Sunday, July 19, 2020

Mary Trump's Book and a Personal Fred Trump Anecdote

Fred & Donald Trump - Date and locale unknown
via CBS News
I finished reading Mary L. Trump's book: Too Much and Never Enough: How My Family Created the World’s Most Dangerous Man. It is a very depressing saga of parental abuse. I thought that my family was fucked up. Compared to this crew, they were the Waltons.

Fred Trump was a monster. He drove his eldest son, Fred Trump Jr., (Mary Trump's father), to an early grave because “Freddy” was not a monster. Freddy died at the age of 43; ill, penniless and an alcoholic.

Donald Trump was Fred's Frankenstein project. From the time when Donald was in his early 20s, he emulated Fred in every conceivable way to curry favor. To invite Fred's wrath was something that no one wanted to do.

One way that Donald became Fred's favorite was to taunt Freddy. Donald was exceptionally cruel. Freddy had the good sense to leave the family business. With ROTC training and Air National Guard service, Freddy became a 707 pilot with TWA at the dawn of the jet age.

In those days airline pilots were paid sums comparable to business executives. It was a glamorous job. Captains were idolized when they walked through airports in their four-striped uniforms. This was particularly true with TWA which was owned, at the time, by Howard Hughes. Domestically TWA was the airline of the stars.

At every opportunity, Fred and Donald piled on, letting Freddy know that he was worthless; just a “glorified bus driver.” Fred and Donald both avoided military service. They were deeply resentful of Freddy's time in the Air National Guard.

Unfortunately, by that time Freddy was already an alcoholic and his career as a pilot lasted less than a year. Freddy crawled back to Fred and rejoined Trump Management. He and his family were required to live in a crumbling, inadequately heated apartment in one of Fred's buildings in Brooklyn.

Mary Trump does have an axe to grind. She remains very angry over the family's treatment of Freddy. Her mother, Linda, was also treated horribly. At the time when she divorced Freddy, Fred Trump was a legitimate billionaire. Yet she was reduced to receiving $600 per month in alimony and child support.

Therefore Mary, Fred's granddaughter, lived a life of near poverty and insecurity. Fred's wife, Mary Anne, sometimes supplemented Linda's income with jars of change from the laundry rooms of Trump buildings.

Donald and Robert eventually cheated Mary and her brother out of what should have been Freddy's inheritance. That has added another layer to Mary's anger.

I did not require Mary's book to know that Donald is a lazy, undisciplined sociopath and narcissist. Mary tells us how he got that way. There is every reason to believe that Eric and Donald Jr. are also monsters. Their mother, Ivanna, is no bowl of cherries either.

Fred was an admirer of Norman Vincent Peale. Peale was a con artist who essentially invented the prosperity gospel. Donald Jr. and Eric have replaced Peale with prosperity preacher Paula White. Eric seems to be the more malevolent of the two brothers.

Many of you have probably read some of the details from Mary Trump's book including the fact that Donald paid someone to take the SATs for him and he paid other students to write his papers. Fred is responsible for creating the Trump Organization, not Donald. It exists because of Fred's money, contacts and influence.

Donald is a terrible businessman. His casinos, the Trump Shuttle (airline) and the Plaza Hotel all went bankrupt. Donald is not very bright. In Atlantic City he had three casinos competing with each other for the same players.

Donald has claimed that he received only a $1 million loan from Fred. While not covered in Mary's book, it has been reliably reported that Fred provided Donald with more than $400 million.

Mary understates Fred's ties to the mob as an expediency to get buildings constructed. It is true that the Mafia was in complete control of New York's construction industry. However, Fred's ties went well beyond just getting projects completed.

Fred's original partner was a mafioso named William Tomasello. Fred eventually swindled Tomasello which became the subject of protracted litigation over three or four years ending in the early 1960s.

Which brings me to —
Fred and David
In the late 1980s I was present at a meeting of contractors and Fred Trump. How did I end up at that meeting? Chalk it off to some very bad judgment on my part. I will leave it at that. I do not think that I said two words but this is what occurred.

The matter at hand was Major Capital Improvements (MCI). MCI are improvements that benefit all tenants.

Fred's buildings were all rent stabilized. Every year New York State's Rent Stabilization Board determines the percentage of rent increases that are permissible for one year and two year leases; usually a couple of percentage points.

However, tenants pay for MCI via (in those days) rent increases up to 6% (it's currently capped at 2%). Indeed, long term tenants pay for the improvements many times over. Keep in mind that this also adjusts the base rent so rent stabilization increases are applied to the MCI-inflated price.

But that wasn't good enough for Fred Trump. The purpose for the meeting with Mafiosi, I soon learned, was to negotiate Fred's cash kickback which was created by inflating the price of the improvements. In other words, a $50 thermal window became a $75 thermal window with Fred pocketing the $25 difference.

That wasn't the only inflation that tenants paid for. The pricing was based on union labor. However, the mobsters who controlled the unions got some cash and the contractor used non-union workers with the union's consent. Fred knew this but his tenants were considered losers who deserved to get fleeced.

Just to recap:
  1. Fred added value to his buildings through major capital improvements.
  2. Tenants actually paid for the improvements through rent increases that Fred would otherwise not be entitled to.
  3. Overall, tenants paid back the cost of improvements many times more than the actual expense.
  4. Due to inflated pricing, the tenants also paid for tax free cash that went into Fred's pocket.
  5. In effect, tenants paid union wages to non-union labor.
  6. Fred permanently increased his rent rolls which also increased the value of the buildings.
After Fred died, geniuses Donald and Robert sold the buildings for $300 million less than they were worth. The buildings were debt free.

Mary claims that Fred's four remaining children created a company which siphoned off 90% of Fred's estate before he died. That was likely an estate tax scam. Donald was in control for years because Fred had developed dementia.

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