Cover Story

President Trump? 'I'm Very Serious'


More than anything else, Donald Trump wants you to know that he is rich.

"Look, the news is that I'm much richer than everyone thinks," Trump says, possibly for the 11th time in one afternoon. "I'm worth more than $7 billion, with hundreds of millions in cash. That's after paying off mortgages, after buying airplanes … "

Trump thrives on an audience and a foil, and today, inside his Trump World Tower offices in New York City, he has both. He's sitting behind his desk, stacked with magazines and newspaper clippings about himself, discussing his proto-Presidential campaign whose sudden momentum seems to have surprised even him. His longtime chief financial officer, Allen Weisselberg, hovers nearby with a bunch of papers: a list of assets as of June 30, 2010, and a blue-bound report by the accounting firm WeiserMazars. "Each line's a different asset," Trump murmurs, running his finger down one of the pages, which lists categories such as residential properties, commercial properties, clubs, real estate licensing deals, and the Miss Universe Pageant, plus around $245 million in cash and equivalents. Then the papers are whisked away. "Most people think I'm worth two billion. They don't know." He adds, "You know, I don't even have mortgages." It turns out that he has at least one: Documents on file with the city of New York indicate there is a $160 million mortgage on 40 Wall Street, which Trump borrowed $10 million to buy in 1996.

Trump has spent years trying to bulldoze the world into believing that he is worth a great deal more than independent analyses have confirmed. He wants the doubters and the haters and the petty critics and the other real estate people to know that not only could he do a better job than President Obama—that, if he were in charge, he would kick China's and Saudi Arabia's butts and have jobs flowing back into the U.S. within months—but that he's been goddamn successful at business.

Throughout his career's wild ups and downs, the value of Trump's holdings has been estimated anywhere from negative $295 million in 1990 (according to data released that year by the New Jersey Casino Control Commission), to $150 million to $250 million (Timothy L. O'Brien in The New York Times in 2005), to $2.7 billion (the latest Forbes ranking). Trump is so obsessed with the public perception of his wealth that he sued O'Brien for defamation in 2006, charging him with damaging his reputation and costing him business opportunities by low-balling his net worth. (He requested $5 billion in damages; the suit was later dismissed.)

Several observers—from veteran pollster Frank Luntz to House Majority Leader Eric Cantor (R-Va.) and longtime Trump friend Larry King—believe he will never actually run for office because, per King, "It's just not Donald," or because it would require that he make public his tax returns. Trump insists that isn't a factor: "I wouldn't mind doing it because I have a great company," he says, "very little leverage, lots of cash and tremendous assets." He's toyed with the notion before, having contemplated a run as a Reform Party candidate in 1999 before pulling out a few weeks after the GOP Iowa Caucus. The final test will be if he formally files with the Federal Election Commission.

"You can call up the banks," Trump continues, tapping his finger on the page. "This is cash. This isn't bulls--t, this isn't, like, ribbons. This is cash."

A woman pops her head into the room. "Senator D'Amato … " she says.

Trump grabs the phone. "Senator Alfooonse! How're you?

"Another poll just came out! I'm doin' well, huh?" Trump oozes into the handset. "Absolutely. Go ahead. You know I know what I'm doing. Hey, did you see the poll? Go ahead … Let me tell ya, Al, I'm having fun. Have you seen the polls, Al? I'm No. 1. In the worst poll I'm No. 2 …

"I have a lot of cash … " he says. "Hey Al, they came in with a building last week, a building I wanted for two years, and I said, 'Who gives a f--k?' … Right? Who cares? No, I see what you're talking about. What did Koch say? No, he's come a long way. I like the guy. Even though he sort of f--ked me.

"I'm going to the Washington correspondents' dinner. That's going to be bedlam. You'll love that one … I love you. Thanks, Senator!"

Trump hangs up the phone. "He said, 'I've never seen anything like this in my life,' " he says. " 'Everybody thinks you're gonna win.' "


Here are a few things we know about Donald Trump: He likes to brag; he's an excellent salesman and a master brander, having put his name on condos, golf clubs, watches, chocolate, ties, and dozens of other products available for purchase at Macy's and elsewhere; he exaggerates as a strategic tool and a birthright. He has learned over time that if he says something often enough and is willing to ignore evidence to the contrary, eventually people will stop bothering to challenge him on matters ranging from his net worth to unsubstantiated claims about President Obama's citizenship—and, that if they do, he can brush them aside and bluff onward, making him the perfect avatar of the truthiness age.

For the past few weeks, he has been impossible to avoid, which is the way he likes it, for just as a shark needs to move, Donald Trump needs attention. And nothing—not splashing his name on buildings, dumping older wives for younger ones, writing books, starring in a hit TV show, The Apprentice, and decades of general ostentation, bluster, and outrageousness—has whipped up the kind of frenzy that his sudden coming-out as a birther and potential Republican Presidential candidate has. "Right now, if I wanted to make three calls, I could do all three networks live within twenty minutes," Trump says. "I mean, it's CRAZY what's going on."

What might have started out as a stunt to gin up ratings as his show grinds through its 11th season has led to a drumbeat of press suggesting that Trump might be semi-serious. As several polls came out putting Trump even or ahead of Mitt Romney, a familiar sense of intoxication washed over the popularizer of the phrase "You're Fired!" Suddenly, people were calling Trump, soliciting his thoughts on world peace and the global economy: What do you think about Libya, Mr. Trump? What are you going to do, Mr. Trump? "I'm very serious," Trump says repeatedly of his pre-campaign. The season finale of The Apprentice is on May 22; he promises a decision shortly thereafter.

So far, Trump has spoken to at least five Republican strategists in his search for political advice, including Tony Fabrizio and John McLaughlin. (Fabrizio, who recently worked with former Minnesota governor Tim Pawlenty and Florida governor Rick Scott, ultimately declined to work with Trump; McLaughlin has counseled many members of Congress as well as former Presidential candidates Steve Forbes and Fred Thompson.) Trump has also laid plans for appearances in key states such as New Hampshire and Nevada, which he planned to visit on Apr. 27 and 28, South Carolina on May 19, and Iowa in June. "He's a known commodity. You've got to think beyond the man to the larger brand," says Kellyanne Conway, a Republican pollster with whom Trump has also had talks. "He just seems to be able to say things and do things that no one else can." But, she adds, "My vote is, don't beat Obama on where he was born, beat him on where he's taken this country."

That Trump is being seriously considered by anyone as a candidate for President is due to a unique confluence of circumstances. Some of it is luck and timing. The Republican Party is struggling for a strong establishment candidate. Thus far, Democrats appear united, and President Obama's fundraising advantage and campaign machinery is formidable. "For the establishment Republicans, it must feel like a game of Whac-A-Mole," wrote the political forecaster Nate Silver on his FiveThirtyEight blog.

Trump offers an antidote to uncertainty. He has spent three decades cranking out best-sellers, making film and TV cameos, and insisting on the supremacy of his guts and acumen with a force that often belies the evidence. The result is that, in many minds, he has become a stand-in for American business at its most audacious. "At this point, Donald Trump is every bit as well-known as Barack Obama," says Roger Stone, a GOP operative and Trump's unofficial campaign chief. "Getting well-known in America is much harder than people think. Just ask Tim Pawlenty." Whether he'll actually run or not is a secret he's keeping to himself, but like fellow television personalities Sarah Palin and Mike Huckabee, the will-he-or-won't-he tension doesn't appear to be hurting the brand.

Trump's adventure has not charmed the core of the party he's flirting with. Trafficking in the birther issue is seen by all but the outer fringe as a waste of time. "This is a mistake and it will marginalize him," Karl Rove told Bill O'Reilly on Fox News (NWS) on Mar. 30. "Barack Obama wants Republicans to fall into this trap because he knows it discredits us with the vast majority of the American people." On Apr. 22, Obama faxed a letter requesting that the Hawaii Health Dept. send him copies of his "original certificate of live birth," which the White House posted online. "We are not going to be able to solve our problems if we get distracted by sideshows and carnival barkers," Obama said during a press conference afterwards. "We do not have time to discuss this."

Trump was more than happy to take credit for the whole thing. "I'm very proud of what I've been able to accomplish," Trump says, on the phone from New Hampshire. "It shows that I can get things done better than anybody else."

Trump is vague on the subject of how he would accomplish his other political objectives. Asked, for example, to elaborate on his February announcement that he had changed his position on abortion, he says: "Well, my policy on abortion is that I'm pro-life."

Does that mean that a person should go to jail for having an abortion? "I would study that," Trump replies. "You have to understand, these are not questions that have ever been asked of me, until the last week! Okay? When I'm building a building some place, contractors don't come in and say, 'Are you pro-life? Or are you pro-choice?' "

Would he raise taxes on the highest earners to help reduce the deficit? "Do you know what solves this problem better than anything?" Trump says. "A good economy." As for how he'd make that happen: "You can't reveal your hand, like in poker. It'll be easy, it'll be quick. But I don't want to go around saying how I'm going to win."

What about making cuts to Medicare, as House Republicans have recently proposed? "I don't want to do anything that's going to in any way inconvenience or disturb our senior citizens, which are the lifeblood of this country," Trump says. "I think that the Republican plan—they got too far out in front. I like Paul Ryan, but he really is not playing a good hand at poker right now."

Surely he's thought about illegal immigration, which affects the construction business? "It's a very complex problem. And I have some very good ideas which I'm going to make public over the next four or five weeks," he says. "I can't do it now."

Few Presidential candidates lay out specific policies 18 months before Election Day. Trump, though, thinks policy is kind of beside the point. "Isn't this more about business, like, what a great job I've done in business?" he says. "'Cause I've made a lot of money!"


Trump's father, Fred C. Trump, was a descendant of the Drumpf family of Germany, who amassed an empire of residential buildings for the middle class in Brooklyn and Queens. Donald split the bulk of his father's estimated $250 million estate with his brother, Robert, and two sisters, Elizabeth, and Maryanne, a U.S. District Court judge. Donald's take came out to around $35 million, according to O'Brien's book, TrumpNation: The Art of Being The Donald. His first real estate experience came from working alongside his dad, before he moved into Manhattan in 1971 and started doing his own deals. He became famous in the 1980s for turning New York's Commodore Hotel into the gleaming Grand Hyatt (H) New York, and for buying the Plaza Hotel and building casinos in Atlantic City. He married Ivana Zelnicek, a model and competitive skier from Czechoslovakia, in 1977, and had three kids: Donald Jr., Ivanka, and Eric. He later ditched Ivana for Marla Maples, with whom he had a daughter, Tiffany, in 1993. They completed their divorce in 1999. He married his current wife, Melania, in 2005, and they have one son, Barron.

By the late 1980s, after a building boom and then a real estate crash, Trump's business was in trouble. According to an article that appeared in The Wall Street Journal in December 1990, he owed $2 billion to various banks, $800 million of which was personally guaranteed; his three casinos were soon to enter bankruptcy, and he was in default on loans secured by his Trump Shuttle airline, which went out of business in 1992. In a deposition taken by Trump in his defamation suit against O'Brien, Trump described 1990 as "probably the worst year in my history."

What followed was the selling off of many of his prized assets, including the Plaza, and the morphing of his business into one that specialized more in branding buildings—where, in exchange for an up-front fee and a percentage of sales, Trump licenses his name to developments, creating Trump franchises—as opposed to actually owning them. "Donald's done something that nobody else did in our business," says Richard S. LeFrak, a third-generation New York real estate developer and friend of Trump's. "There are many of us who build a lot of buildings. He created a brand."

While acknowledging how successful he's been at selling a lifestyle, some developers don't count Trump as one of their own. "Believe it or not, he is not a big-time player here," says Adam Leitman Bailey, whose real estate law firm is involved in litigation over one of Trump's licensed projects, the Trump Soho Hotel Condominium. "Count how many properties he actually owns in New York. Very few."

According to a list of assets that he was willing to share, Trump owns the top three floors, the roof, and commercial and office space at Trump Tower, a high-rise occupying a prime spot on Fifth Avenue next to Tiffany's (TIF), among his actual real estate holdings in New York. He also lists NikeTown on 57th Street; 40 Wall Street downtown; 30 percent of 1290 Avenue of the Americas; five commercial shopping areas around Manhattan; and portions of a handful of other buildings, including apartments at Trump Park Avenue, the roof and a garage inside Trump World Tower, and some unsold apartments inside 100 Central Park South. Then there are eight golf clubs around the country and another course under construction on 1,400 acres of land on the northeast coast of Scotland; Trump's lavish 20-acre Mar-a-Lago beach club in Palm Beach; and a handful of other properties, such as a 30 percent stake in the Bank of America (BAC) building in San Francisco and the 800-acre Kluge Estate Winery and Vineyard in Virginia which he bought at auction in April for $6 million. (He plans to make Trump wine, naturally, and keep Patricia Kluge, ex-wife of media mogul John Kluge, on board.)

It's a nice portfolio, but the development-licensing and branding business is the heart of his empire, and a lucrative one, even if it has created a number of embarrassing headaches. Of the fifty or so projects that Trump lists as active around the world, several are in crisis: In the case of Trump SoHo, a hotel-condominium in downtown Manhattan, a group of buyers sued the developers for allegedly inflating the percentage of units that they said had been sold when marketing them. Sales at the Trump International Hotel and Tower in Chicago slumped during the recession, leading Trump into litigation with his lenders. According to court documents, Trump tried to postpone paying back a $40 million construction loan that he had personally guaranteed by arguing that the economic downturn triggered the "force majeure" act-of-god clause in the lending agreement. The projected Trump International Hotel and Tower in Fort Lauderdale, a Trump licensing deal, became the subject of two class-action lawsuits by buyers, and the developers defaulted on a $139 million loan; Trump says he has since terminated his licensing agreement with the project. "The market crashed, like it did for a lot of other people," Trump says. "My name is on many successful deals."

As Trump grew into a branding machine, he became increasingly obsessive about perceptions of how much money he had. According to two editors who worked for several years on the Forbes 400 list, he campaigned and petitioned the list-makers relentlessly, sending dozens of newspaper articles in which he was mentioned, always circling them with black marker. Meanwhile, the editors said, they could barely get most of their other 399 subjects to return their calls.

In 2006, Forbes's Stephane Fitch wrote an article explaining the methodology behind the magazine's 2006 estimate for Trump's net worth, which came to $2.9 billion. It valued Trump's condo licensing business at $562 million, which the magazine described as "conservative"; it estimated the golf courses to be worth $127 million, and his stake in the casino company at $171 million. All of that, combined with his other properties, added up to the $2.9 billion number, which Trump still found unsatisfactory.

What truly enraged him, though, was the much lower estimate that O'Brien used in his book, and in an excerpt that was printed in The New York Times in 2006. In the deposition given by Trump in the suit he filed against O'Brien, Trump was asked whether he has ever "not been truthful" in his public representations of his properties: "My net worth fluctuates, and it goes up and down with markets and with attitudes and with feelings, even my own feelings, but I try," he responded. When lawyers asked him whether he had ever exaggerated when describing what he owned and was worth to the press, Trump said: "I think everybody does. Who wouldn't?" When a lawyer asked, "Have you ever lied in public statements about your properties?" Trump replied: "When you're making a public statement, you want to put the most positive—you want to say it the most positive way possible. I'm no different from a politician running for office."


One of the first events the nascent Trump 2012 team arranged for its maybe-candidate, an April speech staged by the South Florida Tea Party, was a study in the challenges any Republican will face in winning over the conservative electorate. Several thousand people had converged on a downtown Boca Raton park on a steamy afternoon, after organizers projected that only a few hundred would show up. The police presence was heavy; mothers with toddlers, old ladies with lap dogs, and young men waited anxiously on the scrubby lawn for their headliner to appear. There was a smattering of yellow "Don't Tread on Me" signs. Up on stage, someone was singing This Land Is Your Land, which was being vigorously translated into sign language. "Obama's in office committing crimes every day, and I can't jaywalk?" screamed a woman strolling by with her mortified teenaged son.

Suddenly a bustling, almost panicky wave spread through the group of large, slick-haired men who constituted Trump's advance team, the center of which was occupied by Stone—the GOP operative famous for his colorful sayings ("Politics with me isn't theater. It's performance art. Sometimes, for its own sake"), whom Trump has employed as a lobbyist for more than 25 years. "I think he has the stature and the education and the requisite toughness to be President," Stone says. "They didn't take Reagan seriously, either."

Minutes later, Trump tumbled out of a limousine in a navy suit and a pink silk tie, looking a bit stunned, his dark eyes sunk deeply into his face, which had been the target of too much direct sunlight of late. He was ushered through a narrow doorway to awaiting interviewers from conservative media outlets. Moments before he took the stage, James Brown's Living in America blasted from the speakers, followed by Trump's introduction as "a guy with a pretty good hairdo."

What followed was a Sarah Palin-caliber performance, with Trump delivering a disquisition peppered with political quips, macho talk, and good old-fashioned fear mongering. "The United States has become the laughingstock and a whipping post to the rest of the world," he began. "I've said on numerous occasions that countries like China, India, South Korea, Mexico, the OPEC nations, and many others view our leaders as weak and ineffective and we have repeatedly, unfortunately, been taken advantage of to the tune of hundreds of billions of dollars a year. We have to take our country back." The crowd cheered.

China is stealing our jobs. Abu Dhabi and Qatar have gleaming new airports while LaGuardia is a pit. The Somali pirates are humiliating us. "I'd like to cover just a few topics very quickly so you know where I stand on different issues," Trump continued. "I am pro-life," he said to great applause. "I am against gun control," he added, to more screams. When he said, "I will fight and get rid of ObamaCare," the roar from the audience was deafening.

He was only interested in invading Libya or Iraq if we keep the oil afterwards; "to the victor belonged the spoils … " As for immigration: "You come from Europe, you come from Latin America, you come from different places, you graduate with master's degrees, you're gonna put people to work, you can't come into this country," Trump said. "But sadly, if you're a criminal, a sex offender, a rapist, a murderer or, quite frankly, somebody who has never ever achieved anything, and you're able to cross the borders, you stay in our country in some cases with benefits and never leave! What is going on?" Not only might Obama not be a U.S. citizen, Trump added, "he had lousy marks in school and he got into Harvard on a scholarship! Explain that one." The crowd was ecstatic.

Later, the chairman of the South Florida Tea Party, Everett Wilkinson, said that Trump was by far the No. 1 person his group's members had wanted to see. A Mitt Romney supporter had even called him to try to arrange for Romney to appear at the event as well, but it didn't work out. "Mitt I see less as a real business guy, I see him more as a Wall Street guy, a slick guy," Wilkinson says. "I don't think Mitt Romney would have drawn more than a couple hundred people at best."

Back in his limo after a masterful performance, Trump's hair finally revealed itself, in all its abstract glory: It is something of a miracle, a golden web that emanates from just above his left ear and curls over the top of his head, a meringue in a zero-gravity chamber. He aimed his good side toward the window full of clamoring hands and flashbulbs. "How did you like that, Matt?" Trump asked the broad-shouldered fellow in the passenger seat, Matthew F. Calamari, chief operating officer of the Trump Organization. "Great job," Matt replied without turning around. Trump rolled the window down as the car pulled away. "Iowa," he said to Stone, through the cracked window. "Iowa," Stone replied.

Leaning back in his seat, Trump admitted that he was having a wonderful time. A single bead of sweat trickled down the side of his face—a sign, perhaps, that he possesses the superhuman fortitude to rant and rail in the sun for hours on end, the essence of campaigning. At the same time, he said, he'd be walking away from a "wonderful life" and a hit TV show if he ran. "My company is very, very successful," he said, out of nowhere. "We're very, very liquid and in very little debt. And frankly, you know, I can do what I want to do."

Does that mean that he would finance his own campaign? "I would start by putting in a large amount of cash, which I'll announce if I decide to run," he said. "And then after that I'd want people to invest in my campaign. I want people to feel invested."

As usual he was bursting with ideas about how he hoped to tackle the world's ills as the future leader of the free world, although he wasn't eager to share specifics. Such as in the case of the Israeli-Palestinian conflict: "I don't really want to go into it for this article," Trump said. "I really believe that if the right person were in office I think something could be worked out that would make everybody happy, and that is the ultimate deal because that is a tough one." He allowed that he thinks he'd "get along great" with Vladimir Putin, the Prime Minister of Russia.

Suddenly, Trump stiffened with excitement. "See the trees?" he said, pointing out the window at the lush grounds of the Trump International Golf Club in West Palm Beach, which were glistening green as we passed by in the car. "Look at this piece of property. Matt, do I have any partners?"

"No. No," Matt said.

"Do I have a mortgage?"

"No," Matt said.

"If you wanted to do a story on my finances," Trump said, "I would let you do that because my finances are great."

Kolhatkar_190
Kolhatkar is a features editor and national correspondent for Bloomberg Businessweek. Follow her on Twitter @Sheelahk.

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