In January 1979 the Village Voice published a two-part series on the brash young real estate developer Donald Trump. Barrett reported these pieces from court documents in Philadelphia and New York, campaign-contribution filings, interviews with people who did business with Trump, and fifteen hours of interviews with Trump himself. Barrett spent two months researching the story. —Ed.
DONALD TRUMP. A 32-year-old self-proclaimed real estate colossus price tagged at $200 million. The brash, streetwise son of Brooklyn’s largest apartment builder transplanted from his father’s boxlike office at the Avenue Z tip of the borough to a Fifth Avenue penthouse bounded on both sides by his own stunning Manhattan ventures. The New York Times puffs him as the city’s “number-one real-estate promoter of the mid-seventies… the William Zeckendorf of hard times.”
But the most accurate description of Trump’s real estate genius was contained in a deposition from a four-year-old Philadelphia bankruptcy-court file. When a Penn Central Transportation Company1 representative was asked why he’d contacted Trump alone out of lists of developers interested in building publicly aided housing on the bankrupt company’s West Side {of Manhattan} railyards, the witness replied: “The estate was putting its property in the hands of a developer. It was uppermost in our minds that… the developer… be very high in his political position. Trump is doing what, in our judgment, if anyone can do, he can do.”
Trump’s problem is not so much what he’s done, but how he’s done it. I decided at the start that I wanted to profile him by describing his deals—not his lifestyle or his personality. After getting to know him, I realized that his deals are his life. He once told me: “I won’t make a deal just to make a profit. It has to have flair.” Another Manhattan developer said it differently: “Trump won’t do a deal unless there’s something extra—a kind of moral larceny—in it. He’s not satisfied with a profit. He has to take something more. Otherwise, there’s no thrill.”
In this, the first of a two-part series, I’ll examine the character and history of Trump’s Brooklyn base. In the second, I’ll trace the details that led to his extraordinary acquisitions of the three Manhattan properties—and the government negotiations that are turning them into personal windfalls. Each history—the Brooklyn empire, the Manhattan purchases, and the government contracts—is a tale of overreaching and abuse of power. Like his father, Donald Trump has pushed each deal to the limit, taking from it whatever he can get, turning political connections into private profits at public expense.
Abe Beame,2 whose municipal largesse to the Brooklyn {Democratic Party} organization that spawned him was cut short by the city’s fiscal collapse, has left the Trump penetration of Manhattan as the only tangible sign of his administration’s Brooklyn base.
Beame had known Trump’s family for 30 years. They’d eaten the same clubhouse dinners at the same annual dances given by the borough’s regulars. Like Beame—and most other pols who came up through the local machines—Fred Trump owed his biggest breaks to the county’s party organization. In the beginning, Donald Trump used Beame’s closest political associates—publicist Howard Rubinstein; lobbyist, lawyer, and fund-raiser Abraham “Bunny” Lindenbaum; and Bunny’s son Sandy, now part of a large Manhattan law firm—as the major political brokers on his Manhattan projects.
But the Trumps were too shrewd to rely only on the power of the Beame brokers. There were contributions, too. Beame’s recollections of the Trump firm’s donations were hazy, but the former mayor did say: “I don’t know if he [Trump] gave and when he gave, but he’s a friend of mine. I know he tried to help every time.”
What does seem clear is that Donald’s success in acquiring and developing the Commodore,3 the convention-center site, and, to a lesser degree, the 60th Street yards, was, in part, due to Beame’s support. “It was the Brooklyn crowd at work,” said one top city official.
Hugh Carey,4 another product of Brooklyn politics, has virtually turned a state agency—the Urban Development Corporation—into a temporary Trump subsidiary. UDC is developing Trump’s hotel, convention center, and some new projects, including a multimillion-dollar renovation of Grand Central Terminal. But as Carey has done for Trump, so Trump has done for the governor—to the tune of nearly $125,000 in campaign contributions from the family and their companies: $35,000 in 1974, $66,500 in 1978, plus a $23,000 share of a loan totaling $300,000, a group venture with an inner circle of other Carey financiers, including lawyer Bill Shea, MTA {Metropolitan Transportation Authority} chairman Harold Fisher, realtor Sylvan Lawrence, and ILA {International Longshoremen’s Association} leader Anthony Scotto. The only individual to have exceeded Trump’s election-year generosity was the governor’s oil-rich brother.
In case the donations weren’t enough, Trump retained chief Carey fund-raiser Louise M. Sunshine as his “director of special projects” and registered her as his Albany lobbyist for the convention-center plan. Additionally, Sunshine accompanies Trump to meetings at various government agencies throughout the state. When asked what she does on such trips, one official remarked: “She just hangs around… gets a document if it’s needed… calls the governor.…” During the three years she’s worked for Trump, Sunshine has directed Carey’s campaign finances—first, paying off the governor’s substantial 1974 debt and then serving as his executive director of finance for the 1978 campaign. She was rewarded with a $17,000-a-year, one-meeting-a-month job as vice-chairman of the State Thruway Authority and a position with the Job Development Authority. Although the latter post carries no salary, it does provide up to $5,000 in expenses—and $34 million worth of industrial loans to administer.
The developer sees his companies’ political contributions as part of the cost of doing government business—for tax purposes, most of the money is supplied as corporate contributions. For Trump, the donations are the glue that holds together the public/private relationships.
Although Trump says he joined the 1974 Carey campaign early because “I knew he was a winner,” he hedged his bets pretty carefully. Ken Auletta, then campaign manager for Carey’s primary opponent, Howard Samuels, recalls: “I got a call from Trump. He said he wanted me—as a Samuels staff person—to know that he’d contributed $10,000 to Samuels. Just so I’d know who he was if he ever called. I usually kept far away from the finance end of it, but I checked this donation—and he’d made it.”
Besides the $125,000 donated to Carey, Trump-owned firms have recently contributed an additional $34,000 to city and state candidates in positions to affect his Manhattan projects—$10,500 to {Ed} Koch, after Beame lost; $5,500 to Beame; $4,000 to Mario Cuomo; $10,000 to State Senator Manfred Ohrenstein’s personal or Democratic senate campaign committees; $2,000 to City Comptroller Harrison Goldin; $2,000 to City Council President Carol Bellamy; and $200 to City Planning Commissioner Robert Wagner Jr.
After Manhattan councilman Henry Stern led the opposition to his Commodore tax-abatement scheme, Trump called and offered Stern a contribution. “I declined,” said the councilman. Few others have.
Finally, Trump has retained Roy Cohn as advisor on each of his major deals, on a host of legal actions, and as a conduit to the upper reaches of power—public and private. In recent years, Cohn and Sunshine have replaced the Lindenbaums and Rubinstein as young Trump’s primary resources and agents. The Manhattan hard sell has supplanted the friendly, shrewd, understated style of the old Brooklyn days.
***This elided section includes a long accounting of Fred Trump’s business practices around the development of Trump Village, a state-supported housing development in Brooklyn, including a 1966 report from the New York State Investigations Commission that “prompted the commission chairman, Jacob Grumet, to publicly assail {Fred} Trump, Lindenbaum, et al., as ‘grasping and greedy individuals’ and ask housing finance officials: ‘Is there any way of preventing a man who does business in that way from getting another contract with the state?’” Fred Trump continued to do business with the state. His son began to shift the company away from building. —Ed.***
“We stopped building and started acquiring then,” explains Donald Trump. Trump the builder became Trump the management firm. It is clear that while the company’s properties are surely vast, they are exceeded by those of other landlords. The assessed value of the Trump holdings has varied considerably. Today, Donald hints at a figure well in excess of the $200 million estimate he offered the Times in 1976. He says the firm has acquired highly profitable land in Las Vegas and southern California. But Business Week quoted an independent valuation of $100 million. And the financial institutions backing Donald’s Hyatt deal—with Fred as guarantor of the loans—took 18 months to decide that the Trumps were an acceptable risk (indeed, Fred Trump started Trump Village5 as a private job in 1960, and though he’d been in the business 20 years, he couldn’t get private financing).
In his interviews with me, Donald Trump repeatedly suggested that the firm was an awesome force in the industry. He also claimed that his convention center and hotel would be the largest in the country. They will not be. Real estate entrepreneurs do their own advertising, and Trump has a way of doubling or shaving every number when it suits him. In interviews, Donald Trump has laid claim to 22,000 units in Brooklyn, Staten Island, Queens, Virginia, Washington, D.C., and New Jersey. But his testimony in federal court put the total figure around 12,000 units actually owned and managed. Whatever the size or exact dollar value, however, there is no question about the racial, economic, and sexual character of the Trump holdings. Tenants are mostly white. People receiving welfare do not live in Trump-owned apartments. Households with substantial male incomes do.
Under the federal Fair Housing Act, the US Justice Department’s Civil Rights Division brought a landmark complaint against the Trump organization in 1973. The suit charged that the Trumps refused to rent to blacks. After a year and a half of furious legal and rhetorical combat, the Trumps, in 1975, agreed to a consent decree described by the head of the housing division as “one of the most far-reaching ever negotiated.” It required Trump to advertise vacancies in minority papers, promote minorities to professional jobs, and list vacancies on a preferential basis with the Open Housing Center of the Urban League.
Last March the Justice Department complained that Trump was in contempt of the consent decree and filed pending motions in Brooklyn federal court to compel compliance. The new complaint charges that “racially discriminatory conduct by Trump agents has occurred with such frequency that it has created a substantial impediment to the full enjoyment of equal opportunity.”
The evidence for the original charge against Trump was largely obtained through Urban League testers—white and black—who sought apartments in various Trump-owned complexes. Whites got them; blacks didn’t. The case was also based on a series of individual complaints to Eleanor Holmes Norton, then chairperson of the city’s Human Rights Commission. Norton resolved a half dozen individual cases by compelling Trump to admit black complainants. She asked the federal government to look for a pattern. But perhaps the most compelling evidence came from Trump employees and former employees.
According to court records, four superintendents or rental agents confirmed that applications sent to the central office for acceptance or rejection were coded by race. Three doormen were told to discourage blacks who came seeking apartments when the manager was out, either by claiming no vacancies or hiking up the rents. A super said he was instructed to send black applicants to the central office but to accept white applications on site. Another rental agent said that Fred Trump had instructed him not to rent to blacks. Further, the agent said Trump wanted “to decrease the number of black tenants” already in the development “by encouraging them to locate housing elsewhere.”
Donald Trump charged in the press that the suit was part of a “nationwide drive to force owners of moderate and luxury apartments to rent to welfare recipients.”
“We are not going to be forced by anyone to put people… in our buildings to the detriment of tenants who have, for many years, lived in these buildings, raised families in them, and who plan to continue to live there. That would be reverse discrimination,” he said. “The government is not going to experiment with our buildings to the detriment of ourselves and the thousands who live in them now.”
Trump’s attorney, Roy Cohn, filed an equally shrill affidavit with the court, charging that the government sought “the capitulation of the defendants and the substitution of the Welfare Department for the management corporation!”
In March 1974, Donald Trump testified as president of many of the Trump housing companies. He assumed a color-blind posture throughout much of the questioning, claiming he “had no idea of the racial composition” of his tenants or employees (he lapsed when he described “an all-black job in Washington,” and conceded that the company owned projects that were 100 percent white).
He was, he continued, “unfamiliar” with the Fair Housing Act of 1969, and said that the company had made no changes in its rental policies since the law’s passage. He claimed that the only test of tenant eligibility was that the tenant’s rent should not exceed 25 percent of his income. He testified twice that “we don’t generally include the wife’s income; we like to see it for the male in the family.” Then he changed his testimony the next day, to try to include some assessment of the wife’s income.
Cohn explained the Trump policy of only advertising apartment vacancies in the Times: “We think the Times is geared to minorities. It supported a Puerto Rican for mayor against a Jew.…”
In October 1974, Cohn filed a motion to dismiss the case and charged—in an ironic reversal of his earlier McCarthy days—that federal agents were engaging in “gestapo-like tactics” against his client. Cohn’s affidavit described the agents as “stormtroopers.” In court he said the Trumps were being subjected to “undercover agents going in and out of their buildings, lying as to who they are and where they are from… trying to trap somebody into saying or doing something.”
The judge found Cohn’s charges “utterly without foundation” and said, “This is the first time anyone’s charged FBI agents in a civil matter with… gestapo-type conduct.” Cohn, who fund-raises for the J. Edgar Hoover Foundation, suddenly switched: “I have never brought a charge against the FBI in my life. I have personal reasons why I haven’t and I never would. My relationship is much too close.”
The disastrous failure of the dismissal motion—which may have been prompted more by what the agents were finding than by how they were looking—was the last Trump offensive in the case. A few months later, the firm settled the decree. Trump’s press statement at the settlement was an unreconstructed version of the release the company sent out when the case began. It said the agreement satisfied the firm because it did not contain “any requirements that would compel the Trump organization to accept persons on welfare as tenants.” I asked Donald Trump why he’d stopped advertising vacancies in the Amsterdam News when the two-year court mandate had expired. “It’s a neighborhood paper for Harlem,” he said.
I’ve interviewed a couple of dozen people about Trump—in and out of government. Many had vague awareness of the charges against him, but no one seemed to think that the Trump race record should affect what the company gets from the city or state. In fact, no one had bothered to ask the US Attorney’s Office in Brooklyn, which is handling the case for the Justice Department, just what the facts are. Trump has proposed housing on the West Side—perhaps the most integrated neighborhood in the city. He’s justified the city’s largesse in the Commodore deal partially by pointing to the long-term jobs it will generate. Trump’s 1974 deposition in this case was 100 pages of uncontained contempt for the whole issue. Cohn said it for him: “This is a spit in the ocean.” I got the sense when I interviewed him that Trump has mellowed into a low-keyed indifference to the suit and the issue. It has nothing to do with profits or what he calls commercial “creativity.” It is not part of his real world. Neither is it for the people in government who keep making deals with him.
Early in the reporting of this story, I was at the state’s Urban Development Corporation, reading records on Trump’s Commodore deal in a conference room. No one knew I was there but some UDC officials, and I hadn’t intended to talk to Trump until I’d learned what I could about him from documents. The phone in the office where I was working rang, and the secretary said it was for me. It was Trump, buoyant over his surprise call: “I hear you’ve been going around town, asking a lot of negative questions about me. When are you going to talk to me?” he asked. “I’m circling,” I said.
I met him three times after the call—twice in his Manhattan apartment and once, at my insistence, in his Avenue Z office, still the base of the Trump organization but not where Trump likes to entertain reporters.
“Donald is embarrassed by his Brooklyn roots,” one of his business associates told me. “He uses Manhattan as his business address to put distance between himself and Avenue Z.” When I asked Bunny Lindenbaum what he thought of Donald’s—and his own son’s—preoccupation with Manhattan, his voice rose:
“They want to do their work in Manhattan. I was born in Brooklyn, I always practiced in Brooklyn. I still live in Brooklyn. I still have my offices in Brooklyn. They can’t take Brooklyn out of me.”
Wealth is supposed to convey an enviable status. I rode with Trump through Manhattan in his double-car-length silver chauffeured Cadillac with its “DJT” plates while he talked about how hard New York is on a developer, how communities fight him, how other cities want him. Through 30 blocks of slow Manhattan traffic, not a single New Yorker peered into the back of the carpeted limo.
The West Side groups who’d challenged him on his grandiose housing plans for the 60th Street yard had placed demands on his wealth and were not impressed with the symbols of it that he rushed to accumulate. Why lurch through Manhattan streets in an expensive advertisement of one’s wealth if no one even notices?
Until the last couple of weeks—when he became uneasy about what I’d been doing—Trump would call me for progress reports on my story: “Tell me,” he’d say, “you finding out what we’ve been doing is good for the city? What do people say about me? Do they say I’m loyal? Do they say I work hard?” But at the last interview, before I began my questions, he went through a prepared speech about his reputation: “I really value my reputation and I don’t hesitate to sue. I’ve sued twice for libel. Roy Cohn’s been my attorney both times. I’ve won once and the other case is pending. It’s cost me $100,000, but it’s worth it. I’ve broken one writer. You and I’ve been friends and all, but if your story damages my reputation, I want you to know I’ll sue.” Then, back to the smile—“But everything’ll be all right. We’re going to get together after the story.”
He’d been working gentler versions of this carrot-and-stick approach since the first interview. When I arrived at his apartment the first time, he opened with: “The Voice? That’s owned by Murdoch, right? Don Kummerfeld is running Murdoch’s operations, right? You know the former deputy mayor? He’s a good friend of mine.” At our very first meeting, he’d even begun talking about someone he’d threatened with a slander suit over a harmless comment.
When he found out I lived in the battered Brownsville section of Brooklyn, he called to say: “I could get you an apartment, you know. That must be an awfully tough neighborhood.” I told him I’d lived there for ten years and worked as a community organizer, so he shifted to another form of identification. “So we do the same thing,” he said. “We’re both rebuilding neighborhoods.” And again: “We’re going to have to really get to know each other after this article.”
Trump was testing me, to see what would work—convinced that either fear or the suggestion that I could have some undefined future relationship with his wealth or his influence could help shape the story. He only had to figure out what I wanted. Every relationship is a transaction.
He told me that he’d had to move from a prior Manhattan apartment because a reporter had printed his address. The rich are supposed to insist on privacy, right? But the Times had photographed him in the living room of one prior address, and he’d used the other at the top of his business letterhead. The next time I saw him he said he’d moved because he’d lived across from Gucci and that was no place to raise his new son. Now he lives across from Central Park.
His tendency to view things to his own advantage was made clear to me when I asked him about campaign contributions. He told me he had not contributed to Beame’s 1977 campaign. To do so, he said, would have been a conflict because of the Commodore and convention-center deals. But I found $5,000 in Trump-company contributions to the Beame deficit filed at the Board of Elections in 1978.
He angrily denied that he’d ever given a dime to Ohrenstein individually or to his campaign for Senate majority and threatened to sue anyone who said he did. The Trump organization was among the largest contributors to Ohrenstein individually one year and helped bankroll his campaign for Senate majority. Does he lapse into his fiercest denial when he just doesn’t know? When I confronted him on the Beame and Ohrenstein contributions, he said the donations must have come from his father.
Similarly, in his deposition in the federal discrimination case, Trump refused to acknowledge responsibility for accepting or rejecting individual tenants. Those statements were a material part of his testimony since they went to the heart of the case—Trump’s ability to control the discriminatory practices of his companies.
Shortly after he’d given his deposition, he was interviewed by a field investigator for the secretary of state. The interview had nothing to do with the federal case; the investigator was trying to determine if Trump met the experience requirement for a real estate broker’s license. The report states: “Mr. Trump further stated that he supervises and controls the renting of all apartments owned by the Trump organization.… During my interview with applicant he showed me hundreds of files.… Each contained numerous leases both for commercial and residential tenants… and rental records, all of which contained applicant’s signature and handwriting.” Trump’s lawyer, Mathew Tosti, also claimed in a letter to the secretary of state that Trump had “negotiated numerous leases for apartments.”
Yet he’d testified in federal court:
Government: “Do you ever have anything to do with rental decisions in individual cases?”
Trump: “No, I really don’t.”
Donald Trump is a user of other users. The politician and his money changer feed on each other. The money changer trades private dollars for access to public ones. Trump, Sunshine, Lindenbaum, and their counterparts Carey and Beame are classic expressions of this relationship.
1 The Penn Central Transportation Company (PCTC) bankruptcy was, at the time, the biggest bankruptcy in American history. PCTC was a merger between two railroad companies—the Pennsylvania and New York Central—in 1968; two years later PCTC declared bankruptcy after the federal government turned down a request that it guarantee a $200 million emergency loan. —Ed.
2 Abe Beame, mayor of New York City from 1974 to 1977. —Ed.
3 The Trump-built Grand Hyatt on East 42nd Street now stands where the Commodore Hotel once stood. —Ed.
4 Governor of New York, 1975 to 1982. —Ed.
5 Trump Village consists of seven high-rise residential buildings built between 1963 and 1964 in Coney Island, Brooklyn. It features nearly 4,000 units. —Ed.