By Steve Rhodes
The New York Times has obtained the transcripts of Donald Trump’s 1040s from 1985 to 1994, and they only reinforce what those paying attention already know: As a financial whiz and supreme deal-maker, he’s a fraud who has spent his life playing with daddy’s money and mostly losing. He does, however, have the kind of big mouth and media manipulation skills that news and entertainment outlets have never been able to resist.
To wit:
“The numbers show that in 1985, Mr. Trump reported losses of $46.1 million from his core businesses – largely casinos, hotels and retail space in apartment buildings. They continued to lose money every year, totaling $1.17 billion in losses for the decade.
“In fact, year after year, Mr. Trump appears to have lost more money than nearly any other individual American taxpayer, The Times found when it compared his results with detailed information the IRS compiles on an annual sampling of high-income earners. His core business losses in 1990 and 1991 – more than $250 million each year – were more than double those of the nearest taxpayers in the IRS information for those years.
“Over all, Mr. Trump lost so much money that he was able to avoid paying income taxes for eight of the 10 years.”
The media’s role?
“As with many things Trump, his adventures in the stock market were more image than substance, helped greatly by news reports quoting anonymous sources said to have knowledge of Mr. Trump’s actions. An occasional quote from an associate – including his stockbroker, Alan C. Greenberg – helped burnish the myth.
“He has an appetite like a Rocky Mountain vulture,” Mr. Greenberg, the legendary chairman of Bear Stearns, told The Wall Street Journal in 1987. “He’d like to own the world.”
In his actions, Mr. Trump was more like a peacock.
An early and profitable gambit came in February 1987, when Mr. Trump started buying stock in the company that owned United Airlines. That April, The Times reported that Mr. Trump was “believed to own 4.9 percent” of United and was “believed to have paid” about $50 a share.
Trump takeover speculation set off a rally in the stock. At the end of the month, Mr. Trump quietly sold nearly all his shares. The next day, The Journal reported that Mr. Trump’s gamble appeared to have netted him $55 million.
It was a gross exaggeration. New Jersey gaming regulators later determined that he had purchased only 2.3 percent of the company and gained $11 million, before interest and commissions.
In other words, Blue Horseshoe loved United Airlines. But not as much as Blue Horseshoe claimed.
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Intrigued by the involvement of our hometown airlines and the media myth-burnishing, I decided to dive into the archives to see how Trump’s fake bid for United was played in the local press. Trump actually didn’t appear to be fooling anyone. Let’s take a look.
Appearing in the Sun-Times (sometimes the sources were news wires or somesuch):
April 10, 1987:
“The pilots are not the only investors interested in all or parts of UAL. The Pritzker family, associated with the Hyatt hotel chain, is reported to be buying the company’s stock, and Donald Trump, a New York real estate developer, already is reported to own 4.9 percent. Other buyers and arbitragers are making a move on the company because it is ‘in play’ as a takeover possibility.
“Trump told the New York Times that he had called [United CEO Richard] Ferris to advise him that he ‘totally disagrees’ with the way the company is being run, but did not indicate if he intended to try to buy the corporation.
“Trump said he believes Allegis, the new name to be proposed to stockholders for UAL at the April 30 annual meeting, ‘is better suited for the next world-class disease . . . ‘
“Most analysts believe Trump is interested only in UAL’s hotel properties, which the Westin Hotels and Resorts and Hilton International Hotels units of the parent company control.”
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May 1, 1987:
“Also yesterday, published reports said developer and casino operator Donald J. Trump sold his 4.9 percent stake of UAL Corp. The New York Times and Wall Street Journal said Trump sold his stake, which exceeded 2.5 million shares, over the past week. Quoting unidentified sources, the Times said Trump made about $80 million. The Journal said he made more than $55 million.”
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October 6, 1989:
“Airline takeover fever reached a new high Thursday as American Airlines revealed it received an unsolicited offer of $7 billion, or $120 a share, from Donald Trump . . .
“He tried to buy Bally Manufacturing Co. two years ago, but instead sold back his stock to the company for a profit.”
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Dec 11, 1989, the author is John Crudele, ahem:
“If you had to pick one raider that Wall Street doesn’t trust, it would be Trump, the New York real estate tycoon.
“Trump has bought some casinos and a shuttle airline, but he’s never pulled off a big deal and probably never will. In the middle of what looked to be a legitimate takeover attempt years ago (and I don’t remember which one), Trump once chuckled to me that he never really wanted to buy the company anyway.
“What’s in his future? Trump will soon be worrying more about his real estate empire if property prices keep coming down in New York. Pretending to want to take over companies won’t be as much fun once the wolves are at the door.”
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Appearing in the Tribune:
March 26, 1987: “Reports that real estate magnate Donald J. Trump has acquired a large stake in Chicago-based Allegis Corp. sent the airline and travel services company’s stock flying high Wednesday.
“Trump may be positioning himself to gain control of Allegis (formerly UAL Inc.) to split up its airline, hotel and rental car businesses. Analysts say the company’s units – United Airlines, Hertz Corp., and Westin hotels – are worth much more separately than combined under the Allegis banner.
“Trump’s main target may be Allegis’ far-flung real estate holdings, primarily concentrated in its worldwide hotel chains.
“Allegis, which soon will add the prestigious Hilton International hotels to its family, is valued at about $3 billion at current market prices.
“Allegis stock shot up $2.62 to close at $62.62 a share Wednesday in heavy trading on the New York Stock Exchange.
“Trump couldn’t be reached for comment. It’s believed he holds close to 5 percent of Allegis stock, worth about $150 million.”
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May 1, 1987: “The New York Times reported Thursday that New York real estate developer Donald Trump sold his almost 5 percent stake in UAL for a profit of about $80 million.
“While Trump could not be reached for comment, Wall Street traders said the reported sale was one of the factors causing UAL’s stock to fall. As of mid-day Thursday, UAL’s stock was down $2.25, to $66.12, after shedding $1.25 Wednesday.
“The Times said Trump had considered joining the union in its bid for the airline. The paper said Trump decided against that move because he thought it would be difficult to make the company profitable without a battle with its unions.”
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May 17, 1987: “The pilots union has hoped that a Trump or a Pritzker would join it in a bid for the entire company, which if successful would give them the airline and their partner the rest of Allegis. Such a bid would rank among the largest in corporate history.”
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October 6, 1989: “Donald Trump says he wants to buy the parent of American Airlines for about $7.5 billion, but many investors expect him to bail out with his trading profits without trying to land the nation’s largest airline . . .
“The New York billionaire is widely known as a real estate developer and casino operator who plasters his name on everything he owns. His empire includes the Trump Air helicopter service and the Trump Shuttle, which is the Northeastern U.S. airline service he bought this year for $365 million from Eastern Airlines.
“Several arbitragers view Trump as long on ego and short on credibility. They remember being burned before when he declared interest in some companies and later sold out his holdings at a big profit after the stock soared.
“They noted Trump’s letter didn’t include any financing details, other than his pledge to commit at least $1 billion in equity in the deal.
“Trump wrote in his letter that he has made a ‘substantial investment’ in AMR, but didn’t disclose the size of his stake.
“Susan Heilbron, an executive vice president with New York-based Trump Organization, said Trump hasn’t filed the notice required by the Securities and Exchange Commission when an investor holds at least 5 percent of a company.”
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As for the Pritzkers, they really crossed swords with Trump a few years later – and it was a doozy.
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Comments welcome.
Posted on May 8, 2019