Trump’s
Corporate Rap Sheet
By
Phil Mattera, editor of the Dirt Diggers Digest
For more than 30 years, Donald Trump has been almost continuously in the public eye, portraying himself as the epitome of business success and shrewd deal-making.
He
took a business founded by his father to build modest middle-class housing in
the outer boroughs of New York City and transformed it into a high-profile operation
focused on glitzy luxury condominiums, hotels, casinos and golf courses around
the world.
Operating
through the Trump Organization, his family holding company, Trump also
capitalized on his reality-TV-enhanced name recognition in a wide range of licensing
deals.
Trump’s
decision to enter the race for the Republican presidential nomination in 2015
has brought a great deal of new attention to his wide range of business
activities and the controversies associated with many of them.
Those
controversies — involving issues such as alleged racial discrimination,
lobbying violations, investor and consumer deception, tax abatements, workplace
safety violations, union avoidance and environmental harm — are summarized in
my new Corporate
Rap Sheet on the Trump Organization.
Here
are some highlights:
In
1973 the Justice Department filed
a suit in
federal court accusing Donald Trump and his father Fred Trump of discriminating
against African-Americans in apartment rentals, mostly in Brooklyn and
Queens. Donald Trump vigorously disputed the charges and filed a $100
million countersuit while complaining that the government was trying to
pressure him to rent to “welfare clients.” Trump claimed that doing
so would be unfair to other tenants and warned that it would result in “massive
fleeing.”
In 1975 the Trumps signed an
agreement with the Justice Department in which they did not admit to past
discrimination but promised not to discriminate against African-Americans and
other minorities in the future.
In
1991 the New Jersey Division of Gaming Enforcement announced that the Trump
Castle Casino Resort, then owned by Donald Trump, would pay $30,000 as part of
a settlement of a case in which Trump’s father was found to have improperly
lent $3.5 million to the Atlantic City casino by purchasing gambling
chips not intended to be used for bets. The transaction, designed to help the
casino’s cash-flow problems, was allowed to proceed when Fred Trump agreed to
apply for a license allowing him to lend money to the business.
In
1998 the Trump Taj Mahal, then still controlled by Trump, was fined $477,000
for currency
transaction reporting violations. The Taj Mahal subsequently received
numerous warnings about such issues, and in 2015, by which time it was
controlled by Carl Icahn, the Atlantic City casino was fined $10
million for “willful and repeated violations of the Bank Secrecy Act.”
In
2000 Trump and some of his associates had to pay $250,000
and issue a public apology to resolve a case brought by the New York Temporary
State Commission on Lobbying over the failure to disclose that they had secretly
financed newspaper advertisements opposing casino gambling in the
Catskills. Trump was said to have been concerned that Catskills casinos would
siphon business from the Atlantic City casinos he owned at the time.
In
2002 the Securities and Exchange Commission announced that Trump
Hotels and Casino Resorts had “recklessly” misled investors in a
1999 earnings release that used pro forma figures to tout the company’s
purportedly positive results but failed to disclose that they were primarily
attributable to an unusual one-time gain rather than ongoing operations. No
penalty was imposed on the company, which consented to the SEC’s
cease-and-desist order.
In
2013 New York Attorney General Eric Schneiderman filed a civil
lawsuit against the Trump Entrepreneur Initiative (formerly known as Trump
University), its former president and Donald Trump personally “for engaging
in persistent fraudulent, illegal and deceptive conduct.”
Schneiderman
alleged that the business “misled consumers into paying for a series of
expensive courses that did not deliver on their promises.” The suit asked for
“full restitution for the more than 5,000 consumers nationwide who were
defrauded of over $40 million in the scheme, disgorgement of profits, as well
as costs and penalties and injunctive relief prohibiting these types of illegal
practices going forward.” The case is pending.
In
2006 Donald Trump and the Los Angeles developer Irongate announced plans for a
luxury condominium and hotel project in North Baja, Mexico, south of San
Diego. Two years later, the San Diego Union-Tribune reported that the
project still had not received all of its required permits and was falling
behind schedule.
In 2009, as the delayed continued, Trump removed his name from
the project, which soon failed.
Purchasers sued Trump,
saying they were misled into thinking they were buying into a Trump development
rather than one that simply licensed his name. In 2013 Trump reached a
settlement with the plaintiffs; the details were not disclosed.
After
dealers at the Trump Plaza voted
overwhelmingly to
join the United Auto Workers union in 2007, the management of the casino filed a
challenge with the National Labor Relations Board. The UAW called the move an effort
to delay collective bargaining.
The stance of Trump management may have
been a factor in the UAW’s narrow
loss in
a subsequent representation election at the Trump Marina. The vote at Trump
Plaza was certified, but the UAW had difficulty negotiating a contract, even
after the NLRB ordered the company to bargain in good faith. It appears that
Trump managers dragged out the legal dispute until the Trump Plaza closed in
2014.
In December 2015 the management of the non-casino Trump International
Hotel Las Vegas challenged a vote by
workers to be represented by the Culinary Workers Union Local 226 and the
Bartenders Union Local 165. A hearing officer for the NLRB rejected the
challenge, and the unions were certified in April
2016.
In
April 2016 the U.S. Consumer Product Safety Commission announced that about
20,000 Ivanka Trump-branded women’s scarves made in China were being recalled
because they did not meet federal flammability standards for clothing textiles,
thus posing a burn risk. The importer of the scarves, GBG Accessories, has a
licensing arrangement with Ivanka Trump, daughter of Donald Trump and an executive at the
Trump Organization.