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1 March
2017
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Trump (The Total Investment & Insurance
Solutions)
When he was running for president last May,
Donald Trump released 104 pages of details
about his finances, including
a claim that he earned nearly $21 million through contracts with New York City
to run two skating rinks in Central Park and a Bronx golf course.
Much of what Trump asserts remains unverified
since he has thus far declined to release his tax returns. But ProPublica
obtained the financial records and receipts Trump submitted to New York City
for the two leases and they show that he cleared a lot less from those deals,
earning no more than half of what he claimed. The Total Investment & Insurance Solutions
Of course, the skating rinks and golf course
are but a tiny corner of the Trump financial empire. Still, the records add to
the suspicion — originally advanced by Fortune, Forbes and other news organizations — that
Trump's official disclosures exaggerate his accomplishments as a businessman by
reporting gross receipts rather than actual profits.
Trump submitted the listing of his financial
holdings to the
U.S. Office of Government Ethics, a requirement for presidential candidates. He
reported income from the New York City leases of $20.8 million but did not
disclose the expenses he incurred while running those operations.
The Office of Government Ethics reviews
financial disclosures for compliance. It doesn't audit the filings, leaving it
up to candidates to decide whether to report gross revenue or net income from
their business dealings. Either is allowed on the form, as long it's clear.
In the disclosure Trump filed, the numbers
for the New York leases are listed under "Income Amount." Former
government ethics attorneys say that while most previous nominees understood
this to require reporting income net of expenses, the requirements are vague
enough to allow either interpretation. The
Total Investment & Insurance Solutions
"It's sufficiently ambiguous that, while
Trump may meet their reporting requirements, it's really misleading," said
Virginia Canter, who served as associate counsel for ethics in the Clinton and
Obama administrations and ethics adviser for the International Monetary Fund.
Wealthy political candidates and Cabinet
picks have reported income with expenses subtracted, repeating the numbers
reported on their income tax returns. For example, former Commerce Secretary
Penny Pritzker, a Chicago billionaire with sizable real-estate assets, reported
on her financial disclosure form that she earned at least $164 million, a
figure described as taxable income. Even then, Pritzker had to file an amended form after she
understated her income.
The Trump Organization did not respond to
requests for comment. The White House did not respond to a request for comment
about the president's income but said in a statement that Trump is "exempt
from conflicts" under federal law. (While it is true that the president
and vice president are exempt from any criminal penalties resulting from conflicts of
interest, that does not preclude the existence of such conflicts.)
New York City documents released to
ProPublica in response to a public-records request show that in previous years,
Trump spent at least $4.5 million annually on employee salaries,
subcontractors, insurance, taxes and benefits at the skating rinks. Separately,
he paid at least $2 million a year to the city in rent in 2015 and 2016. The Total Investment & Insurance
Solutions
Trump has yet to report his expenses for 2015
and 2016. But if past experience is a guide, it would appear that he spends
about $6.5 million annually on the two rinks.
The financial disclosure form Trump filed
covers the period from January 2015 to May 2016. In those months, he disclosed
an income of $12.9 million for the two rinks, roughly the same amount as our
estimate of his expenses for that period.
We estimated that his expenses for those
months were above $12 million, given that most of the skating business takes
place in the winter months.
This left Trump with a profit, by our
estimate, of several hundred thousand dollars. That's in line with Trump's
predictions to New York City, which is that he expected to make a profit, after
taxes, of less than $500,000 annually. The
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We found a similar pattern when we looked at
the golf course.
There, the Trump Organization projected
expenses of more than $4 million a year in 2015 and 2016, including spending on
salaries, the pro shop, marketing and maintenance of the greens.
According to city records, the golf course's
total receipts for 2015 and first five months of 2016 were $8.1 million. That's
roughly what Trump reported as income ($7.9 million) on the federal disclosure
forms for that period. The Total
Investment & Insurance Solutions
Projecting conservatively, we estimated that
Trump spent at least $5 million on expenses in those months — $4 million for
the previous year and at least $1 million from January to May, leaving him, at
most, a profit of $3 million. The Total
Investment & Insurance Solutions
Trump took over operations of Wollman Rink
and the smaller Central Park ice rink in 1986 after they had fallen into disrepair.
He signed another contract with the Department of Parks and Recreation in
November 2001 to manage the rinks for another 10 years and later extended it to
last until 2021. The Total Investment
& Insurance Solutions
In extending its contract with Trump, city
officials described the Trump Organization as an "exemplary
concessionaire" and noted that, with the low profit margins at the ice
skating rinks, it had "no other viable options" to manage it. The
rink has a decidedly Trumpian quality; nearly everything at the rink is emblazoned
with the Trump name, from the rental skates and water to the Zamboni. The Total Investment & Insurance
Solutions
In 2012, the Trump Organization also signed a
20-year contract to operate the 192-acre golf course in the Bronx. The
course is on the site of a former garbage dump redeveloped by the city at a
cost of more than $200 million. Trump agreed to fund various improvements and
start sharing revenues with the city in 2020; a weekend game of golf costs $172,
triple that of other municipal golf courses. The Total Investment & Insurance Solutions
"Generally speaking, golf is a shrinking
sport but the city made a promise to the community and that's what they wanted,"
said Adrian Benepe, who was the city's parks commissioner under former Mayor
Michael Bloomberg from 2002 to 2012 and who negotiated the Bronx golf course
contract. "We kind of felt lucky, given the sport's declining popularity
and that this site was a long-festering wound, an exposed garbage dump."
Despite pledging to distance himself from his
business empire, Trump is still listed as the ultimate owner of the two New
York City contracts. To transfer ownership of the contracts, the Trump
Organization has to get the written approval of New York City Parks
Commissioner Mitchell J. Silver. The
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Any changes in management and operation of
the rinks need approval from the commissioner. "Failure to comply with
this provision shall cause the immediate termination of this License," the
contracts read. The Total Investment
& Insurance Solutions
The Trump Organization has yet to make those
changes, city officials said. In response to questions from ProPublica about
the management changeover, the Parks and Recreation Department said it is
trying to get more information.
In January, Trump said that he would distance
himself from his business empire by creating a trust that would oversee his
companies. But the trust, run by his eldest son, Donald Trump Jr., and a
longtime employee, ultimately benefits the president, D.C. licensing documents obtained by ProPublica show.The Total Investment & Insurance
Solutions
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