SINCE DONALD TRUMPS FORTUNES came surging back with the success of The Apprentice 14 years ago, his deals have often been scrutinized for the large number of his partners who have ventured to the very edges of the law, and sometimes beyond. Those associates have included accused money launderers, alleged funders of Irans Revolutionary Guard and a felon who slashed someone in the face with a broken margarita glass.
Trump and his company have typically countered by saying they were merely licensing his name on these real estate projects in exchange for a fee. They werent the developers or in any way responsible.
But an eight-month investigation by ProPublica and WNYC reveals that the post-millennium Trump business model is different from what has been previously reported. The Trumps were typically way more than mere licensors or bystanders in their often-troubled deals. They were deeply involved in these projects. They helped mislead investors and buyers and they profited handsomely from it.
Patterns of deceptive practices occurred in a dozen deals across the globe, as the business expanded into international projects, and the Trumps often participated. One common pattern, visible in more than half of those transactions, was a tendency to misstate key sales numbers.
In interviews and press conferences, Ivanka Trump gave false sales figures for projects in Mexicos Baja California; Panama City, Panama; Toronto and New Yorks SoHo neighborhood. These statements werent just the legendary Trump hype; they misled potential buyers about the viability of the developments.
Another pattern: Donald Trump repeatedly misled buyers about the amount (or existence) of his ownership in projects in Tampa, Florida; Panama; Baja and elsewhere. For a tower planned in Tampa, for example, Trump told a local paper in 2005 that his ownership would be less than 50 percent: But its a substantial stake. I recently said Id like to increase my stake but when theyre selling that well they dont let you do that. In reality, Trump had no ownership stake in the project.
The Trumps often made money even when projects failed. And when they tanked, the Trumps simply ignored their prior claims of close involvement, denied any responsibility and walked away.
The cycle is exemplified in Panama City, where the Trumps were involved in a project to build a massive tower and complex known as the Trump Ocean Club. The projects unfortunate turns included bankruptcy, then, years later, the forcible ejection of the Trump Organization from managing the hotel.
There, as elsewhere, the Trump Organization disclaimed responsibility. It emphasized that it had merely licensed the Trump name to developers who handled everything from construction to marketing. The Trump Organization was not the owner, developer or seller of the Trump Ocean Club Panama project, it said in a statement last year. Because of its limited role, the company was not responsible for the financing of the project and had no involvement in the sale of units.
That was false. For starters, Trump arranged financing his promised commission: $2.2 million or more by bringing in investment bank Bear Stearns, which issued the bonds that paid for the Panama projects construction.
Trump touted himself as a partner of the developer. His daughter Ivanka briefly boasted that she had personally sold 40 units. (A broker on the project said he couldnt remember her selling even one.) Meanwhile, Ivanka told a journalist at the time that over 90 percent of the Panama units had sold and at prices five times as high as comparable buildings. Both statements were untrue.
Not only were the Panama sales figures inflated, but many purchases turned out to be an illusion. That was no coincidence. ...