Why Should You Care?
Donald Trump, the nation's 45th chief executive, is unique in his connection to the business world among U.S. presidents. Certainly, there have been presidents before him who were businessmen: both Bushes were in the oil business, Herbert Hoover was in mining, and Warren G. Harding was in the newspaper business. The difference is that every president before Trump had either held a government position before taking the office or had served as a general in the military. This means that Trump's overall business record, and the performance of his individual companies, was the only way for the public to measure his professional performance before he became president.
During his four years as president, Trump's ties to his personal business empire remained unusually strong and his supporters often cited his business experience as qualifying him for a second term, which he did not win. For this reason, in this story we examine his decades-long record as a business CEO, which is marked with multiple bankruptcies and failures as well as successes. We look at how former president Trump's substantial portfolio of businesses creates a large number of potential and real conflicts of interest. In addition, we explain why the public has little information about the true financial health of most of Trump's current businesses or his personal finances, due to the vagueness of his financial disclosures. Last, we analyze the performance of five of these businesses: the Trump National Doral, Trump Old Post Office LLC, Trump Ruffin Tower LLC, the Trump Turnberry, and Mar-a-Lago Club L.L.C.
- Trump's businesses generated at least $446.3 million in sales in 2019.
- The Trump National Doral golf resort generated the most revenue of any of the president's businesses in 2019, posting $77.2 million in sales.
- Trump's precise net worth is unknown, but Forbes estimates it to be approximately $2.1 billion.
- Trump's personal income is unknown because he lists business revenue instead of personal income on his financial disclosures.
- Trump has held on to far more business interests than any president in modern history, which creates unprecedented potential for conflicts of interest.
Conflicts of Interest
The issue of Trump's conflicts of interest was a prominent topic during his tenure. As president, Trump's enormous power of having the Oval Office at his command made it more important than ever to understand his long list of businesses and how they intersected with his public role as president.
It's important to note that these conflicts of interest were mostly not a problem for Trump legally, as the president and vice president are explicitly exempt from ethics regulations concerning conflicts of interest. The big potential issue is the emoluments clause, which was written into the U.S. constitution by the nation's founders. The clause prohibits the president from accepting things of value from foreign governments. Many critics say the emoluments clause applies in several instances to Trump. But none of the many legal cases alleging violations by the former president have been concluded, nor does it look like they will be in the near future.
How Does He Hold Them?
Almost every U.S. president for the past 40 years has chosen to put their investments into a blind trust to avoid real or perceived influence by the president. The owner of the blind trust has no knowledge or control over what assets are in the trust. The use of these trusts by presidents is a guard against outright abuses or conflicts of interest because presidents otherwise could use the Oval Office to benefit their investments. One exception was former president Obama, who did not use a blind trust because he held broad and simple investments such as index funds and Treasury notes, which were unlikely to be the subject of conflicts of interest.
To create a blind trust, a president first has to liquidate all of their assets to buy new ones to put into the trust. Because the Trump's assets are largely in highly illiquid real-estate, this would be extremely costly and time consuming. In addition, selling some of Trump holdings could prove impossible. For example, Trump can't sell his minority stakes in some office towers without the consent of real estate investment trust Vornado Realty Trust (VNO).
The establishment of a blind trust by a U.S. president isn't required by law, but rather a norm with strong precedent. Trump, as he has done with many presidential norms, has largely ignored this one. Instead, he established a trust managed by his two oldest sons. He is able to withdraw assets and funds from the trust at any time for any reason, without disclosing it. Steven Rosenthal, senior fellow at the Urban-Brookings Tax Policy Center, a nonpartisan think tank, said of the Trump trust: "For tax purposes, it's as if the trust doesn't exist at all ... It's just an entity on paper, nothing more." In fact, Eric Trump, one of the trustees, told Forbes in early 2017 that he planned to regularly update his father on the Trump family's businesses. This practice violates trust documents stating that trustees "shall not provide any report to Donald J. Trump on the holdings and sources of income of the Trust." The result was that the former president Trump's businesses were held by a trust controlled by his sons, where the ability of the trust to insulate the former president from conflicts of interest is questionable.
How Do We Know?
The former president's business activities are largely opaque to the general public for several reasons. Trump's main company, formally called The Trump Organization, is a privately-held business, and is therefore not required to publish quarterly earnings releases like publicly-traded companies. The former president also has notably refused to release his tax returns, contrary to the recent practice of several presidents. As a result, Trump's annual financial disclosures to the Office of Government Ethics have become the primary avenue to assess what businesses the president owns and how much they are making. Every year, the president is required file a list of assets, income sources, positions held outside the U.S. government, business transactions, liabilities, and gifts received. But, in some instances, critics say the president has been reluctant to fully comply with these disclosure requests, by delaying filing and going to unusual lengths to avoid providing clear answers to the public. On Sept. 27, 2020, The New York Times released two stories containing data from Trump's tax returns. The full records have not been released, the Times has extensive analysis of the records.
What We Don't Know
There are a few caveats to keep in mind when assessing the data in the Trump Organization's financial disclosure forms. First, the data is unaudited, self-reported data, meaning that readers have to take the company's word that it's accurate. Second, many of the numbers listed as "income" from certain assets seems, instead, to be the "revenue" from those businesses. This was confirmed when data from Trump's tax returns was released by the New York Times, showing that many of the businesses have been losing money, including some of the largest revenue producers such as the Trump National Doral. As a result, the financial numbers don't show the amount of money that the president actually took home as income. For example, in Trump's 2017 disclosure, he listed his income for the Trump National Doral golf resort as $75 million, which matches the revenue number reported to Miami-Dade County. Net operating income for the resort for that year was dramatically smaller at $4.3 million.
Getting a clear picture of the former president's businesses is further complicated by the fact that income and asset values are listed in very wide ranges. For example, Mar-A Lago Club is listed as having a value of "over $50,000,000." And the Trump National Golf Club in Charlotte is listed as worth between $5 million and $25 million. Yet another complication is that the Trump Organization itself has contradicted its own numbers in disclosures. The Trump Organization contested Palm Beach County's $19.7 million valuation for the Trump International Golf Club in the town of Jupiter, Florida, as being too high. But the former president's government disclosure to the Office of Government Ethics valued the property at more than $50 million, or $30.3 million higher. This inflated the value of the president's property to the public as he is trying to deflate its value for tax purposes.
This lack of information means that any attempt to put a number on the former president's net worth is, at best, an educated guess and would require more information than is presented in the disclosures. Equally important, since we do not know the expenses of the businesses listed, it is impossible to figure out Trump's personal income from his own disclosures.
Public prosecutors are trying to answer similar questions. Trump and his company are being investigated by the New York Attorney General over how the Trump Organization values assets on financial statements used to obtain loans. Separately, the Manhattan district attorney appears to be investigating similar claims of inflated asset values. The former president's former lawyer, Michael Cohen, has testified that Trump regularly inflated the value of company assets to get better loan terms.
On Feb. 22, 2021, the U.S. Supreme Court allowed a subpoena by Manhattan district attorney, Cyrus R. Vance Jr., for Donald Trump's tax returns, as well as other financial records. However, due to grand jury secrecy rules, this decision does not mean they will be made public.
All of these developments cast doubt on the value of unaudited self-reported financial data from the Trump Organization.
What We Do Know
Despite these obstacles, valuable information can still be gleaned from Trump's financial disclosures, especially in concert with other information. First, Forbes has used financial disclosures and a plethora of other information sources to come up with an estimate of Trump's net worth. Forbes currently pegs it at around $2.1 billion. This should be regarded as a rough estimate, even though the publication did as thorough a job as possible given the dearth of information. They also did a good job of showing their work, which you can see here. This $2.1 billion represents a significant drop, having fallen an estimated $1 billion from the $3.1 billion it stood at the end of 2019. This is largely due to the damage COVID-19 has done on the hotel and casino industries. This means that as of Trump's most recent financial disclosures, which go through the end of 2019, Trump's net worth was closer to $3 billion.
The second important financial number we can glean from these documents is that Trump and his businesses generated a minimum of $446.3 million in revenue in 2019, which is up 2.6% from $434.8 million the previous year. Also available are specific revenue numbers for some of Trump's business interests. These numbers provide a general idea of which Trump businesses are the largest revenue generators and whether revenue is rising or declining. The president's businesses generally fall into five categories: hotels, golf courses (or some combination of the two), condos, residential and commercial real-estate rentals, and licensing of Trump's name. Below, we look in detail at the five largest businesses owned by Trump ranked by 2019 revenue.
A new major source of information was released when the aforementioned New York Times articles were published. While they cannot provide information regarding his net worth (tax returns do not include this figure), contain data for 2019, nor contain his full tax records, we can still glean some very useful information from them. Besides confirming that Donald Trumps' disclosed income numbers were actually revenue figures, they also show that, taken as a whole, companies owned by Trump have been incredibly unprofitable for the period between 2000 and 2018. While enterprises such as Trump Tower have been profitable, overall Trump's businesses lost $174.5 million from 2000–2018. By comparison, his net income from licensing and endorsement deals over that period was $230 million, his net income from The Apprentice television show was $197.3 million, and his income from other investments in companies run by other people was $178.7 million.
Top 5 Businesses Owned by Donald Trump
The list below is limited to businesses for which a specific revenue amount was given.
1. Trump National Doral
- 2019 Revenue: $77,207,936
- 2018 Revenue: $75,962,848
- 2019 Asset Value: Over $50,000,000
- Business Type: Golf Resort
What is now the Trump National Doral golf resort was founded in 1962, in the town of Doral, Florida, near Miami. Trump bought the resort out of bankruptcy for $150 million in 2012. The Doral was the source of considerable controversy in 2019 when the president announced plans to hold the 2020 meeting of the G7 at the Trump National Doral. He withdrew the proposal after accusations that this was an attempt to profit from his presidency by raising the sales and profile of the resort through the event.
2. Trump Old Post Office LLC
- 2019 Revenue: $40,523,041
- 2018 Revenue: $40,842,294
- 2019 Asset Value: Over $50,000,000
- Business Type: Hotel
The name of this business may not be familiar to many people because it's the holding company for the Trump International Hotel in Washington, D.C., which operates in the Old Post Office building, a national landmark. Trump's company holds a long-term lease on the property, owned by the U.S. government, which could last nearly 100 years with extensions. The hotel now is at the center of a major emoluments case against the former president. A group of hotel and restaurant owners has sued Trump for violating the emoluments clause, alleging that he is unconstitutionally profiting from his office because his hotel gains business from foreign officials who stay there to curry his favor. The group says this gave the former president's hotel an unfair competitive advantage against their businesses, which is what established their standing (right to sue) in the first place. Partly as a result of lawsuits and public criticism, the Trump Organization planned to sell its lease to the property. They were seeking a purchase price of more than $500 million, one of the highest priced hotel deals per-room ever. The sale process is on hold due to the COVID-19 pandemic.
3. Trump Ruffin Tower LLC
- 2019 Revenue: $27,677,448, divided between $4,414,500 in condo sales and $23,262,948 in hotel revenue
- 2018 Revenue: $28,558,298, divided between $6,002,244 in condo sales and $22,556,054 in hotel revenue
- 2019 Asset Value: Over $50,000,000
- Business Type: Hotel and Condominium Complex
Trump Ruffin Tower LLC manages the Trump International Hotel and Tower in Las Vegas. Originally built in 2008, the tower is a combination hotel and condominium development. It struggled as the Great Recession hit when it opened more than a decade ago, devastating the real estate market. Plans for a second tower to accompany the first were scrapped.
4. Trump Turnberry
- 2019 Revenue: 25,691,318
- 2018 Revenue: $23,446,634
- 2019 Asset Value: Over $50,000,000
- Business Type: Golf Resort
Originally built in 1906 by Archibald Kennedy, the third Marquess of Ailsa, Trump Turnberry is one of two golf resorts the president owns in Scotland. Trump purchased the Turnberry resort from a Dubai-based company for an undisclosed sum.
5. Mar-a-Lago Club L.L.C.
- 2019 Revenue: 21,432,344
- 2018 Revenue: $22,692,146
- 2019 Asset Value: Over $50,000,000
- Business type: Hotel and Resort
The Mar-a-Lago Club, "Sea-to-Lake" in Spanish, was originally built in 1927 by Marjorie Merriweather Post after inheriting the Postum Cereal Company in 1914, which later became the General Foods Corp. In 1968, she decided to donate Mar-a-Lago to the U.S. government to serve as a winter White House. When she died in 1973, her foundation attempted to do so, but the government refused due to the high maintenance costs. The estate was purchased by Trump in 1985 for a reported $8 million, which he now uses both as a winter White House and privately owned hotel.
Outlook for 2020
The year 2020 has been challenging for the former president's businesses as the COVID-19 pandemic hit the hospitality industry hard. A study by the American Hotel & Lodging Association (AHLA) found that almost nine in 10 hotels have resorted to furloughs or layoffs, based on a July 23–27 survey. Only 37% of hotels have brought back more than half of their full-time employees, while 36% have brought back no employees. Less than a quarter of hotels surveyed are back to 60% of their pre-COVID-19 staff levels, while just over a quarter are below 20% of pre-COVID-19 staff levels. More than half of the hotel owners surveyed say they're in danger of losing their properties to foreclosure.
The Trump Organization laid off roughly 1,500 employees due to COVID-19 as of the beginning of April, including 560 at the Trump National Doral. Trump's largest business by revenue, Trump National Doral, had to close in March along with many of his other properties. It reopened in June along with several other Trump hotels.
Trump's Failed Businesses
Trump's current businesses give only a partial picture of his record as a businessman. During his several decades as a real estate executive, there also is a long list of companies that he has sold, dissolved, or which have gone bankrupt. Trump companies have filed for bankruptcy six separate times, a fact that Trump has bragged about, saying he has "used, brilliantly, the laws of the country."
A useful snapshot is Trump's record during the 10 years before he won the presidency. From 2006 to 2016, The New York Times went through every business deal that the Trump Organization announced or that was reported on. The 60 deals reflected a highly uneven track record of business success: "One-third of them never got off the ground or soon petered out. Another third delivered a measure of what was promised — buildings were built, courses taught, a product introduced — but they also encountered substantial problems, like lawsuits, government investigations, partnership woes or market downturns ... The remaining third, while sometimes encountering strife, generally met expectations," according to The New York Times.
Any deeper examination of the president's business record would be incomplete without looking at his series of high-profile bankruptcies and other failures. Below is a list of some of the highlights, although it is by no means comprehensive.
In the early 1990's, Donald Trump was faced with the prospect of personal bankruptcy due to large personal debts, deteriorating finances, and a trio of money-losing casinos in Atlantic City. His largest casino, Trump Taj Mahal, had already declared bankruptcy in 1991, and gaming regulators found his "fiscal health" "worrisome." To deal with this, Trump launched an initial public offering (IPO) of Trump Hotels and Casino Resorts. The public offering raised enough money for Trump to avoid personal bankruptcy and allowed him to offload his heavily-indebted casinos to investors. Trump stepped down in 2009 as chairperson of the company, whose name had been changed to Trump Entertainment Resorts in 2005. By then, the company had gone through bankruptcy twice and investors had lost "well over 90 cents on the dollar," according to billionaire Warren Buffett. Trump Entertainment Resorts went back into bankruptcy in 2014 and was sold to Icahn Enterprises (IEP) in 2016, resulting in Trump losing his stake in the company. The Taj Mahal, which Trump spent $1.2 billion to build in 1990, was later sold by Icahn Enterprises for $50 million, or 4% of its cost, to Hard Rock International in 2017.
Trump Model Management
Trump Model Management was a modeling agency founded by Trump. The company is a natural extension of Trump's interest in beauty pageants, with his production company formerly producing Miss USA pageants and the TV show tied to it named Pageant Place.
In April 2017, news that Trump Models would shut down surfaced after an email from the company's president leaked. Some speculate that the decision to shut down was due to the accusations from some foreign-born former models that they had been hired without the necessary work visas. Trump Model Management denied using illegal labor practices. Trump himself held an 85% stake in the business before it dissolved.
The Trump Entrepreneur Initiative
The now-defunct Trump Entrepreneur Initiative was once known as Trump University. The for-profit education company offered courses in real estate, asset management, entrepreneurship, and wealth creation. The company was not an accredited school and did not offer high school or college credits. The company was embroiled in an ongoing, high-profile scandal during Trump's presidential campaign, and it continued into his tenure as president.
The Trump Entrepreneur Initiative faced a lawsuit in 2013 alleging illegal business practices. The New York state attorney general filed a $40 million civil suit that alleged the corporation made false promises to its students. CNN Politics reported that a New York judge found Trump personally responsible. In late March 2017, a judge approved a $25 million settlement for defrauded students.
Trump Ice Natural Spring Water
Trump Ice is a bottled water brand owned by Donald Trump. The winner of "The Apprentice" season two, Kelly Perdew, served as executive vice president of the organization. The company's website no longer exists, and the product can no longer be found in national grocery chains or stores but is available on eBay and other such sites. The company was used as a gimmick in the show's first season when contestants marketed and sold the product.
Launched in 2007, Trump Steaks was a line of beef products sold exclusively by The Sharper Image and QVC. Due to poor sales, the products were removed from distribution after just two months.