AS HIS FINANCIAL EMPIRE teetered, Trump sat down with Playboy magazine for an interview that would be published in March 1990. Trump’s finances were in tough shape, the worst of his life. Although he had assets worth $3.6 billion, he had $3.4 billion worth of debts, and only $17.1 million cash on hand. He was going to have a hard time paying the interest on his loans. He didn’t let this on to the journalist, though.
Trump let the reporter believe his casino kingdom was gushing money. The reporter wrote that Trump had more than $900 million in cash lying around, with $50 million more a week churning in, not to mention assets of $3.7 billion. To Trump, lying to a reporter wasn’t wrong. It was all about putting a good spin on things. He thought he was putting his best foot forward, the way any businessman or politician would.
In that interview, Trump fudged his cash situation and spoke of big deals, the biggest of which was an enormous development he wanted to build on New York’s West Side. He’d call it “Trump City,” an “architectural masterpiece” that would keep New York competitive with the New Jersey waterfront. There’d be housing galore. He’d construct the world’s tallest building there. He wanted to let the reporter believe that great things seemed possible, including the presidency—not that he had any interest.
“I don’t want to be president,” he told the magazine. “I’m one hundred percent sure. I’d change my mind only if I saw this country continue to go down the tubes.”
“I don’t want to be president,” he told the magazine. “I’m one hundred percent sure. I’d change my mind only if I saw this country continue to go down the tubes.”
But if he did become president, he’d believe in “extreme military strength,” and “he wouldn’t trust anyone.” Not the Russians, and not our allies.
In addition to worrying about his finances and global politics, Trump worried about the fate of his kids.
“Statistically, my children have a very bad shot,” he said. “Children of successful people are generally very, very troubled, not successful.”
Despite their marriage ending, he and Ivana were raising their children to value work. He’d also shown them how to be competitors. On the ski slopes, for example, Trump would hook their jackets with his pole and zoom past them. Forget conventions. Winning was about finding leverage over the competition, wherever you could.
And his kids showed promise. Don, Ivanka, and Eric sold lemonade to their bodyguard and other household staff. They’d even chipped rocks to make them look like arrowheads, buried them in the woods, and sold them to their friends for $5 after “discovering” them. They were born entrepreneurs.
But the end of their parents’ marriage had been hard on the three. Ivanka hadn’t seen it coming. Don Jr. wouldn’t talk with his father for a year.
These were dark days for Trump.
As his marriage ended and the extent of his financial troubles began to sink in, he was living in his tower by himself in an apartment, eating hamburgers and fries delivered from a nearby deli. He hardly left his room and spent evenings staring at his bedroom ceiling while he talked on the phone. His tawny hair nearly reached his collar. A friend compared him to Howard Hughes, the business tycoon, movie producer, and aviator who died as a gaunt recluse with overgrown hair and toenails. Trump told the friend that he didn’t mind the comparison, because Hughes was a hero.
Trump had financial problems and they were largely of his own making. For one thing, even though he’d promised not to fund the Taj with junk bonds, he did anyway, signing a deal for $675 million at 14 percent interest, which he would need a heavy flow of cash to cover. What’s more, his three casinos were competing against one another, cannibalizing revenue. About $58 million he’d been able to make earlier at the Castle and Plaza shifted to the Taj in 1990, its opening year.
And then there was the matter of the Trump Shuttle. Airlines were another business he knew nothing about, and here, he’d borrowed $380 million to purchase a route from a failing airline. He tricked the planes out with gold-plated bathroom fixtures, betting fliers would flock to his fancy lavatories. When they didn’t, the business failed.
Also in 1990, another disaster in the air struck—a helicopter carrying three of his best casino executives crashed, killing them all. This meant he had to run the day-to-day operations. He alienated managers who remained, and things got so bad he was afraid that gamblers on lucky streaks would put him financially under.
Not long after his Playboy interview, Trump couldn’t scrape up the cash to make a $43 million interest payment to people who’d invested in Taj junk bonds. The day after he missed that payment, he celebrated his forty-fourth birthday (which was actually two days earlier) in the Crystal Ballroom of the Trump Castle. He had only ten days to pay up, or he could lose the Taj.
The pressure was intense, and he had to put on a brave face surrounded by reminders of everything that was at risk. The party featured giant replicas of his casinos and a Trump Shuttle jet—the latter large enough to conceal the Lifestyles of the Rich and Famous television host Robin Leach, who popped out to wish Trump a happy birthday. Meanwhile, the comedian Joe Piscopo impersonated Frank Sinatra and made jokes about Japanese people, and a George H. W. Bush lookalike told revelers that Trump should be president.
But Trump had more immediate concerns. His total debt was $3.4 billion—way more than his dad could cover, even though he’d relied on his father to fix his money problems in the past.
But Trump had more immediate concerns. His total debt was $3.4 billion—way more than his dad could cover, even though he’d relied on his father to fix his money problems in the past. His debt was bigger than the gross domestic product of many countries at the time. And he was personally liable for $832.5 million, meaning he could lose his home. If Trump didn’t pay back the loans, he could drag the banks down with him, too.
The banks weren’t the only outside parties at risk.
During this time, Trump didn’t pay many of the contractors who worked on his properties, bankrupting some. A report in USA Today found at least sixty lawsuits from people accusing Trump of stiffing them on their bills. These weren’t big companies. They were often individuals: plumbers and painters. People who install chandeliers. Carpenters. Bartenders and waiters working at his resorts and clubs. Trump’s companies were cited two dozen times for failure to pay workers overtime or minimum wage. On the Trump Taj Mahal alone, the New Jersey Casino Control Commission found at least 253 complaints by subcontractors—the people who built the walls and plumbed the bathrooms and hung the chandeliers.
In one typical strong-arm deal, Trump ordered $100,000 worth of pianos for the Taj and then refused to pay more than $70,000 of the tab. The difference came directly from the pocket of the owner of the small business, causing his business to stagnate for a couple of years until it could recover.
Trump used the legal system to his advantage, betting that most people didn’t have the money to fight him. Trump claimed in many cases that the contractors had done inferior work. But in one of those cases, with a decades-old cabinet company, he immediately said they could work on future Trump projects. A real estate agent he’d shorted on commissions said he used “whimsy” to decide whether he wanted to pay people who worked for him. And in many cases, these people had to take pennies on the dollar or get nothing at all.
Trump fared far better than these creditors. Ironically, the sheer size of his debt actually helped him. It was better for the banks to keep his business limping along than for him to go bankrupt, because then even the banks wouldn’t get paid at all. His creditors made him a deal: In addition to getting a $20 million loan and better terms for other money he’d borrowed, Trump would step down from his businesses and keep his personal expenses below $450,000 a month.
Even while being put on an allowance, Trump drove a hard bargain with the banks, said his friend Roger Stone, a roguish political strategist who’d helped Trump sniff out a run for the presidency. “The man has ice water in his veins. He says to the bankers: ‘I’m worth more to you alive than dead, so you have two choices. You can get screwed and lose everything, or you can work with me, and we’ll work our way out of this.’ It’s brilliant, and he’s fearless. I mean, the guy is completely fearless.”
Trump made it three months before he ran short of $1.1 million in interest that he owed. Once again, the banks were in a pickle. They made Trump put his airline and yacht up for sale. In return, they’d postpone $245 million in payments.
Three more months passed, and once again, Trump was short. He and his father came up with a plan. It wasn’t legal for Trump to take a loan and not report it, so in mid-December, Fred Trump wrote a $3.35 million check that was used to buy 670 blackjack chips worth $5,000 each. Fred had no intention of playing those chips. The money could be kept by the casino. The next day, Fred sent over $150,000 more in exchange for thirty chips. With that $3.5 million total, Trump could make his payments. He didn’t get away with the fraud; he ended up having to pay the Casino Control Commission $65,000 in fines for taking money from an unauthorized source.
Even a multimillion-dollar gift from his father wasn’t enough to keep his life from falling apart. Ivana divorced him in 1991 for “cruel and inhuman treatment,” stating that he “verbally abused and demeaned” her, and that he lied. And by 1992, all three of Trump’s casinos had gone bankrupt. In addition, the Plaza Hotel filed for bankruptcy, which cost Trump 49 percent of the company. This, he had to turn over to his lenders. His debt was reorganized at better terms for Trump, and the consolidated company was renamed Trump Hotels and Casino Resorts. The Chapter 11 reorganization also helped reduce Trump’s personal debt by about $750 million, or four-fifths of the total.
Despite this, Trump didn’t give up on himself.
Despite this, Trump didn’t give up on himself.
In 1993, he tried making a deal with the Agua Caliente Band of Cahuilla Indians to run a casino for them. When this didn’t work out, he complained to Congress that Indian casinos were unfair to “little guys” like him. He told the House Natural Resources Subcommittee on Native American affairs that he’d prepared a speech, but he wasn’t going to give it because it was “boring.”
Then he launched into a dramatic and unsupported claim: “Organized crime is rampant on Indian reservations,” he said. “If it continues as a threat, it is my opinion that it will blow. It will blow sky high. It will be the biggest scandal ever or one of the biggest scandals since Al Capone.”
Trump also said that the operators might be faking their claim to run casinos: “They don’t look like Indians to me, and they don’t look like Indians to Indians, and a lot of people are laughing at it,” he said.
Trump’s remarks about “looking Indian” did not land well. Representative George Miller, a California Democrat, scolded Trump: “Thank God that is not the test of whether or not people have rights in this country or not.”
Trump and Marla Maples wed in December 1993 before more than 1,000 guests, TV crews, gossip columnists, and paparazzi. (Judie Burstein/Globe Photos/ ZUMA Press, Inc./Alamy Stock)
Tribes have requirements for people to claim membership. At a minimum, a person must be a descendant of someone on the original tribal list of members or related to a tribal member who is a descendant.
Trump’s inflammatory statements alienated at least one politician he needed as an ally for his projects.
But life went on, and eight days later, Trump and Maples had a daughter together, Tiffany. And two months later, in December, they were married. Over a thousand guests attended, including seventeen TV crews, assorted gossip columnists, and ninety paparazzi.
“There wasn’t a wet eye in the place,” one writer quipped.
TRUMP WAS LUCKY WITH THE TIMING OF HIS business disasters. In 1978, the United States updated its bankruptcy laws to give more leverage to the person in debt. Trump benefited directly. It would have cost the banks a fortune in legal fees to recoup their money. Making a deal was the safer, quicker bet.
Plus, Trump was a celebrity. It didn’t matter that his fame generally came from outrageous statements and behavior. Trump put on a great show, and people loved watching it. He loved knowing he had an audience, even if he sometimes exaggerated its size. When he paid $200,000 to serve as grand marshal of a Veteran’s Day parade in New York in 1995, newspapers reported a half a million people attended and 26,000 marched. Trump insisted the crowd size was even bigger: 1.4 million.
In his darkest days financially, his strategy to seek the spotlight paid off. By letting him continue being Trump, the banks minimized their catastrophic losses.
Trump, meanwhile, maximized them—at least when it came to the IRS. In 1995, he reported an astronomical loss on his tax return: $915.7 million. By reporting such a titanic loss, he was off the hook for federal income taxes on an equal amount of income for successive years, until his cumulative net gains exceeded this amount.
The same year he lost almost a billion dollars, he sold stock in his casinos to the public. Investors funneled $140 million into the company. In 1996 he sold two of his casinos to the public company for $100 million more than their market value, paying himself an $880,000 commission. This also shifted the debt on the casinos from himself to the Trump Hotels and Casino Resorts company.
It marked a big turning point in his personal fortune.
By October of 1996, Trump had sold his half of the Grand Hyatt, had for the time being managed his debt, and made his way back onto Forbes’s list, where his net worth was estimated to be $450 million. (Trump argued he was worth more than the tally—over $2 billion.)
Also in 1996, he made his first venture into television. After Maples cohosted the Miss Universe pageant, Trump invested in the broadcast rights for its parent company. The pageant combined two of his interests: beautiful women and real estate deals. Under its auspices, he could travel to cities around the world, feeling them out for future Trump Towers and establishing himself as an international entrepreneur.
The pageant enterprise ultimately was not a success in the United States when it came to ratings, which dwindled during the time of his ownership. But it did help him get a foothold in global real estate ventures.
Russia remained a country he wanted to conquer.
Russia remained a country he wanted to conquer. The year he bought the pageant, he traveled again to Moscow to see if he could strike a deal for Trump properties there. He showed up late for a meeting with representatives of Russian president Boris Yeltsin, and brought a pair of young Russian women. He did not close a deal, and his marriage to Maples would soon fall apart (a divorce would follow two years later, in 1999).
But he was still swinging for the fences as a real estate developer in the States. The West Side Yards he’d told Playboy about in 1990 were still in play, and a connection in Russia wanted to help him put a giant bronze statue of Christopher Columbus—taller than the Statue of Liberty—right on the river at the yards. The statue would be a gift from Moscow, Trump said. “It’s got forty million dollars’ worth of bronze in it.”
Trump crossed paths with Russians at his casinos, too. By this time, the Taj Mahal had become a hotspot for Russian mobsters who lived in Brooklyn. In 1998, Trump had to pay the IRS $477,000 in settlement for allegedly breaking rules that required the casino to report gamblers who cashed out more than $10,000 a day. The fine was the largest ever that time for violations of the Bank Secrecy Act, which is intended to foil money launderers.
The Trump family gathers for Donald Trump’s 50th birthday party at Trump Tower in New York City. June 13, 1996. From left to right: Eric Trump, Donald Trump Jr., Tiffany Trump, Ivanka Trump, Donald Trump, and Marla Maples. (Ron Galella/Getty)
In November 1998, Trump caught his first glimpse of Melania Knauss, a Slovenian-born model, at a party during Fashion Week in New York.
“I went crazy,” he said.
“He wanted my number,” Melania said, “but he was with a date, so of course I didn’t give it to him. I said, ‘I am not giving you my number; you give me yours, and I will call you.’ I wanted to see what kind of number he would give me—if it was a business number, what is this? I’m not doing business with you.”
Trump gave Melania all of his numbers.
“It was a great chemistry and energy,” she said. “We had a great time. We started to talk. And, you know, something was there right away.”
Meanwhile, Trump’s father died in 1999, presumably dividing his considerable estate among Trump and his three surviving siblings. It was a huge loss for Trump. His father had been his role model, his inspiration, and at times, his savior.
But Trump kept looking ahead. He was thinking seriously about pursuing the presidency.
In January 2000, Trump released a book called The America We Deserve, outlining his political vision for the nation. “Maybe our next great leader—one with the cunning of Franklin Roosevelt, the guts of Harry Truman, the resilience of Richard Nixon, and the optimism of Ronald Reagan—is walking down Fifth Avenue right now, straight through the heart of this land of dreamers and shakers—this land that I love.”
Although Trump had contributed to both political parties and identified as a Republican, he was looking at the Reform Party for his run. They’d made a good showing in the 1992 and 1996 presidential elections, with businessman Ross Perot as a candidate. The Reform Party might be a shortcut to power, the way buying a USFL team might have been a novel way into NFL ownership.
Trump’s “brief and flamboyant” run, as the New York Times described it, ended in conflict with the party.
The party’s interim head accused Trump of using the party as a tool for self-promotion. “We’re taking our party back to our very principles, and exploiters such as Donald Trump will not be able to exploit us again—and he realizes it.”
Trump saw it differently. He said he didn’t want to be in a party that had among its members former Ku Klux Klan leader David Duke.
Trump released a statement about his departure from the race on Valentine’s Day 2000: “I have consistently stated that I would spend my time, energy and money on a campaign, not just to get a large number of votes, but to win,” he said. “There would be no other purpose, other than winning, for me to run.”
He returned his focus to building his business profile, sometimes in controversial ways.
On September 11, 2001, terrorists hijacked four planes and crashed them into the World Trade Center, the Pentagon, and a field in Pennsylvania after passengers fought back. That very day, Trump mentioned to a New York news station that the collapse of the Twin Towers meant he now had the tallest building in the borough.
Trump was not correct. A building at 70 Pine Street became the tallest after the Twin Towers fell, according to the Council on Tall Buildings and Urban Habitat.
Trump was not correct. A building at 70 Pine Street became the tallest after the Twin Towers fell, according to the Council on Tall Buildings and Urban Habitat.
Trump also dreamed of rebuilding the Twin Towers, just as they were, only stronger and a little taller. He hated the design that ultimately was chosen. “The design for the Freedom Tower is an egghead design, designed by an egghead,” he said.
The architect’s spokesman speculated that Trump wanted that extra floor to “make room for his name.”
By then, even with all his losses, Trump’s name was poised to take a quantum leap forward. In May 2002, the wildly popular reality television show Survivor was shooting its finale at Trump Wollman Rink in Central Park, which Trump had managed to fix in 1986 in just four months after New York City’s overly complex rehab plans had stalled out for six years. Trump had a front-row seat at the Survivor event, and the producer of the show, Mark Burnett, told the story of Trump’s construction feat to the crowd.
Afterward, Trump buttonholed him and said they should “do something together sometime.”
Later that year, while working in a Brazilian jungle, Burnett hatched the idea of a show about people seeking jobs and wealth in another jungle: New York City.
There would be thirteen weeks, and candidates would compete against each other until one lucky winner walked off with a dream job. Burnett would call it The Apprentice. And he knew just who ought to host.
On a trip to New York, Burnett called Trump from the airport, hoping to set up a meeting while he was in town.
Trump invited him to the tower immediately. “Just tell the doorman, and he’ll send you right up.”
Trump loved the idea, but when Burnett pitched Trump’s agent, the agent balked. Dejected, Burnett went back to Trump, not sure how the mogul would take the news.
Trump directed his assistant to deliver the agent a note that said You’re fired. Starting with the first season in 2003, this became the catchphrase to one of the highest-rated shows on television.
Not only had Trump rebounded from bankruptcy and divorce, he’d found love a third time, and in the midst of everything, he’d become the biggest television star in the nation, on a show that presented him as rich, savvy, commanding, and knowledgeable about America’s obsession: money and how to make it.