Saturday, November 12, 2016
About a year after Barack Obama’s election in 2008, Sarah Palin delivered a speech in which she had a cut at the new president. Palin had been on the ticket with the defeated John McCain in the election.
She laid out all that Obama was doing wrong, including a lack of transparency in governing.
“This was all part of that hope and change and transparency,” she said. “Now, a year later, I gotta ask the supporters of all that, how’s that hopey, changey stuff working out?”
On Tuesday, the American people voted for a new brand type of hopey, changey stuff. The election of Donald Trump was all about reaching for change, hoping against hope that this individual might be the vehicle to deliver it.
How desperate were half of the American people for change? Desperate enough to deposit all their hope with a man whose whole life, and in particular his recent campaign, rendered him unfit to be the leader of the free world.
Look at the huge number of blue collar workers in the rust belt of America who placed their faith in him. Trump has a record of stiffing blue collar workers in his own businesses. He has most likely paid no federal tax in the last 20 years, epitomising the worst of an elite which believes that taxes are for the little people. His threadbare economic policy is based on cutting taxes for the wealthy, relying on the kind of trickle-down economics first introduced 30 years ago in the States, which played a central role in ensuring the rich got richer, and the blue collar worker was left to whistle Dixie.
Yet those same disgruntled, disillusioned workers were so desperate that they were willing to parcel up their hope and hand it over to this man.
Look at the conservative Christians, angry at what they perceive to be the relegation of family values in today’s America. They choose as their bulwark a man who has been married three times and has shown contempt for women. During the campaign, Trump, who is 70, discovered that he is now anti-abortion after a lifetime in which he never expressed the slightest interest, not to mind support, for the values of these conservatives. Yet the conservative vote flocked to him, and all because the man simply urged them to buy his snake oil labelled change and disregard his record.
Trump told them they can have whomever they want for appointment to the Supreme Court and that was enough for them. How desperate were they for change?
Then there are those who identify with the Republican Party. Here was a man who had hijacked their party, belittled those who opposed him for the nomination, and abused people of colour, Muslims, and immigrants. When did Republicans stand for such values? Were they so desperate for a change after eight years of Obama that they were willing to throw their lot in with Trump?
Apparently so. The candidate’s instinct to plumb the lowest depths, appeal to the basest instincts, and repeatedly target the most vulnerable were all ignored because he promised to take everybody back to the future and make America great again.
He couldn’t have done it without Hillary Clinton. While Trump’s TV celebrity was a springboard, Clinton’s deficit of campaigning appeal laid her low. He portrayed himself as a strongman, intent on upending Washington. Her long career as a politician was a liability in a time of anti-politics.
No credit was given her for a commendable record of public service as a legislator. Instead, the billionaire managed to label her as “crooked Hillary”, a tribune of the elite, conspiring against the man and woman in the street.
She fit the bill perfectly. The email controversy fed right into the idea that she felt entitled to flout the law in pursuit of her own goals. Her love affair with Wall Street’s dollars was a glaring target.
And the fact that she was a woman exposed a lingering reluctance in many quarters of an allegedly enlightened society to disregard her gender.
Above all though, Clinton represented continuity in the face of a desperate thirst for change among all of those who feel left behind.
Now Trump has the platform to deliver. Notwithstanding the depths he plumbed, his personal achievement is quite amazing. He beat a centuries old, two-party system, had little recourse to professional strategists, and got elected with virtually no fundraising, a long-time staple of elections in the US.
And now he is Mr President Elect, sitting atop the world, soon to have the same access to the nuclear button as he has to his Twitter account.
Those who put him there are thrilled. They invested their desperation in him, and will await his response. The old saying that one “campaigns in poetry and governs in prose” will be put to the test. If he does deliver on his dangerous promises, Trumpland will be a cold place for minorities, immigrants, and much of the rest of the world. If he doesn’t deliver, his followers may turn on him. Form suggests that that is when self-styled strongmen target some minority, some Other, to sate the anger of those he has defrauded.
That’s when this brand of hopey changey stuff will turn really ugly.
The election of Donald Trump implies that anything is possible when it comes to the maintenance of democracy as we know it. His campaign was replete with un-American themes, and thick with insults. Yet all of that was apparently discounted because he purveyed a brand of change which, while fraudulent, was also irresistible to half the electorate.
His presidency will be compelling. He will have to dilute much of the agenda on which he ran, but unless he abandons it altogether there will be major ramifications for large swathes of the USA, and the world beyond.
It will be fascinating to observe how he handles power. This is a man who spent a life in business, mainly in the rough-hewn world of development. Compromise in this milieu is often regarded as weakness. Everything is the deal, every move designed to carve out a short-cut to success.
How will such a creature restrain himself while holding the levers of executive power? If family, friends or relatives approach him looking for a favour, or to be cut some slack, will The Donald respond that he can’t do a thing now as he is working for the American people? Let’s wait and see.
One thing is clear. His election follows a trend. Populist strongmen are in vogue, from Putin in Russia to Hungary’s Viktor Orbán, and Holland’s Geert Wilders, and even Marine Le Pen, a populist strongwoman. All must be salivating at the dawning of Trumpland.
But what about us here on this windswept outpost of Europe?
Two factors that have driven the right-wing populism sweeping across the western world are thankfully absent in this country. While many have been left adrift in society, and laden with debt, there are precious few pining to go back to the future.
The Brexiteers look back to the 1970s as the optimal time when prosperity was theirs and every section of society knew their place. The Trumpeteers would prefer the 1950s, something of a golden age for white America.
Here, the economic good times only began rolling in the 1990s, too recent in the rear view mirror to be cast as a Nirvana lost in the mists of time.
Globalisation is blamed for changed circumstances in places like the rust belt of America or the north of England. Conveniently, they ignore the impact of automation, which has been a much bigger factor in the decline of big industry.
For this country, globalisation has been a boon, as foreign direct investment has transformed the economy.
The other factor driving right-wing populism is the identification of an Other who can be blamed for the ills of the world. This Other has been identified as the immigrant. The immigrant is to blame for swiping away a world that was more secure, most certain. It’s all so easy.
Apart from the racism stoked up by this wantonly warped perception, it is also illogical. How would Britain’s NHS function without the input of immigrants? How would the US economy function if the 11 million illegal immigrants were repatriated?
But logic and facts are surplus to the requirements of populism. Trump and the Brexiteers have the immigrants to blame, just as in a different, even more unstable time, Hitler had the Jews.
Even if a virulent strain of right-wing populism took hold in this country, they would have a problem identifying an Other. Immigration into the country has largely been, and has been seen to be, a positive exercise. Attempts to stoke up anti-immigrant sentiment have largely been a failure.
Not that that is any cause for complacency. Cast your mind back to the late 1990s when asylum seekers and immigrants first began to arrive here on foot of the rising economy. There was much breast-beating and not a little opposition to what appeared to be the changing face of the country.
Some politicians were not adverse to drawing a kick here and there. Michael Healy Rae, then a councillor, said at a meeting in 2000 that Kenmare, County Kerry, was in danger of “becoming like Harlem” and that most refugees were “freeloaders, blackguards and hoodlums”. He was not alone. Stories of refugees being allocated not just big houses, but cars and other various goodies, found their way into public square. Had social media’s echo chamber been around at the time, it is quite likely that things could have turned ugly.
When the economy collapsed in 2008 thankfully there were no efforts in politics to target immigrants for blame. We have been lucky, no more than that.
Recent years have thrown up other conditions that would be manna for any populist leader bearing easy solutions.
The economic collapse and the foisting of bank debt on the citizens generated unprecedented levels of anger and resentment. The political system was exposed as one part gormless, one part feckless and one part in thrall to the alleged wisdom of bankers. As austerity bit, top bankers and politicians sailed off into retirement with obscene pensions sticking out of their arse pockets.
A world that many had come to know, albeit over a short few years, was whipped away. Standards of living plummeted for most, while those on the upper rungs of the socio-economic ladder appeared to be doing just fine.
A chasm also opened up between urban and rural, city and country. Principally in economic terms, but also in social matters, a widening divide that had been masked through the years of illusory plenty, came clearly into view.
While countries like Spain and Greece reached for something new in politics, the conservative Irish electorate went back and forth between Tweedledum Fianna Fáil and Tweedledee Fine Gael.
In fact, the only manifestation of a populist uprising over the last eight years was not at the ballot box but in the campaign to oppose water charges. The ultimate outcome, this column would argue, has been a setback in terms of respect for resources and organising the provision of water.
Equally, though, it could be said that it’s been a small price to pay for the relative stability that has endured. The USA got Donald Trump. We got trade unionist Brendan Ogle. No contest.
So for now, things muddle on. No vision of a better future is offered from our leaders. Our country is still being led by a lame duck who has been in parliament since 1975. An unprecedented crisis in housing continues to be addressed only within the confines of the market. Large swathes of the young and those in rural Ireland are feeling left behind. If you didn’t know better, you’d think this was a place waiting for Trump to happen along.
Thursday, November 10, 2016
When I left Limerick to go to university, it was to study English literature and philosophy. When you come from a poor background and are raised by a single parent, that’s a relatively controversial choice. More than one person told me that I was lucky to be able to go to university at all, and wouldn’t I study the law, or medicine, or something that would make money and help my mother in her old age? Why, they’d ask, would I take this fantastic opportunity, and waste it on sitting around with a shower of socialists toting Chanel handbags and rich daddies and talking about Jaysus poems?
It turned out they were right to a point. I love Jaysus poems. I love Jaysus novels and plays too, and was expeditiously taunted at school whenever other kids caught me reading Shakespeare outside the classroom. But enjoying literature and the act of deconstructing it as though it is a logical or scientific enterprise are very different activities.
I discovered a couple of years into studying English that it wasn’t for me. I didn’t actually want to study literature, it turned out, I wanted to read and enjoy books. Studying literary theory is a bit like accidentally wandering backstage during a production of Hamlet and hearing the actors bitching about the guy playing Polonius because he parked his 1998 Nissan Micra across two spaces.
The analysis of literature didn’t suit me. It superimposes a lens through which you are required to view the work and world, and considers everything in relation to structures such as gender or postmodernism or other possibly useful but rather limiting concepts. An excellent novel or poem gestures at concepts and ideas, but can’t soundly defend or unemotionally delineate their contours. Of course I finished the degree anyway – people from a background such as mine seldom quit because something is less fun than they anticipated.
Philosophy, on the other hand, starts at the beginning. The only walls that enclose it are the limits of human reasoning. It is a maddening, liberating, electrifying practice and field of study that forces you to question every lazy belief you hold, every statement you hear. It robs you of the sloppy confidence with which most of us declare what we believe to be unquestioningly true. In its place it gives you an ability to see to the bottom of things, deconstructing your arguments and those of other people in order to better understand them. It undresses lazy assumptions and poor thinking, leaving them shivering in the nip in front of everybody like the emperor without his clothes.
Philosophy exposes hubris. Most men I’ve met seem for some reason to believe that they inherently know how to fight, should they ever be called upon to defend themselves. They don’t realise it’s a skill until someone who actually practices a martial art or other method of self-defence beats the crap out of them. Debate and argument are similar. People sometimes disdainfully ask me what philosophy is, presuming it to be high-falutin’ and useless without realising that they use it every day when they try to justify a thought, whether in an argument with their husband, or articulating the merits of Hillary over Donald, or vice versa.
It becomes evident that debate and argumentation are skills only when someone who has studied these things has given you the philosophical equivalent of a roundhouse kick to the face. Sadly, rather than questioning ourselves, most of us will get up off the floor, scratch our head confusedly, and say ‘I’ve a right to my opinion’ like the guy who has just been beaten in a fight muttering ‘The other fella just got lucky’.
November 17th is World Philosophy Day, and a brilliant reminder that philosophy is for everyone. As a wonderful introduction to its usefulness as a life skill, I can’t recommend Alain de Botton’s The Consolations of Philosophy enough. Philosophy is not just for stuffy academics with elbow patches, it is for all of us. If you need extra encouragement to read more of it, no one in your family will ever win an argument against you again. And people say it isn’t a practical skill. . .
Tuesday, November 8, 2016
DUST swirled and jackhammers pounded outside the Bonwit Teller building, in Manhattan, as undocumented immigrants tore apart the façade.
It was June 5, 1980, and the workers were bitter; paychecks were weeks late, but since the Poles didn’t have legal status in the United States, there was little they could do about it.
The exterior they were destroying was an architectural masterpiece — bronze, platinum, hammered aluminium, glazed ceramic, and tinted glass that shimmered like jewellery.
Many New Yorkers had hoped the grandest portion would survive; curators from the Metropolitan Museum of Art had asked the developer to carefully remove the two bas-relief sculpture panels, so they could be restored and put on public display. But that afternoon, the labourers, acting on orders from the developer, smashed the 50-year-old art deco panels into a rubble of stone, pebble, and dirt.
The desecration horrified Manhattan’s art community, but the developer, a brash 34-year-old named Donald Trump, dismissed the criticism, while pretending to be his own spokesman, “John Barron”, as he talked to reporters by phone.
Saving the panels would have cost $32,000 each, he said, and delayed work for a few days on the $100m project, Trump Tower. Besides, he said, he knew more than the curators — the panels had no artistic merit and little financial value.
This incident, from long before Trump became a household name, is an ideal exemplar of his business career: he has repeatedly left bitterness and ruin in his wake. His destructive behaviour — reckless, arrogant, and with an unslakable thirst for vengeance — has victimised cities, businesses, investors, partners, even members of his family.
Trump is now completing his biggest, most astonishing demolition: tearing down the US Republican Party. Since the disclosure of a recording, earlier this month, in which Trump demeans women and boasts of sexually assaulting them, the GOP presidential nominee has vowed to make his campaign a scorched-earth mission.
He now speaks of vast conspiracies against him, involving bankers, the media and politicians, while raging against Republicans who have pulled away from his toxic campaign, opening up chasms between his zealous supporters and the GOP. Win or lose on November 8, Trump, whose campaign did not respond to requests for comment about this article, will leave the Republican Party as damaged as those art deco panels were 36 years ago.
To anyone who has watched Trump over the past four decades, none of this is a surprise. His presidential campaign is built on the claim that he’s a brilliant businessman worth $10bn who turns every challenge into success, but Trump is none of those things.
Instead, he was born into an exceedingly wealthy family and tried to build upon his father’s success with ever-riskier ventures, and he failed again and again.
He’d have done better if he’d never gone into business. In 1982, Trump reported to New Jersey regulators a personal net worth of $321m, built largely on his father’s connections, as well as loans and guarantees for bank credit.
Two years later, a Trump lieutenant testified that his worth had not changed much. In 2004, in reviewing his application for a loan, Deutsche Bank concluded he was worth $788m. Trump now makes the highly dubious claim that he is worth $10bn; Forbes estimates that the real number is $3.7bn.
That’s a lot of money, to be sure, but suppose Trump had never done any deals and, instead, had sold all of his assets, back in 1982, and invested them in a fund based on the Standard & Poor’s 500 index.
With dividends reinvested, he would have increased his wealth to $535m by 1985. By 2004, his personal wealth would have increased to $5.9bn. By 2013, he would have exceeded by €1bn what he claims to be worth now; today, he would be worth $13bn, just under three times the Forbes estimate.
If the Republican nominee had done nothing but mow his lawn for the past 35 years, he would be a dramatically wealthier man than he is today. The huge bonus in that scenario: Thousands of people would not have been ridiculed, ripped off, or otherwise have suffered from encounters with Donald J. Trump.
Donald Trump loves to put his name on buildings, but there are no hospital wings named for him. No museums have a piece of artwork with a plaque reading ‘A Gift of Donald J. Trump.’
No buildings at the University of Pennsylvania bear his name, even though he constantly cites his graduation from its Wharton School as a sign of his intelligence. (Contrary to Trump’s suggestion, he attended the school for only two years as an undergraduate and did not obtain a degree from Wharton’s far more prestigious graduate business programme.)
Trump bears little resemblance to prominent billionaires, such as Warren Buffett, Bill Gates, Mark Zuckerberg, Michael Bloomberg, or Charles Francis Feeney, who have dedicated huge sums to aiding the less fortunate. There is no evidence that Trump has done much of anything to make the world a better place; what he has left behind is some buildings, along with a lot of wreckage and rancour.
Trump regularly cheats at golf, even revising his scorecard after a match to transform defeat into victory,
according to two people who have played with him. He persuaded an elderly couple, who ran a Florida antique store, to let him “try out” two valuable pieces, then refused to return or pay for them, according to someone close to the Trump family.
He bought expensive jewellery at Bulgari, on Manhattan’s Fifth Avenue, then colluded with the store to have empty boxes, supposedly containing his purchase, shipped out of state, so he could dodge New York sales tax, court records show.
AFTER dragging a buddy through years of litigation, Trump told the man he had filed the suit only because he was angry the friend had not given him enough public credit for his success, according to a person who witnessed the conversation.
When business executives came to his office, Trump bragged about his current wife, Melania, and showed them nude photographs from her modelling days, two bankers say.
Trump encourages staff at the Trump Organisation to tell him the faults of co-workers while in their presence, creating a vicious corporate environment, a former executive says. His niece and nephew sued him, alleging Trump used his influence over his then-unwell father to rewrite his will and cut out his brother’s side of the family.
Enraged by the suit, Trump reneged on a family commitment to pay the medical bills for his nephew’s sick baby. (They settled under confidential terms.) There are no names attached to these stories, because the sources all know the Republican nominee strikes out viciously over any perceived criticism.
They all asked to remain anonymous, for fear that Trump would drag them to court or try to damage their careers. They know that is one of Trump’s greatest skills: bullying, threatening, and suing anyone who criticises him, and cowing most of them into silence.
He showed his willingness to harm others, for his personal benefit, early in his career. Using those undocumented Polish workers in 1980, for the razing of the Bonwit Teller building, for example, was deemed part of a civil conspiracy to defraud a union pension fund, a federal judge in New York later ruled.
There was another example the following year. Trump purchased an old hotel, and adjacent apartment building, for redevelopment, on Central Park South, one of the toniest streets in Manhattan.
A little more than 100 tenants occupied the rent-controlled apartments, but Trump launched a campaign to drive them out, according to court documents filed by city and state officials.
He filed a barrage of what the city called “nuisance suits” against the residents. He cut off their heat and hot water. He tried to move homeless people into empty apartments to annoy, or frighten, the residents. He decreased security for the building, and, over those 18 months, the number of burglaries in the building skyrocketed.
Trump scoffed at complaints from residents and the government, publicly disparaging occupants of the apartments as pampered millionaires — a claim he made with no information to back it up.
Court proceedings showed that many of the residents were elderly or middle class. In 1986, with the legal proceedings dragging on, Trump finally abandoned his plans to tear down the apartment building, and the residents were allowed to remain.
During that five-year battle, Trump also destroyed a football league. He had been unable to purchase an NFL team — it’s unclear why — so he bought one in the fledgling United States Football League. The idea for the USFL was simple: America had a passion for football and the NFL didn’t play in the spring, so that’s when the USFL would play.
The USFL began in 1983. The timing could hardly have been better. The NFL was still recovering from a players’ strike that occurred in the fall of 1982 , and ESPN, a cable sports network, had recently launched, creating a demand for more programming, a demand that industry analysts expected would grow dramatically.
There were 12 teams in the upstart USFL. ABC Sports and the USFL agreed to a two-year broadcast contract worth $20m; that was followed by a contract with ESPN.
John Bassett, an owner of the Tampa Bay Bandits, who gained a reputation as the USFL’s visionary, said he planned to have the league grow slowly. The owners would take losses for a while — as they would from investing in any promising start-up — but in seven or eight years, Bassett said, the USFL would be on a par with the NFL and have the money to compete for the best players.
After the first USFL season, Trump purchased the New Jersey Generals from an Oklahoma oilman. And, with that, Bassett’s plan unravelled. Trump proclaimed that spring football was stupid.
Bassett cautioned that competing against the NFL, in the same season, would kill the fledgling league, but Trump dismissed Bassett’s warning. “If God wanted football in the spring,” he said, “he wouldn’t have created baseball.”
Rather than holding down costs, Trump began spending wildly for star players, offering so much money that he set off a salary spiral in the NFL and the USFL, driving up the price of tickets to cover the massive expense.
Trump also added cheerleaders, holding tryouts in the basement of Trump Tower and selecting a number of girls for the job.
In 1986, Bassett was dying of brain cancer and struggling to control the brash new owner. Through browbeating, cajoling, and intimidation, Trump persuaded the other teams to abandon the spring league concept and play in the autumn. He and his supporters sent lawyers into court, arguing that the NFL operated an illegal monopoly.
A jury eventually agreed, but awarded the USFL just $1 in damages — an amount that, under antitrust rules, had to be trebled to $3.
The USFL appealed and, as part of its legal strategy, did not start playing again that spring. When the US Supreme Court let the judgement stand, the USFL collapsed. Hundreds of people — players, announcers, executives, cheerleaders, and others — lost their jobs.
Ugly, Incomprehensible Fights
“I love to have enemies,” Trump once said. “I fight my enemies. I like beating my enemies to the ground.”
He uttered these words in 1989, when he was in a series of pointless battles: with other billionaires, with mid-level executives, with nobodies whose lives he destroyed just because he could.
The ugliest — and most incomprehensible — fight involved a New York billionaire named Leonard Stern, who had turned a pet-supply company into a property and media empire.
The two men had been friendly until the spring of 1988, when one of Stern’s magazines, 7 Days, published a fairly innocuous article about Trump Tower, which contained a comment that resale prices on apartments were not as strong as their marketing suggested. This was hardly a surprise, as former Trump Tower residents had already publicly stated that they had lost money on their resales.
The construction of Trump Tower, on the corner of Fifth Avenue and East 56th Street, in Midtown Manhattan, New York City, in August of 1981. Picture: Barbara Alper/Getty Images
Although the comment was true, it infuriated Trump, who wrote to Stern, saying, “I just read a highly inaccurate and biased story in 7 Days by an obvious Trump-hater — it is a disgrace.”
Trump followed up with a note to David Schneiderman, president of Stern Publishing, which owned 7 Days, announcing a mass-plaintiff lawsuit brought by everyone living in every Trump property, all of whom (he claimed) were outraged by the little-noticed comment in a little-read publication. While he was not keen on bringing litigation, Trump wrote, he could not hold back the hordes of apartment owners eager to sue, and so decided to join them.
Trump dropped the threat when he read a subsequent 7 Days article that included a compliment for his then-wife, Ivana, and the role she had played in redecorating his Plaza Hotel. He never explained why the infuriated (and unnamed) Trump apartment-owners no longer cared about the damage supposedly done by the first article.
But he remained paranoid about a documentary financed by Stern and suddenly dragged his fellow billionaire’s wife into the crossfire. Someone planted gossip in the New York Daily News that Allison Stern was incessantly calling Trump’s office, pleading for a date. Trump then confirmed the article, saying, “We spoke. I wasn’t interested.”
The Sterns considered suing, but decided it wasn’t worth the effort. Allison Stern publicly dismissed Trump’s story as “absurd” and “the product of a juvenile mind”.
Stern was not the last billionaire Trump tried to hurt. After Trump opened casinos in Atlantic City, he developed an intense hatred of Steve Wynn, a far more successful gambling-industry executive.
Trump decided to persuade Dennis Gomes, the president of Wynn’s Golden Nugget hotel and casino, in Las Vegas, to break his contract and come work for the Trump Taj Mahal. Wynn sued Trump in a Nevada state court, which found that Trump had poached Gomes out of “personal animosity” for Wynn.
Trump Taj Mahal casino workers on strike in Atlantic City in September. Picture: Andrew Lichtenstein/Getty Images
The super-wealthy, like Stern and Wynn, often walked away from Trump’s rages relatively unharmed. But those of lesser means were sometimes crushed for simply doing their jobs.
In 1990, Marvin Roffman was a little-known analyst working at a second-tier investment company, Janney Montgomery Scott. He specialised in appraising the financial prospects of the Atlantic City gaming industry.
That spring, Trump’s biggest, and by far most expensive, casino, the Trump Taj Mahal, was set to open, and The Wall Street Journal examined its prospects. It called Roffman, who said the Taj would benefit from the publicity surrounding its opening, but predicted it would struggle afterward.
“Once the cold winds blow from October to February, it won’t make it,” Roffman told the paper. “The market just isn’t there.”
Enraged, Trump faxed a letter to Janney Montgomery Scott, blasting Roffman’s statement as an “outrage”. He demanded a public retraction, or that the firm fire Roffman, whom he called “an unguided missile”.
Unless it did as he demanded, Trump wrote, he would launch a “major lawsuit”. Pressured by his company, Roffman faxed Trump a letter of apology the next day, saying the Journal had taken his words out of context. But, after thinking about it overnight, he sent another letter retracting his apology. One day later, the investment company fired Roffman.
Not satisfied, Trump continued to publicly berate Roffman. He told the New York Post, The Philadelphia Inquirer, Barron’s, Fortune, and others, that Roffman was untalented.
He also told the Inquirer that he had saved Roffman’s job six months earlier. Trump delivered the worst false accusation to Vanity Fair, accusing Roffman of blackmail and fraud, claiming the analyst used to beg him to purchase securities through him, “with the implication that if I’d buy stock he’d give me positive comments”.
In the end, however, it was Trump who looked like the fool. Before launching the Taj, he should have consulted Roffman, who later confidentially settled his lawsuit against Trump and won a $750,000 judgement against Janney Montgomery Scott.
And Roffman was right about the Taj: In November, 1990 — one month after Roffman had predicted Trump’s casino would start to struggle — the Taj filed for bankruptcy. And with that collapse, brought about by Trump’s hubris and incompetence, he destroyed the jobs of far more people than just one smart industry analyst.
Big, Bad Bets and Debts
In November, 1988, Trump gave the public a chance to let him wipe out their savings when he offered $675m in junk bonds, sold through Merrill Lynch. He raised the money to buy the Taj from Resorts International and to then rebuild it; despite his promise to use only bank borrowings, the lenders would not hand over enough cash.
Investors wouldn’t, either, unless Trump paid a lot of interest. So, to sell his bonds, Trump agreed to a rate of 14%, far higher than the 9% yield, at the time, on investment-grade corporate bonds.
Even that was not enough to pay for the crazy casino of Trump’s dreams. The bond prospectus estimated the cost of building and operating the Taj, over the next 15 months, at $805m, covered with a $75m cash contribution from Trump; the rest of the money would come from a Trump credit line and other loans.
Trump did not disclose, in the filing, that he was also guaranteeing hundreds of millions of dollars of loans on real-estate properties, which might undermine his ability to tap into his credit. And he spent money on a fight with homeowners, whose land he wanted so he could build a larger parking lot for the casino.
Trump knew the success of the Taj, and the gambling houses he had previously built — the Trump Castle and the Trump Plaza — could mean the difference between Atlantic City’s rebirth or destruction. He also knew that lots of people would suffer along the way.
“People will spend a tremendous amount of money in casinos, money that they would normally spend on buying a refrigerator or a new car,” Trump said.
“Local businesses will suffer, because they’ll lose dollars to the casino.”
He was right. As he built his casinos, Atlantic City was ripped apart. Unemployment soared, hundreds of restaurants went out of business, and dry cleaners and specialty shops disappeared.
With the future of the city, its residents, and investors at stake — and with Trump’s finances spread perilously thin — the market reasonably believed that he, like any smart businessman, would stabilise his gaming empire.
Instead, Trump dashed headlong into other businesses he knew nothing about, borrowing another $380m to buy the Eastern Shuttle (renamed the Trump Shuttle), taking a run at purchasing a department store chain, and even announcing a $7.5bn takeover bid for American Airlines.
When his three top casino executives died in a freak helicopter crash, in late 1989, Trump took over direct management of that business. A short time later, the value of his junk bonds tanked, and Wall Street firms, such as Salomon Brothers, put “sell” recommendations on them. The many people who had purchased Trump’s bonds on his breezy assurances were losing fortunes.
With the financial condition of his casinos steadily worsening, Trump launched a purge of executives, replacing some of them with people who were unqualified for their new jobs.
Trump then publicly criticised the top officers he’d axed and refused to honour some of their severance agreements. Other executives decided to quit; they were no longer willing to tolerate Trump’s erratic leadership.
The chief financial officer of the Taj, Donald Wood, was taken from the building in a stretcher, suffering from exhaustion and dehydration, in April, 1990; Trump fired him two days later.
In June, 1990, the firings continued. Trump turned over the assets of the airline to his banks, putting more than 500 people out of work, according to court records.
The banks also forced Trump to sell his yacht and they put him on a budget. The Queens-born mogul stiffed Taj contractors, whom he owed $35m, but insisted the disaster would only make the public love his brand more. “I think it has greatly enhanced it,” he said.
In November, 1990, the Taj went bankrupt. The bondholders, who had been promised high interest, were forced to swap a large portion of their investment for half of the equity in the casino — a far riskier holding. Trump, however, walked away relatively unscathed.
Banks let him borrow another $65m and forgave his personal guarantees on loans, all to avoid a complete implosion of the Trump empire, one that would have taken many of his lenders down with him.
The entire Trump casino empire then tumbled into bankruptcy court. Trump slashed more jobs, investors lost more money, and the economy in Atlantic City worsened, as unemployment surged.
By 1992, enough of the wreckage had been cleared away that some of the outstanding bonds began to recover, climbing to about 70% of their original value. Delighted, Trump telephoned financial reporters to brag that his investors’ losses weren’t as terrible as they had seemed.
“These prices just prove people love me,” he told The New York Times. “People love Donald Trump.”
Three years later, Trump sold stock in his newly formed Trump Hotel and Casino Resorts, which owned all three of his Atlantic City casinos and another casino he had started in Indiana.
He insisted the stock trade under the ticker DJT — his initials. As chairman of the company, Trump maintained a 41% stake, which was worth about $400m when the stock hit its all-time high of $29.25 a share — less than a year after going public.
Under Trump’s leadership, however, the company was unprofitable every year, and, by the end of his time as chairman, it had lost more than $1bn. By 2004, the stock was selling for 65 cents a share, and the company fell into bankruptcy; people who had put their faith in the Trump name lost more than 90% of their investment.
During the same time, those who owned funds based on the Standard & Poor’s 500 index more than doubled their money. Even in the greatest stock market ever, and in a business regularly described as a licence to print money, Trump left only wreckage in his wake. And investors in Trump hotels saw nothing but losses.
On the other hand, Trump did just fine for himself. Even as his company’s stock price was collapsing and annual losses were piling up, filings with the Securities and Exchange Commission show that, during his years as chairman, $60m poured from the public company into Trump’s pockets.
This is the dirty secret behind Trump’s allegedly miraculous financial recovery. What he told the public was a fable: that he had fought his way back with perseverance and skill. In truth, he did it by snatching huge fistfuls of cash from a company that was wiping out the savings of millions of people.
The Great-American Scheme
The typical business contract lists names and job titles, or perhaps just identifies the companies involved. These documents rarely contain boasts, but that is what is on the first page of a 2004 confidential contract drawn up by Trump, a copy obtained by Newsweek shows.
The other party to the deal was listed as SimDag-RoBEL LLC, a Florida limited-liability corporation. Trump identified himself as the “worldwide, renowned builder and developer of real estate, who enjoys the highest reputation in these fields, among others”.
Those words might have stroked Trump’s ego, but no-one else was ever supposed to see them. As a term of the contract, both sides were forbidden from ever revealing its existence. And for good reason — Trump was trying to keep up a façade of success.
By then, most of the smart money had given up on Trump. To get a new personal credit line, he could no longer rely on handshake deals or personal guarantees with Chase Manhattan, as he once had.
Instead, financial records, obtained by Newsweek, show that in 2003 he turned to the Cayman Islands’ branch of UBS, the Swiss bank. For that loan, however, he had to put up a large number of assets as security, including a portion of his interest in Trump World Tower, all of his investments in a Paine Webber brokerage account, mortgage notes, and numerous other securities and property.
Soon, almost all financial institutions were passing on his deals, other than Deutsche Bank — and, in a few years, he would default on a $640m construction loan from it.
The stock and bond markets, where every investor who had ever placed faith in Trump lost money, were closed to him. A fund financed by the billionaire, George Soros, agreed to invest in a Trump development once — but only once.
A private equity firm, Colony Capital, backed out of a Trump project, forcing the Trump Organisation to self-finance. Wall Street and financial institutions worldwide all knew that, as a businessman, Trump was a disaster.
So Trump went in another direction, rebuilding his reputation on television. Beginning in 2004, around when his public company fell into bankruptcy, Trump began playing the role of a successful businessman on the NBC reality show, The Apprentice. Unless it read the financial news religiously, the public could not know that this portrayal of Trump was a farce.
The success of The Apprentice gave new credibility to Trump, which appealed to people buying apartments and even products. That’s why Trump got into the business of selling his brand, letting other companies and developers use his name on their products for a substantial fee.
The Trump steaks, the Trump water, the vodka, the chocolates, the mortgage company — all were attempts by Trump to make money off his name, because he had few other financial options.
In 2004, he also launched Trump University, a for-profit education company that collapsed amid allegations it had defrauded thousands of people. Two class actions by former Trump University students are proceeding in California; a third case has been brought in New York by the state’s attorney general, Eric Schneiderman.
The 2004 contract with SimDag-RoBEL was for another deal placing Trump’s name on someone else’s product — this time on what was promised to be a Florida condominium apartment building. SimDag-RoBEL was developing the project and paid for the right to call it Trump Tower Tampa.
The contract required SimDag-RoBEL to comply with “Trump Standards,” which the document described as “the level of quality and luxury” associated with premier buildings, like Trump Tower in New York City.
Trump International Hotel and Tower in New York city, which opened in 1983 and which serves as the residence of Donald Trump and as headquarters of his company.
However, the contract said, SimDag-RoBEL, using its “commercially reasonable judgement and discretion,” would be the sole arbiter of whether the building met those standards.
Trump would not need to obtain financing, or handle or inspect any of the development work. Instead, he just needed to pose for pictures and cash the checks — $2m for the initial licence fee, plus an additional share of up to 25% of all sales.
Executives made every effort in the marketing materials to make potential buyers believe Trump was developing the Tampa building. The first sentence of a press release, dated January 10, 2005, read, “Donald J. Trump announced today plans for a 52-storey, ultra-luxury condominium in downtown Tampa, Florida, to be called Trump Tower Tampa.”
The release said the building “will be Mr Trump’s first project” on the Gulf of Mexico. It also quoted Mayor Pam Iorio saying, “I appreciate Mr Trump’s investment in Tampa”.
Trump was not putting any money into Tampa; he was just taking cash out of it. But, that same year, apartment buyers started putting down large deposits on their condominiums.
It was not until May, 2007, when Trump sued SimDag-RoBEL for failing to pay him all of his licensing fees, that the apartment buyers discovered they had been deceived. SimDag-RoBEL failed to complete the building, and the people who put down the deposits sued everyone involved, including Trump.
That suit exposed the beauty of Trump’s scam: He had slapped the Ferrari name on a Chevy. Unless the apartment buyers spent hours reading the lengthy apartment purchase agreement or hired a lawyer to review it, there was no way to know they were the victims of a bait-and-switch. In response to the suit, Trump pleaded innocence — it wasn’t his building, after all.
The ploy worked, again and again. Trump Hollywood failed, and the real estate mogul blamed Jorge Pérez, the developer who had paid to use his name. Trump International Hotel and Tower Fort Lauderdale fell into foreclosure, and 30 buyers lost $100,000 each.
But this was not his fault, Trump said. The same thing happened with the Trump Ocean Resort Baja Mexico, which — though it attracted dozens of buyers, who posted $32m in deposits — never amounted to more than a hole in the ground.
Again, Trump denied responsibility. Building after building, failure after failure, hundreds of millions of dollars lost. Each time, the buyers sued, saying they had been tricked into believing that Trump was the developer.
And each time, Trump pointed to the fine print of the contracts, told the courts the buyers should have read them more carefully, and walked away.
Potentially hundreds of people lost tens of millions of dollars, while Trump pocketed huge sums through his licensing fees.
Trump’s career has been much of the same kind of scam. He demands applause and annihilates those who refuse to give it. He preens about successes he obtained only by destroying the wealth, careers, and reputations of other people.
He takes credit for the victories of others and denies any blame for his many failures. In his impulsive pursuit of self-aggrandisement, his victims are legion.
And now he vows to do to America what he did to them.
Frances Fitzgerald, listening to Garda Commissioner, Noirin O'Sullivan talking to the media. Picture: Mark Stedman/RollingNews.ie
IT’S A scenario that fans of Kafka would savour — the Department of Justice has asked the Garda Ombudsman to investigate a policing controversy.
To start its work, the Ombudsman has sought relevant documentation, held by the same Department.
But the Department has referred the request to the Attorney General, because of strict legal constraints surrounding the release of such documentation.
Legal experts believe it is doubtful GSOC will get what it wants, stalling, if not ending, the inquiry before it even gets started.
Last May, the Irish Examiner published yet another revelation on justice and policing scandals. It sparked outrage and political hand-wringing — and the establishment of yet another inquiry, more than four months ago now.
The “transcripts” scandal, as it was quickly referred to, is not dissimilar to the latest allegations engulfing the Garda Síochána.
Like the current complaints, these transcripts led to allegations, including in the Dáil, that there were efforts to undermine Sergeant Maurice McCabe.
Transcripts from Day Two and Day Three of the O’Higgins inquiry — set up to investigate complaints by Sgt McCabe about policing in the Cavan-Monaghan division — were incendiary.
In it, counsel for Garda Commissioner Nóirín O’Sullivan told Judge O’Higgins that his instructions from the Commissioner were to challenge the “integrity” of the whistleblower.
Queried by the judge, Mr Smyth said he would question the “motivation and credibility” of Sgt McCabe in making allegations of corruption and malpractice.
Asked by the chair was he suggesting Sgt McCabe was “motivated by malice or some such motive” and that this impinged on his integrity, Mr Smyth responded: “That is the position.”
Mr Smyth added: “I mean this isn’t something that I am pulling out of the sky, Judge, and I mean I can only act on instruction.”
Asked again was he “attacking the motivation and integrity” of Sgt McCabe, he responded: “Right the way through.”
Some months later, Mr Smyth made a clarification to the commission: that he never used the word “malice” and that he was in error in saying he had been instructed to challenge Sgt McCabe’s integrity, but rather his “motivation and credibility”.
Commissioner O’Sullivan dodged the potential bullet in explaining what legal instruction she gave to Mr Smyth (citing the legally-bound private nature of the commission’s hearings and legal privilege).
After growing political and public disquiet, on May 25, Ms O’Sullivan called on Ms Fitzgerald to request GSOC to investigate certain matters that led to these claims before the commission.
The Minister agreed, saying there was “significant public concern” and, after further consultation with the commissioner, referred the matter to GSOC on June 19.
As soon as the watchdog formally received the ministerial direction they immediately wrote to the Garda Commissioner seeking all documentation in relation to the matter.
In response to media queries, GSOC issued a statement on June 23.
“We have written to the Garda Síochána requesting that all documentation held by them in this matter be sent to GSOC. We will commence the investigation as soon as we receive this information.”
Some time later — GSOC has declined to say when — the Garda Commissioner replied that she couldn’t be of assistance.
In a statement supplied to the Irish Examiner, GSOC said: “The Ombudsman Commission sought documentation related to the matter arising from the O’Higgins Commission, which GSOC was asked to investigate, from the Garda Commissioner.
“The Garda Commissioner was not in a position to give us the documentation because of the terms of the Commission of Investigation Act.”
The statement finished by saying that they were “continuing to try and progress the matter”.
Section 11 of the act is clear: all business of the commission is conducted in private (save for certain provisions).
It states: “A person (including a member of the commission) shall not disclose or publish any evidence given or the contents of any document produced by a witness while giving evidence in private.” One of the exceptions cited is “as directed by a court”.
Anyone who contravenes this is guilty of an offence, punishable by up to five years in prison on indictment.
Section 43 of the act explains that once the commission reports it is dissolved and all its documents are to be deposited to the relevant ministry.
A spokesman for the Department of Justice confirmed it had received the records of the O’Higgins inquiry on April 25 last and added: “The Department has sought legal advice from the Attorney General regarding a request from the Chairperson of GSOC in the context of its investigation into certain allegations made following the publication of the O’Higgins report.”
Four months on, that’s where the investigation, such as it is, lies.
The signs of it going anywhere fast, if at all, are not encouraging.
Professor of Law, Shane Kilcommins, based at the University of Limerick, is an expert on evidence and jurisprudence. Asked could GSOC access the documentation it is looking for, he said: “It is difficult to see how this would be possible since investigations established under the legislation are conducted in private.”
He said Section 11 states that disclosure “with very specified and limited exceptions” is not permitted. “It is a criminal offence to contravene this position,” he pointed out.
He said Section 19 and 18 provide one exception to the disclosure of evidence – in order to prosecute a person for making a false statement to the commission.
This provision is there so that the commission can prosecute someone for making such a statement to it.
“A Section 18 offence can only be prosecuted either summarily or on indictment with the consent of the DPP,” said Prof Kilcommins.
This section does not appear to provide GSOC with a legal power to access evidence made to a commission — although it is probably the main avenue GSOC is exploring.
Specifically asked if Section 11.3 provided a possible route for GSOC, Prof Kilcommins said: “This is the provision that permits evidence to be disclosed when directed by a court — there would have to be very strong grounds for doing so given the privacy of the proceedings.
“Any subsequent criminal proceedings would be subject to the right to a privilege against self-incrimination.”
He said there was limited case law in the area, but noted that in 2009 the High Court refused to permit disclosure of the MacEntee Commission report into the Dublin/Monaghan bombings, citing that the investigation took place in private and that evidence of documents produced by a witness in evidence could not be disclosed.
For now, all eyes are on the Attorney General’s advice.
If Máire Whelan gives the nod, it is likely GSOC will have to seek a court order. Which, of course, could be challenged.
But the Attorney General could come to the conclusion there is no wriggle room in the legislation — and deny the GSOC request.
We could then have the scenario where an agency, directed by the Department of Justice to investigate something, can’t do so because the same Department won’t give it the information it needs to conduct its investigation. GSOC may even have to go to the courts to force it to.
All the elements of Kafka.
Cormac J O'Keefe