Donald Trump has been here before — 35 years ago — with an investigation. Then a flood in a room with evidence.
It happened when auditors in New York City spent two years probing more than $3 million in unpaid rent the city was expecting from Trump’s Grand Hyatt hotel from operations in 1986.
That flood was noted in passing as part of a 2016 report by CBS News in the context of then-candidate Trump refusing to release his tax returns, purportedly because he was being audited. It said the two-year audit of Trump’s hotel from the late 1980s involved “stonewalling, disorganization and obfuscation at every turn.”
The story has a whole new context after CNN reported that in October of last year, a drained swimming pool at Trump’s Mar-a-Lago home and resort flooded a room with computer servers containing surveillance video.
Skepticism abounded immediately that it was done on purpose to damage evidence in the Justice Department’s investigation of potential obstruction. Trump is under investigation for his handling of classified documents after leaving office as president. The video could show how and when documents were moved.
In the Grand Hyatt case, city auditors filed a 73-page report, posted by CBS News. It said that Trump’s lease obligations should have required substantial documentation — “documentation (that) the Hotel — for one reason or another — could not or did not provide.”
Of particular interest today is the next sentence.
“In September, 1988, the Hotel informed us that it could not locate seven of the twelve monthly general ledgers, because they ‘were discarded after they were severely damaged by water when the room in which they were stored was flooded,’” the report said.
Two months later, the report said, “summary information” about the data being sought was found at a storage site in New Jersey.
“We determined the summaries would be sufficient for our purpose, although their use entailed substantial additional labor to reconstruct the details of the monthly transactions,” the report said.
The audit report went on to describe more delays and missing documents.
The Trump hotel’s “resistance to our review and the Hotel's lapses in record keeping had substantial impact upon our inquiry's scope and methodology,” the report said.
Trump’s rent was tied in part to the hotel’s gross revenue and profits. The report’s Executive Summary said auditors were investigating why the hotel paid $3.7 million for rent in 1985 and, although its gross revenues increased in 1986, it paid only $667,155.
After lawsuits and the bankruptcy of an accounting firm used by Trump, the case was mistakenly labeled as disposed and later reopened. Trump had sold the hotel and the new owners reached an undisclosed settlement, CBS News reported.