October 3, 2016

Weekend Catch-Up: How Did Donald Trump Lose $916 Million?

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Surprisingly, I had some real-life stuff to attend to this weekend, which means I’ve only just caught up on the latest Trump meltdown. I might as well share it with you, since maybe a few other people need to catch up too.

On Saturday, the New York Times published copies of the first page of Donald Trump’s 1995 state tax returns from New York, New Jersey, and Connecticut. They show that Trump declared a net operating loss that year of $916 million—about $1.5 billion in today’s dollars. Questions abounded:

  • Where did the tax returns come from? They were sent to the Times anonymously, so no one knows. But rumors swirled around Marla Maples, Trump’s second wife, who might have gotten them as part of her divorce proceedings in 1999.
  • Did Trump really lose that much money in a single year? It seems all but impossible. Among millionaires who declared losses in 1995, the average amount was $614 thousand.
  • It seems likely, then, that Trump’s gargantuan loss was basically an accounting fiction of some kind. John Hempton, an Australian hedge fund manager and former expert on tax avoidance for the Australian Treasury, has a theory that Trump may have “parked” the debt from his bankruptcies with a dummy party offshore, where it was never collected but never officially forgiven. This would allow him to declare $916 million in losses even though he never truly lost anything.
  • What was the point of all this? Most likely, the Times speculates, it was used as a tax loss carry forward, which allowed Trump to declare zero income—and thus pay zero taxes—for as long as 18 years.

So how did Team Trump respond to this? Notably, nobody denied anything. Rudy Giuliani declared that Trump was an “absolute genius.” Chris Christie also applauded Trump’s genius, and remarked improbably that this was a “very good story” for Trump. Trump himself said nothing except that he had paid lots of other kinds of taxes, and that yes, he is a genius:

Needless to say, Trump knows nothing about tax law at all. He has accountants and tax advisors who do all this stuff for him. Nonetheless, the main message from Trumpville is that Donald Trump is a genius.

Elsewhere, reaction was a wee bit more restrained. It turns out that lots of people think that billionaires probably ought to pay income tax. All of us little people have to, after all.

So what’s next? Well, when the New York Times was asked if they have any more of Trump’s tax returns, they answered “No comment.” That might mean there’s more to come. Next Sunday’s debate should be fun, shouldn’t it?

POSTSCRIPT: Team Trump is trying to bury this story by directing all their attention to Bill Clinton’s sexual escapades; suggesting that maybe Hillary has cheated on Bill; and blathering about Hillary being mean to the women who accused Bill of misdeeds in the 90s. It’s not working. Nobody really cares much about this stuff anymore, and even the small interest that remains was wiped out by the tax story.

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WHO DOESN’T LOVE A POSITIVE STORY—OR TWO?

“Great journalism really does make a difference in this world: it can even save kids.”

That’s what a civil rights lawyer wrote to Julia Lurie, the day after her major investigation into a psychiatric hospital chain that uses foster children as “cash cows” published, letting her know he was using her findings that same day in a hearing to keep a child out of one of the facilities we investigated.

That’s awesome. As is the fact that Julia, who spent a full year reporting this challenging story, promptly heard from a Senate committee that will use her work in their own investigation of Universal Health Services. There’s no doubt her revelations will continue to have a big impact in the months and years to come.

Like another story about Mother Jones’ real-world impact.

This one, a multiyear investigation, published in 2021, exposed conditions in sugar work camps in the Dominican Republic owned by Central Romana—the conglomerate behind brands like C&H and Domino, whose product ends up in our Hershey bars and other sweets. A year ago, the Biden administration banned sugar imports from Central Romana. And just recently, we learned of a previously undisclosed investigation from the Department of Homeland Security, looking into working conditions at Central Romana. How big of a deal is this?

“This could be the first time a corporation would be held criminally liable for forced labor in their own supply chains,” according to a retired special agent we talked to.

Wow.

And it is only because Mother Jones is funded primarily by donations from readers that we can mount ambitious, yearlong—or more—investigations like these two stories that are making waves.

About that: It’s unfathomably hard in the news business right now, and we came up about $28,000 short during our recent fall fundraising campaign. We simply have to make that up soon to avoid falling further behind than can be made up for, or needing to somehow trim $1 million from our budget, like happened last year.

If you can, please support the reporting you get from Mother Jones—that exists to make a difference, not a profit—with a donation of any amount today. We need more donations than normal to come in from this specific blurb to help close our funding gap before it gets any bigger.

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