On a June night in 1990, bunches of grey fog clung1 to the faux-minarets of the Trump Taj Mahal casino, Donald’s third, and biggest, casino, then the tallest tower in Atlantic City. The Taj featured seventy onion-shaped domes, nine stone elephants, staff that wore ostrich feathers, and a 135,000-square-foot betting floor.2 The casino had opened in April in a sea of chaos: the Taj’s managers didn’t know how much cash they had on hand, and some of the slot machines had to be shut down because they weren’t working. Trump went on the Larry King Show to claim that these slot machines “blew apart” from demand.3
Despite the troubles, or perhaps because of them, Trump arrived that June night for a forty-fourth birthday party to promote his new casino. Police officials in Atlantic City had watched anxiously as Donald Trump’s helicopter landed in the fog, but there were no problems. At the ceremony, a huge model of the Trump Shuttle—Trump’s newly acquired airline—rolled onto the stage, past other large models of Trump’s mini-empire of Atlantic City casinos: the Trump Taj Mahal, the Trump Castle, the Trump Plaza. The door of the “Trump Shuttle” opened and out stepped Robin Leach, host of the 1980s hit television show Lifestyles of the Rich and Famous, and the borscht-belt comedian Freddie Roman. “Don’t count him out,” Leach said, of Trump. “He’s the very best there is. Made a career out of doing what people said couldn’t be done.” Comedian Joe Piscopo took the stage, singing “Happy Birthday” to Trump, Frank-Sinatra style. There was a President George H. W. Bush impersonator, a marimba line, and chorus-line dancers in skin-tight outfits singing about Donald Trump’s money. Confetti dropped from the ceiling ducts. The middle-class crowd, lots of older men with younger women, clapped wildly. There was a video clip about Trump, which ended with an image of him holding a check. Then the real Donald Trump appeared on the dais, flashing a victory signal, accompanied by two women in gold lamé dresses.
The Trump Organization had invited the entertainment press to witness all of this, issuing large yellow plastic-encased press credentials. But one reporter—a tall man with a mustache and a long forehead and shaggy brown hair—was not allowed in: the Village Voice’s Wayne Barrett. Dogged and irascible, Barrett had been covering Trump for over a decade by this time. Sometimes, Barrett spoke to students wearing a trench coat and a fedora, calling himself “the people’s detective.” He dug up documents, worked sources, described the levers of power that Trump had pulled to make his deals. While Barrett was investigating the Commodore’s forty-year tax abatement, a state employee tipped off Trump that Barrett was at the headquarters of the state agency, examining documents. Trump called Barrett, and offered an interview. During their conversations, Trump, who had done some investigating of his own, learned Barrett lived in a shabby apartment in Brownsville, Brooklyn. “Wayne,” Trump told him, “You don’t have to live in Brownsville. I have plenty of apartments.” When Barrett’s questions got harder, Trump told him about a reporter he’d ruined, by suing him.4
By 1990, a decade’s worth of Trump reporting behind him, Barrett was barred from the Taj Mahal birthday party event. A hotel executive read from a card that said, “Wayne Barrett is banned for life.” Lurking at the door, Barrett saw Fred Trump and other family members depart. When Donald left for the after-party, Barrett approached, but Trump’s bodyguards surrounded him and shoved him aside. Barrett was promptly detained by off-duty Atlantic City cops working as Trump security guards, his notes fished out of his pocket, his tape recorder briefly confiscated. Then Barrett was taken to a real police station, where other police officers, who also had work as part-time Trump security guards, handcuffed him to a wall in a blood-stained holding cell, and charged him with “defiant trespass.”
A little over a week later, Trump’s casino empire started to unravel.
New Jersey had passed a referendum in 1976 allowing for legalized gambling. Not long after, Trump began to think about building there. In New Jersey, Trump wasn’t the son of Fred, the outer-borough apartment guy. Donald Trump was a flashy New York developer. His sister was first a federal prosecutor, then a judge. Her husband, John Barry, was a well-connected New Jersey lawyer. “What they saw was a very self-assured young man,” a former Trump associate told Barrett, referring to the New Jersey officials who regulated gambling and real estate development. “He obviously showed he came from a family. It was like dealing with a Vanderbilt.”5 Trump represented New York, and to New Jersey, New York was always going to be an object of desire.
By contrast, Michael Checchio of the Press of Atlantic City described the city this way: “Since the dawn of casino gambling in Atlantic City, organized crime has been entrenched. Before the hotels and gaming halls went up, the mobsters were here. They were dabbling in real estate. They were buying bars and transferring liquor licenses. They were distributing cigarettes to vending machines throughout the Atlantic City area and setting up cleaning companies and laundries that could handle future casino contracts.” The casinos are free of organized crime, Checchio wrote, but “the periphery is under invasion.”6
This was the environment Donald Trump entered around 1980, driving down to Atlantic City, taking in a Frank Sinatra concert, strolling on the Boardwalk later that night, laying his eyes on a desirable parcel of land.7 Around this time New Jersey regulators were signaling they were serious about barring casino operators with potential mob ties. They’d indicated that business partners, too, were subject to vetting, and at one point prevented the Hilton Hotel chain from opening a business in Atlantic City because one of the Hilton lawyers had also worked for Mafia figures in Chicago.8 Trump had a similar liability, because his own lawyer, Roy Cohn, was working for several New York mob figures. When Trump got to Atlantic City, he made additional problematic connections.
Some of the land Donald Trump coveted belonged partly to Kenneth Shapiro and Daniel Sullivan, who journalist Timothy O’Brien described in his book TrumpNation as, respectively, “a street-level gangster with close ties to the Philadelphia mob” and “a Mafia associate, FBI informant, and labor negotiator.”9 Sullivan was a six-foot-five former truck driver who had been arrested on weapons and assault charges and been incarcerated for larceny.10 Trump drew him close: according to Sullivan, Trump asked him to handle the problem with the underpaid, undocumented Polish immigrants working on Trump Tower, and to serve as a “labor consultant” for his newly renamed Grand Hyatt hotel on Forty-Second Street in Manhattan.11
In Atlantic City, this could have posed a problem for casino regulators. Since Trump was negotiating a lease deal with Sullivan, that made Sullivan subject to the state’s licensing requirements. So, Trump pulled off a neat trick: he met with two FBI agents who knew Sullivan “to express his reservations about building a casino in Atlantic City,” as described in a memo written by the agents in a form called a 302.12 “TRUMP advised Agents that he had read in the press media and had heard from various acquaintances that Organized Crime elements were known to operate in Atlantic City.” Trump, under the guise of inquiring how to fight the mob, brought up his Mafia associate with the FBI. Then he told the casino regulators in New Jersey that Sullivan had introduced him to the FBI, so everything must be okay.
The agents were taken aback at this. “Writer and Case Agent have repeatedly told TRUMP that they were not references for source and cannot speak for source’s business dealings. The TRUMPs have advised writer and Case Agent that source is involved as a labor consultant to their firm. They are aware that this is a very rough business and that source knows people some of whom may be unsavory by the simple nature of the business.”
But Trump’s trick worked. The New Jersey Division of Gaming Enforcement issued a report laying out a trail of troubling information about Sullivan, including a meeting with a labor lawyer in 1966, after which the lawyer disappeared “and neither he nor his body were ever located.” But the DGE relied on Trump’s representations that “he had been in contact with a law enforcement agency in New York regarding Sullivan and that he had obtained no derogatory information.” It concluded: “During the course the Division’s investigation, it has ascertained that the matters related herein do not impact in a negative manner upon the credentials of Trump.”13
For a long time, Trump continued to nurture his relationship with both Sullivan, the “Mafia informant,” and Walt Stowe, one of the FBI agents who’d handled Sullivan’s case. Stowe later told the Washington Post that Trump had invited him to play golf and took him to lunch at the 21 Club in his chauffeur-driven limousine. Trump even raised the idea of hiring Stowe. “Here I am, like I said, I’m 31 years old or so, and I can see people looking all around to see who is this guy having lunch with Donald,” Stowe said. Being associated with Trump could help an FBI agent on the way up. He “was a guy who knew people,” Stowe said.14
For the next decade, and even after his crash, Donald Trump continued to operate with regulatory favor, continued to build connections to local officials, both insignificant and important. In October 1980, in a rendezvous arranged by lobbyist Louise Sunshine, Trump met with New Jersey Governor Brendan Byrne, who sat atop all the New Jersey regulatory structures. Byrne told Wayne Barrett he was insulated from the regulatory process, and viewed the visit as “a courtesy call.” Afterwards, Sunshine went shopping with Byrne for a present for his wife’s birthday.15
Trump hired the local fixers, too, the lawyers who had grown up across the street from the city commissioners who would be making key decisions about his casinos, like decorated veteran Patrick “Piano Wire” McGahn, so nicknamed because he was reputed to have used a piano wire as a weapon against his enemies in hand-to-hand combat in the Korean War.16 McGahn, the son of an Atlantic City saloonkeeper, was a South Jersey Democratic Party leader with an outsize personality and a reputation for getting things done—for the right people. McGahn was “Paddy” to friends, and soon, to Donald Trump. At one point, when purchasing land for a Trump casino from a particularly blatant mob associate, McGahn had the parcel transferred to his secretary’s name, before turning it over to Donald Trump.
Trump had another in with New Jersey politicians: Roger Stone. After the 1980 Reagan campaign, Stone had offered his political consulting services to Tom Kean, the patrician politician made famous by his advertisements, “New Jersey and you, perfect together,” pronounced “puh-fect,” in blue-blood New Jerseyese. Rare is the politician who doesn’t burn a special candle for the consultant who helped them win their first significant political victory, just as a dying patient venerates the surgeon who saves their life. Those consultants’ opinions always carry a little extra weight; their calls get returned extra fast. Roger Stone understood he could introduce business associates to politicians he’d worked for, and influence their decisions. Trump understood this, too. They struck up a relationship.
In 1980, Stone had co-founded a corporation in the state of Virginia—a lobbying firm: Black, Manafort, and Stone. Charles Black had been a long-time political strategist and advisor to Reagan’s campaigns going back to 1976. Paul Manafort Jr., the son of a Connecticut builder and local politician, had transformed himself into a smooth Washington operative. As Franklin Foer wrote in the Atlantic: “Whereas other firms had operated in specialized niches—lobbying, consulting, public relations—Black, Manafort and Stone bundled all those services under one roof, a deceptively simple move that would eventually help transform Washington.”17 They worked for politicians during the campaign season, performing their political strategists’ magic. In the off-season, they worked for business clients who paid them to call the very politicians they’d helped elect.
This was Stone’s relationship with Kean: he helped him get elected, and reelected, and could call him about anything. Even if Kean were perfectly—puhfectly—upright in all of his transactions with Stone, Stone’s proximity to Kean was a selling point. Especially to Donald Trump.
In 1983, Stone helped the Trump family in a different way: he and Roy Cohn both recommended to the White House that Trump’s sister, Maryanne Trump Barry, be named a federal judge in New Jersey. There was then, as now, a paucity of women judges, and so for Kean, picking a young woman prosecutor was a deft political move. But Trump Barry was an assistant United States attorney in those days, a position which rarely led straight to a federal judgeship. The American Bar Association gave her a tepid rating of “qualified.” She told Trump biographer Gwenda Blair: “There’s no question Donald helped me get on the bench. . . . I was good, but not that good.”18
Trump continued to charm the regulators. On one occasion some years later, as Matt Katz of WNYC has reported, Trump flew by helicopter to Trenton to take then-State Attorney General David Samson—the man ultimately in charge of casinos—out to a steak lunch. Days later, Trump sent a thank-you note to Samson that included a picture of Trump’s then-girlfriend.19 Trump showed up at every regulatory hearing, even if it was only a staff hearing, in person.20 He took local council members to dinner.
There was something else. Legislators from New York and New Jersey would regularly hit the casinos, where they were comped with all manner of freebies.21 But their every transaction was recorded and memorialized for regulators, and was caught by the unblinking eyes of the video cameras placed around the casinos. In an interview, one former New Jersey legislator said he was warned to be careful about activities he didn’t want anyone to know about. He was told, “never do it within sixty miles of Atlantic City.” The legislator further clarified, “ ‘It’ was not gambling or drinking, ‘it’ was sex.”
By the late 1980s, Trump was a notably large political donor. He made the New York Times as one of a small group of $100,000 donors to the Republican Party.22 He and his father were among the largest donors to the Manhattan district attorney, Robert Morganthau23 (whose favored charity, the Police Athletic League, the Trumps also generously supported.)
Trump had given so much money in campaign contributions that regulators in two states had taken note. For July 1985 through September 1986, the New Jersey Division of Gaming Enforcement tallied the number at $200,000.24 The New York State Commission on Government Integrity called Trump to testify about why he’d been so generous; about what he wanted.
“According to the Board of Elections records that the Commission has examined, you contribute quite heavily to local campaigns?” his examiner asked.
“That’s correct. Yes,” Trump responded.
“In fact, in 1985 alone, your political contributions exceeded $150,000, is that correct?”
Trump suggested his contributions were so large, from so many sources, that he couldn’t keep track. “I really don’t know, I assume that is correct, yes.”
He was asked to identify, from elections records, which “enterprises are either Trump-controlled or have significant Trump interests.” The list was long: “Shore Haven Apartments No. 2, Inc., Shore Haven Apartments No. 6, Inc.”—also Number 3 and Number 1. There was Trump Village Construction Corp., Sussex Hall, and Garnet Hall, Inc.: a vast interlocking network of companies.
“Why,” he was asked, “aren’t these political contributions just made solely in your name?”
“Well,” he replied, “My attorneys basically said that this was a proper way of doing it.”25
As the Reagan era came to an end, Donald and Ivana Trump traveled to the USSR to explore the idea of partnering with the Soviet tourist agency, Intourist, to build and manage a hotel in Moscow. Their trip was arranged by the Soviet ambassadors to the United States and the United Nations. During what would turn out to be the final years of the USSR, Donald and Ivana stayed in the National Hotel, under twenty-four-hour surveillance by the KGB. Within months of his return, counseled by Roger Stone, Trump took out full-page ads in the Boston Globe, New York Times, and Washington Post, calling for the United States to stop spending money to secure Japan and the Persian Gulf.26
Immediately the question came up: Is he running for something? In October 1987, prime test-the-waters time, Trump flew to Portsmouth, New Hampshire, where he was enthusiastically greeted with signs that said “Trump for President.” Trump did not run. George H. W. Bush did.
For New Year’s of 1989, Donald Trump decided to bring both his wife and his girlfriend to Aspen, with his children, Ivanka, Don Jr., and Eric. The day before Don Jr. turned twelve, the family was lunching at the ski resort, when a leggy blue-eyed blonde walked up to Ivana and said, “I’m Marla and I love your husband. Do you?”27 Back in New York, Donald and Ivana Trump carried out a marital dispute via the tabloids.
Then it was spring, in Atlantic City. For a decade Trump’s biggest success had been working his contacts to convince regulators that they should allow him to borrow more and more money. After his first casino, the Trump Plaza, Trump added the Castle, which he picked up from the hotelier Barron Hilton, and the Taj Mahal, which he acquired after a shareholders’ fight that involved the television magnate Merv Griffin. Having three competing businesses on the same strip was unsustainable, but each time Donald Trump asked to expand and borrow, the regulators said Yes. “The Casino Control Commission is like the Catholic Church: you can make all kinds of sins as long as you make confession,” one Trump business associate told Wayne Barrett.28 Some regulators that approved Trump projects were later given judgeships. But Trump’s bankers were starting to look more closely at their loans.
“Donald Trump is driving 100 miles per hour toward a brick wall, and he has no brakes,” a banker told then–Wall Street Journal reporter Neil Barsky while sitting at a poker table. “He is meeting with all the banks right now.”29 Four banks had large Trump exposures. Trump had personally guaranteed $830 million of debt, “which was reckless of him, but even more so for the banks,” as Barsky later wrote. The bankers were furious with Trump. They faced losing tens if not hundreds of millions from their association with him. Trump, divorcing his wife—and trying desperately to keep his finances from her, the tabloids, and the bankers—was facing insolvency, and, worse, for Trump, ignominy.
He tried to stave it off. At one point, Barksy reported, Fred Trump sent an attorney to buy $3.5 million worth of gambling chips at one of Trump’s casinos and then leave, essentially making an unregistered $3.5-million loan to his son, which enabled Donald to make a bond payment. Not long after, a Trump attorney offered Barsky tickets to a boxing match in Atlantic City. Barsky accepted them, “an act of bad judgement,” he later called it. A story appeared in the New York Post, saying Barsky had extorted the tickets. Barsky was made to give up the Trump beat.
Not long after, Trump very nearly lost everything. On June 15, 1990, the day before Trump’s birthday party at the Taj Mahal with the faux-shuttle and the scantily clad dancers, Trump’s Castle casino failed to make its bond interest payments. First Fidelity Bank sent the casino a notice of default. Personal loans from Manufacturers Hanover and Citibank were also coming due, and there was no apparent way for Trump to pay them. Singularly for an Atlantic City casino, the newly opened Taj Mahal earned less than 50 percent of its revenues from slot machines. The Castle had undergone costly renovation to attract high-end gamblers that were never really a market for Atlantic City. Only the Plaza made money.30
There were days of tense negotiations. Some bankers simply wanted to pull the plug, to offer Trump no further loans and no restructuring deals and end their business relationship. A banker named Wilbur Ross argued otherwise. He convinced the other bankers that “Trump” was too big to fail, and that Trump should continue operating his properties, with the Trump name.
“We believe that part of the assets of the casino, albeit one that we don’t have a mortgage on, is Donald Trump,” Ross told reporters at the time.31 Trump had to give up some assets—the airline he’d acquired, the yacht he’d bought from Adnan Khashoggi—and he had to live on a $450,000-a-month “budget,” but the bankers let him keep going, as Trump.
From then on, however, mainstream American banks all but ceased doing new business with Trump. He would have to look elsewhere for money: abroad.
In 1989, right before Donald Trump’s Atlantic City crash, real estate financial analyst Abe Wallach went on PBS’s MacNeil-Lehrer NewsHour to criticize Donald Trump. With short, reddish brown, curly hair, round gold banker’s glasses, a charcoal suit and yellow paisley tie, Wallach looked the part of sober financial analyst, the kind of guy who scrutinizes rows of numbers and sees buildings. Wallach couldn’t stand the glitz and the glamour and the stretch limos. He couldn’t understand how banks had loaned Trump huge sums for a West Side property when there was no demand for residential or office space. Or how Trump owed banks hundreds of millions of dollars at a time when tourists and businesses were trimming real estate expenditures. Wallach saw a braggart entangled in scores of legal disputes who had left a trail of broken promises, and he wanted the world to know it.
A week after the show, Wallach said, he opened the door at his Chelsea loft to a process server, who handed him papers for Trump v. Wallach, asking for $250 million in damages for defamation. Wallach enlisted his firm’s lawyer (also, as it turned out, Trump’s lawyer) to defend the case. Not long after, Trump invited Wallach to his offices, where the analyst stepped off the elevator. “I did get taken in by the beauty of the views from the 26th floor out to Central Park,” Wallach later said in an interview in his Southampton home.32 There were the magazine covers and the nonstop phone calls coming into Donald’s office. There was the forceful personality, turned solely, fleetingly, on him. Donald offered him a job. Despite his distaste, there was a sense of beckoning possibility. Anything could happen if he went to work for Donald Trump. Wallach said Yes. “Donald was a name to be reckoned with, even if he was having hard times.” And it was exciting. Trump would call up Wallach and invite him and his boyfriend for last-minute helicopter rides and a night in Atlantic City, sometimes with Marla Maples.
Wallach became Trump’s executive vice president for acquisitions and finance. As it soon became clear, Wallach was not going to find financing for Donald Trump among US banks. Trump had burned them too badly.
So, Wallach went in search of foreign money. As Wallach told the story, he was turning the pages of a newspaper one day when he read that sovereignty of Hong Kong was going to revert to mainland China. He figured some Hong Kong financiers would be in a rush to export their money, so he asked Donald for his Rolodexes, the 1980s-style rotating spindles that contained lists of contacts, each written out on a three-inch card. The basic unit was about six inches in diameter. Donald Trump had two of them, each about two feet high. Wallach was only allowed to look at them one at a time.
Wallach found some names, people with whom Donald had discussed starting a casino in Macau. Wallach made calls, flew to Hong Kong, and convinced investors to finance a proposed Trump project on the Upper West Side, which Donald was about to lose for lack of financing. While Wallach was in Hong Kong, he learned that Trump had simultaneously signed a deal on a napkin with a broker to pay her $10 million to introduce him to the very people Wallach was meeting with. “And I said, ‘Donald why would you do this?’ ” Wallach said. “You know he doesn’t really give you an answer for anything. But that was the nature of what went on.” The project did get financing, with both the US broker and Wallach claiming credit.
During the decade he was with Trump, Wallach found financing in many unusual places. After Wallach’s intervention, an elderly German man who, Wallach said, was afraid the Russians were going to invade and come for his money, extended Trump a 250-year lease for 40 Wall Street. Wallach obtained financing from a South Korean conglomerate for Trump World Tower, across from the United Nations. In a meeting in South Korea, the idea was casually raised that the financiers could name a building they were working on the Trump Tower Seoul. The bankers’ agreed, launching Trump’s foreign licensing business.
As with Gleidman and his weight issues, Trump had something he could use to manipulate Wallach: Wallach was gay, and also, he was a convicted shoplifter. Trump began to push Wallach to cross lines on his behalf. Wallach used a secret side room off the Astor Suite at the Plaza Hotel to listen in on Saudi-Chinese negotiations over the fate of the Plaza. Once, seated next to a business adversary on an airplane, Wallach put a tranquilizer in the man’s drink so he could secretly rifle through his briefcase to understand his negotiating tactics.
Despite these techniques, the tacit embargo on loans from US banks crippled the Trump Organization. It scaled back and shrunk its staff. Two-foot-high Rolodexes or no, Trump’s active list of important contacts had ebbed to a few dozen. Trump became practiced at not paying full fees to people who did work for him.
During this period Wallach bought a new home in Westchester, and Donald offered to renovate the bathroom for free. “So after maybe a month of hassling me about the bathroom I finally said ‘Okay. Do it. Do it.’ And it wasn’t just redoing a bathroom. He brought his people up from Mar-a-Lago and they put in walls of granite. Not tiles of granite but slabs of huge granite and after a month I had the most gorgeous bathroom I had ever been in and I didn’t like the gold fixtures but, you know, I could live with it.”
At the end of the year, when it came time for bonuses, Trump shifted stances. “Didn’t I pay for your bathroom?” he asked. Wallach had a check at the ready, to pay for renovations. Trump tore up the check, gave him a bonus anyway.
This had become standard business practice. Everyone, Trump seemed to think, was making extra money by working with him so no one got paid full price. They owed their success to him and had to pay a tithe for it. Trump stiffed the contractor who molded the seventy minarets and domes for the Taj Mahal.33 One lawyer who had worked for Trump said in an interview that Donald told him, after paying him thirty cents on the dollar: “You don’t know how much business you get by telling people you’re my lawyer.” Premier New York broker Barbara Corcoran had to sue him to get her brokerage fee. There was the bill Trump sent a dying Roy Cohn for his boyfriend’s accommodations. Trump tried to extract a million dollars from Louise Sunshine when she left to work with financier Tom Barrack.34 He even tried to rewrite his own father’s will in a way that would have put Fred’s assets at risk to Donald’s creditors. (Fred found out and had Maryanne Trump Barry put a stop to it.)35
It was Wallach’s job to deal with people who tried to collect on their invoices. Wallach said they “would come into my office and say, ‘Hey, can you get them to write me a check for the thirty thousand you know he owes me?’ And I would say to these people, ‘Why do you keep coming back for more? Why don’t you stay away from him because you know he’s not going to pay or it’s going to be a struggle?’ ” None of them quite managed to quit Donald Trump. “Everybody wanted to be around Donald Trump,” Wallach said. “I mean, even though you know he had had his financial problems, he is a very dynamic individual.”
In 1996, on a gorgeous spring evening, Wayne Barrett and I were trying to cover the New York GOP’s high-roller fundraising gala at the Waldorf Astoria from the eighteenth-floor elevator lobby. We were told we would be arrested if we didn’t leave. We did not leave. Minutes later, a police officer stationed in the Waldorf’s basement was upstairs, ready to issue pink desk appearance tickets for trespass. Before we were taken away by the police, we caught a glimpse of the blond hair and kinetic energy of Donald J. Trump.
The charges against us were dropped on a technicality.
Despite all of Donald Trump’s courting and threatening of politicians, by the 1990s, regulators did begin to penalize Trump entities. In 1988, the Federal Trade Commission sued Trump for buying stock via the brokerage house Bear Stearns but keeping it in Bear Stearns’ name so competitors wouldn’t know what his interest was; the case was settled for $750,000.36 In 1991, New Jersey’s Casino Control Commission penalized Trump’s casinos $200,000 for removing black and women dealers from the table when a high-rolling gambler patronized the Trump Plaza.37 And the Castle had to pay $30,000 after Fred Trump was caught buying $3.5 million in chips from his son’s casino, which was an unregistered loan.38
In 1998, the US Treasury caught up with Donald Trump, sort of. Because it’s so easy to turn money into chips, and then back into cash, casinos are required to report any large transactions to authorities so they can screen for money laundering. That year the Treasury Department’s Financial Crimes Enforcement Network, or FinCEN, found 106 occasions where the Trump Taj Mahal had failed to report large currency transactions to regulators. The casino settled, admitting no wrongdoing, and was assessed a civil money penalty of $477,000.39 At the time it was the largest fine in FinCEN history.
Two years later a Republican named David Grandeau, with thick black hair and a perpetually neat look, even in casual dress, had a job nobody wanted, as head of the New York Temporary State Commission on Lobbying. The unpopularity of the job stemmed from its torpor: anyone who took it seriously would immediately become a pariah in the company town that is Albany. At first, Grandeau’s job consisted largely of looking out for illegal lobbying by sitting and reading the paper all day, and listening to the radio.
In early 2000, Grandeau started to notice certain advertisements in those media. Some of them attacked the governor at the time, George Pataki, for trying to bring casino gambling to Monticello, in the Catskills. Some of them made disparaging, racist claims about the Saint Regis Mohawks, the Native American tribe trying to start the casino. One showed a picture of a hypodermic needle and portrayed the tribe as drug dealers and smugglers with connections to organized crime. The ads were signed by a group in Rome, New York, which is 150 miles from Monticello: the “New York Institute for Law and Society.”40
“I didn’t think any organization in Rome, New York, called the Institute for Law and Society, would have the necessary resources to run an ad in The New York Times,” Grandeau said in a 2016 interview. He called up the executive director of the “Institute for Law and Society,” Thomas Hunter, who turned out to be a magazine salesman. Hunter quickly folded and told Grandeau he worked for Roger Stone.
Grandeau demanded phone records, bank statements, and invoices. Those documents showed that Stone had hired Thomas Hunter to be the front man, and together they invented the group, including its fictitious 12,000-person donor list, which they described as conservative New Yorkers opposed to gambling.
Stone had hired the lawyer who incorporated the group. He wrote and handled payments for all the ads. He scripted the robocalls, the mailgrams, even the talking points that Hunter used when speaking to reporters. It eventually came out that Hunter didn’t even understand some of the words that Stone put in his mouth. “Panacea” was one of them.
Grandeau summoned Stone to Albany, to be deposed under oath. He got Stone to admit that the Institute for Law and Society was a sham.
“Everything they did you completely controlled?” Grandeau asked Stone in the deposition. “Yes,” Stone acknowledged.
But Stone was himself a marionette. During the deposition, Stone admitted that the Institute for Law and Society was a front group for Donald Trump.
“It didn’t exist. Only reason it existed was so you could hide the actions of Trump?” Grandeau asked, in the deposition.
“Yes,” Stone said.
“From the public?”
“Yes.”
“And you did that?”
“Yes.”
“Over and over again?”
“Yes.”
Stone and Trump had concluded, correctly, that the Institute for Law and Society’s conservative anti-gambling message would be muddied if people knew it was being funded by Trump. But Trump personally approved every aspect of the campaign.
They had “two sets of documents,” Grandeau said. One was from Trump, the other from Stone. There was, for example, an invoice for a media buy. “On the document we got from Trump, the invoice had the amount, the date, everything, but no other writing on it. The invoice we got from Stone, was the identical invoice but it had a note on its side, clearly in Mr. Trump’s handwriting. I’ve seen quite a bit of it, that bold, up-and-down stroke.”
A copy of the ad with hypodermic needles, blaming the Mohawks for bringing drug dealing to the Catskills, also had Trump’s writing on it. It said “Roger—this could be good.” On another, it said: “Roger, do it—Donald.” Trump signed off on the bills for the television and radio ads and the anti-Pataki ads. Stone spent tens of thousands of dollars on a private investigator to dig up dirt on the Pataki administration, which Stone shopped around to reporters. Trump signed off on that, too.
The documents show that Trump also bankrolled and controlled a lawsuit against Pataki brought by two New York State Democrats. On one of the documents, Stone explained that the two were Trump’s lawyer’s plaintiffs, and described the Institute for Law and Society as a “pass-thru.” Trump wrote on those documents, too. He spent over a million dollars in all.
Grandeau said Stone seemed bursting to share his deviousness. “It was actually a very easy deposition to get Roger Stone to convict Roger Stone because he wanted to—in some weird way he wanted to take credit for the whole thing.”
Grandeau fined Trump $250,000 for running an illegal lobbying campaign, which was then the largest fine in the history of the New York State lobbying commission. He fined Stone $100,000.
The next year, Trump offered Grandeau a job, which the regulator did not take.
In 1997, Trump was furious with rival casino owner Steve Wynn, who wanted to build a tunnel from the expressway to his own proposed casino, bypassing Trump’s. The tunnel was supported by a New Jersey state senator and power broker, William Gormley. As a casino owner, Trump wasn’t allowed to donate to New Jersey legislative races. But according to the Press of Atlantic City, Roger Stone ran a candidate against Gormley, and much of the money for it came from lobbyists, law firms, and consultants who had worked for Trump.41 Gormley won anyway. Wynn got his tunnel.
Two years later, Trump decided he actually needed Gormley on his side, and marshalled his full support for Gormley when the state senator decided to run for the US Senate. Whatever the outcome of the federal race, Trump could ply Gormley with donations that he was not allowed to directly give to Gormley’s state senate campaign. If Gormley won the US Senate seat, he could help Trump; if he lost and stayed in the state senate, he could help him even more. So Trump held a fundraiser for Gormley at his Trump Tower triplex, attended by a number of Trump employees. Trump invited a hundred guests, acting “in my individual capacity and not in my representative capacity as Chairman Trump Hotels & Casino Resorts, Inc.,” supplying his guests with “food and beverages,” according to an affidavit that Trump filed in connection with a complaint that had been made. Charged with having illegally pressured subordinates to make donations, Trump fought back, specifically delineating the ways his contributions had not been illegal corporate contributions, had not come from undue pressure on his employees, had not been handed over personally by him or his subordinates, but were collected at “a table in the foyer inside the entrance to my residence which was staffed by Gormley for Senate personnel.”42
Gormley’s campaign was later fined for campaign finance violations in a conciliation agreement that did not mention Trump.43 Gormley lost the Senate primary and remained a New Jersey state senator, where, aligned with Trump, he fought forcefully against a new tax on casinos.
In his state senate post, Gormley also had oversight over a bistate transportation agency, the Port Authority of New York and New Jersey. His committee had to approve the incoming Port Authority chairman, a position that typically goes to a financial benefactor of the governor. Because there was no statewide elected official in New Jersey other than the governor, use of this oversight authority was one way an opposition party could put the brakes on a governor’s power. In the early 2000s State Senator Gormley sought to do exactly that, by focusing on one such political patron. The new appointee at the Port Authority was an ambitious real estate developer with seemingly bottomless pockets.
Charles Kushner.