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Is Trump a broke ‘billionaire’?

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- Commentary
David Cay Johnston
David Cay Johnston

Was Donald Trump starved for cash in fall 2016, when 62 million voters cast ballots for a candidate who told them repeatedly that he was “rich — really, really rich.”

The way that Trump “funneled” hush money to a porn actress just 11 days before the election sure makes it look that way. This would be consistent with four decades of Trump claiming vast wealth, but not being able to pay his bills as they come due.

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This article originally appeared at DCReport. And was republished at Salon by permission.

As you read what follows keep two thoughts in mind.

First, would any billionaire need months to pay a $130,000 bill?

Second, there is not now and never has been a shred of verifiable evidence that Trump is or ever was a billionaire, a myth I first demolished using his own net worth statement prepared for a lawsuit in spring 1990.

Trump called me a liar back then for four months until he had to put into the public record his bankers’ assessment of his riches. The bankers calculated that Trump was worth a negative $295 million.

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Casino regulators concluded that without many tens of millions of new loans, Trump could not pay his bills coming due over the next several years, not exactly the story of someone with a net worth in eight figures. This also is not the story one expects of anyone who owns three large casinos.

Rudy Giuliani revived the issue of whether Trump merely poses as a billionaire during his Wednesday night chat with Fox entertainer Sean Hannity. No doubt that was not what he intended.

During a rambling chat full of legal nonsense, meandering syntax and ludicrous assertions that captivated reporters and pundits, Giuliani also revealed that Trump took four months or more to pay the hush money to Stephanie Clifford, better known as the porn star Stormy Daniels. The news focused on the admission that Trump did pay the hush money, showing that the president and the White House lied earlier.

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But the more significant revelation came when Giuliani said that it took Trump four months or more to pay the bill. Think of it as one of those 90-days same-as-cash deals that merchants with excess goods offer so they can generate enough immediate cash to pay their bills.

Trump lawyer Michael Cohen “funneled it [the $130,000] through a law firm and the president repaid it,” Giuliani said, speaking with Trump’s advance knowledge.

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“You’re going to do a couple of checks for $130,000,” Giuliani said.

Why Trump didn’t pay with a single check, as any mere multimillionaire could be expected to do. Giuliani didn’t say, and the entertainer Hannity didn’t ask even though his show appears on Fox News.

Some reporters and pundits cited the multiple payments as potential violations of the federal Cash Transaction Report rules on payments of more than $10,000. But those rules don’t apply to checks and do not apply to payments for services.

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Then came the real news, however much unintended by Giuliani. His very next words: “When I heard Cohen’s retainer of $35,000 when he was doing no work for the president, I said that’s how he’s repaying — that’s how he’s repaying it with a little profit and a little margin for paying taxes for Michael.”

“The president reimbursed that over a period of several months,” Giuliani said.

That makes clear that the hush money paid to keep her silent just before voters went to the polls was a loan from lawyer Cohen to Trump. No such loan is disclosed in either Trump’s ethics filings or campaign finance filings. That might cause legal problems for Trump and Cohen, though keep in mind that “might” implies doubt.

There might also be federal gift tax violations, depending on the fine print of the transactions.

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Maybe these comments will get political journalists to stop making a claim that Trump has himself taken back and to look hard at whether his fortune is really just massive cash flow, not wealth. And much of that cash flow may be going to pay interests on debts that, because of loopholes in federal ethics and campaign finance laws, he has not been required to disclose.

As readers of DCReport know, Trump last year claimed to be worth just $1.4 billion. That figure, attested to by Trump under penalty of perjury, is a nearly 90 percent reduction from the more than $10 billion he touted on the campaign trail.

Even that much-reduced net worth figure is grossly inflated. For example, Trump claims his Scottish golf courses are each worth more than $50 million. That’s odd because in recent years they have lost tens of millions of dollars, British disclosure statements show.

If put on the market the Scottish courses might well fail to attract any buyer because their value, including debt, appears to be less than zero.

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Federal ethics laws are so riddled with loopholes that we have no idea how deeply Trump is in debt. Debts owed via partnerships are not reported for example.

From the unreported debts we do know about, thanks to the diligence of New York Times reporters, we can report that Trump’s net worth is significantly less than $1 billion.

So just keep asking yourself, and asking others: Have you ever heard of a multibillionaire who couldn’t pay a $130,000 bill and needed a 120-day or longer loan from his lawyer to cover the bill?


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