Why We Took Trump Off The Forbes 400 During His Decade Of Tax Losses
By Dan Alexander, Forbes Staff May 8, 2019
Donald Trump appeared alone on the cover of Forbes magazine for the first time on May 14, 1990. The story inside offered a devastating look at his finances. FORBES
Donald Trump listed $1.2 billion of losses on his tax filings from 1985 to 1994, according to a blockbuster report released by the New York Times Tuesday. Those were high-flying years for Trump, then a young, brash businessman getting more headlines-per-square-foot than any other developer. In 1985, Trump appeared by himself on the Forbes 400 list of America’s richest people for the first time, after inventing a fake persona to lie about a transfer of wealth from his father.
Forbes fell for that ruse—taking Fred Trump off the list and listing Donald alone. But five years later, wepublished an explosive story, uncovering the trouble brewing inside Trump’s empire. Leaning on nonpublic documents, Forbes writers Richard L. Stern and John Connolly identified the same sort of profitability problems that are still making headlines 29 years later. Forbes took Donald Trump off its list for the first time that year, explaining that a “decline in Atlantic City gaming revenues, unmasking of misstated asset values, declining real estate values and massive debt may have put The Donald within hailing distance of zero.”
Here, Forbes republishes the 1990 magazine story, putting it online for all to read:
By Richard L. Stern and John Connolly
WHAT IS DONALD TRUMP really worth? His estranged wife, Ivana, would like to know. So would his creditors, who are many. The public, fascinated with Trump’s exploits and his bigger-than-life personality, relishes the guessing game. This we can say with confidence: His net worth is nothing like the $3 billion Business Week magazine estimated three years ago and has dropped considerably from our own 1989 estimate of $1.7 billion.
Forbes has obtained nonpublic documents submitted by Trump to a governmental body. In it, he lists his assets and liabilities as of May 31, 1989. The documents — which have been amended to include some more recent acquisitions — claim a net worth for Donald Trump, after deducting all debts and mortgages, of $1.5 billion.
Shares of SunPower Corporation(NASDAQ: SPWR) jumped as much as 14.4% in trading Friday after the solar manufacturer reported first-quarter 2019 results. Shares gave back some of those gains midday, but at 12:15 p.m. EDT shares were still up 9.5% on the day.
So what
Quarterly revenue was $348.2 million and net loss was $89.7 million, or $0.63 per share on a GAAP (generally accepted accounting principles) basis. On a non-GAAP basis, revenue was $411.6 million and the loss was $57.4 million, or $0.41 per share. Adjusted EBITDA was negative $23.8 million, down from a gain of $32.3 million a year ago.
Image source: SunPower Corporation.
Management also said it continues to expect 1.9 to 2.1 gigawatts of solar deployed with $1.9 to $2.0 billion of non-GAAP revenue for 2019. What investors likely gravitated to was management increasing the lower end of adjusted EBITDA guidance for 2019 from $80 million to $90 million, while keeping the $110 million top end of the range the same.
Now what
There weren’t any huge surprises in the quarter, but investors are likely relieved that operating conditions are expected to get better as the year goes on. The solar industry has been very competitive in the last few quarters, and price wars can lead to lower margins across the board. SunPower says it’s expecting margins to improve as new high-efficiency solar panels are rolled out and U.S. residential and commercial markets grow. That’s why there’s optimism today, and now the company needs to execute on rising expectations.
What Happens When a Bad-Tempered, Distractible Doofus Runs an Empire?
By Mirandea Carter June 6, 2019
During Kaiser Wilhelm II’s reign, the upper echelons of the German government began to unravel into a free-for-all, with officials wrangling against one another. Photograph by Hulton-Deutsch Collection / Corbis via Getty
One of the few things that Kaiser Wilhelm II, who ruled Germany from 1888 to 1918, had a talent for was causing outrage. A particular specialty was insulting other monarchs. He called the diminutive King Victor Emmanuel III of Italy “the dwarf” in front of the king’s own entourage. He called Prince (later Tsar) Ferdinand, of Bulgaria, “Fernando naso,” on account of his beaky nose, and spread rumors that he was a hermaphrodite. Since Wilhelm was notably indiscreet, people always knew what he was saying behind their backs. Ferdinand had his revenge. After a visit to Germany, in 1909, during which the Kaiser slapped him on the bottom in public and then refused to apologize, Ferdinand awarded a valuable arms contract that had been promised to the Germans to a French company instead.
Not that this deterred the Kaiser. One of the many things that Wilhelm was convinced he was brilliant at, despite all evidence to the contrary, was “personal diplomacy,” fixing foreign policy through one-on-one meetings with other European monarchs and statesmen. In fact, Wilhelm could do neither the personal nor the diplomacy, and these meetings rarely went well. The Kaiser viewed other people in instrumental terms, was a compulsive liar, and seemed to have a limited understanding of cause and effect. In 1890, he let lapse a long-standing defensive agreement with Russia—the German Empire’s vast and sometimes threatening eastern neighbor. He judged, wrongly, that Russia was so desperate for German good will that he could keep it dangling. Instead, Russia immediately made an alliance with Germany’s western neighbor and enemy, France. Wilhelm decided he would charm and manipulate Tsar Nicholas II (a “ninny” and a “whimperer,” according to Wilhelm, fit only “to grow turnips”) into abandoning the alliance. In 1897, Nicholas told Wilhelm to get lost; the German-Russian alliance withered.
About a decade ago, I published “George, Nicholas and Wilhelm: Three Royal Cousins and the Road to World War I,” a book that was, in part, about Kaiser Wilhelm, who is probably best known for being Queen Victoria’s first grandchild and for leading Germany into the First World War. Ever since Donald Trump started campaigning for President, the Kaiser has once again been on my mind—his personal failings, and the global fallout they led to.
Trump’s tweets were what first reminded me of the Kaiser. Wilhelm was a compulsive speech-maker who constantly strayed off script. Even his staff couldn’t stop him, though it tried, distributing copies of speeches to the German press before he’d actually given them. Unfortunately, the Austrian press printed the speeches as they were delivered, and the gaffes and insults soon circulated around Europe. “There is only one person who is master in this empire and I am not going to tolerate any other,” Wilhelm liked to say, even though Germany had a democratic assembly and political parties. (“I’m the only one that matters,” Trump has said.) The Kaiser reserved particular abuse for political parties that voted against his policies. “I regard every Social Democrat as an enemy of the Fatherland,” he said, and he denounced the German Socialist party as a “gang of traitors.” August Bebel, the Socialist party leader, said that every time the Kaiser opened his mouth, the party gained another hundred thousand votes.
When Wilhelm became emperor, in 1888, at twenty-nine years old, he was determined to be seen as tough and powerful. He fetishized the Army, surrounded himself with generals (though, like Trump, he didn’t like listening to them), owned a hundred and twenty military uniforms, and wore little else. He cultivated a special severe facial expression for public occasions and photographs—there are many, as Wilhelm would send out signed photos and portrait busts to anyone who’d have one—and also a heavily waxed, upward-turned moustache that was so famous it had its own name, “Er ist Erreicht!” (It is accomplished!)
In fact, Wilhelm didn’t accomplish very much. The general staff of the German Army agreed that the Kaiser couldn’t “lead three soldiers over a gutter.” He had neither the attention span nor the ability. “Distractions, whether they are little games with his army or navy, travelling or hunting—are everything to him,” a disillusioned former mentor wrote. “He reads very little apart from newspaper cuttings, hardly writes anything himself apart from marginalia on reports and considers those talks best which are quickly over and done with.” The Kaiser’s entourage compiled press cuttings for him, mostly about himself, which he read as obsessively as Trump watches television. A critical story would send him into paroxysms of fury.
During Wilhelm’s reign, the upper echelons of the German government began to unravel into a free-for-all, with officials wrangling against one another. “The most contradictory opinions are now urged at high and all-highest level,” a German diplomat lamented. To add to the confusion, Wilhelm changed his position every five minutes. He was deeply suggestible and would defer to the last person he’d spoken to or cutting he’d read—at least until he’d spoken to the next person. “It is unendurable,” a foreign minister wrote, in 1894. “Today one thing and tomorrow the next and after a few days something completely different.” Wilhelm’s staff and ministers resorted to manipulation, distraction, and flattery to manage him. “In order to get him to accept an idea you must act as if the idea were his,” the Kaiser’s closest friend, Philipp zu Eulenburg, advised his colleagues, adding, “Don’t forget the sugar.” (In “Fire and Fury,” Michael Wolff writes that to get Trump to take an action his White House staff has to persuade him that “he had thought of it himself.”)
More sinisterly, Wilhelm’s patronage of the aggressive, nationalistic right left him surrounded by ministers who held a collective conviction that a European war was inevitable and even desirable. Alfred von Tirpitz, Germany’s Naval chief—who realized at his first meeting with the Kaiser that he did “not live in the real world”—consciously exploited Wilhelm’s envy and rage in order to extract the astronomical sums required to build a German Navy to rival Britain’s, a project that created an arms race and became an intractable block to peace negotiations.
The Kaiser was susceptible but never truly controllable. He asserted his authority unpredictably, as if to prove he was still in charge, staging rogue interventions into his own advisers’ policies and sacking ministers without warning. “You cannot have the faintest idea what I have prevented,” his most obsequious aide, Bernhard von Bülow, complained to a friend, “and how much of my time I must devote to restoring order where our All Highest Master has created chaos.”
The Kaiser’s darkest secret was that every few years—after his meddling and blunders had exposed his incompetence or resulted in a crisis—he would suffer a full-blown collapse. His entourage would scrape him off the floor, and he would retire to one of his palaces, where, prostrate, he would weep and complain that he’d been victimized. After the moaning came the pacing, in uncharacteristic silence. Occasionally he would give way to tears. Gradually he would recalibrate his sense of reality—or unreality—and after a few weeks would bounce up again, as boisterous and obstreperous as ever.
I spent six years writing my book about Wilhelm and his cousins, King George V, of England, and Tsar Nicholas II, and the Kaiser’s egotism and eccentricity made him by far the most entertaining of the three to write about. After a while, though, living with Wilhelm—as you do when you write about another person over a long period—became onerous. It was dispiriting, even oppressive, to spend so much time around someone who never learned, and never changed.
The Kaiser wasn’t singly responsible for the First World War, but his actions and choices helped to bring it on. If international conflict is around the corner, it would seem that you really don’t want a narcissist in control of a global power. Wilhelm’s touchiness, his unpredictability, his need to be acknowledged: these things struck a chord with elements in Germany, which was in a kind of adolescent spasm—quick to perceive slights, excited by the idea of flexing its muscles, filled with a sense of entitlement. At the same time, Wilhelm’s posturing raised tensions in Europe. His clumsy personal diplomacy created suspicion. His alliance with the vitriolic right and his slavish admiration for the Army inched the country closer and closer to war. Once the war was actually upon him, the government and military effectively swept the Kaiser aside. And the gravest damage occurred only after Wilhelm abdicated, in November of 1918. (He spent the rest of his life—he survived until 1941—in central Holland.) The defeated Germany sank into years of depression, resentments sharpened, the toxic lie that Germany had been “robbed” of its rightful victory in the war took hold. The rest, as they say, is history.
I’m not suggesting that Trump is about to start the Third World War. But recent foreign developments—the wild swings with North Korea, the ditching of the Iran nuclear deal, the threat of a trade war with China—suggest upheavals that could quickly grow out of American control. Some of Trump’s critics suppose that these escalating crises might cause him to loosen, or even lose, his grip on the Presidency. The real lesson of Kaiser Wilhelm II, however, may be that Trump’s leaving office might not be the end of the problems he may bring on or exacerbate—it may be only the beginning.
Fake German heiress sentenced to 4-12 years behind bars
Jim Mustian May 10, 2019
Fake German heiress sentenced to 4 to 12 years behind bars.
NEW YORK (AP) — Anna Sorokin, the German con artist who passed herself off as a wealthy heiress to swindle banks, hotels and even close friends as she lived out a high-society, Instagram-ready fantasy in New York, was sentenced Thursday to four to 12 years in prison.
The 28-year-old, who had played with her own tabloid image during the trial by wearing stylish dresses to court, looked despondent as the verdict was announced. She pressed her hand to her face and squeezed her eyes shut, appearing to hold back tears.
Judge Diane Kiesel said Sorokin had been “blinded by the glitter and glamour of New York City” as she turned to fraud to finance a life she could never afford. But the judge turned down a request by Sorokin’s lawyers to sentence her to the time she has already spent in jail awaiting trial.
“I am stunned by the depth of the defendant’s deception,” Kiesel said, adding that she hoped to send a message to Sorokin’s internet following “that her behavior is unacceptable.”
“Certainly she didn’t think about the people she scammed,” the judge added.
The sentencing capped a spectacular case that drew international attention and tabloid headlines. Netflix and HBO are both working on shows based on Sorokin’s audacious efforts to finagle her way into the Manhattan socialite scene.
She was convicted last month on multiple counts of larceny and theft and has been in custody since her October 2017 arrest— time behind bars that will be credited toward her sentence. The judge also ordered Sorokin to pay nearly $200,000 in restitution and a $24,000 fine.
U.S. Immigrations and Customs Enforcement said it will seek to deport Sorokin to Germany following her release from state prison.
Moments before she was sentenced, Sorokin briefly addressed the court, saying, “I apologize for the mistakes I made.”
Her defense attorney, Todd Spodek, told a gaggle of reporters that Sorokin was “holding up OK.” He described the prison sentence as “expected” but said Sorokin will pursue an appeal.
“She’s a tough woman,” Spodek said, noting she has been at Rikers Island for more than 500 days.
Sorokin forged a new identity — Anna Delvey — and defrauded financial institutions and Manhattan celebrities into believing she had a fortune of $67 million (60 million euros) overseas that could cover her jet-setting lifestyle , high-end clothing and lavish hotel stays. She falsely claimed her father was a diplomat or an oil baron and falsified bank records. In fact, her father told New York magazine he’s a former trucker who runs a heating-and-cooling business.
Her ruse included an application for a $22 million loan to fund a private arts club, complete with exhibitions, installations and pop-up shops, prosecutors said. She was denied that loan but persuaded one bank to lend her $100,000 that she failed to repay.
In all, prosecutors accused her of stealing some $275,000, including a $35,400 bill she failed to pay for a plane she chartered to and from the Berkshire Hathaway shareholders meeting in Omaha, Nebraska. She went to great lengths to ensure others paid her way, even as she had “not a cent to her name, as far as we can determine,” prosecutor Catherine McCaw said following Sorokin’s arrest.
“An ordinary person would just take coach,” McCaw told Kiesel at Thursday’s hearing. “The defendant did not want an ordinary life, and she was willing to steal in order to get that.”
The jury convicted Sorokin of four counts of theft of services, three counts of grand larceny and one count of attempted grand larceny.
Jurors acquitted her of two counts, including an allegation that she promised a friend an all-expenses paid trip to Morocco and then stuck her with the $62,000 bill. She was also found not guilty of one of the most serious charges in the indictment: attempting to steal more than $1 million from City National Bank.
Spodek argued that Sorokin had been “buying time” and always intended to settle her debts. He portrayed her as an ambitious entrepreneur and said she lacked criminal intent.
McCaw rejected that characterization, saying Sorokin showed “almost no remorse” throughout the proceedings. The prosecutor said Sorokin seemed to revel at the plight of her victims and showed more concern for her attire than the emotions of those she hurt.
Charlie Munger: Trump is not primarily responsible for US economic success
Max Zahn with Andy Serwer,Yahoo Finance May 9, 2019
Charlie Munger joins Influencers with Andy Serwer
President Donald Trump is not primarily responsible for U.S. economic success, says Charlie Munger, the right-hand man of Berkshire Hathaway CEO Warren Buffett.
“I think [Trump] deserves some credit, but a lot of it just happened,” says Munger, 95, in his first interview after the Berkshire Hathaway Shareholders Meeting.
The U.S. has been awash with positive economic news in recent weeks.
Last month, the Bureau of Economic Analysis reported first quarter GDP growth of 3.2%, which far exceeded expectations. Meanwhile a jobs report released last week found the economy added 263,000 jobs in April, dropping the unemployment rate to 3.6%, its lowest level since 1969.
Munger, a Republican, said the strong economic performance resulted largely from the natural economic cycle and the decisions of Trump’s predecessors in the White House.
Munger made the remarks to Editor-in-Chief Andy Serwer in a conversation that airs on Yahoo Finance on Thursday at 5 p.m. EST in an episode of “Influencers with Andy Serwer,” a weekly interview series with leaders in business, politics, and entertainment.
Munger call U.S. healthcare system a ‘national disgrace,’ economic success thanks to Trump predecessors
Berkshire Hathaway Vice Chairman Charlie Munger sits down with Yahoo Finance for a wide ranging interview with Editor-in-Chief Andy Serwer, saying that the US economic success has nothing to do with Trump. He also said that Democrats hate Trump ‘so much that they’re against him even when he’s right.’ Munger went on to call America’s healthcare system a ‘national disgrace.’
Since 1978, Munger has served as vice chairman at Berkshire Hathaway alongside Buffett. The two met 20 years earlier through a mutual contact in Omaha, Nebraska, where both were born and currently live. Berkshire Hathaway is the fourth-largest public company in the world, yielding Buffett a net worth of $83.1 billion and Munger one of $1.7 billion.
Berkshire Hathaway owns over 60 companies, like Geico and Dairy Queen, plus minority stakes in Apple, Coca-Cola, among others.
Berkshire Hathaway Chairman and CEO Warren Buffett, left, and Vice Chairman Charlie Munger, briefly chat with reporters Friday, May 3, 2019, one day before Berkshire Hathaway’s annual shareholders meeting. (AP Photo/Nati Harnik)
‘Presidents have always done this’
In his interview with Yahoo Finance, Munger dismissed criticism of Trump’s efforts to pressure Federal Reserve Chairman Jerome Powell on interest rates.
“I think presidents have always done this,” Munger says. (Indeed, past presidents including Richard Nixon, George H.W. Bush, and Lyndon Johnson tried to influence the Fed.)
But Munger sharply rebuked Trump’s policy goals at the Fed, arguing that a push to keep benchmark interest rates low will ultimately backfire.
“If you’re a politician in a democracy, of course you want people to print money and spend it,” Munger says. “And of course, it’s not a good idea.”
“There comes a point when printing money is counterproductive,” he adds.
Decade in the Red: Trump Tax Figures Show Over $1 Billion in Business Losses
Newly obtained tax information reveals that from 1985 to 1994, Donald J. Trump’s businesses were in far bleaker condition than was previously known.
By Russ Buettner and Susanne Craig May 7, 2019
Donald J. Trump in 1986, during a tumultuous period of his career marked by acquisition and collapse.Ted Thai/The LIFE Picture Collection, via Getty Images.
Times Investigation
By the time his master-of-the-universe memoir “Trump: The Art of the Deal” hit bookstores in 1987, Donald J. Trump was already in deep financial distress, losing tens of millions of dollars on troubled business deals, according to previously unrevealed figures from his federal income tax returns.
Mr. Trump was propelled to the presidency, in part, by a self-spun narrative of business success and of setbacks triumphantly overcome. He has attributed his first run of reversals and bankruptcies to the recession that took hold in 1990. But 10 years of tax information obtained by The New York Times paints a different, and far bleaker, picture of his deal-making abilities and financial condition.
The data — printouts from Mr. Trump’s official Internal Revenue Service tax transcripts, with the figures from his federal tax form, the 1040, for the years 1985 to 1994 — represents the fullest and most detailed look to date at the president’s taxes, information he has kept from public view. Though the information does not cover the tax years at the center of an escalating battle between the Trump administration and Congress, it traces the most tumultuous chapter in a long business career — an era of fevered acquisition and spectacular collapse.
The numbers show that in 1985, Mr. Trump reported losses of $46.1 million from his core businesses — largely casinos, hotels and retail space in apartment buildings. They continued to lose money every year, totaling $1.17 billion in losses for the decade.
In fact, year after year, Mr. Trump appears to have lost more money than nearly any other individual American taxpayer, The Times found when it compared his results with detailed information the I.R.S. compiles on an annual sampling of high-income earners. His core business losses in 1990 and 1991 — more than $250 million each year — were more than double those of the nearest taxpayers in the I.R.S. information for those years.
Over all, Mr. Trump lost so much money that he was able to avoid paying income taxes for eight of the 10 years. It is not known whether the I.R.S. later required changes after audits.
Since the 2016 presidential campaign, journalists at The Times and elsewhere have been trying to piece together Mr. Trump’s complex and concealed finances. While The Times did not obtain the president’s actual tax returns, it received the information contained in the returns from someone who had legal access to it. The Times was then able to find matching results in the I.R.S. information on top earners — a publicly available database that each year comprises a one-third sampling of those taxpayers, with identifying details removed. It also confirmed significant findings using other public documents, along with confidential Trump family tax and financial records from the newspaper’s 2018 investigation into the origin of the president’s wealth.
The White House’s response to the new findings has shifted over time.
Trump Engaged in Suspect Tax Schemes as He Reaped Riches From His Father
Several weeks ago, a senior official issued a statement saying: “The president got massive depreciation and tax shelter because of large-scale construction and subsidized developments. That is why the president has always scoffed at the tax system and said you need to change the tax laws. You can make a large income and not have to pay large amount of taxes.”
On Saturday, after further inquiries from The Times, a lawyer for the president, Charles J. Harder, wrote that the tax information was “demonstrably false,” and that the paper’s statements “about the president’s tax returns and business from 30 years ago are highly inaccurate.” He cited no specific errors, but on Tuesday added that “I.R.S. transcripts, particularly before the days of electronic filing, are notoriously inaccurate” and “would not be able to provide a reasonable picture of any taxpayer’s return.”
Mark J. Mazur, a former director of research, analysis and statistics at the I.R.S., said that, far from being considered unreliable, data used to create such transcripts had undergone quality control for decades and had been used to analyze economic trends and set national policy. In addition, I.R.S. auditors often refer to the transcripts as “handy” summaries of tax returns, said Mr. Mazur, now director of the nonpartisan Urban-Brookings Tax Policy Center in Washington.
In fact, the source of The Times’s newly obtained information was able to provide several years of unpublished tax figures from the president’s father, the builder Fred C. Trump. They matched up precisely with Fred Trump’s actual returns, which had been obtained by The Times in the earlier investigation.
Mr. Trump built a business licensing his name, became a television celebrity and ran for the White House by branding himself a self-made billionaire. “There is no one my age who has accomplished more,” he told Newsweek in 1987, adding that the ultimate scoreboard was “the unfortunate, obvious one: money.” Yet over the years, the actual extent of his wealth has been the subject of much doubt and debate. He broke with four decades of precedent in refusing to release any of his tax returns as a presidential candidate, and until now only a few pages of his returns have become public. Last year’s Times investigation found that he had received at least $413 million in 2018 dollars from his father.
The new tax information does not answer questions raised by House Democrats in their pursuit of the last six years of Mr. Trump’s tax returns — about his recent business dealings and possible foreign sources of financing and influence. Nor does it offer a fundamentally new narrative of his picaresque career.
But in the granular detail of tax results, it gives a precise accounting of the president’s financial failures and of the constantly shifting focus that would characterize his decades in business. In contrast to his father’s stable and profitable empire of rental apartments in Brooklyn and Queens, Mr. Trump’s primary sources of income changed year after year, from big stock earnings, to a single year of more than $67.1 million in salary, to a mysterious $52.9 million windfall in interest income. But always, those gains were overwhelmed by losses on his casinos and other projects.
The new information also suggests that Mr. Trump’s 1990 collapse might have struck several years earlier if not for his brief side career posing as a corporate raider. From 1986 through 1988, while his core businesses languished under increasingly unsupportable debt, Mr. Trump made millions of dollars in the stock market by suggesting that he was about to take over companies. But the figures show that he lost most, if not all, of those gains after investors stopped taking his takeover talk seriously.
In Washington, the struggle over access to Mr. Trump’s tax returns and other financial information has sharpened in recent days, amid partisan warfare over the findings in the Mueller report. On Monday, the Treasury secretary, Steven Mnuchin, said he would not deliver the tax returns to the Ways and Means Committee. And after vowing that “we’re fighting all the subpoenas” from House Democrats, the president has filed lawsuits against his banks and accounting firm to prevent them from turning over tax returns and other financial records.
In New York, the attorney general’s office is investigating the financing of several major Trump Organization projects; Deutsche Bank has already begun turning over documents. The state attorney general is also examining issues raised last year by The Times’s investigation, which revealed that much of the money Mr. Trump had received from his father came from his participation in dubious tax schemes, including instances of outright fraud.
The first of the two previous glimpses of the president’s tax returns came from his 1995 filings, pages of which were anonymously mailed to The Times in 2016. They showed that Mr. Trump had declared losses of $915.7 million, giving him a tax deduction so substantial that it could have allowed him to legally avoid paying federal income taxes on hundreds of millions of dollars of income for almost two decades. Several months later, the journalist David Cay Johnston was mailed pages of Mr. Trump’s 2005 returns, which showed that by then he had significant sources of income and was paying taxes.
THE ART OF LOSING MONEY
Mr. Trump spent $365 million in 1989 to buy a shuttle operation from Eastern Airlines. It never turned a profit.Don Hogan Charles/The New York Times.
The year was 1985, and Mr. Trump appeared to be on top of the world.
He was still riding high from the completion of his first few projects — the Grand Hyatt Hotel, Trump Tower and another Manhattan apartment building, and one Atlantic City casino. He also owned the New Jersey Generals of the United States Football League.
As the year played out, he borrowed hundreds of millions of dollars to fuel a wave of purchases, acquiring a second casino ($351.8 million), a Manhattan hotel ($80 million), the Mar-a-Lago property in Florida ($10 million), a New York hospital he intended to replace with an apartment building ($60 million) and an undeveloped expanse of railroad yards on the West Side of Manhattan ($85 million), where he planned to construct an entire neighborhood, including a 150-story tower envisioned as the world’s tallest.
For the first time, Forbes’s ranking of the wealthiest Americans listed Mr. Trump individually, independent of his father — with an estimated net worth of $600 million that included the real estate empire Fred Trump still owned.
“What I have done is build the most beautiful buildings in the best locations,” Donald Trump told the magazine.
But what the newly revealed tax information makes clear is that, with his vast debt and other expenses on those properties, Mr. Trump’s fortunes were already on the way down.
His yearly carrying costs on the rail yards would rise to $18.7 million. He would not be able to convert Mar-a-Lago into a moneymaking club for another decade. The apartments on the hospital site would not be ready for sale, as Trump Palace, until 1990, and another residential project would be stalled for years. The football league would soon fold.
Because his businesses were generally created as partnerships, the companies themselves did not pay federal income taxes. Instead their results wound up on Mr. Trump’s personal ledger.
Beyond the $46.1 million loss that his core businesses logged in 1985, Mr. Trump’s tax information shows that he carried over $5.6 million in losses from prior years. The I.R.S. data on one-third of high-income tax returns that year lists only three taxpayers with greater losses.
In his letter, Mr. Harder, the president’s lawyer, took issue with comparing the tax returns of “a real estate developer to the returns of all taxpayers.” But most of the high-income taxpayers appeared, like Mr. Trump, to be business owners who received what is known as pass-through income. (That data does not include businesses, like most large corporations, that pay their taxes directly.)
The next years were a time of continued empire building. The information also documents, year by year, a time of gathering loss. Here is how it added up.
In 1986, he bought out his partners in Trump Tower and the Trump Plaza Hotel and Casino. He bought an apartment building in West Palm Beach for $43 million. His business losses for the year: $68.7 million.
A Deal Maker in Financial Distress
Every year from 1985 through 1994, Donald J. Trump reported a negative adjusted gross income on his tax returns. That number grew as new losses were combined with those from prior years. The New York Times previously found that Mr. Trump declared an adjusted gross income in 1995 of negative $915.7 million.
1987: “I don’t do it for the money. I’ve got enough, much more than I’ll ever need.”
1988: “If the world goes to hell in a handbasket, I won’t lose a dollar.”
1990: “It’s been good financially.”
Rich Harris and Andrew Rossback/The New York Times
About two weeks before the stock market crash of Oct. 19, 1987, he spent $29 million on a 282-foot yacht. Months later he bought the Plaza Hotel for $407 million. He recorded $42.2 million in core business losses for 1987, and $30.4 million for 1988.
In 1989, he bought a shuttle operation from Eastern Airlines for $365 million. It never made a profit, and Mr. Trump would soon pump in more than $7 million a month of his dwindling cash to keep it airborne, New Jersey casino regulators, who closely monitored his finances in those years, found.
Mr. Trump’s business losses that year soared to $181.7 million.
Then came the Trump Taj Mahal Hotel and Casino, which opened in April 1990 saddled with more than $800 million in debt, most at very high interest rates. It did not generate enough revenue to cover that debt, and sucked revenue from his other casinos, Trump’s Castle and Trump Plaza, pulling them deep into the red.
As a result, 1990 and 1991 represented the worst years of the period reviewed by The Times, with combined losses of $517.6 million. And over the next three years, as Mr. Trump turned over properties to his lenders to stave off bankruptcy, his core businesses lost an additional $286.9 million.
The 10-year total: $1.17 billion in losses.
Mr. Trump was able to lose all that money without facing the usual consequences — such as a steep drop in his standard of living — in part because most of it belonged to others, to the banks and bond investors who had supplied the cash to fuel his acquisitions. And as The Times’s earlier investigation showed, Mr. Trump secretly leaned on his father’s wealth to continue living like a winner and to stage a comeback.
This is not to say that Mr. Trump never made money on a deal. One that turned out quite well came in 1985, when he bought the Hotel St. Moritz in Manhattan for $73.7 million. Mr. Trump has said he sold it for $180 million in 1989. His tax information showed long-term capital gains of $99.8 million, accounting for the vast majority of such gains in the 10 years reviewed by The Times.
But that rich payday was overwhelmed by his business losses, and Mr. Trump still paid no federal income taxes that year.
Some fraction of that ocean of red ink represented depreciation on Mr. Trump’s real estate. One of the most valuable special benefits in the tax code, depreciation lets owners of commercial real estate write down the cost of their buildings.
“I love depreciation,” Mr. Trump said during a presidential debate in 2016.
In “The Art of the Deal,” Mr. Trump points to one of his Atlantic City casinos to illustrate the magic of depreciation. If the casino’s cost was $400 million, he says, he would be able to depreciate it at a rate of 4 percent a year, allowing him to shelter $16 million in taxable income annually.
But while this example is intended to show the benefits of depreciation, it also demonstrates that depreciation cannot account for the hundreds of millions of dollars in losses Mr. Trump declared on his taxes.
The tax code also lets business owners like Mr. Trump use losses to avoid paying tax on future income — a lucrative deduction intended to help troubled businesses get back on their feet. Mr. Trump’s losses over the years rolled into the $915.7 million free pass from income taxes — known as net operating loss — that appeared on his 1995 returns.
The newly revealed tax information sheds light on how those net operating losses snowballed. By 1991, they had grown to nearly $418 million, accounting for fully 1 percent of all the losses that the I.R.S. reported had been declared by individual taxpayers that year. And the red ink continued to accumulate apace.
Because Mr. Trump reported a negative adjusted gross income in each of the 10 years, he was not allowed to deduct any charitable contributions. So while he has boasted of making large donations at the time, the information obtained by The Times shows no such itemized deductions. Potential deductions could have been carried over to a future year, should Mr. Trump have reported a positive income.
A VULTURE’S APPETITE
Mr. Trump at his home in Greenwich, Conn., in 1987. “There is no one my age who has accomplished more,” he told Newsweek that year.Joe McNally/Getty Images
As losses from his core enterprises mounted, Mr. Trump took on a new public role, trading on his business-titan brand to present himself as a corporate raider. He would acquire shares in a company with borrowed money, suggest publicly that he was contemplating buying enough to become a majority owner, then quietly sell on the resulting rise in the stock price.
The tactic worked for a brief period — earning Mr. Trump millions of dollars in gains — until investors realized that he would not follow through. That much has been known for years. But the tax information obtained by The Times shows that he ultimately lost the bulk of the gains from his four-year trading spree.
The figures do not include an itemization of individual trades. But The Times was able to align the reported total gains with details on trades publicly documented by casino regulators at the time.
As with many things Trump, his adventures in the stock market were more image than substance, helped greatly by news reports quoting anonymous sources said to have knowledge of Mr. Trump’s actions. An occasional quote from an associate — including his stockbroker, Alan C. Greenberg — helped burnish the myth.
“He has an appetite like a Rocky Mountain vulture,” Mr. Greenberg, the legendary chairman of Bear Stearns, told The Wall Street Journal in 1987. “He’d like to own the world.”
In his actions, Mr. Trump was more like a peacock.
An early and profitable gambit came in February 1987, when Mr. Trump started buying stock in the company that owned United Airlines. That April, The Times reported that Mr. Trump was “believed to own 4.9 percent” of United and was “believed to have paid” about $50 a share.
Trump takeover speculation set off a rally in the stock. At the end of the month, Mr. Trump quietly sold nearly all his shares. The next day, The Journal reported that Mr. Trump’s gamble appeared to have netted him $55 million.
It was a gross exaggeration. New Jersey gaming regulators later determined that he had purchased only 2.3 percent of the company and gained $11 million, before interest and commissions.
The same tactic continued to work through 1988. Mr. Trump made a total of $57 million by briefly presenting himself as a takeover threat to, among others, Hilton Hotels, the Gillette razor company and Federated Department Stores, casino regulators found.
In all, from 1986 through 1989, Mr. Trump declared $67.3 million in gains from stocks and other assets bought and sold within one year.
By 1989, investors were less fooled by his moves. That September, he bought a large stake in American Airlines and announced a takeover bid.
“I’m very skeptical of everything this man does,” Andrew Geller, then an airline analyst at Provident National Bank in Philadelphia, told The Associated Press.
Mr. Trump was rebuffed, and the stock price fell sharply. Though at the time his losses were reported to be modest, the new tax return figures show that in 1990, the year he sold his American Airlines stake, Mr. Trump lost $34.9 million on short-term trades, wiping out half his gains from the previous four years.
He appears to have held only one other significant chunk of stock by decade’s close: a 27 percent stake in the Alexander’s department store company.
Mr. Trump had bought those shares for $67.9 million and held on, hoping to gain control of the company’s real estate with a partner. After climbing on the possibility of a takeover, the stock price slid.
Mr. Trump ultimately agreed to turn over that stock and most of his other assets — including the yacht, the Trump Shuttle and his stake in the Grand Hyatt — to his lenders. On the day in 1992 when he gave up the stock, it was trading at about $9 a share — which would represent a loss of $55.5 million.
And with that, Mr. Trump’s days as a market mover were over.
ONE HUGE PAYDAY
Mr. Trump in 1990 at his Taj Mahal casino in Atlantic City, which opened that year with over $800 million in debt.Ángel Franco/The New York Times.
As would be expected for a business owner, the line on Mr. Trump’s tax returns showing regular wages and salary does not represent the bulk of his income. But one year stands out: 1988, when he recorded $67.1 million in salary — 90 percent of his total regular wages for the 10 years.
The figure appears to include a payment he received as part of a deal to buy the unfinished Taj Mahal casino from Merv Griffin, the talk show host turned businessman. Mr. Griffin’s company had agreed to pay Mr. Trump to manage construction of the casino, among other services, and the resolution of a bitter dispute between the two included Mr. Griffin’s company paying Mr. Trump $63 million to buy out that contract.
That windfall contributed to Mr. Trump’s making his biggest income tax payment of the 10 years reviewed by The Times. Even so, his overwhelming business losses meant that he paid only $1.4 million in alternative minimum tax that year.
The only other income tax he was required to pay in those years was $124,344 in 1987, also under the alternative minimum tax, which was created to make sure wealthy people could not avoid all income tax through loopholes and deductions.
AN INTEREST MYSTERY
Mr. Trump with his first wife, Ivana, and household staff at Mar-a-Lago in Florida.Ted Thai/The LIFE Picture Collection, via Getty Images.
One number from Mr. Trump’s tax returns is particularly striking — and particularly hard to explain: the $52.9 million in interest income he reported in 1989.
Mr. Trump reported $460,566 in interest income in 1986. That number grew to $5.5 million the next year, and $11.8 million the next. Then came the outlier 1989.
Taxpayers can receive interest income from a variety of sources, including bonds, bank accounts and mortgages. High-yield bonds, though less common today, were popular with institutional investors in the 1980’s. And to make $52.9 million in interest, for example, Mr. Trump would have had to own roughly $378 million in bonds generating 14 percent a year.
Hard data on most of Mr. Trump’s business life is hard to come by, but public findings from New Jersey casino regulators show no evidence that he owned anything capable of generating close to $52.9 million annually in interest income.
Similarly, there is no such evidence in a 1990 report on Mr. Trump’s financial condition, prepared by an accounting firm he hired at his bankers’ request and based on his most current tax returns and audited financial statements.
Mr. Trump’s interest income fell almost as quickly as it rose: He reported $18.7 million in 1990, and only $3.6 million in 1992.
At his nadir, in the post-recession autumn of 1991, Mr. Trump testified before a congressional task force, calling for changes in the tax code to benefit his industry.
“The real estate business — we’re in an absolute depression,” Mr. Trump told the lawmakers, adding: “I see no sign of any kind of upturn at all. There is no incentive to invest. Everyone is doing badly, everyone.”
Everyone, perhaps, except his father, Fred Trump.
While Donald Trump reported hundreds of millions of dollars in losses for 1990 and 1991, Fred Trump’s returns showed a positive income of $53.9 million, with only one major loss: $15 million invested in his son’s latest apartment project.
Barr Is Wrong: Mueller Was Dead Right on Trump and Obstruction
By Rebecca Roiphe, The Daily Beast May 7, 2019
Special Counsel Robert Mueller is expected to testify before the House Judiciary Committee as early as next week. What will he answer when asked about perhaps his most controversial decision: to decline to reach a conclusion on whether President Trump criminally obstructed justice?
Attorney General Bill Barr and Special Counsel to the President Emmet Flood have made it clear that they consider this a fundamental failure on Mueller’s part. Mueller will likely explain that given the unique position of the president in the American constitutional system, his choice was not only defensible but also necessary.
In a newly revealed letter sent a day after the Mueller Report’s release, Flood argued to Barr that because the decision to charge is a fundamental aspect of a prosecutor’s job, Mueller’s failure to do so constituted a political act, dangerous and inappropriate for the Department of Justice, a body that is supposed to apply the law to fact in an even-handed and nonpartisan way. Barr echoed this argument in the hearing before the Senate last week, claiming that it fell to him to decide whether the evidence in the Mueller Report constituted criminal obstruction of justice. That, he explained, is the one role of prosecutors: to investigate and decide whether to prosecute. Because Mueller supposedly failed in this aspect of his mandate, Barr himself had to fill in.
Flood and Barr are wrong, because they, unlike Mueller, fail to understand that the special counsel’s job is different from that of ordinary prosecutors in a fundamental way. As Mueller explained in his report, the Office of Legal Counsel within DOJ has concluded that a sitting president is immune from criminal prosecution, stating “under our constitutional plan… only the Congress by the formal process of impeachment, and not a court by any process should be accorded the power to interrupt the Presidency or oust an incumbent.” Mueller took this seriously and adapted the normal prosecutorial function to facilitate this constitutional requirement.
The Constitution gives Congress the authority to hold the president accountable by impeaching him for treason, bribery, “high Crimes and Misdemeanors.” Historically, this term has not been limited to or even defined by the penal code. It is a term of art that most historians believe denotes a serious abuse of power. By declining to determine whether or not Trump committed criminal obstruction, Mueller left it to the constitutionally appropriate branch to decide whether the conduct outlined in his report amounted to such an abuse.
But Congress cannot impeach and the American public cannot judge the president’s conduct without an accounting of the facts. So, the question remains, how to ensure that Congress can draw on the service of professional prosecutors to determine the facts necessary to carry out its constitutional obligation?
Our system of government has struggled to answer this question. In 1978, shortly after the Watergate scandal, Congress enacted the Ethics in Government Act, which created a congressional independent counsel whose job it was to investigate crimes by top executive officials. This post was held by Ken Starr, among others. The Supreme Court upheld this law but Congress nonetheless let it sunset amid concerns that the independent counsel was unaccountable to the American people. The special counsel regulations, pursuant to which Mueller was appointed, were a compromise, an effort to enlist an independent prosecutor in uncovering improper acts by top executive officials while maintaining checks on his work through limited oversight by the attorney general.
The special counsel regulations thus provide that an attorney general or his deputy can appoint a special counsel when the department itself has a conflict of interest and when the public interest so requires. The regulations go on to state that the special counsel must comply with DOJ policy and in his judgment, report periodically to the attorney general. As such, a special counsel is insulated from political influence but not unmoored entirely from accountability.
The role of the special counsel is to uncover facts in a neutral way so that the country can have faith in the outcome of the investigation and, if appropriate, Congress can deliberate on whether the evidence constitutes an impeachable offense. Where evidence falls in a gray zone in which prosecutorial judgment must be called upon, a conclusion that the evidence supported criminal obstruction would not bear on Congress’s ultimate work, as the impeachment inquiry is independent of whether a prosecutor deems he has sufficient evidence to prove a crime beyond a reasonable doubt. Nor would it be of any practical moment, as no actual charges could have been brought against the president by virtue of his office. And as Mueller explained, the facts did not allow him to exonerate Trump of obstruction charges. Despite all this, Barr felt the need to weigh in anyway.
No doubt if Mueller had engaged in what OLC called the “unavoidably political act” of rendering judgment on Trump’s criminal obstruction, the president and his allies would have accused Mueller of partisanship, by virtue of his drawing gratuitous conclusions. Pundits and politicians would have echoed Trump’s rhetoric and insisted that Mueller was engaged in a “witch hunt.” By declining to reach a conclusion on obstruction, Mueller managed to avoid such accusations and preserve the legitimacy of his investigation and the DOJ in general without depriving Congress of the information it needed to fulfill its constitutional duty.
Mueller’s understanding of the unique constitutional status of a president as the subject of prosecutorial investigation becomes obvious when we consider his report’s other major finding: the evidence did not establish a criminal conspiracy between the Trump campaign and Russians. That aspect of the investigation looked at many members of the campaign other than the president. And there was no constitutional bar to Mueller’s deciding whether those persons should be prosecuted. But the obstruction question related to the president alone, mandating a different approach.
Instead of following Mueller’s lead in preserving the investigation’s constitutional role, Barr unnecessarily plunged the Department of Justice into a political firestorm by opining on the question of criminal obstruction.
To be sure, by handing over the lightly redacted results of Mueller’s investigation to Congress, Barr served the purpose of the Constitution and special counsel regulations. But, by making his own call on criminal obstruction, Barr made a serious error. These regulations were specifically designed to remove the investigation of high executive officials from political appointees who may have a conflict of interest. Any decision by such appointees would lack credibility. The public would assume they were politically motivated. Barr is precisely such a political actor. His proximity to Trump makes any decision regarding the facts or law of the investigation suspect. By weighing in on an irrelevant point of law, Barr has done much to undermine the purpose of the special counsel and reverse the careful work of Mueller to uphold his mandate and the Constitution itself.
‘Every Day He’s Obstructing Justice.’ Pelosi Issues Impeachment Warning as White House Escalates Fight
Shannon Pettypiece May 7, 2019
Every Day He’s Obstructing Justice. Pelosi Issues Impeachment Warning as White House Escalates Fight
House Speaker Nancy Pelosi warned that the Trump administration’s defiance of subpoenas could be an impeachable offense, even as the top White House lawyer instructed his predecessor not to comply with a subpoena from House Democrats.
White House Counsel Pat Cipollone said in a letter Tuesday to the House Judiciary Committee that President Donald Trump may want to assert executive privilege over the documents the panel is seeking from former counsel Don McGahn.
At the same time, Trump’s Justice Department is pushing back against a separate subpoena from the House Judiciary Committee for the full, unredacted version of Special Counsel Robert Mueller’s report.
Trump and his Republican allies are trying to move past the Mueller probe, with Senate Majority Leader Mitch McConnell calling it “case closed” in a floor speech Tuesday.
But Pelosi made clear that Democrats plan to press their multiple investigations of the president, accusing Trump of “goading” House Democrats into trying to remove him from office.
One of the articles of impeachment against President Richard Nixon was based on ignoring subpoenas from Congress, the speaker said Tuesday during an event at Cornell University.
“That could be part of an impeachable offense” against Trump, Pelosi said. “Every day he’s obstructing justice by saying this one should testify, that one shouldn’t testify.”
The Trump administration has been rebuffing House Democrats’ demands for testimony and documents, with Trump saying last month that “we’re fighting all the subpoenas.”
Questioning McGahn took on additional importance since the former White House counsel provided Mueller a detailed account about Trump’s attempt to have the special counsel removed from his post. The White House gave McGahn permission to speak with Mueller.
The House Judiciary Committee subpoenaed McGahn last month with a Tuesday deadline to comply with the records request. Cipollone told the committee to redirect its subpoena to the White House. His letter said White House acting Chief of Staff Mick Mulvaney instructed McGahn not to hand over the records.
A lawyer for McGahn, William Burck, said he told his client to honor the White House request, unless the committee and Trump administration reach an agreement.
Attorney General William Barr missed a separate deadline on Monday to comply with the Judiciary panel subpoena for the the full Mueller report on Russian election-meddling and the Trump campaign. After committee Chairman Jerrold Nadler scheduled a vote to hold Barr in contempt, the Justice Department agreed to hold further talks Tuesday on the dispute.
The House is justified in seeking the full Mueller report “in order to exercise all of the powers of Congress, including impeachment,” Pelosi said at Cornell.
Pelosi said following “the facts and the law” will lead Congress to the correct action to take in response to Trump’s actions documented in the Mueller report. She said any case against Trump must be built not only in congressional committees, but also in the court of public opinion.
“He is just trying to goad us into impeachment, and wherever you go, I say to my colleagues — whatever it is, be ready,” the California Democrat said.
Why Mnuchin Doesn’t Want You to See Trump’s Tax Returns
Timothy L. O’Brien May 7, 2019
Mnuchin Refuses to Release Trump Tax Returns.
Surprising absolutely no one, U.S. Treasury Secretary Steven Mnuchin thumbed his nose at the House of Representatives on Monday evening and decided not to turn over President Donald Trump’s business and personal tax returns after weeks of saying he just needed a little more time to think about it. In a letter to House Ways and Means Committee Chairman Richard Neal, Mnuchin, citing guidance he received from the Justice Department, said the committee’s request for Trump’s returns “lacks a legitimate legislative purpose” and he was “therefore not authorized” to release them. With that, Mnuchin said he was “informing” Neal that Treasury “may not lawfully fulfill the Committee’s request.”
If it wasn’t clear before, then it is now: Trump’s White House has decided to wage war on the principles of transparency and oversight, arguing in a series of recent confrontations with the law enforcement community and Congress that the executive branch has the authority and independence to decide for itself whether it has to respond to – and even recognize – checks on its power.That muscularity surfaced during Attorney General William Barr’s Senate testimony last week, when he fended off hours of questions about how he oversaw the disclosure and interpretation of Special Counsel Robert Mueller’s report on his Russia-Trump investigation. In response to questions about whether Trump had tried to impede or derail Mueller’s probe, and had therefore obstructed justice, Barr at one point said presidents had the power to upend any federal investigation – and to make up his or her mind whether the underlying reasons for a probe were robust enough for it to continue.
“The president, who has constitutional authority to supervise proceedings – if in fact a proceeding was not well-founded, if it was a groundless proceeding, if it was based on false allegations, the president does not have to sit there, constitutionally, and allow it to run its course,” Barr said.
In short, if the president doesn’t like a federal investigation, even if it’s about him or her, and makes a case that it’s being conducted in bad faith, then they can stop it. (This might recommend all future presidents to take to Twitter, perhaps, to poison public sentiment about any probe involving the Oval Office.) It’s no shock, then, that Barr’s Justice Department gave Mnuchin the legal argument he needed to keep Trump’s tax returns under wraps.
Trump’s private attorneys are on board with these arguments too. In a lawsuit last week that they filed on behalf of Trump, his three eldest children, and his company against Deutsche Bank AG and Capital One Financial Corporation, they argued that neither company should comply with Congressional requests for the Trump family’s financial records because doing so violated the family’s financial privacy and exceeded Congress’s constitutional mandate. And how does the lawsuit define Congress’s mandate? It claims legislators can only legislate and therefore don’t have constitutional authority to engage in oversight or investigations of the presidency. Congress can only take actions that are tied to existing legislation, the lawsuit asserts.
That, of course, is also Mnuchin’s argument. In the language of the Trump family’s lawsuit, none of this is about legislation, it’s all about partisan politics. Investigations of the president, the lawsuit says, are taking place only to “ferret about for any material that might be used to cause him political damage,” and “no grounds exist to establish any purpose other than a political one.” That’s remarkably similar to Barr’s repeated observation about the origins and goals of the Mueller probe, one he emphasized during his press conference on April 18 when he released the report: “The president was frustrated and angered by a sincere belief that the investigation was undermining his presidency, propelled by his political opponents, and fueled by illegal leaks.”
Defining Congressional oversight as legitimate only when it’s tied to legislation helps keep Congress off your back, obviously. But that doesn’t mean it’s the proper definition or that it’s in the broader, non-partisan public interest to define it as such. Effective oversight, as the Constitution’s framers clearly understood, involved separation of powers and checks and balances. Congress is empowered to monitor the presidency, and denying it any supervisory capacity beyond legislation leaves it hamstrung – intentionally.
Trump is the most financially conflicted president of the modern era. Unlike recent predecessors in the Oval Office, he has chosen not to voluntarily release his tax returns. That limits the public’s full understanding of the financial or business pressures that might inform his policy-making, an understanding that is basic to ethical and transparent governing. It’s the kind of situation that calls for aggressive Congressional monitoring. But in the era of Mnuchin, Barr and Trump, this view is unlikely to prevail unless legislators take the battle just as seriously as the White House does.
Post-apartheid South Africa is world’s most unequal country
Cara Anna, Associated Press May 7, 2019
World Bank: Post-apartheid South Africa is world’s most unequal country
JOHANNESBURG (AP) — Perhaps nowhere in today’s South Africa is the country’s inequality on more dramatic display than in the neighboring Johannesburg suburbs of Sandton and Alexandra.
With its gleaming high-rises and lush estates, Sandton is known as Africa’s richest square mile. Alexandra, a onetime home to Nelson Mandela, is a squalid, cramped and crime-infested black township. Many of its residents stream into Sandton every day on a bridge over a highway to work in upscale shops or homes.
Angry protests flared in Alexandra last month, stoked in part by campaigning for Wednesday’s national election but mostly by the frustration that South Africa should look far different than the country of haves and have-nots that it has become. Many voters believe the ruling African National Congress has lost its way since Mandela won the first post-apartheid presidential election in 1994, and that belief threatens the ANC’s absolute majority grip on power.
The ANC has been shaken by widespread allegations of corruption that saw former President Jacob Zuma forced out a year ago, and many South Africans feel the party can no longer coast on its legacy of fighting the brutal system of apartheid.
Unemployment in the country of 56 million people soars past 25%. There are tire-burning protests almost every day over the lack of basic services like working toilets in mostly black neighborhoods. Whites still hold much of the wealth and private levers of power, while blacks trim their lawns and clean their homes.
“We find virtually no whites living below the middle class,” Fazila Farouk and Murray Leibbrandt with the Southern Africa Labor and Development Research Unit wrote last year. “Whites have, in fact, comfortably improved their economic status in post-apartheid South Africa because our economy channels such a big share of national income to the top 10%.”
Half of South Africans are in households with per capita income of 1,149 rand ($90) or less a month, they wrote, with little chance to change their fortunes despite working hard as maids or security guards.
“Put bluntly, they’re stuck,” Farouk and Leibbrandt concluded.
Thembeni Manana, an activist who works with the Greater Alexandra Chamber of Commerce, knows the feeling well, describing the inequality that residents of Alexandra feel when then cross the highway bridge into upscale Sandton.
“The air in Sandton is so fresh, you could swear they have air-cons outside,” Manana said, referring to the air-conditioned high-rises in the wealthy enclave. “When you come back to Alex, yo! A most disgusting smell! A sewer that’s overflowing, rats all over the road.”
The 28-year-old helped coordinate last month’s protests, saying that the challenges in righting the inequality are more than cosmetic, more than huddling through power outages in Alexandra while the Sandton skyline glows, unaffected.
“With us, we decided enough is enough. We want to challenge the system,” she added.
She delivered a rapid-fire list of demands: Schools in Alexandra should have a ratio of 30 children per teacher instead of 70. Street vendors should be allowed to supply grocery store chains, giving them access to the wider economy. Children should be able grow up with both parents in homes that have more than one room, allowing for privacy.
The World Bank says South Africa is the most unequal nation on the planet, a fact that former President F.W. de Klerk, a Nobel Peace Prize winner, called “the deepest national shame.”
It’s cutting criticism by someone who oversaw the end of a system that chilled much of the world by segregating its people by the color of their skin. Current President Cyril Ramaphosa, a Mandela protege, doesn’t shy away from the critique.
“Ours is still a deeply unequal country,” he acknowledged last month in marking 25 years since the end of apartheid .
South Africa’s “disturbing” wealth inequality is even more striking than its income disparity, and it threatens democratic values, according to a committee that explored the idea of a wealth tax. Such a tax might help but likely would not change the social relations that create inequality, said Aroop Chatterjee of the Southern Center for Inequality Studies at the University of the Witwatersrand in Johannesburg.
As Ramaphosa wages war on corruption within an ANC divided into the allies of Zuma, the former president, and those who want reform, public exasperation grows and populist movements simmer .
Grievances like those cited by Manana are not limited to Alexandra but exist in many of South Africa’s black townships, and Wednesday’s election likely will reflect the weariness of asking again and again for change.
While South Africa was famous for its long lines of voters in the first post-apartheid election 25 years ago, the sense of national apathy is an ominous sign for the ANC.
“I think people are just tired of voting,” Manana said.
“They realize the character of the political parties, only out to play during election time,” and then disappear until the next balloting five years later, she said.
