How Russian Money Helped Save Trumps Business
Posted: Sat Aug 15, 2020 3:34 am
In the fall of 1992, after he cut a deal with U.S. banks to work off nearly a billion dollars in personal debt, Donald Trump put on a big gala for himself in Atlantic City to announce his comeback. Party guests were given sticks with a picture of Trump’s face glued to them so they could be photographed posing as the famous real-estate mogul. As the theme music from the movie Rocky filled the room, an emcee shouted, “Let’s hear it for the king!” and Trump, wearing red boxing gloves and a robe, burst through a paper screen. One of his casino executives announced that his boss had returned as a “winner,” according to Trump biographer Michael D’Antonio.
But it was mainly an act, D’Antonio told Foreign Policy. In truth Trump was all but finished as a major real-estate developer, in the eyes of many in the business, and that’s because the U.S. banking industry was pretty much finished with him. By the early 1990s he had burned through his portion of his father Fred’s fortune with a series of reckless business decisions. Two of his businesses had declared bankruptcy, the Trump Taj Mahal Casino in Atlantic City and the Plaza Hotel in New York, and the money pit that was the Trump Shuttle went out of business in 1992. Trump companies would ultimately declare Chapter 11 bankruptcy two more times. When would-be borrowers repeatedly file for protection from their creditors, they become poison to most major lenders and, according to financial experts interviewed for this story, such was Trump’s reputation in the U.S. financial industry at that juncture.
For the rest of the ’90s a chastened Trump launched little in the way of major new business ventures (with a few exceptions, such as the Trump World Tower across from the United Nations, which began construction in 1999 and was financed by two German lenders, Deutsche Bank and Bayerische Hypo- und Vereinsbank). “He took about 10 years off, and really sort of licked his wounds and tried to recover,” D’Antonio said. As late as 2003, Trump was in such desperate financial trouble that at a meeting with his siblings following his father’s death he pressed them to hurriedly sell his father’s estate off, against the late Fred Trump’s wishes, the New York Times reported in an investigation of Trump family finances in October. And his businesses kept failing: In 2004, Trump Hotels and Casino Resorts filed for bankruptcy with $1.8 billion dollars of debt.
But Trump eventually made a comeback, and according to several sources with knowledge of Trump’s business, foreign money played a large role in reviving his fortunes, in particular investment by wealthy people from Russia and the former Soviet republics. This conclusion is buttressed by a growing body of evidence amassed by news organizations, as well as what is reportedly being investigated by Special Counsel Robert Mueller and the Southern District of New York. It is a conclusion that even Trump’s eldest son, Donald Trump Jr., has appeared to confirm, saying in 2008—after the Trump Organization was prospering again—that “Russians make up a pretty disproportionate cross-section of a lot of our assets.”