‘Forbes’ Runs Trump Financial Scandal Story – W.H. In Shambles

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A blockbuster report released by The New York Times on Tuesday revealed that Mr. Trump listed over a billion in losses from his businesses between the years of 1985 and 1994, painting a bleaker picture of his finances than previously thought.

On Wednesday, Forbes decided to republish an article from 1990 explaining why they took Trump off the Forbes 400 during that decade of losses.

According to Forbes:

‘IN 1985, TRUMP APPEARED BY HIMSELF ON THE FORBES 400 LIST OF AMERICA’S RICHEST PEOPLE FOR THE FIRST TIME, AFTER INVENTING A FAKE PERSONA TO LIE ABOUT A TRANSFER OF WEALTH FROM HIS FATHER.’

At the time, Forbes took Fred Trump off the list and listed Donald alone. However, five years later, an explosive story shed some troubling light on the president’s business empire. According to Forbes:

‘LEANING ON NONPUBLIC DOCUMENTS, FORBES WRITERS RICHARD L. STERN AND JOHN CONNOLLY IDENTIFIED THE SAME SORT OF PROFITABILITY PROBLEMS THAT ARE STILL MAKING HEADLINES 29 YEARS LATER. FORBES TOOK DONALD TRUMP OFF ITS LIST FOR THE FIRST TIME THAT YEAR, EXPLAINING THAT A “DECLINE IN ATLANTIC CITY GAMING REVENUES, UNMASKING OF MISSTATED ASSET VALUES, DECLINING REAL ESTATE VALUES AND MASSIVE DEBT MAY HAVE PUT THE DONALD WITHIN HAILING DISTANCE OF ZERO.”’

The 1990 article stated that Trump’s net worth was nothing like the $3 billion estimated by Business Week magazine three weeks before, and had even dropped considerably from their 1989 estimate of $1.7 billion.

Stern and Connolly wrote:

‘FORBES HAS OBTAINED NONPUBLIC DOCUMENTS SUBMITTED BY TRUMP TO A GOVERNMENTAL BODY. IN IT, HE LISTS HIS ASSETS AND LIABILITIES AS OF MAY 31, 1989. THE DOCUMENTS — WHICH HAVE BEEN AMENDED TO INCLUDE SOME MORE RECENT ACQUISITIONS — CLAIM A NET WORTH FOR DONALD TRUMP, AFTER DEDUCTING ALL DEBTS AND MORTGAGES, OF $1.5 BILLION.’

The writers went on to explain why they thought that net worth was too high including the fact that the value of all real estate had come down in value in the past few years. Another large reason they cited was:

‘BEYOND THAT, FORBES THINKS THAT SOME OF THE VALUES TRUMP ASSIGNED TO INDIVIDUAL PROPERTIES IN THAT 1989 DOCUMENT WERE UNREALISTICALLY OPTIMISTIC EVEN THEN.’

Forbes actually estimated Trump’s net worth in 1990 to be about $500 million. They came up with a list of properties that were believed to have a market value of less than $3.7 billion and were encumbered by nearly $3.2 billion in debt to reach that number.

According to Forbes:

‘THE READER MAY ASK: IF HIS ASSETS EXCEED HIS LIABILITIES BY AS MUCH AS $500 MILLION, WHY DOES THE INCOME FROM THEM FALL SO SHORT OF COVERING INTEREST PAYMENTS?’

The article goes on to explain that Trump bought Manhattan’s Plaza Hotel for $407 million and then spent $25 million to renovate it. He borrowed all of that money at ten percent, but his maximum cash flow from the property was not more than $26 million a year.

So, Trump bought it at ten percent, but it only yielded a cash return of six percent. Forbes explained:

‘REAL ESTATE PEOPLE DO DEALS LIKE THIS BECAUSE THEY COUNT ON CAPITAL APPRECIATION TO MORE THAN OFFSET ANY SHORTFALL OF CASH, BUT CAPITAL APPRECIATION CAN NO LONGER BE TAKEN FOR GRANTED IN THESE SOMEWHAT DEFLATIONARY TIMES. IF TRUMP WERE A CASH BUYER, HE COULD OWN THE PLAZA COMFORTABLY; AS A LEVERAGED BUYER, HE LOSES CASH ON IT.’

Forbes concluded:

‘THE TIME HAS COME TO VISIT DONALD TRUMP, AND ASK HIM HOW HE JUSTIFIES THE HIGH NUMBERS HE CLAIMS FOR HIS NET WORTH.’

That statement is still timely and people are ready for the truth to be known.

Featured image is a screenshot from YouTube