Pulitzer Prize-winning investigative reporter for The New York Times.
Pulitzer Prize-winning investigative reporter previously with The New York Times, now a columnist for The Daily Beast.
Donald Trump has threatened to sue The New York Times for publishing leaked pages from his tax returns, and the paper’s executive editor, Dean Baquet, said he would do so even if it meant risking jail time. We speak with two investigative journalists who report on Trump’s taxes and describe his legal threats in letters and phone calls, and their reaction. "Mr. Trump, especially given the positions he’s staked out ... would represent a really significant threat to the tradition of an independent free press in the United States," says David Barstow of The New York Times. "I think Donald Trump represents a clear and present danger to the liberties of the people, to the idea of the First Amendment," agrees David Cay Johnston, now a columnist for The Daily Beast.
AMY GOODMAN: We’re talking about Donald Trump’s taxes with two Pulitzer Prize-winning journalists: David Barstow of The New York Times and David Cay Johnston, now with The Daily Beast, also author of the book The Making of Donald Trump. I want to go to Donald Trump talking about taxes during a Republican primary debate last year at the Ronald Reagan Library in California.
DONALD TRUMP: Well, I think the thing about the flat tax—I know it very well—that I don’t like is if you make $200 million a year, you pay 10 percent. You’re paying very little, relatively, to somebody that’s making $50,000 a year and has to hire H&R Block to do the work because it’s so complicated. One thing I’ll say to Ben is that we’ve had a graduated tax system for many years, so it’s not a socialistic thing. What I’d like to do is—and I’ll be putting it in the plan in about two weeks, and I think people are going to like it—it’s a major reduction in taxes. It’s a major reduction for the middle class. The hedge funds guys won’t like me as much as they like me right now. I know 'em all. But they'll pay more. I know people that are making a tremendous amount of money and paying virtually no tax, and I think it’s unfair.
AMY GOODMAN: That’s Donald Trump talking about taxes during the Republican primary debate at the Ronald Reagan Library. Your response to that, David Cay Johnston? He says that’s unfair.
DAVID CAY JOHNSTON: Well, it is yet another example of Donald says one thing and does another, because we—the last year that we know Donald Trump actually paid income taxes was 1977. And we know from other public records that in recent years he reported an income of less than $500,000 for tax purposes. So, for Donald Trump to complain that people are living tax-free is just absurd.
AMY GOODMAN: What most surprised you by the _Times_’ revelations of these tax documents of Donald Trump’s tax returns?
DAVID CAY JOHNSTON: The interest that he had. He collected about $7 million of interest. Now, if he bought regular corporate bonds, that implies he owes $100 to $150 million worth. But he may have owned junk bonds that were bought at a very low price, and that interest, therefore, may have represented a much smaller investment—would be still tens of millions of dollars, but a much smaller investment. But I was surprised at how much interest he was collecting, because that’s a very, very conservative thing to do, and Donald presents himself to the world as this swashbuckling, brilliant business genius.
The second thing is the size of the loss. I covered this back then for the Philadelphia Inquirer and wrote a book about Atlantic City. And I’m having a hard time figuring out how Donald got to, even over a period of years, $916 million of net operating losses. And David, by the way, earlier made a point: He couldn’t use that much. He doesn’t have that much income. His income does not reflect a man who is a billionaire at all. It reflects a wealthy person, but not even close to the billionaire class.
AMY GOODMAN: What about that, David Barstow?
DAVID BARSTOW: There’s one thing I just wanted to focus in a minute, which is, his basic presentation right now is "You should elect me because I know all the tricks of the tax code. I know"—and he said the tax code’s unfair, and he personally has benefited from that unfairness. "And so, therefore, I’m the guy to fix it." But what is, I think, also noteworthy is that we have yet heard from him any specific proposal to actually fix any of these provisions that benefited him so richly in this 1995 tax return. He has talked about some changes to the tax code, but they’re changes that—as best as anyone can assess them so far, they’re fixes that would actually further benefit him.
DAVID CAY JOHNSTON: Yeah, his plan, Amy, is very oriented toward people at the top. Think of it as George W. Bush’s tax cuts on steroids. And by the way, this is an area I know very well; I’m literally drafting—my next book is a new federal tax code for the 21st century. But, you know, Donald and I actually had lunch about this—these issues in 1990. And I pointed out to him that he had a $3.4 million negative income, and he only needed $1 to pay no taxes—he actually could have made a little bit of money and paid no taxes—and suggested that if he reorganized his partnerships, he could, in essence, sell those tax benefits to somebody else. And Donald, who was nonplussed—he couldn’t imagine a journalist understood the tax code—I don’t think he really understood the points I was making to him at the time, because he doesn’t focus well on things. He didn’t do the stuff that’s here. His tax advisers—notably, Jack Mitnick—did this.
AMY GOODMAN: So, the Trump Organization has threatened to sue you, David Barstow, and the Times?
DAVID BARSTOW: They have. They’ve taken, actually, I think, a really remarkable position with us. The letter that they sent to us before we published took the position that unless we had the specific blessing and permission of Donald Trump to write a story about his tax returns, we would be in violation of the law. It was almost—I mean, the notion of prior restraint on the press has been—has been roundly dismissed in Supreme Court decision after Supreme Court decision. The Supreme Court has ruled over and over and over again that if reporters obtain documents in the way we obtained them, we have a perfect right under the First Amendment to publish information that’s in the public interest.
DAVID CAY JOHNSTON: And this goes directly, by the way, to why Donald Trump isn’t getting the critical coverage he should be getting. He called me at home on April 27th to threaten to sue me. Some of the freelance articles that I have written were lawyered way beyond all reason, out of fear. And I’ve had two news organizations say, "We can’t report that, because we’re afraid that Donald Trump will sue us." This is an extraordinary thing for a politician to do. And the Supreme Court in this country has been very clear back to the 19th century that the highest and most protected form of speech is political speech. And this is all about—falls under the rubric of political speech.
DAVID BARSTOW: But not only is it political speech, right? But there is a tradition in this country, as you mentioned, going back to the 1970s, of presidential candidates releasing their tax returns, for the very reason that we’re talking about. It helps us have an informed debate about their finances and how they pay taxes.
DAVID CAY JOHNSTON: And because we don’t want another crook in the White House. Remember, Richard Nixon’s tax guy went to prison, and he wasn’t indicted simply as a courtesy to the office of the presidency. And his vice president confessed to a tax—resigned, confessed to a tax crime. We don’t want to have tax felons in the Oval Office.
AMY GOODMAN: During a forum in September, the Pulitzer Prize-winning journalist and filmmaker Laura Poitras asked New York Times executive editor Dean Baquet if he would publish information from Donald Trump’s tax returns even if it meant risking jail time. They were also joined by The Washington Post associate editor, Bob Woodward. This is a part of the exchange.
DEAN BAQUET: I would argue that for a presidential candidate whose—whose whole campaign is built on his success as a businessman and his wealth, who’s given different versions of his wealth, I agree with you.
LAURA POITRAS: So you’re going to publish them, if you get them?
DEAN BAQUET: I would publish them, strenuously.
BOB WOODWARD: Yeah, but—but the problem is, five years—
LAURA POITRAS: So, you will. OK, that means you—
DEAN BAQUET: I would publish them; after, bring them to the Post, yeah.
BOB WOODWARD: The problem is, five years—
LAURA POITRAS: And if it means—and if it means having—and if it means having to be drawn into a grand jury, you have to go.
DEAN BAQUET: Yes.
LAURA POITRAS: Like, you have to fight it. You can’t let—
DEAN BAQUET: Yes.
LAURA POITRAS: OK.
BOB WOODWARD: It’s five years in jail.
DEAN BAQUET: Right.
BOB WOODWARD: And Mary Jordan’s husband—
LAURA POITRAS: I think, yes, but the chances—
BOB WOODWARD: —Kevin suggested that if we publish them and get them and get five years in jail, that everyone at the Post take a day.
DEAN BAQUET: Yeah.
BOB WOODWARD: It’s kind of like jury duty. I don’t know that they would allow that, but if The New York Times gets them, and they send you to jail, I will come over and take a day, maybe even two days.
DEAN BAQUET: OK, thank you. Thank you. Thank you. Thank you.
LAURA POITRAS: So, but—
BOB WOODWARD: But, you know, this is central.
LAURA POITRAS: But so, you are going to publish them?
BOB WOODWARD: Pardon?
LAURA POITRAS: You’re going to publish them, if you got them?
BOB WOODWARD: I think—I think you kind of would have to.
DEAN BAQUET: Are you surprised to hear that?
LAURA POITRAS: No, he hasn’t answered.
BOB WOODWARD: You’re right. I mean, the question—some things you have to do.
AMY GOODMAN: So, there you have Bob Woodward and New York Times executive editor Dean Baquet. David Barstow, your boss.
DAVID BARSTOW: You know, there were a lot of difficult things about bringing this story to the public on Sunday. From my perspective, the least difficult part of it was deciding that the legal threats from Mr. Trump were not worth losing a minute’s sleep over. I think the position that they’ve taken—and we have some of the best First Amendment lawyers in the business working for us—they think that he’s taken a position that is so outside the norm of the American legal tradition that we don’t feel like these kinds of threats are anything to sweat over.
DAVID CAY JOHNSTON: David, if he gets elected, he will have the power of federal law enforcement. I’m not worried if he threatens to sue me, as he has, if he loses. But if he wins, he could put you and I and Dean Baquet on no-fly lists. And the courts have been very reluctant to let people off those, if the government claims national security. He can do all sorts of things to mess up your life. And he’s made it clear he will do this. He talks as if the president is a dictator with unlimited power, who doesn’t need to pay attention to Congress or to the courts. He’s talked of firing generals. And the first thing someone does who plans to turn a republic into a dictatorship is they fire those general officers who are loyal to country and replace them with people loyal to him. And in my book, I quote Donald at length, in several forums, as saying what matters to him is getting revenge—that’s his philosophy: get revenge; even though he says he’s Christian, get revenge—and absolute loyalty to him, the person. That’s what these threats of litigation should really concern the voters about.
DAVID BARSTOW: I definitely—I think that anyone who cares about an independent free press should be paying closer attention to these kinds of threats, simply because they’re not normal. This letter that was sent to us by one of the top litigators in New York, who’s now representing Mr. Trump, it’s just—it’s so outside the norm of—I mean, sure, we get threatening letters all the time, and we get lawyer letters all the time. And—
DAVID CAY JOHNSTON: They go with the job.
DAVID BARSTOW: It goes with the job, goes with the territory. But this, this was extraordinary. My jaw almost dropped when I read it, not because I was—
AMY GOODMAN: Because? Because?
DAVID BARSTOW: Because what he’s—he’s taking a position that unless he, Donald Trump, personally blesses The New York Times writing a story about his income tax returns, we’re committing a crime, we’re violating the law.
DAVID CAY JOHNSTON: And he’s said—he’s said things like this for a long time. He told The New York Times that, first of all, his father wasn’t arrested at a KKK rally with a pitched battle with police in 1927, and he didn’t live at that address. Well, they lived at that address, and he was arrested. And then he said, "Well, there were no charges. They just arrested him. Therefore, you shouldn’t write about it." He has said at campaign rallies, "We’re going to change these laws and sue these journalists and get rich." He said at other campaign rallies, "They shouldn’t be allowed to write things, if you don’t think that that’s what they should be." This is not the democratic process. This is the language of someone who believes that he is a dictatorial king or would be.
AMY GOODMAN: What did the Trump campaign say to you when you reached out to them before you published this?
DAVID BARSTOW: So, I mean, what’s interesting is, we—the first response, like official response, was this letter from this high-priced lawyer threatening to, you know, rain legal hell on us if we went forward. The second response—then, 30 minutes later, the second response was a statement they released saying basically he’s a brilliant businessman who has a fiduciary obligation to his family and his businesses not to pay any taxes. And then it went on to say, "And here are all the taxes that he’s—that he does pay," this long, long laundry list of taxes.
DAVID CAY JOHNSTON: That aren’t income taxes.
DAVID BARSTOW: But, of course, what was missing from that long laundry list was federal income tax. It was the second response that we thought was the far more telling and important response.
DAVID CAY JOHNSTON: And to be fair to Donald, he did pay New Jersey state income tax, because of its rules. On, I think it was, $1.4 million of New Jersey state income, he paid around $96,000 of tax.
AMY GOODMAN: We’re going to break and then come back to this discussion. Our guests are David Cay Johnston, author of The Making of Donald Trump, and we’re talking to David Barstow, who led The New York Times team analyzing part of the Trump tax returns that they had mailed to them from—did you say Trump Tower? That was the return address?
DAVID BARSTOW: The return address indicated it was from Trump Tower.
AMY GOODMAN: Who do you think it was?
DAVID BARSTOW: I mean, I think we’ve been, like everybody else, trying to figure it out and reading the tea leaves and examining these documents and doing everything we possibly can to encourage additional leaks to come to us.
DAVID CAY JOHNSTON: There’s a good chance it was Donald himself. Donald has a history of leaking things that you and I might think are damaging, but that he thinks enhances his reputation.
AMY GOODMAN: We’ll be back with the Davids. Is it they who are taking on Goliath? Or are they the Goliath as the press in this country? We will see. David Barstow and David Cay Johnston, we’ll be back with them in a minute.
AMY GOODMAN: "Many Rivers to Cross" by Jimmy Cliff. This is Democracy Now!, democracynow.org, The War and Peace Report. I’m Amy Goodman. We’re talking about Donald Trump’s taxes with two Pulitzer Prize-winning journalists: David Barstow of The New York Times, who led the investigation into Donald Trump’s tax records, and David Cay Johnston.
Now, David Barstow, in July, you wrote a piece for The New York Times headlined "Donald Trump’s Deals Rely on Being Creative with the Truth." You wrote about how Trump was the beneficiary of miraculously well-timed memory lapses. You write, quote, "Such was the case when Mr. Trump filed a libel lawsuit against Timothy L. O’Brien, the author of 'TrumpNation: The Art of Being the Donald.' Among other things, Mr. Trump asserted that 'TrumpNation' cost him a 'deal made in heaven' with a group of Italian investors, men he had met and who were on the brink of signing a business partnership that would have made him hundreds of millions of dollars. Their names? He could not recall. 'TrumpNation' also cost him a hotel deal with Russian investors, he said. He could not remember their names, either. He was certain the book also ruined a deal with Turkish investors. Again, he could not recall any names. Polish investors also got cold feet after they read Mr. O’Brien’s book. Their names escaped him, too. The book also scared off investors from Ukraine. Alas, he could not think of their names either.
"Mr. Trump’s lawsuit was dismissed." David Barstow?
DAVID BARSTOW: That’s a pretty good paragraph. I like that.
DAVID CAY JOHNSTON: Yeah.
DAVID BARSTOW: I forgot I had written that. Yeah, it’s an amazing thing to study him as a businessman and to study him especially when he’s being pressed on things about his business career. I mean, these—and every time—you know, he’s been deposed so many times. He’s been—he’s testified so many times. And he’s been, you know, tangled with some really good lawyers over the years. And you can see the lawyers—you can see their exasperation rising, because every time they get close to kind of cornering him in an untruth, he has one of these moments where "Oh, I just—I can’t remember."
DAVID CAY JOHNSTON: And there’s a legal reason—there’s a legal reason for that. And that is, when Donald says something under oath, he can get into serious trouble. So, he’ll say publicly outrageous things, but when you put him under oath, he can’t remember. And revealingly, I think, about Donald, in the case against Timothy L. O’Brien, he was asked about his net—
AMY GOODMAN: And explain who Timothy L. O’Brien is.
DAVID CAY JOHNSTON: Timothy L. O’Brien is a former colleague of ours at The New York Times when I worked there and Tim worked there, and wrote this book, TrumpNation, that said Trump is not a billionaire, he’s probably worth less than $200 million. And Donald said that was worth $5 billion of damages to him. Under oath, he was asked, "Well, how do you determine your net worth?" Most of us, you know, add up our assets, subtract what we owe the bankers, and the difference is our net worth. Donald’s answer? "Well, it depends on my mood. It depends on how I’m feeling." And the lawyer pursued this; he didn’t just—you know, to make sure that there was a clear record. Then Donald kept saying, "Yes, it depends on how I feel today." So I want you to know, this is a great day, Amy; I’m worth $2 billion.
AMY GOODMAN: Well, you do a lot of quoting in that piece, in the July piece, David Barstow, "Donald Trump’s Deals Rely on Being Creative with the Truth." You write, "There was the time Donald J. Trump told Larry King that he had been paid more than $1 million to give a speech about his business acumen when in fact he was paid $400,000. Or the time he sought a bank loan claiming a net worth of $3.5 billion in 2004, four times as much as what the bank found when it checked his math. Or the time he boasted that membership to Trump National Golf Club in Westchester County, N.Y., cost $300,000 when the actual initiation fee was $200,000. Or the time he bragged on CNBC about his new Trump International Hotel and Tower in Las Vegas, claiming, 'We have 1,282 units, and they sold out in less than a week.' As Mr. Trump knew, more than 300 units had not been sold.
"Confronted in a court case about this last untruth, Mr. Trump was anything but chagrined. [He said,] ’I’m talking to a television station. ... We do want to put the best spin on the property.’"
Yes, I’m reading from David Barstow’s July article in The New York Times, "Donald Trump’s Deals Rely on Being Creative with the Truth." That’s very interesting: While I’m talking on television, I don’t have to tell the truth—which is what he’s doing now in this presidential campaign. He’s speaking on television.
DAVID BARSTOW: You know, the paragraph that lawyers and journalists go back to over and over again from his book, The Art of the Deal, is a paragraph where he talked about the—his admiration for the concept of truthful hyperbole.
AMY GOODMAN: Explain.
DAVID BARSTOW: And it’s this idea that the way he sees it, there’s nothing wrong with—I mean, first of all, truthful hyperbole makes no sense at all, right? And he just sees it as entirely legitimate to exaggerate, to say things that aren’t true, to play to people’s desires, their fantasies. And I think you see—
DAVID CAY JOHNSTON: Well, because he’s a master salesman. It’s a mixture of—Donald is a master salesman. You’ve got to give him credit for some things in this world. And one of them is he knows how to sell—
DAVID BARSTOW: Yeah.
DAVID CAY JOHNSTON: —and sell you something that may be worthless, but persuade you it’s gold. And secondly, that’s what con artists do. The thing about Donald, I once fed him false information, and his answers embraced my falsehoods. That demonstrated he didn’t know what he was talking about, but he put them into his answers. And he’s done things like this in interviews with other people. So there’s a mix here of, you know, the con and the sales job. And if it benefits Donald, "What are you worried about these fine, detailed facts for?"—unless he’s under oath.
DAVID BARSTOW: When you know—when you know what the facts are, and you know that he knows what the facts are, and then you watch him kind of mush all that together and throw in a bunch of, you know, nonsense, he’s actually—it’s a stunning talent.
DAVID CAY JOHNSTON: Yes.
DAVID BARSTOW: I mean, it’s—you know, all politicians—right?—are bending the truth and are hedging here and there. But there’s something about him. I think it’s one of his most remarkable abilities, is this—there’s this—and you see it, actually, even when he’s under oath and when he’s being deposed, this incredible ability to weave fact and fiction together and make it sound like, you know, it’s this seamless reality.
DAVID CAY JOHNSTON: Which, David, that’s why I say Donald creates his own reality. That’s the most—if you want to understand Donald Trump, if he says it’s true, he’s thinking it’s true at the moment, not because it is, but because it will get what he wants out of you. Donald creates his own reality.
DAVID BARSTOW: And I think it’s one reason why even though fact checkers, you know, point out over and over and over again, "No, that’s not true. No, that’s not true. That’s wrong. That’s—he did support the Iraq War," it doesn’t matter in his kind of conception of the world, because he does create this reality, right?
DAVID CAY JOHNSTON: Exactly right.
AMY GOODMAN: Fusion writes who pays more in taxes than Trump: undocumented immigrants, retired veterans, single people making $15,000 a year.
DAVID BARSTOW: Somebody sent me an email last night saying that the Clinton campaign should make up signs and just pass them out to their—at their rallies that says, "I pay more taxes than Donald Trump."
DAVID CAY JOHNSTON: Right.
DAVID BARSTOW: And a lot of people probably could hold up those signs.
AMY GOODMAN: Do you feel that there is a threat to freedom of the press now more than you’ve seen in many, many years?
DAVID BARSTOW: I think that—I think that Mr. Trump, especially given the positions he’s staked out over the course of this campaign and his whole lifetime, would represent a really significant threat to the tradition of an independent free press in the United States. I think this—the way he reacted to this story is particularly chilling, to me, as a journalist. I just have never seen someone take the kind of position that he took.
DAVID CAY JOHNSTON: Amy, we’ve had a well-financed 40-year campaign to discredit the press. There are these bumper stickers in America, you know, "Don’t trust the liberal press." No, trust the news organizations that just make it up. And I think Donald Trump represents a clear and present danger to the liberties of the people, to the idea of the First Amendment. By his own words, he’s made it very clear, if he were president, he would do everything he could to suppress any speech that he doesn’t agree with or he sees as damaging to what he’s doing. And he would have not just his finger on the button, but he would have the full powers of federal law enforcement. I also think that would provoke a constitutional crisis—I certainly hope it would provoke a constitutional crisis. But this is a real serious problem that Trump is exploiting.
DAVID BARSTOW: He would clearly—he would clearly do all he could to weaken our defenses against libel lawsuits. He’s brought five libel lawsuits himself. He sued the architecture critic for the Chicago Tribune for—
DAVID CAY JOHNSTON: Because he didn’t like his opinion.
DAVID BARSTOW: He didn’t like his opinion.
DAVID CAY JOHNSTON: And opinions are totally protected.
DAVID BARSTOW: So, I mean, those are—those are the kinds of—you know, those are the kinds of judgments that make you really wonder: What does he understand about our tradition of a free press?
AMY GOODMAN: We have to leave it there. I want to thank you both for being with us, a Pulitzer Prize-winning journalist, David Barstow, who led The New York Times team that published the explosive report on Donald Trump’s tax returns, and David Cay Johnston, author of The Making of Donald Trump.
That does it for our broadcast. We’ll be broadcasting tonight the vice-presidential debate. Check democracynow.org.