Amid the many Donald Trump scandals circulating in the news lately, whether it be on Russia, Stormy Daniels, his racist rhetoric, and anything else relating to his presidency, there is a strong tendency for the media to skirt many harrowing moments from his shockingly shady past. Now I get that it’s the media’s job to cover what’s currently going on in the world. Yet, that doesn’t mean many of these scandals don’t matter for a lot of them can tell us a lot about Trump’s character and abilities as well as what he really stands for. Nonetheless, Trump’s breadth of scandals is staggering with mafia tie allegations, unscrupulous business dealings, sexual assault allegations, racial discrimination, and alleged marital rape. All of which number in the thousands while spanning over 4 decades from the 1970s to the present day ranging from the trivial to the truly appalling.
Nevertheless, there are some Donald Trump scandals that are worth revisiting since they still carry negative repercussions to this day. In a time of obscene economic inequality, egregious corporate greed, rising costs of living, and diminishing labor power, Trump has styled himself in his 2016 presidential campaign as a successful businessman who many working class whites viewed as their champion despite the fact he’s neither. But none shows the negative effect Trump has had on many Americans than the debacles surrounding his casino empire in Atlantic City, New Jersey during the 1980s-2000s. In his career-long pursuit to increase his personal coffers, Trump has been involved with a wide range of businesses over the years. The sheer range of ventures may offer a superficial appearance of a broad array of mastery, that doesn’t mean he’s good at business. Since he wouldn’t be able to try his hand in multiple ventures if he wasn’t born wealthy to begin with. But like any expert con artist across industries, Trump has only mastered an essential skill of structuring deals financially beneficial for him regardless whether the underlying business succeeds and regardless what damage is done.
Nowhere else is this ability echoed than in his dealings regarding his casinos in Atlantic City when he was a chair of a publicly traded company. Since such role not only made him responsible for his own interests, but also those of his company’s shareholders. But rather than create wealth for business partners, Trump took advantage of investors who believed in him in order to benefit. As head of Trump Hotels & Casino Resorts, he ran the company to the ground, immiserating shareholders while walking away with enormous bags of cash. And he’s doing the same thing to the United States in the White House because his brand managed to impress over 60 million people willing to vote for him.

Here are the remnants of Trump Plaza which closed in 2014. Without its glitzy lights, it seems like a rather basic abandoned building only taking up space in the city.
It’s not unusual for large business enterprises to be largely financed by people who didn’t found the company and don’t usually manage. In fact, this is how many multinational corporations that shape our lives today get started in the first place. Yet, while starting and managing a successful company is one way to make a shitload of money, it’s not the only way. Another method is running a business that stays afloat for some years without being really profitable. You then treat yourself to a high salary and when it goes bankrupt, that’s the investors’ problem. While business failure is always a fact of life, giving oneself a cushy salary while everyone else suffers from their sins is a terrible way to do business. But it’s a scheme more common than people might think in a day of massive corporate debts, private equity, bailouts, and government subsidies for big businesses. We all remember how Wall Street bankers caused the 2008 Great Recession with their complicated financial schemes which ruined the lives of millions. People lost their jobs, their homes, and/or their life savings. Large financial giants like Lehman Brothers and Bear Stearns ended in bankruptcy. Yet, the bankers all gave themselves nice bonuses from their government bailouts while none of them received any prison sentence whatsoever. In fact, when a major business in America fails these days, it’s always the employees and communities who get screwed while the executives responsible for the company’s demise make out with the bag.
In any case, this is exactly what happened with Donald Trump’s casinos in Atlantic City. But unlike most capitalists in their business ventures, Trump focused more on personally profiting from his casino empire than building it into a successful business. And for that reason, the New York Times reported that Trump “was failing in Atlantic City long before Atlantic City itself was failing.” But they note, even as his companies floundered, he personally profited. According to the Times, “He put up little of his own money, shifted personal debts to the casinos and collected millions of dollars in salary, bonuses and other payments. The burden of his failures fell on investors and others who had bet on his business acumen.” Not to mention, he extracted management fees from the companies he was involved with, which he handsomely profited from while his companies suffered. In fact, his casinos never made a profit. In other words, it had the makings of a major con job.

Here are the remnants of Trump Taj Mahal. With an unsustainable debt, it would never really turn a profit and eventually had to close amid a strike in 2016. It has since been bought by Hard Rock in 2017.
While most people know Atlantic City for its casinos, but many people don’t know that some of the people who live and work there blame Donald Trump for ruining their hometown. Now home to many shuttered and struggling casinos, the Washington Post has noted, “The unemployment rate of the city is already 9.2%, nearly twice the national average, and Atlantic County, N.J., is the nation’s mortgage foreclosure capital, meaning that many workers whose homes are underwater won’t be able to afford to move somewhere else to seek new jobs.” Trump has said, “Atlantic City is a disaster, and I did great in Atlantic City. I knew when to get out. My timing was great. And I got a lot of credit for it.” He further stated he personally got out of the Atlantic City casino business before it entirely collapsed, and that the collapse had more to do with the spread of legal gambling in other East Coast locations than with anything particular with his properties there. While that may be part of the reason, Trump at least contributed to Atlantic City’s decline, if not precipitated its perils himself. The Washington Post blames him for the “orchestration of a casino-industry bubble,” which he accomplished by “flouting local regulation, building the Taj with $700 million in junk bonds at 14% interest, defaults, [and] bankruptcies.” As we see now things didn’t turn out well for his business or Atlantic City.

Here’s a graph of Donald Trump’s casinos and their projected costs to build. I didn’t get into the Trump World’s Fair since it basically closed after 3 years so. Yet, they were all financed by debt which was why they never turned a profit and eventually closed due to financial difficulties.
Now Donald Trump’s casino failures were inevitable because of the way he built his business. As the New York times reads, “assembled his casino empire by borrowing money at such high interest rates — after telling regulators he would not — that the businesses had almost no chance to succeed.” Yet, he made money from his ventures through 2 primary means. One was extracting management fees from companies doing business with him. The other was transferring personal debt to companies he controlled. At a business standpoint, this smells of a racket to me.

Built in partnership with Harrah’s in the 1980s, Trump Plaza was the first Trump Atlantic City Casino. It was the scene of a notorious baccarat session where Akio Kashiwagi lost $10 million. But once Trump Taj Mahal opened, its fortunes would decline and never recover.
Donald Trump’s very first Atlantic City casino, Trump Plaza, was a partnership with Holiday Inn-owned Harrah’s for which he was paid a $24 million management fee. The place cost $210 million to build. The relationship wasn’t a cordial one. Trump convinced Harrah’s to remove itself from the name and thwarted attempts to build a parking garage on land in front of the casino since he wanted to attract high-rollers, not day gamblers. A year after its 1984 opening, the Holiday Inn sued Trump. He countersued alleging that it had had “badly bloodied” the Trump name with their mismanagement. Eventually, Harrah’s got out of the deal, selling its Plaza share to Trump for $223 million. Like he did with purchasing his marina casino, Trump bought the stake with borrowed money. He then left his first wife, Ivana in charge who took the casino’s only suite for herself. By the early 1990s, it was already hemorrhaging cash that Trump filed for bankruptcy in November 1992. The banks took a 49% stake in the Plaza for more favorable terms on the $550 million in debt the building had on it. By the time he emerged, he was $900 million in personal debt. Announced its closure in 2014 while Trump sued to have his name removed from there.

Trump Castle (later Trump Marina) was built in partnership with Hilton Hotel. But since Hilton couldn’t get a casino license, Trump assumed full ownership. Out of all the casinos, it’s the only one still open but as the Golden Nugget due to new ownership since 2011.
Trump Castle was built in partnership with Hilton that cost $310 million to build. But when the New Jersey Casino Control Commission denied Hilton’s casino license application, it was forced to sell. Donald Trump took the offer. In the early 1990s, Donald Trump’s father Fred sent his lawyer there to buy $3.5 million worth of casino chips without playing them, in what amounted to an immediate cash infusion. State regulators later fined the casino $30,000 for it, but allowed the business to keep the money. As Trump Marina in 2011, it was sold for about a tenth its original worth under new management as the Golden Nugget.
In 1986, using borrowed money again, Donald Trump bought 10% of Bally Manufacturing. Bally sued him within days on accusations of antitrust and securities law violations. Trump countersued. In February 1987, Bally settled its litigation with Trump by buying back his stock at an inflated price and paying him a $6.2 million fee to go away to 10 years. Trump’s gross profit from the suit was $21 million. Since New Jersey law limited casino ownership to 3, Bally could block a takeover by buying a second gambling hall. So the company bought the Atlantic City Golden Nugget from Steve Wynn for a wildly inflated price of $440 million. Bally’s spendthrift reaction to Trump’s raid left the company drowning in red and unable to effectively compete in Atlantic City (or Nevada). And the raid compelled Wynn to leave town. Still, this shows that Trump’s casino scandals didn’t just affect his own.

Financed by junk bonds at 14% interest under Donald Trump’s ownership, Trump Taj Mahal’s money woes would plague his casino empire to no end. A year after its 1990 grand opening, it was bankrupt due to unsustainable debts. During Trump’s ownership, it also had allegations of money laundering and links to Asian organized crime.
Trump Taj Mahal was built in partnership with Resorts Casino Hotel which had already sunk $500 million in its construction and hadn’t come close to finishing it. Donald Trump opened the casino using $675-900 million in patently unsustainable junk bonds at 14% interest. As David Clay Johnston wrote, “The shortage of funds was obvious inside the building. The long second-floor hallways leading to the New Delhi Deli and ballrooms were supposed to have marble columns. Instead, they were hastily covered with pink wallpaper. Many rooms were a mess, with hanging rods laying on closet floors, curtains that would not close and keys that did not match the doors weeks after the grand opening.” In addition to unsustainable debt, the casino was slapped with fines for “significant and longstanding” money laundering and had ties to Hong Kong organized crime. Unable to keep up with high interest payments, Trump Taj Mahal bankrupted within a year in 1991 which resulted in Trump losing half his interest in the casino and had to sell his yacht and airline. His creditors even put him on a budget of $5.4 million for a $65 million bailout per approval by the New Jersey Casino Control Commission.
Only 4 months after Trump Taj Mahal’s opening, the New Jersey Casino Control Commission reported that 253 Atlantic City-area subcontractors hadn’t been paid either in full or on time for the project. Trump owed $69.5-72 million, mostly to small family businesses. They had worked they hadn’t been paid for and they negotiated very small amounts to get paid. When Trump’s company declared bankruptcy in 1991, many small companies went out of business.
In 1995, the company Trump Hotels & Casino Resorts staged an IPO but began using some of the almost $300 million it had raised to clear Donald Trump’s personal loans, which amounted to $916 million due to his early 1990s bankruptcies. THCR’s sole asset at the time was the Trump Plaza Hotel and Casino which was already debt he personally guaranteed. Thus, not only did the company have debt from its own operations it had to pay, but also Trump’s personal debts. For a public company to have debt isn’t unusual. But here you see Trump socializing his debts by making his personal debts his company and shareholders’ problem. And to a certain extent, the people of Atlantic City. Yet, such leveraging off burdened THCR with millions of unsustainable debt.
In addition, $140 million of that money came from what Vox calls, “mom-and-pop investors” who’d later lose nearly everything for putting their confidence in him. Since stocks in the 1990s were the hot asset class that got so hot to increasingly attract naïve middle-class investors hoping to make a quick buck and unscrupulous financial racketeers hoping to make a quick buck off of them, Trump saw this mania as a perfect opportunity to escape from the legacy from his disastrous investments from the early 1990s. Since mom-and-pop investors don’t know shit about real estate tax law, they made the perfect suckers.
In 1996, THCR casino workers were encouraged to invest their 401(k) savings directly into Trump stock. By late 2003, the pool of employee retirement accounts held at 1.1 million in company stock. But shortly before THCR’s 2004 bankruptcy, the company’s retirement fund committee voted to sell the remaining shares in bulk to Merrill Lynch. More than 400 employees still held Trump stock when the force sale arrived and were sold at an average of $.57 per share. For an employee who put $1000 into a retirement account in 1997 when shares averaged $9.65 apiece, those savings had dwindled to $59. Three weeks after the forced sale and 2004 THCR bankruptcy filing, the share price was up to $2.04. None of the employees were able to profit from the gain.
Also inn 1996, THCR sold $1.1 billion in junk bonds to offset Donald Trump’s personal debt and buy 2 more ill-fated Atlantic City casino properties. In 1997, Donald Trump sold off Trump Castle to THCR for $490 million which according to the Times was “was based on optimistic profit projections and was about $100 million too high” while paying himself $888,000 for the deal. A Wall Street Journal report from 1997 describes Trump’s obscene pay package:
“Donald J. Trump received a $7 million pay package in 1996, including a $5 million bonus and a 71% salary increase, despite a more than 70% drop in the shares of Trump Hotels & Casino Resorts Inc. from their high last year.
“In addition to his bonus, Mr. Trump, the company’s chairman, received a salary of $1 million and another $1 million to cover services rendered by Mr. Trump’s privately held companies to Trump Hotels, according to the company’s recent filing with the Securities and Exchange Commission.”
THCR’s price dropped because it was unprofitable due to assuming $1.7 billion in debt thanks to the Trump Castle acquisition. Essentially Donald Trump had been paying a high salary for himself for running a company whose main purpose was taking enormous debts off of his personal balance sheet and shift them over to the company. He told the Journal, “Other than the stock price, we’re doing great.” The stock price would begin a long decline from which it never recovered. Nonetheless, this echoes how many Wall Street executives received generous pay packages following the 2008 crash that kickstarted the Great Recession despite how poorly their banks did that they were begging for government bailouts. While everyone else suffers the consequences from their greed.
In addition to assuming Trump’s personal debts and paying him an exorbitant salary, THCR also heavily purchased services from Trump’s privately-held companies, which doesn’t happen in most diversified enterprises. Normally, a company would buy the tie-ins at a discount and promote them for the customers. At least what I think. As the Washington Post reported:
“As the company spiraled downward, it continued to pay for Trump’s luxuries. Between 1998 and 2005, it spent more than $6 million to “entertain high-end customers” on Trump’s plane and golf courses and about $2 million to maintain his personal jet and have it piloted, a Post analysis of company filings shows.
“Trump also steered the company toward deals with the rest of the Trump-brand empire. Between 2006 and 2009, the company bought $1.7 million of Trump-brand merchandise, including $1.2 million of Trump Ice bottled water, the analysis shows.”
The Post then stated that a shareholder who bought $100 in DJT stock could sell them for about $4, which is a 96% loss. While investing that same amount of money to MGM Resorts would’ve yielded a $600 or 6 times the initial investment. Trump’s casinos even paid an annual $300,000 for the right to use his jet for transporting celebrities to gigs.
Nonetheless, the company went bankrupt in 2004 with $1.8 billion in debt. Shareholders saw their remaining stake’s value further reduced as creditors seized a large equity share. As a major shareholder, Trump lost out in the bankruptcy with his share reduced to 28%. But since unsustainable debts had previously been owed to him personally, it was a huge net win for him as his investors took further losses. THCR then changed its name to Trump Entertainment Resorts.
In 2009, Trump Entertainment Resorts filed for bankruptcy with $1.2 billion in debt after bondholders rejected Donald Trump’s last-ditch effort to retake control. He resigned from the board and ended up with just 10% of the company’s share after it emerged. He sold his remaining share to Carl Icahn who bought the casino out of its final bankruptcy in 2014 along with the other casinos under TER (or at least their debt anyway). Amid a strike by the casino’s union UNITE HERE Local 54 went on strike in 2016, Icahn closed the Taj before selling it to Hard Rock for $50 million the next year.

This is a graph of Atlantic City casinos from 1999 to 2010. As you can see, while all Atlantic City casinos have suffered in recent years, Donald Trump’s have fared the worst. The green lines highlight the years the casinos filed for bankruptcy.
Based on these reports, what Donald Trump didn’t do was run a successful business even when other Atlantic City casinos did quite well. From 1997-2002 as revenues from other Atlantic City casinos rose 18%, Trump’s fell by 1%. Had Trump’s revenues have grown at the same rate, his company could’ve made interest payments and possibly register a profit. In 2007, the New York Times reported: “Over all, an index of casino stocks is up 268% since June 1995. Trump investors lost 93%.” Instead of turning a profit, the public company left a trail of losses for shareholders and bondholders as well as unpaid bills to contractors and subcontractors. Each time Donald Trump’s casino companies appeared in bankruptcy court, he persuaded bondholders to accept less money while he still added debt to his businesses. Furthermore, he didn’t even try offering high-quality amenities or first-class service that could’ve attracted more tourists in Atlantic City. For according to Trump’s longtime investment bankers at Donaldson, Lufkin & Jenrette, “The Trump name does not connote high-quality amenities and first-class service in the casino industry.” Rather, the Trump name connotes “the failure to pay one’s debts, a company that has lost money every year, and properties in need of significant deferred maintenance and lagging behind their competitors.”
Still, we must understand that whatever mistakes he made in his business career, his THCR episode was a tour de force. The total money Trump netted from salary, fees, cash paid to his other businesses, canceled personal debts, and overpriced assets bought is incalculable. And though it wasn’t perfectly legal since there were money laundering fines, securities law violations, campaign finance laws, and others, it was legal enough to work. Trump is an unscrupulous businessman who talked people into
lending him money to run casinos. Though the fact he was bad running casinos is nobody’s problem but anyone he owed money from.
However, given that gambling isn’t a normal industry, New Jersey let Donald Trump’s shenanigans slide in Atlantic City as part of a larger economic development scheme aimed at creating a stable job base for the resort town. Essentially in principle, it meant licensed casino operations not supposed to be running with the kind of excessive debt levels Trump used to keep his scheme running. New Jersey regulators had extensive discretion which they used to let Trump do whatever he wanted. In fact, they seemed largely uninterested in exploring Trump’s varied business relationship with Mafia-tied front companies, so they probably let other practices slide as well. Atlantic City was also complicit in Trump’s predatory business scheme since the leaders saw casinos as a way to solve its financial woes, which seemed to work for awhile. Until a predatory vulture capitalist like Donald Trump showed up.

Here’s a graph from Newsweek showing Atlantic City casino job rates from 1997 to 2010. While the casino business is always a gamble which hasn’t been doing well in recent years, Trump’s casinos cut far more jobs than every other casino there in that timespan.
Had Donald Trump really kept the interests of other people invested in or running his company, his casino empire might not have been so detrimental to Atlantic City. After all, Trump Castle had its own TV show at one point while Trump Plaza had a famous Japanese gambler losing $10 million there along with other events. Instead, Donald Trump used Atlantic City to privately enrich himself while his casinos floundered in unsustainable debt. With each bankruptcy, he was slowly forced out of the business as a result as he tried to hold onto his casino empire as late as 2009. Eventually management drove him out since he was failing long before Atlantic City itself went down. While Trump’s profitable business failures do indeed demonstrate his business prowess, provided if it’s a long shell game to make himself rich at others’ expense. But even the most successful cons will eventually be found out once the marks realize they’ve put in their fortunes for gains that will never materialize. Donald Trump may repeatedly deny that Atlantic City’s current failures have nothing to do with him since he’s gone. Yet, it was his gamble that blew the city to this degree in the first place. It was his promise that attracted thousands of workers and their families to this place, building developments, shopping malls, and schools to accommodate the new community that was to serve Trump’s personal seaside empire. People were beholden to him, manipulated by him, and played as cogs in his machine that would benefit nobody but himself in the end.
The casinos’ massive debts remained unmanageable as before that subsequent managers couldn’t manage them properly before they shuttered. When Donald Trump’s casinos eventually closed down so did the resort town’s lifeblood. Thousands were left without jobs and the city penniless. Today, Atlantic City remains neglected according to the New Yorker which, “has been attributed to a bloated municipal payroll,” to “the suffocating effect of the casinos, which are boxed off from the city and are designed to keep patrons inside losing money rather than outside spending it,” and to the “the thorny old problem of race or the dreary question of the structure of municipal government statewide.” Trump isn’t responsible for all these problems, but from his racism to profiting off unprofitable companies, he didn’t set a good example. But as one investor noted in The New York Times, Trump lent to companies the gilt sheen his name projected, yet ultimately, “drove these companies into bankruptcy by his mismanagement, the debt and his pillaging” of assets.