In 2018, President Trump’s company lost control of a hotel in Panama and saw its name stripped from a condo building in New York. At its remaining properties, there was a steady drip of bad news: Trump golf courses lost money in Scotland and Ireland, Trump Tower lost rent revenue in Manhattan, and high-paying charity customers stayed away from Mar-a-Lago in Florida.
The new year might be better. Trump’s company is preparing to launch a pair of long-delayed hotel chains in the United States, hoping to turn Trump voters into Trump customers. The Trump hotel in Washington continues to attract GOP fundraisers, interest groups and foreign embassy events.
But 2019 will also bring new problems.
Trump’s company is facing multiplying investigations from state and federal authorities, as well as lawsuits seeking to pry into its transactions with foreign governments. And House Democrats plan to use their new majority to delve into the president’s business and personal finances.
As the year begins, 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 his golf courses in Los Angeles and the Bronx, according to records filed with local governments. (Trump’s golf courses in Scotland and Ireland lost money, but that was the case long before Trump ran for office). 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 residential buildings in New York since Election Day 2016.
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 $4.2 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 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 $151,000 in “foreign profits” in 2017 and donated the same amount to the U.S. Treasury. But the company gave no details about who those foreign customers were or how much in total they paid. The Trump Organization says it plans to make a similar donation this year but has not shared further details.
QUESTION 4: What did we learn in 2018 about how Trump ran his businesses before he ran for president?
ANSWER: Quite a bit, actually.
For one thing, we 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 quietly bankrolled by his father, whose money helped his son out of financial jams. This runs counter to much of what Trump has said about his career, particularly his assertion that his father provided him with very little help.
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.
And federal and state investigators have gathered evidence about potential immigration-law violations at Trump’s Bedminster golf club, according to an attorney for several former workers.
In the House, Democrats said they now 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 in Washington.
QUESTION 6: That’s a lot of gloom. What does the Trump Organization have to be optimistic about as 2019 begins?
ANSWER: The company still plans to begin expanding the Trump brand again — and expanding the size of some Trump properties.
In the United States, the company is set to launch two new lines of hotels that will not carry the Trump name. Both will begin in Mississippi. The first American Idea hotel, intended as a cozy but low-cost brand, is expected to open in the spring in a former Comfort Inn in that state. The first Scion hotel — an upscale brand with a boutique, hipster vibe — should open later this year in Cleveland, Miss.
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.
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 October 2018, went to the Small Business Administration: The White House said it would go to a program preparing veterans for private-sector careers.