There are multiplying investigations from state and federal authorities, as well as lawsuits seeking to pry into its transactions with foreign governments. House Democrats plan to use their new majority to delve into the president’s business and personal finances.
And evidence is mounting about his company’s long-standing use of undocumented labor at its golf courses, leading to the firing of at least 18 workers in recent months. At Trump’s golf club in Westchester County, N.Y., the company fired 11 workers — including some who had been employees for more than a decade. Some of those workers later said Trump’s staff had required them to work extra hours without pay — a practice prohibited by labor laws.
Here are answers to seven key questions about the state — and the troubles — of the Trump Organization.
QUESTION 1: Didn’t Trump give up his businesses when he took office?
ANSWER: No, he didn’t.
Trump handed over day-to-day control of his businesses to his sons, Don Jr. and Eric, along with a longtime Trump Organization executive named Allen Weisselberg. But Trump did not give up ownership of his businesses: They are still his, and he can withdraw money from them at any time.
That was a fateful choice.
By retaining his ownership, Trump tied the Trump Organization’s commercial fortunes to his political fortunes. It has also exposed the company to unprecedented legal scrutiny from investigators, competitors and legislators who are now exploring whether the Trump Organization is being patronized by those seeking to influence the government.
QUESTION 2: Has Trump’s presidency benefited or hurt his business?
ANSWER: That’s hard to assess.
We know that in some foreign countries and in liberal areas of the United States, Trump’s political rise has coincided with a drop in business and a retreat of his brand.
His hotels in Chicago and New York saw business decline after he got into politics, according to documents shared with Trump’s investors. So did Doral, Trump’s mega-resort in Miami, where company documents show net operating income fell 69 percent between 2015 and 2017. “They are severely underperforming,” said a representative hired by the Trump Organization to seek a property-tax reduction from Miami-Dade County. She blamed the “negative connotation” of the Trump name.
In addition, Trump’s name has come down from hotels in Panama, Toronto, Rio de Janeiro and New York’s SoHo neighborhood and from four (soon to be six) residential buildings in New York since Election Day 2016.
The Trump Organization says there is no problem with its brand. It blamed hurricanes and the Zika virus for the decline at Doral, and worries about gun violence for the decline in Chicago. It blamed political enemies and the media for the company’s decision to shelve two planned new hotel chains that were to include an upscale boutique brand called Scion and a line of lower-cost hotels called American Idea.
“We live in a climate where everything will be used against us, whether by the fake news or by Democrats who are only interested in Presidential harassment and wasting everyone’s time,” Eric Trump said in a statement in February, when he announced the cancellation of those plans.
And there is little doubt that the company is paying more in legal fees than previously, though the amount has not been released.
But the Trump presidency has also brought in new customers who want to show support for his administration.
Republican candidates, for instance, have flocked to Trump’s properties. They spent at least $4.5 million on meals, ballrooms and steak dinners during the 2018 election cycle, campaign finance records show. Foreign governments have paid Trump hotels for ballroom rentals and overnight stays. And in Palm Beach, pro-Trump groups have held events at Mar-a-Lago to make sure their dollars go to the president.
What does it all add up to? Crain’s New York Business estimated that the Trump Organization’s annual revenue, which stood at about $700 million in 2016, fell between $45 million and $90 million in 2017.
QUESTION 3: Are foreign countries spending money at Trump properties?
ANSWER: Yes. But we don’t know how much in total.
In Washington, the embassies of Azerbaijan, the Philippines, Bahrain and Kuwait have all held parties at the Trump International Hotel since Trump was elected in 2016, according to embassy staff and news reports. At the same hotel, lobbyists working for the Saudi government reserved more than 500 rooms at Trump’s hotel in the four months after he was elected, The Washington Post previously reported, paying more than $270,000.
And in Chicago, the Romanian Consulate rented a ballroom at the Trump hotel to hold its national day celebration in 2018.
Those are just the events we know about, thanks to media reports and federal filings. The Trump Organization has said little on the subject.
It announced that it reaped about $191,538 in “foreign profits” in 2018 and donated the same amount to the U.S. Treasury. That was up slightly from the $151,000 in profit from foreign-government customers that the company reported from 2017. But, in both years, the company gave no details about who those foreign customers were or how much in total they paid.
QUESTION 4: What have we learned now about how Trump ran his businesses before he ran for president?
ANSWER: Quite a bit, actually.
For one thing, we’ve learned that in the nine years before he began his presidential run, Trump made a significant and unusual switch in the way he paid for real estate.
Before, he had largely purchased properties by borrowing money with mortgages. Trump even called himself the “King of Debt.” But in 2006, he began buying without loans, paying out of a vast source of ready cash, a tactic not commonly used in the real estate industry.
In all, Trump paid more than $400 million for 14 properties over nine years without using loans. His son Eric Trump said that the company produced enough cash flow to make such purchases and that his father had wanted to avoid piling up debt.
From the New York Times, we learned that Trump’s father, Queens real estate developer Fred Trump, used what the Times called “suspect tax schemes” to funnel $413 million to his son. The Times said that for much of his life, Donald Trump’s career had been bankrolled by his father, whose money helped his son out of financial jams. The Times also reported that Trump had claimed more than $1 billion in losses on his tax returns between 1985 and 1994 — more losses than nearly any other American in that period. Those revelations run counter to much of what Trump has said about his career, particularly his assertion that he succeeded on his own, with very little help from his father.
And from Michael Cohen — the longtime Trump “fixer” who pleaded guilty to federal charges in 2018 — we learned that Trump’s efforts to build a Trump Tower Moscow had lasted far longer than he and Trump had acknowledged. Even while Trump was running for president in 2016 and praising Russian President Vladimir Putin along the way, Cohen said, he was asking the Kremlin for help in making the deal happen.
QUESTION 5: What legal issues does the Trump Organization face?
ANSWER: Trump’s business and its executives are facing an unprecedented level of legal scrutiny from state and federal authorities — and it is likely to increase this year.
Federal prosecutors in New York have examined the role of unnamed Trump Organization executives in what they said was a scheme by Cohen to pay women hush money before the 2016 election, according to court papers.
Trump’s company has been sued by the attorneys general of Maryland and the District of Columbia, who are seeking details on the company’s transactions with foreign governments. Those attorneys general say such payments violate the Constitution’s emoluments clause, which bars presidents from taking payments from foreign countries.
The new attorney general in New York, Letitia James (D), has promised to increase scrutiny of Trump’s business practices, past and present. Her staff has questioned ex-workers from Trump’s Westchester County golf course about the workers’ allegations that Trump’s staff violated labor laws. James has also subpoenaed Deutsche Bank, one of Trump’s biggest lenders, after allegations that Trump had exaggerated his net worth in statements sent to the bank in pursuit of loans.
In the House, Democrats said they plan to use their new majority to investigate Trump’s foreign customers, his sources of funding for real estate deals and his lease on the federal building that houses Trump International Hotel.
QUESTION 6: That’s a lot of gloom. What does the Trump Organization have to be optimistic about?
ANSWER: In Scotland and in Ireland, Trump’s company has proposed expanding the footprint of three golf courses by adding hundreds of private homes next to them. Those plans, if approved by local land-use regulators, could bring a major payoff if Trump could then sell lots or finished homes.
In California, too, Trump sought permission to sell 23 home lots near his oceanside golf course.
And in Dubai, Indonesia and Uruguay, the Trump Organization is planning to open licensed properties — golf courses, hotels and a building whose owners will pay to use the Trump name. Those projects all were agreed to before Trump won the presidency.
QUESTION 7: Is Trump donating his presidential salary, as he promised?
Trump has donated his presidential salary — $400,000 per year — to agencies of his own government. The most recent quarterly donation, in January 2019, went to the National Institute on Alcohol Abuse and Alcoholism, which funds alcohol research. Trump’s older brother, Fred Jr., died young after a long struggle with alcoholism.