The Big Cheat

How Donald Trump Fleeced America and Enriched Himself and His Family

David Cay Johnston

• Publisher: Simon & Schuster
• Year: 2021
• ISBN:
  9781982178055
• Topic: Politics & International Relations
• Subtopic: Political Biographies
• Index: Politics & International Relations

Pulitzer Prize­–winning reporter and dean of Trumpologists David Cay Johnston reveals years of eye-popping financial misdeeds by Donald Trump and his family. While the world watched Donald Trump's presidency in horror or delight, few noticed that his lifelong grifting quietly continued. Less than forty minutes after taking the oath of office, Trump began turning the White House into a money machine for himself, his family, and his courtiers.More than $1.7 billion flowed into Donald Trump's bank accounts during his four years as president. Foreign governments rented out whole floors of his hotel five blocks from the White House while lobbyists conducted business in the hotel's restaurants. Payday lenders and other trade groups moved their annual conventions to Trump golf resorts. And individual favor seekers joined his private Mar-a-Lago club with its $200, 000 admission fee in hopes of getting a few minutes with the President. Despite earning more than $1 million every day he was in office, Trump left the White House as he arrived—hard up for cash. More than $400 million in debt comes due by 2024, and Trump still lacks the resources to pay it back."Few people are as well positioned to write an exposé of the former president as Johnston" ( The Washington Post ), and The Big Cheat offers a guided tour of how money flowed in and out of Trump's hundreds of enterprises, showing in simple terms how a corrupt president used our government for his benefit, even putting national security at risk. Johnston details the four most recent years of the corruption that has defined the Trump family since 1885 and reveals the costs of Trump's extravagant lifestyle for American taxpayers.

— 1 — Original Lie

Donald Trump’s 2015 announcement that he was running yet again for president began with a nationally televised lie that it seemed no one caught that day. Had it been reported at the time, had it made front-page headlines and the network news broadcasts, this lie might well have turned Trump into a laughingstock. But the lie got lost amid coverage of Trump’s hour-long rant pronouncing the American Dream dead and calling Mexicans rapists and murderers. He got air time to insist that, unlike any other politician in either party, he could fix what ailed America.

It was just the first of tens of thousands of documented lies he told over the next six years as candidate, president, and—to use a term he hates—former president. What I will call Lie One made Trump’s campaign appear to be a popular movement Americans were aching to join. It began late on the morning of June 16. Melania Trump stepped onto a Trump Tower escalator, followed by her husband. Loudspeakers blared “Rockin’ in the Free World,” Neil Young’s angry 1989 protest against the presidency of George H. W. Bush, the epitome of establishment Republicanism.

“I see a woman in the night,” the singer belted out as Melania descended toward the lower lobby, the networks cutting out the lyrics that followed moments later: “she hates her life and what she’s done to it.”

Melania’s tight white dress drew eyes away from the small crowd behind her, partly visible through a low glass partition that prevents people from falling onto the escalator. Television viewers saw the crowd for just a few seconds, but close examination of the images later showed each person had plenty of room, most of them standing only two deep. Many wore white T-shirts pulled over their street clothes, with TRUMP stamped across their chest.

Down on the main floor, Ivanka Trump, in a competing tight white dress, had just finished saying that her father needed no introduction. Then she devoted five minutes to a fanciful list of virtues Trump wasn’t known for, notably hard work and his desire “to make a positive contribution to society.”

Affixed to the podium was a sign that said “TRUMP” in big white letters, and below, in a smaller font, his campaign slogan: “Make America Great Again!”

Soon Trump stood at the podium. He had choreographed every aspect of what television viewers could see, right down to telling journalists where to position their video cameras and lights. At many events he would tell the more docile ones which questions to ask.

Trump stood in front of a row of large, gold-fringed American flags, their crisp red and white stripes neatly angled toward the viewer’s right. He positioned himself between two of the flags so that the stars framed his face in an attempt to make him look heroic.

“Wow. That is some group of people. Thousands,” Trump began, trying to be folksy. He paused. He waited to make sure the live national television audience heard the burst of applause, the first of what would become forty-three rounds of clapping and hollering. He claimed the crowd was bigger than any rival had drawn. This was a lie, but it wasn’t the big lie that day.

One tip-off to the lie was the applause that followed Trump’s assertion, “When Mexico sends its people, they’re not sending their best. They’re not sending you. They’re not sending you. They’re sending people that have lots of problems, and they’re bringing those problems with them. They’re bringing drugs. They’re bringing crime. They’re rapists. And some, I assume, are good people.”

Trump was speaking in liberal Midtown Manhattan, so the applause he got for his description of Mexicans was inexplicable. But that incongruous response to his bigotry didn’t make the network news that night or the major newspapers the following day. Instead, some, such as ABC News, focused on a remark that Trump wanted them to highlight: “Sadly the American dream is dead. But if I get elected president I will bring it back, bigger, and better, and stronger than ever before.” Instead of scrutinizing the audience reaction, the New York Times focused on how Trump’s gaudy lifestyle would play in Iowa. The paper didn’t even directly quote his bigoted remarks on Mexicans, dryly noting that “he vowed to build a ‘great wall’ on the Mexican border to keep out rapists and other criminals, who he said were sneaking into the United States in droves.”

But the next day an entertainment industry trade publication, the Hollywood Reporter, exposed the lie behind the crowd’s 43 rounds of applause. The seemingly enraptured Trump supporters were actors and extras taking advantage of a chance to make some quick and easy money.

Extra Mile, a New York casting company that hires people to populate the background in movies and television programs, had sent out an email seeking performers to salt a June 16 event “in support of Donald Trump.”

“We are looking to cast people for the event to wear t-shirts and carry signs and help cheer him in support of his announcement. We understand this is not a traditional ‘background job,’ but we believe acting comes in all forms and this is inclusive of that school of thought.” The acting job was to last less than three hours. “The rate for this is: $50 CASH at the end of the event.”

Corey Lewandowski was Trump’s campaign manager in 2015. He denied paying anyone to attend the event. That, too, proved to be a lie. We know this because a campaign watchdog organization, the American Democracy Legal Fund, filed a formal complaint that August with the Federal Elections Commission. It is illegal to pay organizations and people for work on a campaign without disclosing who they are and how much they are paid. Seven months after the announcement, the Trump campaign admitted to the elections commission that it had paid Gotham Government Relations a $12,000 fee to recruit the performers, via its subcontractor Extra Mile, who feigned support for him and applauded his racist tirade. Commission staff noted that this long delay in paying and confessing could be prosecuted, but recommended leniency.

This foundational lie, Lie One, of a mass upwelling of popular support was the corrupt seed that grew into mighty crowds at rallies. There Trump found people so angry over their circumstances that they wanted to join his assault on America. These were the millions of Americans left behind economically, especially former factory workers, as new global trade rules allowed big companies to close shop at home and take advantage of cheap labor overseas.

Trump gave aid and comfort to those who feared racial minorities. He turned up the heat on long-simmering tensions between white Americans who feared that they or their descendants would become the new minority and those who embraced diversity and immigration. Those Trump attracted wanted people of color, women, and minorities to know their places as second-class citizens. In supporting Trump they found a way to express the desire of many to Make America White Again.

Among the many other lies told during the announcement of his candidacy, was one that people should embrace Trump because he was a self-made billionaire. Ivanka said in her lengthy introduction to the man who needed no introduction, “Throughout his career my father has been repeatedly called upon by local and federal government to step in and save long-stalled, grossly over-budget public projects.” These were, in fact, projects he got paid for and which, in the case of Wollman ice skating rink in Central Park, he falsely told vendors he was rebuilding pro bono so they would not charge him for their work or only charge costs.

Trump’s story that he was “really rich” held appeal even for many people who disliked, even detested him. They bought into his claim that his net worth was in the billions of dollars. During his announcement that he was running for president, Trump put a number on it: $8,737,540,000.

Days later he would claim that his net worth was much more, greater than $10 billion. That, too, was a lie, as Trump’s financial disclosures after he became president would show. Assuming those disclosure statements were trustworthy, and using the threshold of $50 million for assets he said were worth that much or more, his net worth when he entered the White House was about a tenth of his highest claim. Both Bloomberg and Forbes, which run competing indexes of billionaires, put his net worth at a few billion, acknowledging that many of his properties were difficult, if not impossible, to value. Much of this wealth was the assumed value of the Trump name, a method of valuation similar to that used by luxury brands like Fairmont Hotels, Dolce & Gabbana, and Tiffany.

Claiming to possess great riches and showing signs suggestive of them, such as his personal jet, were critical to fulfilling his long-sought desire to commandeer our federal government and then squeeze every opportunity to put taxpayer money into his enterprises. And, of course, he wanted to get his family, friends, and political allies in on the profiteering as well.

Even news organizations bought into this tall tale of great wealth, routinely referring to Trump as a billionaire or multibillionaire, even though there has never been verifiable evidence that he is worth even $1 billion. Trump is certainly a rich man, but the best evidence comes from my former New York Times colleague Tim O’Brien. Trump let O’Brien examine his tax returns and other financial documents. O’Brien put Trump’s fortune in 2015 at a few hundreds of millions of dollars. Even that assumes he doesn’t have significant hidden liabilities.

The myth of the modern Midas started with the remaking of the once-grand Commodore Hotel next to Grand Central Terminal in Midtown Manhattan. The derelict hotel fell into the hands of the Trump family in the 1970s, when Fred Trump, Donald’s father, arranged through his outer-borough political connections to rebuild the hotel into a high-end Hyatt.

In late 1977, Abe Beame was the lame-duck mayor of New York. Beame was also a longtime ally of Fred Trump, who had put money into his campaigns for years. Fred called Beame, saying he needed his help, and the mayor agreed to a meeting.

Beame called his advance man, Jonny Messer, into his office. Messer, six years younger than Donald Trump, had grown up down the street from the Trump home. He was among those familiar with Donald’s boyhood bullying including throwing little rocks at a baby in a playpen next door to Fred and Mary Trump’s home.

“Freddie’s coming to see me and I may need you to get the schmuck out of the room,” Beame said, referring to Donald, who was 29 years old at the time. “Freddie’s bringing Donald with him and because of that, if I just need to talk to Freddie privately, I’m going to ask you to take Donald out for a walk.”

When the Trumps arrived, Messer went outside to greet them and bring them to the mayor’s office. “Jonny Messer, look at you all grown up in a suit and tie,” Fred snarked, while his surly son said, “[Epithet deleted], what are you doing here?”

Fred explained to the mayor that he wanted to revise the Commodore Hotel deal to make it Donald’s first big project. Beame threw his hands into the air, saying he doubted he could do anything about that. After all, he had only two of 22 votes on the city’s Board of Estimate, which controlled city contracts, making it the center of power in New York City.

According to Messer, Donald bolted out of his chair, leaned across the desk, and jabbed the 71-year-old mayor with his index finger, shouting, “You are going to do what my father wants you to do.” Fred grabbed his son and pulled him away from the mayor, who was a foot shorter.

The mayor and Fred Trump continued talking about the project until Donald jumped out of his chair a second time and again leaned across the desk and jabbed the mayor. At this point, Beame turned to his aide and said, “Jonny, take him for a walk.”

Messer sized up Donald and decided he needed backup. “Push the blue button,” Messer said to Beame, referring to one of three buttons under the mayor’s desk. One summoned his secretary, another Messer; the blue one alerted the two cops seated just outside the mayor’s office.

The cops, one tall and lean and the other short and heavy, stepped in. “Take him for a walk and lock him in a closet,” Messer recalled Beame saying.

When Donald resisted, the officers put the ends of their batons under his armpits to prod him out of his chair and then muscled him into the hall and outside, Messer trailing. They forced Trump into his father’s waiting limousine, then ordered the driver to give them the keys, which one of the cops tossed to Messer.

Donald got out of the car and started walking. “Where you going?” one of the cops asked. Donald touched his pockets and realized he had no money on him. “Here, take the subway,” said one of the cops, tossing him a quarter, half the subway fare at the time.

Donald eventually returned to the mayor’s office, where his father ordered him to apologize. “Donald mumbled something I couldn’t make out,” Messer recalled.

Trump was similarly threatening later to lawyer Richard Ravitch, then chairman of the New York State Development Corporation, over his demands for a Commodore Hotel tax exemption, which eventually cost the city more than $410 million. “If you don’t give me a tax abatement, I’m going to have you fired,” Ravitch recalled Trump saying.

Eventually, the project went ahead as Donald’s, though his father’s backing and influence made the financing possible. Beame issued an order in his last weeks in office: “Whatever Mr. Trump wants in this town he gets.” Donald got a property tax abatement for four decades, boasting later that had he asked for 50 years he would have gotten it, such was his power to make golden deals and avoid taxes.

In this story of how the Trump saga began, we can see Donald’s arrogance and his belief that rules don’t apply to him. He set out to turn his run for the White House into a profit-making enterprise, to make his brand more valuable so he could get more for licensing his name. And if he had to lie and cheat along the way, none of that would be new for Donald Trump.

— 2 — Jobs Mirage

A month after his Electoral College victory in 2016, Donald Trump called a press conference to demonstrate that he would make good on his frequent campaign promise of economic and job growth the likes of which America had never seen.

It was an event filled with good news. However, it also had a secret purpose that would not emerge for years, a purpose that proved lucrative for Trump, bad for jobs, and came with the added risk of a new kind of explosive modern horror, as we shall see.

Six weeks before the election Trump spoke at the New York Economic Club, telling the members about “a plan for American economic revival. And it’s a bold and ambitious and forward-looking plan to massively increase jobs, wages, income and opportunities for the people of our country—the great people of our country.” But his speech offered barely an outline, let alone a plan. It had few details. The key specifics he did promise mostly disappeared when his tax-cut bill was signed into law in 2017.

Trump’s promise was something that millions of Americans desperately wanted to hear. Decades of economic woes weighed people down even as television celebrated the rise of a superrich class with mansions, personal jets, and yachts the length of a football field. Corporate loyalty to workers was gone. No one had job tenure, a fact reinforced by Trump’s signature line, “You’re fired.” The disappearance of good-paying manufacturing jobs, coupled with rising debt and middle-of-the-night anxiety from knowing that one unexpected health crisis could mean bankruptcy had soured many people on the established order. Federal Reserve data showed that the net worth of the typical middle-income family with children headed by an adult age 35 or younger had shrunk so much that it was a smaller in 2016 than in 1986.

Trump promised economic growth of 4, 5, even 6 percent a year, figures no one else was talking about. In this century America’s gross domestic product (GDP) has grown by mo...

Table of contents

• Cover
• Title Page
• Dedication
• Introduction
• Chapter 1: Original Lie
• Chapter 2: Jobs Mirage
• Chapter 3: Charity Doghouse
• Chapter 4: Off the Books
• Chapter 5: Collecting Tribute
• Chapter 6: Don’t Ask, Don’t Know
• Chapter 7: Conflicts of Interest
• Chapter 8: Tax Scam
• Chapter 9: Polishing Apple
• Chapter 10: The Koch Papers
• Chapter 11: Wall Scam
• Chapter 12: Opportunity Knocks
• Chapter 13: Dangerous Favors
• Chapter 14: Expensive Juice
• Chapter 15: The Shipping News
• Chapter 16: Russian Money Man
• Chapter 17: Promises, Promises
• Chapter 18: Family First
• Chapter 19: After Trump
• Acknowledgments
• About the Author
• Notes
• Index
• Copyright