Donald Trump made a pretty penny off a program to help small businesses hurt by 9/11, one of many times where The Donald took advantage of government programs to save or make money off the taxpayer.
The self-proclaimed billionaire, who has so far refused to release his tax returns, was one of many wealthy individuals and businesses who used a loophole in a program intended to help smaller companies in lower Manhattan recover after the Sept. 11 tragedy.
Trump got $150,000 for his swanky property at 40 Wall Street because the Empire State Development Corporation, run by the state, didn’t enforce federal guidelines on what defines a small business. Instead, the state used much looser rules that let The Donald and others including Morgan Stanley and Bank of China take money that was earmarked by Congress to help small business owners in the neighborhood recover after the tragic attacks, a 2006 Daily News expose found.
Locals say Trump, who used the bravery of 9/11 responders to counter-punch when Ted Cruz maligned his “New York values” during the Republican primary, didn’t live up to the term.
“A billionaire taking money meant for struggling small businesses after September 11th is not ‘New York values,'” said Catherine McVay Hughes, a longtime community organizer in Lower Manhattan who worked with grassroots groups to help rebuild the neighborhood and currently chairs Community Board 1.
Many small businesses were destroyed in the towers themselves, and others in the neighborhood went under because of the exodus of locals, loss of patrons who used to work in other shuttered shops and a decrease in foot traffic in the area. The funds were aimed at helping the mom and pop shops make it through an incredibly difficult stretch.
“It’s really indefensible that this money went to big guys like Trump,” said Rep. Jerry Nadler (D-Manhattan), who helped secure the funds from Congress for the program and earlier in his career fought Trump over funding for a pair of construction projects on the Upper West Side.
“It’s unfortunate because it meant a lot of the small businesses didn’t get that money,” Nadler continued.
Trump has so far refused to release his tax returns, making him the first presidential candidate in nearly a half-century not to put them out. That makes it impossible to see the full extent of his business dealings. But past events make it clear that the September 11 cleanup wasn’t the only time Trump dipped into the public coffers — and the sum from the 9/11 funds pales in comparison to the millions he’s saved in other government deals.
Early in his career, Trump struck an agreement with the city to build the Grand Hyatt Hotel in Grand Central Station that would let him avoid paying taxes on the property for 40 years — $60 million in tax savings in the first decade alone, according to reports, and as much as $400 million today.
In exchange, a portion of the hotel’s profits were required as payment. But a city audit a few years later said that his company was short-changing New York City by millions.
Former New York City Auditor Karen Burstein looked into the payments and found that Trump’s company had underpaid the city by almost $3 million. She told the Daily News that she identified some shady book-keeping aimed at reducing the hotel’s tax burden that she’s convinced Trump knew about.
“You can’t call them illegal but they were irregular to the max. They got all this money in tax agreements, and all that money would go to the city’s treasury for police and fire. This is the public’s money,” she said. “Their accountants were asked by Trump whether they could reduce the amount of the money they paid the city. … Trump signed off on all the changes, he knew.”
Burstein said Trump’s staff had lobbied the mayor’s office hard to keep her report from being released, and that they’d even offered her deputy a job during the process to try to keep him off the audit.
“Imagine how rich you would be if the government helped you acquire valuable real estate with no money down, helped you build a large luxury hotel and then let you pay no property taxes for 40 years,” David Cay Johnston, a Pulitzer Prize-winning investigative tax reporter who has tracked Trump’s career for decades, told the Daily News. “That’s the deal Trump got when he built the Grand Hyatt in Manhattan, a deal worth $400 million just in the taxes never paid.”
Trump’s campaign didn’t respond to two requests for comment on the deals.
He told Time Magazine earlier this year that the 9/11 money was “probably a reimbursement for the fact that I allowed people, for many months, to stay in the building, use the building and store things in the building,” arguing “The value of what I did was far greater than the money talked about, much of which was sent automatically to building owners in the area.”
Trump’s attorneys railed against Burstein’s 1989 report, arguing it had “a hostile tone and ill-conceived bias throughout.”
Trump hasn’t been shy about bragging about his ability to get the best deal possible – even when that meant securing government funds.
“When I work for myself, I try to make the maximum profit,” he told the Los Angeles Times in 2011. “If I run (for president) and if I win, I will no longer care about myself. I’ll be doing the same kind of things for this country.”
Trump’s company still brags about the Grand Hyatt deal, pointing out on the Trump Organization website that because New York City “was facing bankruptcy, Mr. Trump was able to negotiate an unprecedented contract in which the city provided a 40-year tax abatement, the first ever granted to a commercial property.”
Nadler says he saw this type of deal-making first-hand.
After buying a huge tract of valuable land on the Upper West Side in the 1980s, Trump tried to get it considered as “blight” property because it was a former rail yard. The move would save him tens of millions.
Nadler fought hard to make sure that didn’t fly with the federal government.
“The idea that you could stretch the tax break and call it blighted land is not in the public interest. He was really stretching it,” Nadler told the Daily News. “The guy has been leaching off the government for decades.”
Later, in the early 1990s, Trump tried to get the government to pay to move the Miller Highway underground and build a park that would increase his property’s value — even though the Upper West Side highway had just been repaired.
“He didn’t give a damn. He just wanted to use the taxpayer money to make him richer by making the marketability of his apartments,” said Nadler.
Trump has, throughout his career, sought to get properties valued at lower than they’d originally been listed and get government tax breaks to build projects. Trump Bay in New Jersey has a five-year tax abatement. Trump Tower got a $20 million tax abatement in 1986. Many of his properties have been reassessed by local governments at lower values that decreased his tax burden.
“Trump is a welfare king who owes much of his fortune to the largesse of taxpayers,” said Johnston.
