Hurricane Maria has devastated the U.S. territory of Puerto Rico and Donald Trump’s response has left a lot to be desired. Trump has the Atlantic Ocean and Puerto Rico’s debts for its troubles. However, it turns out that one of Trump’s failed businesses may be partially responsible for the territory’s debts.
President Trump on hurricane response challenges in Puerto Rico: “This is a thing called the Atlantic Ocean. This is tough stuff.” pic.twitter.com/03UUPklJ4i
— NBC News (@NBCNews) September 26, 2017
By 2008, the Coco Beach Golf & Country Club was failing. In order to turn things around, the resort’s owners turned to Trump in an effort to save the failing club. Trump promised the club’s owners that he would attract new members and address the club’s budget woes. Later that year, the club was rebranded the Trump International Golf Club Puerto Rico. Despite his talk, Trump failed to attract a significant number of new members, but his promises were enough to obtain government-backed loans to keep the failing club afloat. However, by 2015, the club shut down.
When the club went under, the Trump family tried to distance themselves from the failure and said that the organization merely licensed the Trump brand. However, the documents obtained by BuzzFeed News tell a different story. Trump signed two different contracts with the club’s owners. The first one was a licensing agreement which allowed the club to use Trump’s name. The second one, however, was a management agreement which put Trump in charge of the club’s operation in exchange for a portion of the club’s revenues as well as a separate agreement which would give him cut of the club’s theoretical profits.
Trump’s management of the club did little to turn things around and it bled money for the next several years. The club closed its doors in 2015, but it actually defaulted on its first round of government-backed loans in 2011 leaving the Puerto Rican taxpayers on the hook for more than $32 million.
One could argue that the Puerto Rican government shouldn’t be backing loans for troubled golf clubs, but perhaps Trump should take a look how his own poor management contributed to the Puerto Rican debt crisis.
Featured image via Getty Images.