9

“A BRIDGE TO THE FUTURE”

A few days before the 1989 New York City mayoral election, the Republican candidate, Rudy Giuliani, thin and long-faced with square-cut black hair, took the podium at a breakfast at the New York Hilton. He was there to make his closing argument in the race against the Manhattan borough president, David N. Dinkins, who was running to be New York’s first African-American mayor. The podium was in the middle of a long table, where women with feathered hair and well-padded shoulders were seated on either side of forty-five-year-old Giuliani, who was wearing a black suit and a black tie, looking like a G-man teleported from the 1950s. In his speech, Giuliani mentioned the Soviet Union.¹

The race had not gone quite as planned: Giuliani had thought his opponent would be Mayor Ed Koch, running for a fourth term, whose years of presiding over a city government riddled with municipal corruption had offered a wide and public target. But Koch unexpectedly lost the primary, and Giuliani hadn’t been able to consolidate support among Republicans. At the women’s breakfast, he plowed gamely on. “As United States Attorney I got to see up close the inner workings of this city,” he said with his slight lisp, more pronounced in those days. “I saw the invisible government of drug dealers who are taking over our neighborhoods. The mobsters who infiltrate legitimate businesses and make our housing even more unaffordable, the white-collar criminals who think they can get away with not paying their taxes and the traders on Wall Street who think they can escape the rule of law.”

Giuliani’s speech gained steam, his eyebrows popping up when he thought he’d hit a high note of logic. “I saw the corrupt politicians who take money from our seniors and our children to line their own pockets. . . . I’ve met older New Yorkers trapped in their homes in fear of the violence on the streets of this city.” I am the one who can fix this, Giuliani was arguing. I understand it as no one else. Elect me.

This was Giuliani in his purest form. His US Attorney’s Office had broken the spine of “The Commission,” the group that ruled the Mafia, also known as La Cosa Nostra. Giuliani personally led the prosecution of Bronx boss and Roy Cohn law partner Stanley Friedman for racketeering. But as a candidate, he was not above making specific promises to specific communities. “Wherever I’ve travelled during this campaign, I’ve heard the concerns, and I’ve responded,” Giuliani said at the breakfast. “When I met with the people on the Upper West Side, I told them I oppose the Trump project and the extra congestion and density it would bring to the area.”

Giuliani and Trump already had a history at this point. In 1988, Trump had been investigated by an FBI agent working for Giuliani, a man named Tony Lombardi, who had looked into whether Trump had done anything improper when he sold an apartment to a man named Robert Hopkins. As reported by Wayne Barrett in the Village Voice, Hopkins’s 1984 closing—where Trump made a personal appearance—involved two dubious tax returns, faked diamond appraisals, and up to $200,000 in cash in a suitcase delivered to a New Jersey bank favored by Trump in a Trump limo.² Hopkins was later convicted of running a mob-backed gambling ring out of Trump Tower. Trump wasn’t charged.

In 1988, a witness who was himself under investigation approached Lombardi, offering up dirt on Trump. But instead of quietly investigating, as law enforcement agents usually do, Lombardi went straight to Trump. “The guy met me without an attorney, he answered all my questions,” Lombardi told Barrett. “I amazed myself that I was able to talk to him for an hour without being interrupted.”

In an article about the incident, Barrett laid out evidence that Lombardi, instead of trying to investigate Trump, was secretly feeding Trump information, and ensuring that Trump wouldn’t be prosecuted. “The best indication,” Barrett wrote, of Lombardi’s “continuing ties to Trump involve this reporter.” At one point, Barrett had asked Lombardi about a tip he’d received, a tip he’d discussed with no one else. “An outraged, well-informed Trump was telling a lawyer about it right after my meeting with Lombardi,” Barrett wrote. Later Barrett confronted Lombardi about the tip. Lombardi denied passing along the information, though he acknowledged he would have liked to work for Trump, telling Barrett the men had “chemistry.”

Not long after the investigation fizzled, Trump announced that if Rudy Giuliani ran for mayor, he, Trump, could raise two million dollars for him in half an hour. The following year, Trump served as co-chair of Giuliani’s first major fundraiser, sitting on the dais at the Waldorf Astoria. According to Barrett, Trump, “his family, and his staff raised and gave at least $41,000 to the campaign.”³ But by the time of the women’s breakfast at the Hilton, the developer’s ties to Giuliani had begun to attenuate. No matter which political party occupied Gracie Mansion, the Democrat-led committees would still oversee the approvals and abatements Trump needed. Backing an untested Republican for mayor was a risk. Giuliani lost.

Four years later, in 1993, Rudy, as everyone now called him, made another run at Dinkins, this time as a changed man. (I directed the communications team for the last six months of the Dinkins campaign. It was my final job in politics before switching to journalism.) Giuliani had come to a truce with the Republican kingmaker, Senator Alfonse D’Amato, and hired Ed Koch’s strategist, but most of all, he came back with a new and highly nonspecific message: one of cutting government, cutting taxes, cutting benefits, cutting “red tape” for businesses, and most of all cutting crime.

Though crime rates had already started to fall from their peak, under Dinkins, homicides were still at intolerably high levels, over two thousand a year.⁴ The recession that hit the country in 1990 had taken hold in New York City fifteen months prior; it cut across every sector, hundreds of thousands of jobs were lost, 10 percent of the city’s jobs base.⁵ Rudy’s answer was to cut city workers, privatize city services, and generally limit the ways the city provided for its citizens: fewer teachers, less government-provided healthcare, less money for the subways. Rudy eked out a victory, becoming the first Republican in a quarter century to ascend to the mayoralty.

Just two weeks after the mayoral election, the US House voted to approve the North American Free Trade Agreement (NAFTA); the Senate followed suit three days later—in both cases Republicans made up the majority of yeas.⁶ The bill had been negotiated and signed by President George H. W. Bush, but it was Bill Clinton who steered it through Congress. In his first year in office, Clinton had reversed some of Reagan’s tax cuts, reinstating a 39.6 percent top tax rate, a hike expected to affect only the top 1.2 percent of wage earners. NAFTA was, among other things, a rapprochement with Republicans.

“When you live in a time of change the only way to recover your security and to broaden your horizons is to adapt to the change, to embrace, to move forward,” Bill Clinton said at a signing ceremony in the East Room of the White House in September 1993.

“Nothing we do—nothing we do in this great capital can change the fact that factories or information can flash across the world; that people can move money around in the blink of an eye.”⁷ By 1993, the American middle class was visibly struggling. Bill Clinton’s solution was NAFTA.

Speaking in California, Donald Trump disapproved. “It’s a no-brainer,’’ Trump said, as reported by the Long Beach Press-Telegram in 1993. “The Mexicans want it, and that doesn’t sound good to me.”⁸ Giuliani, weakly, opposed NAFTA. “I continue to be concerned about the effect it would have on the job situation in New York City,” he told reporters the week after his election. “It is somewhat a narrow perspective, but it’s my most important narrow perspective, which is the people of New York City.”⁹

On January 1, 1994, Giuliani was sworn into office, and NAFTA took effect.

A few weeks later, Bill Clinton, in his State of the Union address, was making more promises: “to guarantee health security for all, to reward work over welfare, to promote democracy abroad and to begin to reclaim our streets from violent crime and drugs and gangs, to renew our own American community.”¹⁰ Of those goals, two aligned with Giuliani’s and real estate developer Trump’s interests: reforming welfare and reducing crime through heavy policing. Those two reforms were enacted. The other major pillar—health care for all—failed spectacularly, and created as a by-product the image of a monstrous, power-hungry, and secretive Hillary Clinton, an image that would plague her for the next quarter century.

 

In New York City, Rudy pushed his interpretation of the “broken windows” theory of crime fighting, based on the idea that visible signs of crime and disorder breed more serious crime and disorder. If the NYPD focused on arresting the turnstile-jumpers, the pot-smokers, and people with open beer cans on their stoops, the theory went, it would discourage more violent, disruptive crimes. Broken windows policing translated to the criminalization of daily behavior, which dovetailed with the Clinton-supported Violent Crime and Control Act of 1994. Both fueled the era of mass incarceration, disproportionately affecting black and brown Americans, and a surge of new police officers on a local level.

While funding the police, Rudy made deep cuts elsewhere: city workers, health care costs, and, above all, welfare. “Reinventing Government,” Rudy called this shift in priorities. “Instead of fearing change we should lead the way,” he said in his 1995 State of the City Address. In Washington, Bill Clinton, the Democrat, had been pushing a similar agenda.

Clinton, born to a widowed mother in Hope, Arkansas, had promised in his 1992 campaign to “end welfare as we know it,” taking his cue not from Franklin Delano Roosevelt but from Ronald Reagan. The Personal Responsibility and Work Opportunity Act, which Clinton signed in 1996, ended six decades of social policy that ensured federal guarantees of assistance.¹¹ The Rose Garden ceremony was protested on Pennsylvania Avenue by women’s groups and advocates for the poor. As the Washington Post wrote, a “cloud of controversy” settled over the signing.¹²

Then Clinton flew to Chicago for the Democratic National Convention, where he averred, “We do not need to build a bridge to the past, we need to build a bridge to the future, and that is what I commit to you to do. So, tonight let us resolve to build that bridge to the twenty-first century, to meet our challenges and protect our values.”¹³

 

Though Trump had drifted from Giuliani during the 1989 campaign, they were again closely aligned by the mid-1990s. Trump and his wife, Marla, had given well over $10,000 to Rudy’s campaigns.¹⁴ Trump, who knew better, tried to send two checks totaling $6,900 to Rudy Giuliani at City Hall, plus another $3,100 to the Liberal Party of New York, run by lobbyist and Trump friend Ray Harding. There was a scrawled note with the contribution: it said, “Rudy—Marla thinks you’re GREAT!” next to the sharpie-signed initials, DT. Rudy’s deputy mayor, Randy Mastro, sent the checks back with a note that Trump needed to send them to “Friends of Giuliani,” the campaign committee. But by then the City Hall administration had been made pointedly aware of Donald’s largesse.¹⁵

In 1995, around the same time Giuliani was talking about work requirements and fraud prevention measures for welfare recipients, Giuliani’s Department of Housing Preservation and Development wrote a letter to its Washington counterpart, endorsing a Trump proposal seeking $356 million in federal mortgage insurance intended for low-income housing. The money was for a Trump project named Riverside South, a proposed suite of massive silver towers along the Hudson River on Manhattan’s Upper West Side. Candidate Rudy Giuliani had predicted during the 1989 mayoral race that it would bring “congestion” and “density.”

A coalition of Upper West Side elected officials, including a portly, bespectacled second-term congressman named Jerrold Nadler, went ballistic. They accused the city of “colluding with Trump.” They said the “tainted” application was a “speculative scheme to subsidize luxury housing in an already largely affluent area.”¹⁶

The federal mortgage insurance relied on the site’s getting an official “blight” designation under Section 220, a 1954 federal program backing housing in so-called “urban renewal areas,” that is, slums. The Riverside project “would not eliminate slums and blighted conditions,” Representative Jerry Nadler wrote in a letter to the federal Department of Housing and Urban Development, because the site lay “in the heart of one of the wealthiest, fastest growing, thriving areas of the City, if not the entire nation.”¹⁷

Still, the Giuliani administration argued that the site was indeed “blighted” and the Trump development was part of a “coordinated” plan for the area. But though the Giuliani administration could argue that a major developer deserved $356 million in federal mortgage insurance to build luxury condos at the same time that it was arguing welfare recipients should be stripped of their monthly grants (maybe $2,500 for a family of four), it could not, in fact, produce the loan.

By the time HUD was ready to make a ruling, the federal agency was run by a curly haired, espresso-eyed cabinet secretary, Andrew Cuomo, who had done legal work for Trump while his father, Mario, was governor. Andrew Cuomo was not inclined to approve the project, which his counsel, Howard Glaser, later described on Twitter as “an attempt to siphon fed $$ for his luxury housing.”¹⁸ What Trump was doing, Glaser said, was a “scam” to “skim $350 million” that was “typical Trump”: attempting to inflate the value of the federal subsidy by including the value of adjacent city parkland. Cuomo determined it would have been illegal, according to Glaser.

Trump was furious. As he described it in his book How to Get Rich, in a chapter called “Sometimes You Have to Hold a Grudge,” he leaned on Andrew Cuomo’s father, former governor Mario Cuomo, to sort out the problem. “I called Mario to ask for a perfectly legal and appropriate favor involving attention to a detail at the Department of Housing and Urban Development, which at the time was being run by his son Andrew.”

Trump continued: “Mario told me that this would be hard for him to do because he rarely calls the ‘Secretary’ on business matters. I said to him, ‘Mario, he is not the Secretary, he is your son.”

Mario demurred.

Trump wrote: “I began screaming, ‘You son of a bitch! For years I’ve helped you and never asked for a thing, and when I finally need something, and a totally proper thing at that, you aren’t there for me. You’re no good. You’re one of the most disloyal people I’ve known and as far as I’m concerned, you can go to hell.’ ”

“My screaming was so loud that two or three people came in from adjoining offices and asked who I was screaming at. I told them it was Mario Cuomo, a total stiff, a lousy governor, and a disloyal former friend. Now whenever I see Mario at a dinner, I refuse to acknowledge him, talk to him, or even look at him.”¹⁹

What Trump did not put in his book, according to Glaser: Mario Cuomo’s firm was working for Trump at the time. Trump went to the firm’s senior partners and threatened to fire the firm, Glaser wrote, unless “M. Cuomo got A. Cuomo to approve the fraudulent use of funds. M. Cuomo declined of course.”

 

Though Rudy Giuliani was unable to secure federal subsidies for Trump’s luxury housing project, the mayor was able to help the developer out in other ways. Trump hired the lobbying firm closest to Giuliani, that of Liberal Party boss Ray Harding, once described by the New York Times as “his own smoke-filled room.”²⁰ Harding’s firm helped Trump World Tower, across from the United Nations, get approvals from three separate levels of the Giuliani administration, despite vociferous opposition to the height of the tower from figures including fossil-fuel billionaire David Koch and Walter Cronkite, the former CBS news anchor.²¹ (Giuliani’s administration did draw the line at offering Trump a 421a “blighted” tax break for the luxury tower across from the United Nations. Trump sued, and eventually settled for an abatement worth $119.5 million over ten years.²²)

 

In June 1999, Fred Trump, who had suffered from Alzheimer’s in his later years, died at age ninety-three, after contracting pneumonia. His funeral was attended by senators and entertainers and real estate developers, written up in the New York Post under the headline, “Trump Patriarch Eulogized as Great Builder.” Mayor Rudy Giuliani gave a speech. “Fred Trump not only helped to build our city, but helped to define it,” Giuliani said, standing near the coffin draped with white roses. “He helped make it the most important city in the world.” The New York Post described Fred C. Trump as “the son of a Swedish immigrant father.”

“This is by far the toughest day of my life,” Donald Trump said when it was his turn to speak. “My father was a great builder. I learned everything from him. He was a master builder, but also a very hard worker. He would be very upset if his kids weren’t working today. . . . He was a great husband for sixty-three years to my equally incredible mother, something I’ll never be able to catch him on and he knew that.”

Concluding his remarks, Donald Trump said: “I love you, Pop.”²³

By the time he stood before the crowd at Marble Collegiate Church for his father’s funeral, Donald Trump and his siblings had already spent the better part of the decade implementing strategies to avoid the tax on Fred’s estate, some of them legal, and some of them, according to the New York Times, that were “legally dubious and, in some cases, appeared to be fraudulent.”²⁴ The legal part involved a special type of trust, called a GRAT, an acronym for grantor-retained annuity trust, that allowed dynastic families like the Trumps to pass parts of their wealth from one generation to the next, paying zero dollars in estate taxes.

“The details are numbingly complex,” the Times wrote, “but the mechanics are straightforward. For the Trumps, it meant putting half the properties to be transferred into a GRAT in Fred Trump’s name and the other half into a GRAT in his wife’s name. Then Fred and Mary Trump gave their children roughly two-thirds of the assets in their GRATs. The children bought the remaining third by making annuity payments to their parents over the next two years. By November 22, 1997, it was done; the Trump children owned nearly all of Fred Trump’s empire free and clear of estate taxes.”

The benefits were not equally distributed. Fred Trump wrote the heirs of Fred Trump Jr.—an alcoholic who had died in his forties—largely out of his will. Fred Jr.’s heirs sued. At one point in the legal battle, Donald Trump terminated Fred’s children’s health insurance, even though one of them had an eighteen-month-old son who suffered from a rare neurological disorder. “When [Fred 3rd] sued us, we said, ‘Why should we give him medical coverage?’ ” Donald Trump told the New York Daily News during the legal battle. “Asked whether he thought cutting their coverage could appear cold-hearted, given the baby’s medical condition, Donald made no apologies,” the News wrote. “I can’t help that,” Donald Trump said. “It’s cold when someone sues my father. Had he come to see me, things could very possibly have been much different for them.”²⁵

 

By the time Fred Trump died, the summer of 1999, Rudy Giuliani was already thinking about his next move, a run for US Senate. Rudy had a story to tell: He had presided over a halving in violent crimes, and a reduction of the unemployment rate, from over 10 percent to a little less than 7 percent.²⁶ He had pushed economic development in places like Times Square, that transformed the neighborhood from the gunshot and prostitute-wracked war zone of Tom Hanks’s 1988 movie Big to a haven for families and tourists. And Giuliani had created an enormous amount of wealth for people who owned real estate. A Manhattan apartment worth $100,000 in 1993 was worth $197,000 in 2000, Giuliani’s penultimate year in office, according to New York University’s Furman Center.²⁷ This success story was to be the basis for his US Senate campaign against the person everyone believed would be his opponent: First Lady Hillary Rodham Clinton, who was already preparing a run.

While Clinton was conducting a “listening tour” in upstate New York, three hundred miles to the south, in Washington, DC, her husband was helping to maneuver through Congress the Gramm-Leach-Bliley Act, aka “The Financial Modernization Act,” which repealed the Glass-Steagall Act.

In 1933, after widespread bank failures, four thousand bank suspensions, hundreds of millions of dollars in depositor losses, and a week-long shutdown of the entire banking system, President Franklin Delano Roosevelt signed the Banking Act of 1933, which included key provisions known as Glass-Steagall. These were designed to create a firewall between commercial banks—the ordinary banks where people make deposits and get loans—and investment banks, which oversee the issuance of riskier investments, like stocks and bonds. The idea was that unsophisticated customers should be shielded from the risk more-sophisticated investors might make, and that if there was a problem in the investment banking world, the contagion would be contained.

By the 1980s, regulators and judges began eroding the law. In 1991, the first Bush administration called for its outright repeal. Eight years later—and after a campaign that involved hundreds of millions of dollars in lobbying and political contributions²⁸ to a bipartisan group that included New York’s junior senator, the banking committee chairman Alfonse D’Amato, and the man that succeeded him, Charles Schumer—President Bill Clinton struck a deal “to maximize the possibilities of the new information-age global economy, while preserving our responsibilities to protect ordinary citizens and to build one nation here.”

It was, Bill Clinton argued, a victory for freedom and free markets and consumer protection. “The Glass-Steagall law is no longer appropriate for the economy in which we live,” Clinton said, at the bill signing. “It worked pretty well for the industrial economy. But the world is very different.” The president thought, wrongly, that he was preparing the country for the economy to come. “Today what we are doing is modernizing the financial services industry, tearing down these antiquated walls and granting banks significant new authority. This will, first of all, save consumers billions of dollars a year through enhanced competition. It will also protect the rights of consumers.”²⁹

At a desk, Clinton picked up a dozen black and gold pens one by one in his left hand and signed the bill to delighted applause from a mostly male group of members of Congress, who clustered around him in a triangular tableau.³⁰

Three months later, in a vaulting student gym at the State University of New York in Purchase, in the suburbs of New York City, the president joined his daughter and the two US senators from New York as his wife, Hillary Clinton, wearing a black pantsuit and pearls, her hair short, her face unlined, formally announced her campaign. “I don’t believe government is the source of all our problems or the solution to them,” she told two thousand onlookers, an unusually large crowd for a US Senate launch in New York. “But I do believe that when people live up to their responsibilities, we ought to live up to ours to help them build better lives. That’s the basic bargain we owe one another in America today.”³¹

 

In 1999, before he even declared for US Senate, Rudy raised an astonishing $11.6 million, including $100,000 raised from the Florham Park offices of New Jersey real estate developer Charles Kushner. Until then, Charlie had not been a Republican donor. He was introduced to Giuliani by friends in the Orthodox Jewish Community. Raising money for a law and order candidate, Kushner ran afoul of federal campaign finance rules. “Errors Turn Fund-Raising Coup Into Embarrassment for Giuliani,” a New York Times headline read. Fifty-seven thousand of those dollars had to be returned.³²

In December 1999, the Center for Public Integrity’s Knut Royce raised more questions about Rudy’s fundraising:³³ from 1994 to 1999, Rudy had accepted more than forty thousand dollars in contributions, an unusually large amount, from the family of a Russian émigré named Semyon (Sam) Kislin.³⁴ Kislin was a commodities trader who the FBI had once suspected of being tied to the Russian mob and to various money-laundering schemes. Kislin denied the allegations and was never charged.

At the time Kislin donated to Rudy, he’d been working at a business made lucrative by the soaring real estate values under Rudy. In 1998, the ruble crashed, Russian banks started to collapse, and newly valuable New York real estate was a particularly good place to park foreign capital. Kislin began issuing mortgages for apartment buyers in the Trump World Tower. According to a report by Bloomberg’s Caleb Melby and Keri Geiger, “It’s highly unusual for individuals to issue formal mortgages for U.S. luxury real estate, and the tower loans are the only ones Kislin ever made in New York, public records show.”³⁵ One of those loans, for $674,000, was to Vasily Salygin, a Ukranian politician, for an eighty-third-floor apartment in Trump World Tower.³⁶ Kislin and Trump had done business before. Around 1980, Kislin and a partner, ex-Soviet cab driver turned electronics entrepreneur Tamir Sapir, had sold Donald Trump two hundred television sets for the Commodore Hotel.

Trump also gave money to Rudy Giuliani at the start of his campaign. But that came before a dramatic four weeks in the spring of 2000, when Giuliani announced in rapid succession that he had prostate cancer, was having an affair (with his future third wife, Judith Nathan), and was separating from his second wife, Donna Hanover, which news he made known to her via a press conference. Hanover, in turn, accused Rudy of having another affair, with a mayoral staffer. Giuliani dropped out of the US Senate race.

The next month, ten people with the last name “Kushner” contributed to Hillary Clinton’s campaign, among them nineteen-year-old Jared, who had just finished his freshman year at Harvard.³⁷

Clinton won her race against Rudy’s replacement, Long Island Representative Rick Lazio, early in the evening of November 7, 2000. “We started this great effort on a sunny July morning in Pindars Corners on Pat and Liz Moynihan’s beautiful farm,” she said in her victory speech. “And sixty-two counties, sixteen months, three debates, two opponents, and six black pantsuits later, because of you, here we are,” Clinton said.³⁸ The crowd cheered particularly hard when she pledged to defend a woman’s right to choose.

The next morning, the presidential race was still unsettled. Al Gore had been poised to concede, then pulled back. Bush led by a few hundred votes out of millions cast in the swing state of Florida. During the protracted court battle that followed, a group of well-dressed young men disrupted an attempted recount in what became known as the “Brooks Brothers riot.” One of its instigators was Roger Stone.

“When three Democratic commissioners took the box into a room by themselves and closed the door then I said, ‘Yes, break that door down, you’re breaking the law.’ ” Stone said in a 2004 interview with Wayne Barrett. “I don’t think the people that rioted did anything wrong,” Stone added.³⁹ The count was halted.

There was another way Stone bolstered Bush’s post-election efforts.⁴⁰ He secretly organized the “Committee to Take Back Our Judiciary” to run campaigns against judges who might rule in favor of Gore. There was, actually, no such committee, a judge ruled, just a front group created by Roger Stone. It never emerged who had provided the funds for Stone’s efforts.

The recount of Miami-Dade’s votes was never completed. Bush won Florida, and the presidency, by just a few hundred votes. (He won the electoral college but lost the popular vote nationally.)

Almost right away, as senator, Hillary Clinton began building an operation that would allow her, someday, to run for president.