You’ll Want To See How Trump Defrauded This Contractor


by Josh Adler

I’ve held off on publicizing my Trump stories online, but his allegation at the debate tonight that maybe he didn’t pay his contractors because they didn’t do good work pissed me off, and I have to leak one. My grandfather’s company was one of the numerous contractors that Donald Trump refused or was unable to pay in full for their work. “Unable” because of Trump’s mismanagement and over-leverage, not because he had some kind of ex post facto savvy for retrading his contracts. The payment failures were not because of poor performance — Trump repeatedly hired my grandfather’s company for every project that Trump developed in Atlantic City, as did every other casino developer in Atlantic City. What I heard growing up was that it was Trump’s well-known practice not to pay final bills and then dare his contractors to sue. Most couldn’t afford the fight, and most didn’t obtain lien rights because they needed the work too badly too fight that hard on the contracts.

My grandfather, who was responsible for negotiating contracts face-to-face with Trump for at least a decade (and had a number of choice anecdotes about Trump that I will not share tonight), therefore insisted on mechanics lien rights on their jobs. His company had essential, specific expertise Trump needed, and Trump blustered and threatened but caved in when my grandfather walked out. On Trump’s final project, when Trump could not pay the bill, he begged them to release their lien at a discount or else he would go bankrupt and pay them nothing. It was indeed true that he could not afford to pay the bill and would be forced into bankruptcy if they did not release the lien. They checked. There was no concern about the quality of work. To my knowledge, he never alleged that the work was bad nor could he have — they were one of the essential prime contractors for every casino he or anyone built in A.C. Preferring something to nothing, they agreed to discount the payment and release the lien. He then reneged on the new discounted deal, and soon went bankrupt anyway. Nonetheless, they were paid a larger share of what they were owed than most others were, because he couldn’t open the casino without the lien released. State law. And you know what? All the lights, slot machines, security cameras, escalators, elevators and air conditioners in those casinos? They worked! That’s why they were hired to build every single casino in Atlantic City, not just Trump’s.

Eventually Trump had to get out of the real estate development business and go into reality television and product branding. Noble vocations, no doubt. He couldn’t get anyone competent to work for him anymore at competitive rates because they knew they wouldn’t get paid, nor could he get equity investors or debt financing for new projects on market terms after all the bankruptcies and accounting scandals. Maybe Hillary Clinton doesn’t have the standing or expertise to challenge him on his “business” arguments, or maybe it’s not a strategic point for her, but when he toots his horn about building a great real estate empire, let’s be clear: Trump was a failure as a real estate developer. His early New York projects that made his small but up-and-coming reputation were subsidized by his father’s personal loans and relationships. The later, bigger ones all flopped. After he worked his way out of all those failed projects in the 1990s, he didn’t — couldn’t — do any more development, he just licensed his name to other developers who took the risk and maybe he invested his inheritance in some acquisitions as a passive partner.

(By the way, I’ve never been as big a real estate developer as Trump, and Trump was not a big developer, he was a small developer. I’m a microscopic developer. But I’ve built a few buildings and I know how it works.)

And hey, maybe his tax returns say something else. We’ll never know. My suspicion is that they would reveal that he has a lot fewer assets than he’s claimed, and none that he developed. He’s not embarrassed about not paying taxes, that’s a silly charge. Of course he didn’t pay taxes. His alleged audit is irrelevant, even if true, since the returns were already filed and say whatever they say, he can’t change them now so releasing them can’t impact the audit. It seems far more likely to me that his fear is that revealing the returns would TRIGGER an audit. (If there is one thing all Americans can agree on, it’s that Donald Trump cheats on his taxes. It’s just that his supporters believe that’s a selling point.) Heck, he probably claimed the Earned Income Tax Credit on his negative income. I would bet $1,000 that he claimed the EITC. I think they would also show that he owes a lot of money to the only kinds of organizations who would still make him loans after all of his real estate fiascos — those who either charge above market rates — which would embarrass him because that looks like a bad deal — or who earn their returns in other ways, through influence, though he probably doesn’t report that income. Since his son revealed publicly not long ago that much of their recent financing has come from Russia, and most exported Russian wealth is subject to Putin’s whims, that could explain Trump’s obfuscation and denial of Russian atrocities in Syria and Ukraine and his frequently professed admiration for Putin. Not hard to guess who pulls those strings.

Here’s what I meant to say before I went on this speculative tirade: If Trump hired so many thousands of contractors whom he didn’t pay because, somehow, they all did such bad jobs for him, again, and again, and again, bad architects, bad drapers, bad plumbers, doesn’t that just say he must be terrible at hiring people? Fool me twice… you can’t fool me… but fool me thousands of times? After all, there must be SOME capable American workers out there (though I doubt very many of his workers were American.) This scarey-clown who says he is going to surround himself with all the best and smartest people in the world can’t hire a good plumber in a thousand tries, despite being one of history’s great titans of stone and steal? I mean steel? How did he ever succeed in business? Oh, that’s right. He didn’t. Good thing about Papa Fred buying all those casino chips and the $14 million mini-loan. That’s what she should have said.

My grandfather was born in 1917 in Atlantic City to German-Jewish immigrants and orphaned at age eight. He worked nearly every day of his life from then until he passed away at 95. He sold his first company in his 60s but couldn’t stay retired and went back to work for another 30 years. His job for the U.S. Army during World War II — assigned to a high school graduate because he shared a last name with a famous (but unrelated) Austrian psychiatrist — was to interview and assess convicted felons to determine whether they were psychologically fit for early release from prison to carry a weapon with our troops overseas. He always said that job, judging the character of dangerous men with a strong incentive to deceive him, or as he put it, being a “human bullshit detector,” was the training that made him a great success in business. So when my grandfather would occasionally remark to me that Donald Trump was the worst person he had ever known, I remembered it.

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