Trump and Me (3 page)

Next item: Norma had drafted a letter to Mar-a-Lago members, inviting them to a dinner featuring a speech by George Pataki and entertainment by Marvin Hamlisch. “Oh, and speaking of the Governor, I just got a call. They're shooting a new ‘I Love New York' video and they'd like Libby Pataki to go up and down our escalator. I said fine.”

A Mar-a-Lago entertainment booker named Jim Grau called about a Carly Simon concert. Trump switched on his speakerphone: “Is she gonna do it?”

“Well, two things have to be done, Donald. No. 1, she'd like to hear from you. And, No. 2, she'd like to turn it in some degree into a benefit for Christopher Reeve.”

“That's not a bad idea,” said Trump. “Is Christopher Reeve gonna come? He can come down on my plane. So what do I have to do, call her?”

“I want to tell you how we got Carly on this because some of your friends are involved.”

“Jim, I don't give a shit. Who the hell cares?”

“Please, Donald. Remember when you had your yacht up there? You had Rose Styron aboard. And her husband wrote
Sophie's Choice.
And it's through her good offices—”

“O.K. Good. So thank 'em and maybe invite 'em.”

Click.

“Part of my problem,” Trump said to me, “is that I have to do a lot of things myself. It takes so much time. Julio Iglesias is coming to Mar-a-Lago, but I have to
call
Julio, I have to have
lunch
with Julio. I have Pavarotti coming. Pavarotti doesn't perform for anybody. He's the highest-paid performer in the world. A million dollars a performance. The hardest guy to get. If I call him, he'll do it—for a
huge
amount less. Why? Because they like me, they respect me, I don't know.”

During Trump's ascendancy, in the 1980s, the essence of his performance art—an opera-buffa parody of wealth—accounted for his populist appeal as well as for the opprobrium of those who regard with distaste the spectacle of an unbridled id. Delineating his commercial aesthetic, he once told an interviewer, “I have glitzy casinos because people expect it….Glitz works in Atlantic City….And in my residential buildings I sometimes use flash, which is a level below glitz.” His first monument to himself, Trump Tower, on Fifth Avenue at Fifty-sixth Street, which opened its doors in 1984, possessed many genuinely impressive elements—a sixty-eight-story sawtoothed silhouette, a salmon-colored Italian-marble atrium equipped with an eighty-foot waterfall—and became an instant tourist attraction. In Atlantic City, the idea was to slather on as much ornamentation as possible, the goal being (a) to titillate with the fantasy that a Trump-like life was a lifelike life and (b) to distract from the fact that he'd lured you inside to pick your pocket.

At times, neither glitz nor flash could disguise financial reality. A story in the
Times
three months ago contained a reference to his past “brush with bankruptcy,” and Trump, though gratified that the
Times
gave him play on the front page, took umbrage at that phrase. He “never went bankrupt,” he wrote in a letter to the editor, nor did he “ever, at any time, come close.” Having triumphed over adversity, Trump assumes the prerogative to write history.

In fact, by 1990, he was not only at risk, he was, by any rational standard, hugely in the red. Excessively friendly bankers infected with the promiscuous optimism that made the '80s so memorable and so forgettable had financed Trump's acquisitive impulses to the tune of three billion seven hundred and fifty million dollars. The personally guaranteed portion—almost a billion—represented the value of Trump's good will, putative creditworthiness, and capacity for shame. A debt restructuring began in the spring of 1990 and continued for several years. In the process, six hundred or seven hundred or perhaps eight hundred million of his creditors' dollars vaporized and drifted wherever lost money goes. In America, there is no such thing as a debtors' prison, nor is there a tidy moral to this story.

Several of Trump's trophies—the Plaza Hotel and all three Atlantic City casinos—were subjected to “prepackaged bankruptcy,” an efficiency maneuver that is less costly than the full-blown thing. Because the New Jersey Casino Control Act requires “financial stability” for a gaming license, it seems hard to avoid the inference that Trump's Atlantic City holdings were in serious jeopardy. Nevertheless, “blip” is the alternative “b” word he prefers, as in “So the market, as you know, turns lousy and I have this blip.”

Trump began plotting his comeback before the rest of the world—or, perhaps, even he—fully grasped the direness of his situation. In April of 1990, he announced to the
Wall Street Journal
a plan to sell certain assets and become the “king of cash,” a stratagem that would supposedly set the stage for a shrewd campaign of bargain hunting. That same month, he drew down the final twenty-five million dollars of an unsecured hundred-million-dollar personal line of credit from Bankers Trust. Within seven weeks, he failed to deliver a forty-three-million-dollar payment due to bondholders of the Trump Castle Casino, and he also missed a thirty-million-dollar interest payment to one of the estimated hundred and fifty banks that were concerned about his well-being. An army of bankruptcy lawyers began camping out in various boardrooms.

Making the blip go away entailed, among other sacrifices, forfeiting management control of the Plaza and handing over the titles to the Trump Shuttle (the old Eastern Airlines Boston–New York–Washington route) and a twin-towered thirty-two-story condominium building near West Palm Beach, Florida. He also said good-bye to his two-hundred-and-eighty-two-foot yacht, the
Trump Princess,
and to his Boeing 727. Appraisers inventoried the contents of his Trump Tower homestead. Liens were attached to just about everything but his Brioni suits. Perhaps the ultimate indignity was having to agree to a personal spending cap of four hundred and fifty thousand dollars a month.

It would have been tactically wise, to say nothing of tactful, if, as Trump's creditors wrote off large chunks of their portfolios, he could have curbed his breathtaking propensity for self-aggrandizement. The bravado diminished somewhat for a couple of years—largely because the press stopped paying attention—but by 1993 he was proclaiming, “This year has been the most successful year I've had in business.” Every year since, he's issued the same news flash. A spate of Trump-comeback articles appeared in 1996, including several timed to coincide with his fiftieth birthday.

Then, last October, Trump came into possession of what a normal person would regard as real money. For a hundred and forty-two million dollars, he sold his half interest in the Grand Hyatt Hotel, on Forty-second Street, to the Pritzker family, of Chicago, his longtime, and long-estranged, partners in the property. Most of the proceeds weren't his to keep, but he walked away with more than twenty-five million dollars. The chief significance of the Grand Hyatt sale was that it enabled Trump to extinguish the remnants of his once monstrous personally guaranteed debt. When
Forbes
published its annual list of the four hundred richest Americans, he sneaked on (three hundred and seventy-third position) with an estimated net worth of four hundred and fifty million. Trump, meanwhile, had compiled his own unaudited appraisal, one he was willing to share along with the amusing caveat “I've never shown this to a reporter before.” According to his calculations, he was actually worth two and a quarter billion dollars—
Forbes
had lowballed him by eighty percent. Still, he had officially rejoined the plutocracy, his first appearance since the blip.

Jay Goldberg, who in addition to handling Trump's matrimonial legal matters also represented him in the Grand Hyatt deal, told me that, after it closed, his client confessed that the novelty of being unencumbered had him lying awake nights. When I asked Trump about this, he said, “Leverage is an amazing phenomenon. I love leverage. Plus, I've never been a huge sleeper.” Trump doesn't drink or smoke, claims he's never even had a cup of coffee. He functions, evidently, according to inverse logic and metabolism. What most people would find unpleasantly stimulating—owing vastly more than you should to lenders who, figuratively, at least, can carve you into small pieces—somehow engenders in him a soothing narcotic effect. That, in any event, is the impression Trump seeks to convey, though the point is now moot. Bankers, typically not the most perspicacious species on earth, from time to time get religion, and there aren't many who will soon be lining up to thrust fresh bazillions at him.

When I met with Trump for the first time, several months ago, he set out to acquaint me with facts that, to his consternation, had remained stubbornly hidden from the public. Several times, he uttered the phrase “off the record, but you can use it.” I understood the implication—I was his tool—but failed to see the purpose. “If you have me saying these things, even though they're true, I sound like a schmuck,” he explained. How to account, then, for the bombast of the previous two decades? Alair Townsend, a former deputy mayor in the Koch administration, once quipped, “I wouldn't believe Donald Trump if his tongue were notarized.” In time, this bon mot became misattributed to Leona Helmsley, who was only too happy to claim authorship. Last fall, after Evander Holyfield upset Mike Tyson in a heavyweight title fight, Trump snookered the
News
into reporting that he'd collected twenty million bucks by betting a million on the underdog. This prompted the
Post
to make calls to some Las Vegas bookies, who confirmed—shockingly!—that nobody had been handling that kind of action or laying odds close to 20-1. Trump never blinked, just moved on to the next bright idea.

“I don't think people know how big my business is,” Trump told me. “Somehow, they know Trump the celebrity. But I'm the biggest developer in New York. And I'm the biggest there is in the casino business. And that's pretty good to be the biggest in both. So that's a lot of stuff.” He talked about 40 Wall Street—“truly one of the most beautiful buildings in New York”—a seventy-two-story landmark that he was renovating. He said he owned the new Niketown store, tucked under Trump Tower; there was a deal to convert the Mayfair Hotel, at Sixty-fifth and Park, into “super-super-luxury apartments…but that's like a small one.” He owned the land under the Ritz-Carlton, on Central Park South. (“That's a little thing. Nobody knows that I own that. In that way, I'm not really understood.”) With CBS, he now owned the Miss U.S.A., Miss Teen U.S.A., and Miss Universe beauty pageants. He pointed to a stack of papers on his desk, closing documents for the Trump International Hotel & Tower. “Look at these contracts. I get these to sign every day. I've signed hundreds of these. Here's a contract for two-point-two million dollars. It's a building that isn't even opened yet. It's eighty-three percent sold, and nobody even knows it's there. For each contract, I need to sign twenty-two times, and if you think that's easy…You know, all the buyers want my signature. I had someone else who works for me signing, and at the closings the buyers got angry. I told myself, ‘You know, these people are paying a million eight, a million seven, two million nine, four million one—for those kinds of numbers, I'll sign the fucking contract.' I understand. Fuck it. It's just more work.”

As a real-estate impresario, Trump certainly has no peer. His assertion that he is the biggest real-estate
developer
in New York, however, presumes an elastic definition of that term. Several active developers—among them the Rudins, the Roses, the Milsteins—have added more residential and commercial space to the Manhattan market and have historically held on to what they built. When the outer boroughs figure in the tally—and if Donald isn't allowed to claim credit for the middle-income high-rise rental projects that generated the fortune amassed by his ninety-one-year-old father, Fred—he slips further in the rankings. But if one's standard of comparison is simply the number of buildings that bear the developer's name, Donald dominates the field. Trump's vaunted art of the deal has given way to the art of “image ownership.” By appearing to exert control over assets that aren't necessarily his—at least not in ways that his pronouncements suggest—he exercises his real talent: using his name as a form of leverage. “It's German in derivation,” he has said. “Nobody really knows where it came from. It's very unusual, but it just is a good name to have.”

In the Trump International Hotel & Tower makeover, his role is, in effect, that of broker-promoter rather than risktaker. In 1993, the General Electric Pension Trust, which took over the building in a foreclosure, hired the Galbreath Company, an international real-estate management firm, to recommend how to salvage its mortgage on a nearly empty skyscraper that had an annoying tendency to sway in the wind. Along came Trump, proposing a three-way joint venture. G.E. would put up all the money—two hundred and seventy-five million dollars—and Trump and Galbreath would provide expertise. The market timing proved remarkably favorable. When Trump totted up the profits and calculated that his share came to more than forty million bucks, self-restraint eluded him, and he took out advertisements announcing “The Most Successful Condominium Tower Ever Built in the United States.”

A minor specimen of his image ownership is his ballyhooed “half interest” in the Empire State Building, which he acquired in 1994. Trump's initial investment—not a dime—matches his apparent return thus far. His partners, the illegitimate daughter and disreputable son-in-law of an even more disreputable Japanese billionaire named Hideki Yokoi, seem to have paid forty million dollars for the building, though their title, even on a sunny day, is somewhat clouded. Under the terms of leases executed in 1961, the building is operated by a partnership controlled by Peter Malkin and the estate of the late Harry Helmsley. The lessees receive almost ninety million dollars a year from the building's tenants but are required to pay the lessors (Trump's partners) only about a million nine hundred thousand. Trump himself doesn't share in these proceeds, and the leases don't expire until 2076. Only if he can devise a way to break the leases will his “ownership” acquire any value. His strategy—suing the Malkin-Helmsley group for a hundred million dollars, alleging, among other things, that they've violated the leases by allowing the building to become a “rodent infested” commercial slum—has proved fruitless. In February, when an armed madman on the eighty-sixth-floor observation deck killed a sightseer and wounded six others before shooting himself, it seemed a foregone conclusion that Trump, ever vigilant, would exploit the tragedy, and he did not disappoint. “Leona Helmsley should be ashamed of herself,” he told the
Post
.