Lucky Loser: A deep dive into the myths of Donald Trump's fortunes

Lucky Loser: How Donald Trump Squandered his Father's Fortune and Created the Illusion of Success

Authors: Russ Buettner and Susanne Craig

Publisher:  Penguin

Pages: 517  

Price: Rs 999

  This book was published in September, three months ahead of the US presidential polls, presumably to reveal to voters the dangers of returning Donald Trump to the White House. Since the American people, with ample experience of Trump’s toxic first term, chose to vote him back, the deluge of bad publicity from the liberal establishment, this book included,  didn’t work. That reality does not detract from the fact that Lucky Loser is a very good book. By scrutinising Trump’s business and tax returns over decades, Russ Buettner and Susanne Craig offer forensic proof that the man who will be sworn in as the 47th president of the United States is little more than a duplicitous chancer.

 

Buettner and Craig are Pulitzer Prize-winning investigative reporters at the New York Times who have been reporting on Donald Trump’s businesses and personal finances since 2016. Some of the stories of his failures in running casinos and golf courses and stunning $915,729,293 losses on his income tax returns in 1995 had made headlines at the height of his first presidential campaign. With this book, the authors comprehensively disprove “Donald Trump’s lifelong claim that his father gave him nothing more than a ‘small’ $1 million loan.”

 

On the contrary, as their investigations revealed, Trump was the quintessential Trust Fund kid, financing his high rolling lifestyle and early business ventures through money that his low-key billionaire father, Fred Trump, sequestered in a trust fund for his five children. In Buettner and Craig’s telling, Donald Trump is, in fact, a terrible businessman, choosing investments on a whim and so chronically unable to soberly assess business potential that he almost never made money on any of his marque ventures. Each time he failed it was his father’s fortune and political contacts that bailed him out – sometimes illegally.

 

This exploration of Trump’s extraordinary ability to thrive — the “lucky loser” —after serial failures is a thought-provoking account that reveals how credulous bankers and business partners were taken in by the media’s amplifying role in building up Trump’s self-promoting myths. The press gave him an extraordinarily easy pass. Forbes, which put him on the millionaires’ list when Buettner and Craig showed that he emphatically wasn’t one, the New York Times and other respected media groups and such breathless TV programmes as  Lifestyles of the Rich and Famous regularly proffered flattering profiles and quotes. Early in his career, Trump used the alias “John Baron” as a spokesman or to tip off reporters. When one reporter investigated and wrote a story proving that Baron was, in fact, a Trump masquerade, no media outlet chose to pick it up. By the time the press caught on to his many duplicities, the bankrupt Trump was reinventing himself as a reality TV star. Here, again, the image of the sober, reasoned businessman carefully crafted by producers of the hit show The Apprentice, earned him millions in merchandising and endorsement deals.  

 

Trump’s father was a shrewd first-generation German immigrant who benefitted from government programmes to address housing shortages during the Great Depression and World War II. Fred Trump’s tight control on costs and innovative hands-on management – he is said to have devised the “assembly line” method of mass housing construction – ensured that his projects were profitable.

 

During World War II, the FHA incentivised the construction of rental apartments near factories and military bases by offering low interest loans that would cover 90 per cent of the estimated construction cost. 

 

The loophole here, which Fred Trump exploited to the hilt, was that the new law did not require developers to document how much they had spent or pay back any portion of the mortgage not spent on construction. That allowed builders to inflate costs and pocket large amounts of cash while building vast building complexes. These practices were later questioned by federal authorities but the politically well-connected Fred escaped the consequences. By the end of the war, Fred Trump had built more than 14,000 apartments and was a very rich man. The post-war housing shortages brought more bonanzas in the form of government guaranteed loans at even lower interest rates and relaxed mortgage limits. That enabled Fred Trump to build enormous rental properties that became the basis of his cash flows which he padded out by setting up wholly-owned companies that supplied materials to these projects at a premium.  Later, he transferred the land on which these properties stood to his five children, a transaction that attracted gift tax rather than the higher income tax, and then paid them annual rental incomes. This, rather than any claimed business acumen, was the basis of Donald Trump’s wealth.

 

The authors acknowledge that Donald Trump wielded an “extraordinary charisma” that prompted his father to designate him his successor over his two older brothers. The oldest, Freddy, was an alcoholic but Fred never considered his second son the sober, accomplished Robert or well-educated daughter Maryanne, who became a federal judge. Instead, Donald, who falsely claimed he had graduated with honours from Wharton, became the chosen one.

 

Like his father, Trump benefited from an economic downturn. In the seventies, he obtained a significant tax abatement to renovate the storied Commodore Hotel in Manhattan. Lacking the expertise to develop a project of this size, he partnered with the Pritzker family of Hyatt group to renovate and operate it as a 1,400 room hotel (the partnership deteriorated and the Pritzkers bought out Trump’s stake in the hotel in 1996). This was one of his few successful projects, but it was built on the back of his father’s funds and political connections in persuading the city to hand over the property to an untried developer. When his signature Taj Mahal casino, which he saddled with high-interest debt, was threatened with closure for failing to pay taxes, it was Fred who made good on the amount, simply buying millions of dollars’ worth of betting chips to pump in the cash – an illegal procedure that somehow escaped scrutiny.

 

The authors frequently express wonder at Fred’s non-judgemental and unstinting support for a son so notably unlike him. Where he reputedly collected fallen nails from his construction sites to minimise waste, his son blew money on jets, yachts and an airline service – all confiscated by banks when he reneged on loans. Where his father rarely announced projects without tying up the finance, the son boasted of fantastical projects without a dime or approvals in place. He boasted to the media about a fantastical project called Television City along the Hudson River, which was to 8,000 apartments and condominiums, some 3 million square feet of television and movie studio space, and some 2 million square feet of “prestigious” stores, plus the world’s tallest building. Nothing ever came of it.

 

Though Buettner and Craig track the minutiae of financial statements, tax returns, business plans and local government policy, they have managed to write a compelling page turner that takes you inside the fraudulent, chaotic and toxic world that is Donald Trump Inc. They may not have reckoned that a lucky loser would become a lucky winner.