Trump Taxes
Trump only stayed afloat because banks judged him 'worth more alive to us than dead,' lawyer says
At CNN on Wednesday, Gloria Borger tried to figure out how Donald Trump lost nearly $1 billion in 1995, as declared on a personal tax return leaked to The New York Times. Trump's accountant up until that year, Jack Mitnick, disputes Trump's boasts about his expertise in tax law, and Borger spoke with two people involved in Trump's 1990s collapse who disputed his business acumen. First, she spoke with securities analyst Marvin Roffman, an expert in the Atlantic City casino industry Trump bet big on in the late 1980s and early 1990s.
Donald Trump built two casinos in Atlantic City and then bought the massive Taj Mahal, his biggest gamble ever, Borger explained, and when he called up Roffman to brag about the Taj Mahal deal, Roffman said he told Trump: "'I think you did a great deal, but I think you made a mistake.... Why own three casinos in Atlantic City? How are you going to differentiate the marketing?' And here was his comment: 'Marvin, you have no vision. This is going to be a monster property.'" For Trump to break even, "you'd have to generate a casino win of somewhere over a million dollars day," Roffman explained. "And no casino in the world had ever even come close to anything like that."
When real estate hit a slump in 1990, Trump was in trouble, owing $4 billion to the banks, $1 billion of which he was personally on the hook for. At a rally on Monday, Trump described that market and said: "Some of the biggest and strongest people in companies went absolutely bankrupt. Which I never did, by the way. Are you proud of me? Would have loved to have used that card, but I just didn't want to do it." Alan Pomerantz, a real estate attorney who represented 72 banks Trump owed money to, told Borger that Trump was actually very close to personal bankruptcy in the early '90s, totally overleveraged with the casinos, an airline, a yacht, a helicopter, and a need to maintain his lavish lifestyle. The banks kept him afloat.
"We made the decision that he would be worth more alive to us than dead, dead meaning in bankruptcy," Pomerantz said. "We don't want him to be in bankruptcy, we want him out in the world selling these assets for us." Trump is a great salesman, he added. "We kept him alive to help us." Peter Weber