TRUMPED!: Epilogue

The following is an excellent excerpt from the book “TRUMPED!: The Inside Story of the Real Donald Trump–His Cunning Rise & Spectacular Fall” by John R. O’Donnell, Former President, Trump Plaza Hotel & Casino with James Rutherford from the Epilogue on page 329 and I quote: “The Taj, which was supposed to have been Donald’s financial triumph, turned out to be a pit of quicksand that sucked dollars until they disappeared.

The Taj had broken every Atlantic City record for win in April 1990, its first month of operation, recording $34.4 million in casino revenue.  But the Taj was not expanding the market, as Donald and Al Glasgow claimed it would.  Instead it was simply cannibalizing the competition.  Casino win industrywide in April rose $12 million over the year, a 5 percent increase.  Considering that the Taj had added 20 percent more capacity to the market, that meant the Taj was drawing money away from the other casinos.  The win at eight other casinos was down a total of $19 million in April, an average decrease of 10 percent.  And what Donald swore would never happen did: the properties that took the biggest beating were his own.  Trump Plaza dropped from first place in win to eighth–a 23 percent decline, the worst in town–and Trump Castle fell from sixth place to ninth place, down 11.4 percent.

Trump Plaza bounced back in May but there’s a story behind that.  My efforts and Ernie Cheung’s paid off as Akio Kashiwagi returned and lost $10 million at baccarat.  Although I was gone from the property by then, I felt vindicated.  On this second trip Kashiwagi gave the casino four solid days of play, and, as I was sure would happen, Trump Plaza won back the $6 million it lost to him in February and $4 million more besides.  But Donald sweated the action all the way, pacing the baccarat pit with Ed Tracy and Al Glasgow while Kashiwagi played.  Finally, when he was ahead the $10 million, Donald shut down the game even though the Japanese tycoon still had $2 million in credit left to play.  Kashiwagi left the casino in a rage.  Caesars–which Donald claimed would not allow Kashiwagi to play–sent a white limousine to pick him up at Trump Plaza’s door and take him to their casino.

Vindication of a different sort came when the holders of some $600 million in Trump Plaza and Trump Castle bonds sued Donald that spring, claiming the transfer of customer lists to the Taj improperly sapped revenues from the other two gaming halls.  They further alleged that the transfer of lists was a breach of contracts, and, by failing to disclose it, Trump may have violated the securities laws.

The Taj Mahal would win $305 million in 1990, an impressive performance for only nine months of operation.  But that was still $5 million per month short of the $39 million a month the casino needed to win to turn a profit.

The industry as a whole won $2.95 billion for the year, a 5.7 percent increase over 1989.  But nine gaming halls posted lower wins in 1990 than the year before.  Removing the Taj from the picture, the town actually suffered a decrease in win of 5.2 percent.  Worst hit was Trump Castle, where casino revenue fell 11.7 percent.  Trump Plaza, the once mighty cash machine that powered the Trump empire, saw its win plummet 8.8 percent from $306 million in 1989, when it led the city, to $279 million.

The banks came to Donald’s rescue after he failed to make $43 million in interest and principal payments due June 15 on his Castle bonds.  Technically, the bondholders were empowered to wrest the casino away from him, which would have brought Donald’s mountain of debt crashing down.

For several weeks that summer, his advisers huddled with representatives from scores of banks, all desperate to salvage the $1.9 billion they had lent him in the days when his star was on the rise.  What came out of those meetings was 1,000 pages of documents providing for an emergency loan of $65 million and a deferral of interest payments on most of his bank debt, which enabled him to pay the Castle bondholders and forestall a potential firesale of hotels, casinos, condominiums, mansions and airlines.   In return Donald pledged his three casinos as security to the banks.  He promised to submit to regular officers to manage the teetering Trump empire.

The hope was that the loan would give him time to get his financial house in order through an orderly sale of some of his biggest money-losers, like the Trump Shuttle, the Plaza Hotel, the Trump Princess and his private jet.  A bank-ordered audit at the time tallied his debt at $3.2 billion, against which he held assets that, had he sold them all at that moment, would have left him in the hole of more than $290 million.  But he still owned everything, at least for a while.

No sooner was the ink dry on this complicated arrangement than Trump officials announced that the Taj Mahal would not be able to make a $47 million interest payment due in November on its $675 million in first-mortgage bonds.

As the year drew to a close, the Taj Mahal reported huge losses.  The interest payment on the bonds was out of the question, and the bondholders forced Trump to give up half the equity in the property as part of a “pre-packaged” bankruptcy.  The deal, which was concluded in November, granted Donald a reduction in interest rates, part of which he could pay with new notes, while the maturity date on the bonds was extended from 1998 to 2000.  Under certain favorable conditions, Donald could buy back up to 30 percent of the equity.  But if the Taj fails to perform to the bondholders’ expectations, he could lose control of the property entirely.

On December 17, according to various reports, a lawyer acting on behalf of Donald’s father, 85-year-old Fred Trump, entered Trump Castle, deposited a certified check in the casino’s cage, bought $3.35 million in gray $5,000 gambling chips, put the chips in a bag and left the casino.  The next day, Fred Trump wired another $150,000 to the casino and bought more chips that were never gambled.  That same day, Donald announced to everyone’s surprise that he would make an $18.4 million interest payment due that day on his Trump Castle bonds.  The new director of the state Division of Gaming Enforcement, John Sweeney, promised an investigation, since the twin transactions amounted to an interest-free loan, which may have violated both state regulations that require approval of all casino financial sources and the terms of Donald’s massive bank bailout back in the summer.

Meanwhile, on December 11, Ivana Trump was granted an uncontested divorce in New York court in Manhattan on grounds of “cruel and inhumane treatment.”  An April 11, 1991, court date was set on a property settlement including a decision of the couple’s $25 million nuptial agreement, which Ivana is contesting.  She wants half of everything her ex-husband owns–which may be nothing.

In the meantime, she reportedly signed a $3 million publishing deal for two “novels” not yet written: one of them promising to be a veiled autobiography, including, presumably, details of her life with the somewhat tarnished master of the deal.

Then on December 19 Liz Smith broke the news of my book in the New York Daily News.  I was told by some of his closest Atlantic City associates that Donald went on a rampage for days afterward.  On December 23, he responded in the New York Post, calling me “a disgruntled former employee.”  That didn’t surprise me.  But at the same time Norma Foederer, Donald’s spokesperson, gave a statement which did.  Speaking of my three years at the highest levels of management of the only profitable company her boss ever owned, she made the ridiculous statement that I was “never in the mainstream” of the organization.  This from the woman who called me the day I resigned to tell me I was “the last good man” Donald had.  But working too long for Donald has that effect on people.

Donald was at work behind the scenes, as well.  On the morning of December 19, I was paid a visit by Joseph Fusco, a Trump Casino attorney with the Atlantic City firm of Ribis Graham Verdon & Curtin.  He came to my office at Merv Griffin’s Resorts Casino Hotel, where I had taken the post of executive vice-president and chief operating officer.

“Jack, I’m here for three reasons,” he started.  “First, to say ‘How ya doing’ to an old friend.”

“I’m doing fine, Joe,” I said.

“The second is to tell you that the feds are proceeding with their investigation into —-,” referring to a gambler I knew from Trump Plaza.

“You know,” Joe continued, “they’re pretty hot to get him.”

“Yeah? So why are you telling me?”

Joe didn’t answer that. But he went on, “And the third reason is your book. . . . I just want you to know that Donald is going off the wall about this.  He doesn’t know what’s in this book.  He doesn’t know what you might say.  He’s expecting the worst.  He is going to react, he’s going to fight this as hard as he feels he must.  Accordingly, I’m here on his behalf.  He does not want this book published, and if you proceed, he’s going to look for anything he can to discredit you. . . . You know, he’s going to say you had an affair with one of our executives–he’s already got that information on you–and he’s going to go public with it.  He’s also going to tie you into illegal business dealings with ——,” referring to the same former Trump Plaza gambler.

“This is good stuff, Jack,” he continued.  “I’m just here to warn you, this is what’s going to happen.”

I was furious, and not only because both allegations were completely false.  I was outraged that Donald would send one of his lawyers with whom I had worked in the past, when I was with the Trump Organization, to stride into my office threatening me in this way.

I told Joe I intended to report this visit to state authorities and document it in my book.  His face went blood red, and he begged me not to.

“Count on it, Joe,” I said.

Later that day, Nick Ribis called me.  “Jack, I just want to say good for you.  You write your book, print the truth and fuck Donald.”

But then he asked me to keep Joe Fusco’s name out of it.

“Jack, he was just doing what Donald wanted,” Nick said.  “I begged Donald to stay away from the personal stuff. . . not to get involved in that type of activity; but, Jack, you know Donald; he’s uncontrollable; I can’t stop him.”

On December 21 I went to the state capital in Trenton to meet with Division of Gaming Enforcement Director John Sweeney specifically to report the treats that Fusco had conveyed.

The state DGE said, however that they could not make a “credibility determination” between my account of the meeting with Joe Fusco and an apparently different version given by him and Ribis.  A DGE official also responded that he could not conclude that the DGE had jurisdiction over this matter.

Then a couple of weeks later, came the most astounding call of all.  It was from Ed Tracy of all people.

“Jack,” he said, “I want you to know that I owe you nothing and you owe me nothing.  Man to man, Ed to Jack, I need to tell you something. . . . If I knew someone was doing to me what they are doing to you, I would kill.”

“What are you talking about, Ed?” I said.

“They’re tailing you, they’re digging into your past, and more.  I’m uncomfortable with this, and I want you to know that I have nothing to do with it.  Every man has his limits, and they’ve gone way beyond mine.”

He added, “Things have really gone crazy in Trump Land.  I can’t predict anything on a day-to-day basis anymore.”

Immediately afterward, I called my attorney, who called Nick Ribis to complain.  Nick denied the allegations that were described to him.  Instead he proposed a meeting between Donald and me.  I said I would consider it but I was not going to walk into such a meeting blind; I wanted a specific agenda.  That was the last I heard about a meeting with Donald.

But interesting things were happening to Ed Tracy, Nick Ribis and all the people I knew from my days in the Trump Organization.   Back in June Bucky Howard, who had succeeded Walt Haybert as president of the Taj Mahal, was himself replaced by Donald’s friend, I. G. “Jack” Davis, one-time president of the old Resorts International, who was fired when Merv Griffin took over the company.

Then the new year, 1991, brought the “Atlantic City Massacre.”  Donald purged his casino leadership again.

Roger Wagner, president of the Claridge Hotel & Casino, was named president of Trump Castle.  Anthony Calandra, who had been named Castle president when Ed Tracy was promoted, was demoted to a “marketing position.”

At Trump Plaza, Gary Selesner, who had replaced me as president, was likewise demoted.  An executive with Steve Wynn’s Mirage in Las Vegas, Kevin De Sanctis, was named the new president.

The most dramatic change came when Ed Tracey was “reassigned,” as one news report put it, to the presidency of the Taj Mahal.  Jack Davis was demoted to vice-president.  Mark Etess’s joke that the Taj had the potential to devour a few presidents’ careers proved truer than either of us could have known.  Tracy was the Taj Mahal’s fifth president in sixteen months, the fourth since it had opened only ten months earlier.

The top job as chief executive officer of all Trump’s Atlantic City holdings went to Nick Ribis, Donald’s lawyer.

It was around that time that I received an unsettling, anonymous letter one day in my office at Resorts.  It was hand-printed on Trump Castle stationery:

“Watch your back!” it warned.

“Donald Trump is desperate [sic] to find out exactly what your book is going to have in it. . . . Donald is outraged that Ivana Trump may have more information on his affair with MM than he originally thought.  He’s afraid there is enough to void his agreement because MM was in the picture before Dec. [sic] 1987, as you also know. . . . He is going to try some ‘typical Trump tactics’ to make sure that none of the pre-publication excerpts are not [sic] printed before April 11, his court date with Ivana Trump. . . .

“Jack, be careful. . . . Don’t put it past Donald to have your office or home broken into.  I’m positive it’s [sic] on his mind quite a lot.

“Good luck.  I’m looking forward to a good read.”

Late in the summer of 1990, I was called to give a deposition in Pratt Hotel Corporation’s antitrust lawsuit against Donald over the Penthouse site.  I related the facts as I knew them.  But apparently Donald’s lawyers reported back that my testimony had been favorable to his case.  Shortly after, he called me at Resorts and thanked me.

“All I did was tell the truth, Donald,” I replied.

“Yeah, but you didn’t have to,” he said.  “A lot of guys in your shoes would have gone in there with a different attitude.”

“Well, that’s not me,” I said.

Then he said, “I want you to know that I consider you my friend.”

I didn’t know how to respond to that dubious honor.  I just wanted to end the conversation, so I thanked him.  Of course, he didn’t know about my book, and I didn’t tell him.  I thought it better to leave it this way.  I figure Donald needs all the friends he can get.”

(THE FOLLOWING IS ABOUT THE AUTHOR AND THE INSIDE JACKET COVER AND I QUOTE:

JOHN R. O’DONNELL is currently the chief operating officer of Merv Griffin’s Resorts Casino Hotel in Atlantic City, New Jersey.  Before working for Donald Trump, he held marketing positions at Steve Wynn’s Golden Nugget Casino in Atlantic City and at casinos in Las Vegas, Nevada.  He lives in Atlantic City suburbs with his wife and daughter.

JAMES RUTHERFORD began his journalism career as a reporter and editor with newspapers in Philadelphia, Vineland, New Jersey, and Atlantic City.  He is now a freelance writer and lives with his family in the Atlantic City area.”

“Most of what we know about Donald Trump’s businesses and about his celebrated deal-making comes from Trump himself.  Now, for the first time, a high-level Trump executive takes us behind the scenes to reveal how Donald Trump really operated and why his once-thriving empire has fallen on hard times.

Jack O’Donnell worked for Donald Trump for three years, eventually becoming president of Trump Plaza Hotel & Casino in Atlantic City, New Jersey.  It was in Atlantic City that Trump scored some of his biggest successes but also suffered his worst failure, the Taj Mahal debacle.

Again and again, O’Donnell shows us how Trump’s deal-making suffered because he valued publicity over sound finance.  He explains how Trumps personal life affected his decisions, and why Trump really exiled Ivana from Atlantic City to run the Plaza Hotel in New York City.  O’Donnell gives us a blow-by-blow account of the astonishing events in the week before the opening of the Taj Mahal Casino, when O’Donnell was called in to try to salvage a desperate situation.  He sadly recalls the events surrounding the helicopter crash in October 1989 that took the lives of three of Trump’s top executives–all close friends of O’Donnell’s–and weakened Trump’s multimillion-dollar casino operations.  Finally, he shows us Trump surrounded by long-time advisers, uncomprehending of a rapidly worsening financial situation in 1989 and 1990, and still clinging to over-optimistic financial forecasts.

As Donald Trump began blaming his financial problems on key subordinates, particularly the three deceased executives, Jack O’Donnell resigned his position in disgust to write this book.”

MY COMMENTS: THIS IS AN INTERESTING BOOK BECAUSE IT WAS WRITTEN BY SOMEONE THAT USED TO WORK FOR DONALD TRUMP.  AND THE REASON HE QUIT WORKING FOR HIM WAS BECAUSE OF MR TRUMP’S TEMPERMENT WHICH HAPPENED OVER AND OVER WITH HIS FINANCIAL PROBLEMS AND WILL PROBABLY EXPLAIN WHY HE WENT BANKRUPT FOUR TIMES.

LaVern Isely, Progressive, Overtaxed, Independent Middle Class Taxpayer and Public Citizen Member and USAF Veteran

Advertisements

About tim074

I'm a retired dairy farmer that was a member of the National Farmer's Organization (NFO). Before going farming, I spent 4 years in the United States Air Force where I saved up enough money to get my down payment to go farming. I also enjoy writing and reading biographies and I write about myself as well as articles and excerpts I find interesting. I'm specifically interested in finances, particularly in the banking industry because if it wasn't for help from my local Community Bank, I never could have started farming which I was successful at. So, I'm real interested in the Small Business Administration and I know they are the ones creating jobs. I have been a member of Common Cause and am now a member of Public Citizen as well as AARP. I have, in the past, written over 150 articles on the Obama Blog (my.barackobama.com) and I'd like to tie these two sites together. I'm also on Twitter, MySpace and Facebook and find these outlets terrifically interesting particularly what many of these people did concerning the uprising in the Arab world. I believe this is a smaller world than we think it is and my goal is to try to bring people together to live in peace because management needs labor like labor needs management. Up to now, that hasn't been so easy to find.
This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s