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"A Classic State Capitalist": How Donald Trump Profited from Public Subsidies & Political Favors

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"It’s not been easy for me. It has not been easy for me. I started off in Brooklyn. My father gave me a small loan of a million dollars." Those were the words of presumptive Republican nominee Donald Trump during a town hall event last year in New Hampshire. Today we look back at Trump’s rise to power and how he profited from his father’s deep pocketbook and political connections. Decades before Donald Trump became a household name, his father Fred Trump emerged as one of New York’s most prolific real estate developers, building more than 27,000 homes in Brooklyn and Queens. In 1927, Fred Trump made the news when he was arrested at a Ku Klux Klan riot in Queens. We speak to Wayne Barrett, considered the preeminent journalist on Donald Trump. As a reporter at The Village Voice, Barrett began reporting on Donald Trump in the late 1970s. Barrett’s 1991 biography of Trump was just republished as an ebook with the title of "Trump: The Greatest Show on Earth: The Deals, the Downfall, the Reinvention."

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Transcript
This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: We turn now to Donald Trump.

DONALD TRUMP: It’s not been easy for me. It has not been easy for me. And, you know, I started off in Brooklyn. My father gave me a small loan of a million dollars. I came into Manhattan. And I had to pay him back, and I had to pay him with interest. But I came into Manhattan. I started buying up properties, and I did great. And then I built the Grand Hyatt, and I got involved with the convention—so, I did a good job. But I was always told that that would never work. Even my father, he said, "You don’t want to go to Manhattan. That’s not our territory," because he was from Brooklyn and Queens, where we did, you know, smaller things. And he said, "Don’t go to Manhattan. That’s not our territory." But he was very proud of me. But all my life, I was told no.

AMY GOODMAN: Those were the words of presumptive Republican presidential nominee Donald Trump during a town hall event last year in New Hampshire. Well, today we look back at Trump’s rise to power and how he profited from his father’s deep pocketbook and political connections. Decades before Donald Trump became a household name, his father Fred Trump emerged as one of New York’s most prolific real estate developers, building more than 27,000 homes in Brooklyn and Queens. In 1927, Fred Trump made news when he was arrested at a Ku Klux Klan riot in Queens.

Earlier this week, Democracy Now!'s Juan González and I spoke with Wayne Barrett, considered the preeminent journalist on Donald Trump. As a reporter at The Village Voice, Barrett began reporting on Donald Trump in the late ’70s. Barrett's 1991 biography of Donald Trump was just republished as an ebook with the title Trump: The Greatest Show on Earth: The Deals, the Downfall, the Reinvention. We spoke to Wayne Barrett at his home in Brooklyn, where he has largely been confined due to his battle with lung cancer. I began by asking Wayne Barrett why he’s tracked Donald Trump for so long.

WAYNE BARRETT: When I started, in the '70s, he was this golden boy, you know, and he had not had much press, but it had all been very supportive, because he was doing the Grand Hyatt, which was his first big project in Manhattan. And the city was down in the dumps, you know, near broke during the ’70s, and he looked like the embodiment of a rising city. And he was getting that kind of press, though not much of it. And I was at The Village Voice, and so I took on—I was a rookie, he was a rookie. We're about the same age; I’m a little older. And so, I took on this whole notion of, well, let’s take a look at this guy who appears to be the answer to the city’s very grave financial problems at the time. And I started working on him in the maybe '77 period. I worked on him intensely in ’78 while the Hyatt was under construction, had not completed yet. And that's when I first got to know him. And I did about 10 hours of taped interviews with him as a young guy and wrote a two-part series that led to the impaneling of a federal grand jury, actually, because he was engaged in all kinds of machinations, even as a rookie. I mean, he started out playing games. So, there was a federal grand jury here in the Eastern District in Brooklyn, that did not lead to an indictment, but may have been the toughest ride he’s ever had, really, with a prosecutor.

JUAN GONZÁLEZ: One of the points that you made in the original book was the amount of—he has always projected himself as a self-made millionaire and then billionaire, but the amount of support he got from his father, also a real estate developer, and that his father was really crucial to his rise.

WAYNE BARRETT: Unbelievably crucial. When he opened his first office in Manhattan, the rent was paid by his father’s company out here on Avenue Z in Brooklyn. And everything that he did, whether it be the Grand Hyatt—the Grand Hyatt, for example, to get the financing, he got the financing from two banks that his father had used, used his father’s relationship banker. And the father had to sign the financing agreements. I mean, they’re not going to give a 30-year-old kid $35 million in 1978 to build a hotel. It has to be done with Fred’s resources. And Fred Trump was a great outer borough builder and really built good housing, 20,000 units totally, all over Queens, all over Brooklyn, some of them towers, like Trump Village, many of them single-family homes, that he had a great reputation as a builder. He was politically wired, as his son was. I mean, they played the political game, both of them, expertly, but Fred Trump was indispensable. I mean, even Trump Tower, which comes along later in Donald’s career, could not have been done without Fred coming in and supporting the financing of it. When he opened his first casino in Atlantic City, when he bought the first properties, the lease holds for the first properties for Trump Plaza, his casino in Atlantic City, Fred rode down in the limo with him and signed all the lease hold documents. Nobody was going to be financing this kid developer, kid casino operator. It was Fred who was the key to all of it.

It’s so ridiculous for him to call himself a self-made guy, when Fred was critical at the political end, too. I mean, everything that came to Donald came through political connections. And they were political connections forged by his father over decades with Brooklyn politicians. He came from the same political club as the then-mayor of New York, Abe Beame. And when they—he had to get an option for the Grand Hyatt and for the West Side Yards from a bankrupt railroad in Philadelphia, Penn Central, and the people who were selling the assets of the bankrupt railroad wanted to make sure that the option that they gave, they were giving it to a developer who would actually develop, because that’s when the real payment comes to the railroad. And so, they came up from Philadelphia, and Fred Trump greets them. And Fred and Donald get them in a limo and take them down to City Hall, and there’s Abe Beame standing on the steps of City Hall. "Anything you want, we’ll give you." So this totally a byproduct of Fred’s relationship.

JUAN GONZÁLEZ: I wanted to ask you—in the book, you refer to both of them, both Fred and Donald, as state capitalists.

WAYNE BARRETT: Yeah.

JUAN GONZÁLEZ: And you talk about the political connections and the degree to which they depended on government officials or politically connected leaders, to build their empire.

WAYNE BARRETT: Yeah. Well, that’s the irony of his current run. I interviewed a guy named Joe Sharkey for the book. And this is not actually in the book, because I’m not in the book, but—so I don’t tell this tale. But Sharkey was the county leader of the Brooklyn Democratic Party years ago. And I interviewed him. He was in his eighties and a little hard of hearing. And I said to him, "When did you first see Fred Trump at the FHA?" The FHA, the Federal Housing Administration, had financed virtually everything that Fred Trump ever built in the early phase of his career. He later latched onto Mitchell-Lama, which, you know well, is a state subsidy program similar to FHA. And so I said to—I said to him, "When did you first see Fred at the FHA?" And he said, "I went down to Roosevelt’s inaugural. And then, after the inaugural, I went over to the FHA, and Fred was already there." And so, these guys were living at the trough, you know? They’d been living at the trough their whole lives.

AMY GOODMAN: Explain what you mean by that.

WAYNE BARRETT: Well, you know, everything that they’ve done was based on political connections and associations. Fred had them unbelievably. Bunny Lindenbaum was his lawyer. Bunny Lindenbaum was the most wired lawyer in New York. He actually had a locker in the basement of City Hall, where he would keep a bottle. And if it was an overnight Board of Estimate meeting, which was then the governing body of the City of New York where they made all the big zoning decisions and dispositions of city property and all that, he kept a bottle in the locker.

AMY GOODMAN: And the FHA and the Mitchell-Lama were subsidies of the housing?

WAYNE BARRETT: Subsidy programs, yeah. So these were the things that—you know, that Donald learned at the foot of the master. Fred was a master at this. You know, there were two different investigations—one by the State Investigations Commission of New York and one by Congress—of the FHA program, and Fred figured prominently in national scandals of the misuse of FHA funding. And he figured—he was the number one target of the State Investigations Commission for ripping off the Mitchell-Lama program here in New York. And so, they had a long history of this.

JUAN GONZÁLEZ: You also talk about the political leaders Donald Manes and Stanley Friedman and their role in the rise of Trump, as well.

WAYNE BARRETT: Yeah, well, Stanley Friedman became the boss of the Bronx. He was the first deputy mayor under Abe Beame. He was the one who did the legwork. Abe Beame said, "Anything you want, you got." Stanley Friedman, as the deputy mayor, shepherded, right to the last day—on the last day of the Beame administration, Stanley Friedman personally approved the award of the Garden Room, which hangs over 42nd Street, which was unprecedented at the time, that they would allow a major hotel to build something literally hanging over a street as prominent as 42nd Street—very controversial decision done on the final day of the administration. He walks out of the office that day, and the next week he starts at Roy Cohn’s law firm. And Roy was Donald’s attorney on the Grand Hyatt. And he goes right as a partner into Roy Cohn’s law firm. So, and Stanley Friedman ultimately is convicted by Rudy Giuliani, became the most powerful Democratic boss in the state of New York and did all kinds of things for Donald Trump. Yeah, so, Donald Manes was the Queens county leader and borough president, whose brother-in-law had a lighting company. When you look at Trump Tower every day on the national news, he did all the lighting in the lobby. Bill Warren is his name. That was the brother-in-law. He used to—Trump would stir up all kinds of business for Donald Manes’s brother-in-law. Manes winds up putting a kitchen knife through his chest, when Rudy Giuliani and the feds are after him, and killing himself. And these are the guys who were absolute linchpins to Donald Trump’s early career. They supported him at the Board of Estimate, approving all these projects.

AMY GOODMAN: Speaking of that unfortunate term "linchpin," what do you know of Fred Trump’s involvement with the Ku Klux Klan?

WAYNE BARRETT: Well, you know, I didn’t know about that at the time of the book. It’s not in the book. I’ve read about it since. I can’t understand how Donald Trump denies that this is true. There’s, I think, Washington Post clips—

AMY GOODMAN: The New York Times.

WAYNE BARRETT: —you know, which clearly say he was involved with the Ku Klux Klan. What I did write about in the book and what I actually wrote about at the Voice in the '70s was the race discrimination case that Richard Nixon's Justice Department brought against Fred and Donald Trump for racially excluding blacks and Latinos in a systematic way, with a color-coded system where if a black came in seeking an apartment, they got a certain color folder, where if a Latino came in, they got a different color folder, of where the application was put—the easiest way to exclude people. And, you know, the federal government established that during the course of protracted hearings. And ultimately, Fred and Donald settled the case.

And Donald does an affidavit in the case in which he claimed that he didn’t have anything to do with the actual rentals personally, actual rentals of the apartment. But I found, and wrote it in the Voice and then examined it a little bit more in the book, that he was simultaneously seeking a real estate broker’s license in New York state and that he had to file sworn statements. And then, in his sworn statements, he claimed he was in charge of all the rentals of the apartments. So, there was a sworn statement saying, from him, "I don’t have anything to do with it," and almost simultaneously a sworn statement saying, "I run it." You know, so the racial discrimination pattern at Fred Trump developments was really quite extraordinary.

AMY GOODMAN: He was found guilty?

WAYNE BARRETT: Well, it was—he signed a consent decree. This was a civil lawsuit, and he signed a consent decree. And he and Donald signed the consent decree. And then they violated it. They were not in compliance with it. And they had to go back, the feds did, in ’78 and do it again a second time.

JUAN GONZÁLEZ: Now, you talk about Trump Towers, in the new introduction to the book, as basically housing for a rogues’ gallery of felons—

WAYNE BARRETT: Yeah.

JUAN GONZÁLEZ: —that’s never been really touched upon. Could you expound on that?

WAYNE BARRETT: Well, you know, in the book itself, I added to the list that’s in the book. I have a couple dozen felons who wind up getting apartments in Trump Tower. In fact, one of the remarkable things about Donald is how he has avoided being indicted in the course of his career. One of the tales that I tell there involves a guy named Robert Hopkins, who was then running the biggest illegal gambling operation in the Bronx—and a client of Roy Cohn’s. He’s one of the early buyers, this guy Robert Hopkins, of an apartment in Trump Tower, paid about $2 million for it. And so, at the closing, Ted Teah, who you must remember, Juan—he was the City Planning Commission member from the Bronx appointed by Stanley Friedman, an associate in Roy Cohn’s law firm with Stanley Friedman, and he’s representing this guy Hopkins at the closing. And Hopkins is sitting there, with Trump in the room, mind you, with a briefcase filled with cash.

AMY GOODMAN: This is Donald Trump?

WAYNE BARRETT: Yes, counting the money out, hundreds of thousands of dollars, paying for the apartment in cash. And he had partial mortgages, which a guy named Robert Lamagra, a semi-wise guy kind of guy, who gets subsequently prosecuted in the Eastern District of New York—Hopkins was under indictment for murder of another mob guy, which that case wound up going nowhere, but he was convicted in other cases. And that’s just one of the many tenants that were drawn—it was like a magnet for bad guys, Trump Tower.

JUAN GONZÁLEZ: "Baby Doc" Duvalier?

WAYNE BARRETT: Yes, "Baby Doc" Duvalier is there. Yes, you’ve got—

AMY GOODMAN: While he was still in office in Haiti, the dictator?

WAYNE BARRETT: No—well, yes, he started this. That’s absolutely right. Yes, he was looking at it as a place to dump some of his booty from Haiti. He gets an apartment in there. And it’s just a long list, an incredibly long list. Joe Weichselbaum, who is an extraordinary side of Donald, he not only has an apartment in Trump Tower, he has one in Trump Plaza. And he’s like a several times convicted felon as a cocaine trafficker, and he flew Donald’s high rollers down to his casinos in Atlantic City. He’s got an apartment there. It’s just a laundry list of bad guys drawn to this—this temple of greed.

AMY GOODMAN: Investigative journalist Wayne Barrett wrote for The Village Voice for 37 years and continues to write as an independent reporter. His 1991 biography of Donald Trump was just republished as an ebook with the title Trump: The Greatest Show on Earth: The Deals, the Downfall, the Reinvention. We’ll continue with Part 2, 3 and 4 of our conversation with Wayne Barrett, who’s now confined to his home as he battles lung cancer, in the coming days on Democracy Now!, so do stay tuned.

When we come back, we’ll be joined by Karenna Gore, the daughter of former Vice President Al Gore. She was just arrested in Roxbury, Massachusetts, protesting against climate change. Stay with us.

[break]

AMY GOODMAN: "Old Man Trump" by Ryan Harvey, with Ani DiFranco and Tom Morello. The song was written, but never recorded, by Woody Guthrie, about his landlord, Donald Trump’s father Fred Trump. This is Democracy Now!, democracynow.org, The War and Peace Report. I’m Amy Goodman.

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