testified to doing something illegal? Okay so what was the outcome? Is this something that has been hidden?
Point 7: Again, did this go to court? Because it is illegal to manipulate the prices of stocks. What was the outcome of the case?
Trump won against Clinton, who through political connectivity alone amassed a fortune of about US$250 million. In the battle between a dodgy candidate and another dodgy candidate, the USA elected a dodgy President.
The amazing thing about American politics is the people who point to this report or Schweizer's Clinton Cash as evidence that the opposing voting block are deranged. They do this without the slightest hint of irony.
Uranium One....and of course electing Hilary also meant electing Billary, of little blue dress fame.
Its the American dream , make a fortune , and pay as little tax as possible. This is more likely to make him a hero than a villian in many voters eyes. About 40 % or so.
They should have separated out the probable tax avoidance,vs probable tax evasion , (legal vs illegal), and used the values at the time the various "gifts" happened. Saying they were worth 10 times more a few years later just gives the impression of good investing.
The only real damage to Trump is the blowing of the myth he only got a million form his Dad. That seems to be undeniable now.
But what is his message - he seems to prevaricate most of the time. This on the border wall.....
https://www.businessinsider.com.au/trump-shutdown-border-wall-daily-cal…
The problem I have with your comment is it is vague and not measurable in any way, sharp or form. Totally subjective and really only intended for the faithful (which I suspect many here are not). As my epistemology lecturer said "be precise".
Here is something he did before The Apprentice.
https://www.youtube.com/watch?v=ZN5PoW7_kdA
While everyone is pointing the juju bone at each other in these discussions, what i find disappointing is the utter lack of good solid discussion in depth, on why Trump got elected. This would also discuss why Brexit happened.
I find too many people derail those discussions into ares of personal interest. What we (the world) need to understand is how to avoid another Trump (or a repeat), and to do that we must understand why and how he got to where he is.
quite simple - Trump/Brexit/hard right resurgence is a reflection of declining prosperity for the masses.... the pie is no longer growing ... and you aint see nothing yet.
If the systems holds, the next Potus is likely to be someone like Pence ...ie a religious zealot as well with Gods permission to make America great
A simplistic left wing explanation that conveniently ignores the facts..
Fact : a majority of college educated males voted for Trump ( hardly the downtrodden masses ).
You are right about one thing though - if the Dems continue the way they have been Trumpism will persist , simply as the lesser evil.
I think most compelling explanation is to view Trump and Brexit as outcomes of a conflict between financially protected classes (rich and educated public servants and professionals in service industries that do not have to compete with immigrant labour or cheap imported manufactured goods, more frequently of left, and more frequently female) and poorer labouring classes more vulnerable to competition from cheaper immigrant labour, more frequently right wing and more frequently male.
The protected classes want their cheap cleaners and plumbers and labourers and restaurant workers and cheap imported goods. The non-protected classes feel nothing but the squeeze that reduces the value of their labour and leaves them relatively poorer. They quite sensibly reject of globalism and open immigration from poorer countries to help themselves - even if it might be worse for their country overall.
That the other large pool of voters supporting Trump (not Brexit) are those on the receiving end of the toxic excesses of intersectionality (identity politics). Mostly men, mostly white or (in US) asian. Also; there are far more male than female Science, Technology, Eingeneering and Mathematics graduates in the US exposed to competition from immigrant labour (H1B's) and imported goods.
Where have the Republican deficit hawks gone?
When Donald Trump campaigned for president, he promised to balance the budget and to chop down the debt. But once President Obama was out and President Trump was in, that's not what happened. Under President Trump and House Speaker Ryan, spending has increased, and the Republican tax cuts have blown a bigger hole in the budget.
...estimates from the Congressional Budget Office show that Washington is borrowing a lot money — we're talking off-the-charts borrowing by historical peacetime standards. According to the CBO, in just a few years the US will be paying more in interest to pay down the national debt than on the military or Medicare.
More folk living off the back of future compatriots through economic short-termism?
Hahaha losers! Has there ever been anyone as famous as Trump? I think not! The fact that he gets so many arrogant knickers in a knot, just adds to his glory. Every pea brain in politics is cheating on tax as much as their IQ will allow them to. It's absurd to get so hyped the tax returns of a dead man, but then again the entire obsession with Trump is absurd.
Kind of ironic that the far-left highly partisan NYT publishes this hit-piece when less than a month ago they have been outed telling lies about UN Ambassador Nikki Haley having ordered lavish curtains for the New York residence when they were actually ordered under the Obama administration. And of course they had to retract a grievous lie claiming a Kavanaugh witness remembered the sexual abuse claim when the witness actually said the opposite. NYT also admitted in May it had lied about crowd sizes at Trump's Nashville rally. I could go on. Maybe then add in the hiring of Sarah Jeong, who's comments about white males are too vile to repeat, and their credibility as a politically impartial presenter of the news is for me gone.
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