Contrary to the public image he has been selling, Donald Trump is no self-made man, found an investigation by The New York Times. In the almost-15,000-word article, The New York Times reported that by the age of three, Trump was earning $200,000 a year (adjusted for present rates) from his father’s empire. "He was a millionaire by age eight. By the time he was 17, his father had given him part ownership of a 52-unit apartment building. Soon after he graduated from college, he was receiving the equivalent of $1 million a year from his father. The money increased with the years, to more than $5 million annually in his 40s and 50s."
In his version of success story, Trump claimed that he wagered an initial $1 million loan from his father Fred C Trump, who was a renowned real estate giant in New York, into a $10 billion empire. When he was campaigning, Trump repeatedly boasted of his ability to turn a small loan from his father into his fortune. "My father gave me a very small loan in 1975," he had said, "and I built it into a company that's worth many, many billions of dollars."
In October, 2015, Trump had said, "It has not been easy for me. And you know I started off in Brooklyn, my father gave me a small loan of a million dollars." In February, 2016, Trump reiterating how he got the "small" loan from his father. The then presidential candidate had said, "He (Marco Rubio) also said I got $200 million from my father. I wish. I wish. I got a very, very small loan from my father many years ago. I built that into a massive empire and I paid my father back that loan… The number is wrong by a factor of hundreds of — I mean, by a fortune. I got a small loan. I started a business."
The New York Times said Trump and his father, Fred, avoided gift and inheritance taxes by setting up a sham corporation and undervaluing assets to tax authorities. The New York Times said its report is based on more than 100,000 pages of financial documents, including confidential tax returns from the father and his companies.
Forbes magazine, meanwhile, estimated Trump's fortune at $3.1 billion — the same as last year, but a third smaller than it was in 2015. Forbes ranked Trump's fortune at 259 in the world, down from 248 the year he was elected president.
Lawyer, White House say bogus claims
A lawyer for Trump, Charles J Harder, told The New York Times that there was no "fraud or tax evasion" and that the facts cited in the report are "extremely inaccurate." The White House dismissed the report as a "misleading attack against the Trump family by the failing New York Times." It criticised the newspaper and other media outlets, saying their low credibility with the public is "because they are consumed with attacking the president and his family 24/7 instead of reporting the news."
The New York Times said the records also indicate that Trump helped his father take millions more in improper tax deductions. And he helped devise a scheme that undervalued his parents' real estate holdings by hundreds of millions of dollars, sharply reducing taxes on those properties when they were transferred to their children, according to the paper.
Addressing a press conference, White House spokeswoman Sarah Sanders criticised the article's main claims, but said it was right in one important aspect: Trump's business acumen.
"I will say one thing the article did get right was that it showed that the president's father had a great deal of confidence in him. "The president brought his father into a lot of deals and they made a lot of money together. His father went on to say that everything he touched turned to gold."
The Failing New York Times did something I have never seen done before: Donald Trump
Reacting to the story, Trump accused the newspaper of "doing a very old, boring and often told hit piece on me." In a tweet, he said:
The Failing New York Times did something I have never seen done before. They used the concept of “time value of money” in doing a very old, boring and often told hit piece on me. Added up, this means that 97% of their stories on me are bad. Never recovered from bad election call!
— Donald J. Trump (@realDonaldTrump) October 3, 2018
The New York Times quoted the president's brother, Robert Trump, who issued a statement on behalf of the Trump family: "Our dear father, Fred C. Trump, passed away in June 1999. Our beloved mother, Mary Anne Trump, passed away in August 2000. All appropriate gift and estate tax returns were filed, and the required taxes were paid. Our father’s estate was closed in 2001 by both the Internal Revenue Service and the New York State tax authorities, and our mother’s estate was closed in 2004. Our family has no other comment on these matters that happened some 20 years ago, and would appreciate your respecting the privacy of our deceased parents, may God rest their souls."
The investigation by NYT
The findings by The New York Times is based on interviews with Fred Trump's former employees and advisers and trove of documents explaining and describing the "inner workings and immense profitability of his empire. They include documents culled from public sources — mortgages and deeds, probate records, financial disclosure reports, regulatory records and civil court files."
The New York state tax department told The Associated Press that it is reviewing the allegations in The New York Times and "is vigorously pursuing all appropriate avenues of investigation." The department typically refers findings to the state attorney general's office.
The New York Times reported that the Trump family hid millions of dollars of transfers from the father to his children through a sham company owned by the children called All County Building Supply and Maintenance. Set up in 1992 ostensibly as a purchasing agent to supply Fred Trump's buildings with boilers, cleaning supplies and other goods, the father would pad invoices with markups of 20 percent or even 50 percent, thereby avoiding gift taxes, the newspaper reports.
The report says that before Fred Trump died in the late 1990s, he transferred ownership of most of his real estate empire to his four living children. The value of the properties in tax returns summed up to $41.4 million, vastly less than The New York Times says they were worth.
The same properties would be sold off over the next decade for more than 16 times that amount. In total, the president's father and mother transferred over $1 billion to their children, according to The New York Times tally. That should have produced a tax bill of at least $550 million, based on a 55 percent tax on gifts and inheritance at the time.
Instead, the children paid $52.2 million, or about five percent. Tax experts cited in the report say that Trump is unlikely to face criminal prosecution in helping his parents evade taxes because the maneuvers occurred long ago and are past the statute of limitation.
'At one point, Donald Trump was an extraordinarily wealthy toddler. And today? He is still that'
The paper's contention that Trump was earning as much as $200,000 a year in today's money by the time he was three years old, and was the equivalent of a millionaire by the age of eight, drew considerable attention. The assertion was pounced on by several late night talk show hosts, including comedian Stephen Colbert, the host of "The Late Show" on CBS.
"So, let me get this straight: At one point, Donald Trump was an extraordinarily wealthy toddler. And today? He is still that," he said.
Not everything, however, was a laughing matter: The New York Times said Trump's tax-hating father used various methods to funnel his wealth to his children and shield it from the Internal Revenue Service, some of which tax experts said were improper or possibly illegal.
Democratic Senator Ron Wyden called for federal tax authorities to investigate as well. "It's critical that IRS fully investigate these allegations and prosecute any violations to the fullest extent of the law," Wyden wrote on Twitter. Speculation about the source of Trump's wealth has mounted since 2015, when he declared his candidacy for the nation's highest office but broke with long-standing tradition by refusing to release his tax returns.
He has been repeatedly rebuked over ethics violations for refusing to divest his assets in the Trump Organization, instead turning over control of the entity to his sons, Donald Jr and Eric. The president also continues to stay or make use of hotels and golf clubs he owns, leading to conflict of interest allegations and multiple lawsuits.
In July, a federal judge allowed a suit to proceed accusing Trump of violating the constitution by maintaining his interest in a hotel that does business with foreign governments. It marked the first time a court interpreted the anti-corruption clause in the constitution, known as the emoluments clause, and applied it to a sitting president.
With inputs from agencies
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Updated Date: Oct 04, 2018 12:58:14 IST