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Trump Is Finally Almost Done Resigning From His Businesses

Reprinted with permission from ProPublica.

At a press conference before he took office, then-President-elect Donald Trump said he had signed paperwork “turning over complete and total control” of his business empire to his sons. His lawyer said the more than 400 businesses would be placed in a trust by Inauguration Day.

Now, nearly 100 days later, he’s nearly fulfilled this promise.

President Trump and his daughter, Ivanka, are closing in on removing their names from the one business where they are still listed as managers on state filings.

That business is the Trump SoHo, a hotel and condo tower in lower Manhattan. The company only filed an application in March to remove Trump and Ivanka as managers listed on state liquor licenses. The application is still pending New York’s approval.

New York requires companies to register management changes within 10 days. Bill Crowley, a spokesman for the New York State Liquor Authority, said the two-month delay in filing is a violation, but a “common error made by corporations that does not usually result in prosecution” provided state officials receive new documentation “within a reasonable amount of time.”

The White House referred all questions about Trump SoHo to the Trump Organization. In a statement, the Trump Organization said “all of the necessary paperwork to remove President Trump from the licenses associated with his businesses was validly filed with the appropriate agencies months ago. Unfortunately, the approval process does not always happen overnight.”

We first revealed Trump’s failure to transfer control of his businesses on Inauguration Day. Following our story, Trump did start filing the necessary paperwork with states. (Here are all of those filings.)

Former White House ethics attorneys, both Republican and Democrat, have said even Trump’s completed transfer of management duties is far from enough. They say that the president needs to either sell his companies or put them in a blind trust run by an outsider.

“It really doesn’t matter if he’s listed on these documents or not. It’s all part of his efforts to distance himself, but he hasn’t sold anything,” said Richard M. Painter, a former White House ethics counsel under President George W. Bush and a critic of Trump’s trust arrangement. “From an ethics standpoint, it’s all about ownership and he’s not willing to part with anything.”

The Trump SoHo, which is right next to ProPublica’s offices, has wrestled with lawsuits and financial troubles ever since Trump announced plans to build it in the 2006 season finale of his reality TV show, “The Apprentice.”

The project opened shortly before the financial crisis, leading to sluggish sales. One of Trump’s partners in the deal, Felix Sater of the Bayrock Group, was a convicted felon and later a confidential informant who had been imprisoned for stabbing a man in a bar fight. In 2010, Bayrock, another partner, the Sapir Organization and the Trump Organization settled a fraud lawsuit in which condo buyers claimed the sponsors inflated condo sales numbers.

Under Sater and the Sapir Organization (whose founder, Tamir Sapir, died in 2014), the project went into foreclosure. The Los Angeles-based CIM Group then bought a controlling stake.

Trump is no longer a part owner of the condo tower. But the owners still contract with the Trump Organization to manage and market the property. Trump gets 5.75 percent of Trump SoHo’s annually operating revenues for that work.

In 2015, according to the federal financial disclosure reports, Trump made $3 million off of the deal.

Five CIM representatives are currently also listed on the liquor license as principals along with President Trump, Donald Jr. and Ivanka.

Elisabeth Gawthorp contributed to this report.

ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for their newsletter.

Trump Lawyer Confirms President Can Pull Money From His Businesses Whenever He Wants

Reprinted with permission from ProPublica.

Update, April 4, 2017: In an interview with ProPublica, Trump Organization attorney Alan Garten confirmed that President Trump can withdraw profits and underlying assets from his trust at any time.

He also said the president has been able to withdraw money since Trump took office on Jan. 20. That language was not included in a Jan. 26 summary of the trust — what’s known as a trust certification — but was included in a Feb. 10 version of the document.

Asked about the change, Garten said the Trump Organization prepares different versions of the summaries to “highlight different things for different people.”

The full details of the trust are in what’s known as a trust agreement, which Garten said the Trump Organization will not release. He referred further questions about release of the trust agreement to the law firm of Morgan Lewis, which did not respond to a ProPublica request for comment. We have updated the story’s headline to reflect Garten’s comments.

When President Donald Trump placed his businesses in a trust upon entering the White House, he put his sons in charge and claimed to distance himself from his sprawling empire. “I hope at the end of eight years I’ll come back and say, ‘Oh you did a good job,’” Trump said at a Jan. 11 press conference. Trump’s lawyer explained that the president “was completely isolating himself from his business interests.”

The setup has long been slammed as insufficient, far short of the full divestment that many ethics experts say is needed to avoid conflicts of interest. A small phrase buried deep in a set of recently released letters between the Trump Organization and the government shows just how little separation there actually is.

Trump can draw money from his more than 400 businesses, at any time, without disclosing it.

The previously unreported changes to a trust document, signed on Feb. 10, stipulates that it “shall distribute net income or principal to Donald J. Trump at his request” or whenever his son and longtime attorney “deem appropriate.” That can include everything from profits to the underlying assets, such as the businesses themselves.

Here is the new clause, from page 161:

“It’s incredibly broad language,” said Frederick J. Tansill, a family estate and trust attorney outside Washington, D.C., who reviewed the documents for ProPublica.

There is nothing requiring Trump to disclose when he takes profits from the trust, which could go directly into his bank or brokerage account. That’s because both the trust and Trump Organization are privately held. The only people who know the details of the Trump trust’s finances are its trustees, Trump’s son, Donald Jr., and Allen Weisselberg, the company’s chief financial officer. Trump’s other son, Eric, has been listed as an adviser to the trust, according to this revised document.

The Trump Organization did not answer detailed questions about the trust. In a statement to ProPublica about the companies’ corporate structures, a Trump Organization spokeswoman, Amanda Miller, said, “President Trump believed it was important to create multiple layers of approval for major actions and key business decision.” (Sic. Read the full statement.)

There is a chance Trump will list his profits in his next federal financial disclosure, in May 2018, but the form doesn’t require it. The surest way to see what profits Trump is taking would be the release of his tax returns — which hasn’t happened. Income has to be reported to the IRS, whether it comes from a trust or someplace else.

“For tax purposes, it’s as if the trust doesn’t exist at all,” said Steven Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center. “It’s just an entity on paper, nothing more.”

It’s not clear why Trump added the language to the trust document. His original trust document, which ProPublica obtained in January, designated Trump as the “exclusive beneficiary.” It did not include any restrictions on when Trump could get the money.

Taking profits regularly could benefit Trump in a variety of ways. It would give the president yet more details on the ongoing finances of his businesses. Trump’s son Eric recently told Forbeshe plans to update his father on the company regularly, though the revised trust document states that the trustees “shall not provide any report to Donald J. Trump on the holdings and sources of income of the Trust.”

Trump could also simply find the income helpful, even as president. The trust document shows that Trump has “broad rights to the trust principal and income to support him as necessary,” Tansill said.

The General Services Administration released the document last week when it approved the Trump Organization’s plan to address conflicts involving the Trump International Hotel in D.C. (The GSA, which handles procurement for the government, owns the land and Trump has a 60-year lease for the building.) In response to criticism about Trump being, in effect, both tenant and landlord, he agreed to not take any profits from the hotel while in office.

Trump money flows

Profits will go into a separate company account, which can only be used for hotel upkeep, improvements or debt payments. Watchdog groups have derided that deal as insufficient, noting that pouring profits back into the hotel will make it more valuable in the long term.

With Trump’s hundreds of other businesses, including golf courses, hotels and branding deals, profits from each go to a holding company and eventually into Trump’s trust. Other corporate documents we obtained, reflecting changes made after President Trump’s Jan. 20 inauguration, show how money flows from a golf club outside Philadelphia to the president’s trust (as shown at left).

There soon could be many more Trump family businesses.

The Trump Organization has recently touted plans to open hotels across the country, including a second one in Washington, D.C. “It’s full steam ahead,” Trump Hotel CEO Eric Danziger said recently. “It’s in the Trump boys’ DNA.”

Golf icon by Nick Holroyd from the Noun Project.

 

Trump Can Pull Money From His Businesses Whenever He Wants — Without Ever Telling Us

Reprinted with permission from ProPublica.

When President Donald Trump placed his businesses in a trust upon entering the White House, he put his sons in charge and claimed to distance himself from his sprawling empire. “I hope at the end of eight years I’ll come back and say, ‘Oh you did a good job,’” Trump said at a Jan. 11 press conference. Trump’s lawyer explained that the president “was completely isolating himself from his business interests.”

The setup has long been slammed as insufficient, far short of the full divestment that many ethics experts say is needed to avoid conflicts of interest. A small phrase buried deep in a set of recently released letters between the Trump Organization and the government shows just how little separation there actually is.

Trump can draw money from his more than 400 businesses, at any time, without disclosing it.

The previously unreported changes to a trust document, signed on Feb. 10, stipulates that it “shall distribute net income or principal to Donald J. Trump at his request” or whenever his son and longtime attorney “deem appropriate.” That can include everything from profits to the underlying assets, such as the businesses themselves.

Here is the new clause, from page 161:

“It’s incredibly broad language,” said Frederick J. Tansill, a family estate and trust attorney outside Washington, D.C., who reviewed the documents for ProPublica.

There is nothing requiring Trump to disclose when he takes profits from the trust, which could go directly into his bank or brokerage account. That’s because both the trust and Trump Organization are privately held. The only people who know the details of the Trump trust’s finances are its trustees, Trump’s son, Donald Jr., and Allen Weisselberg, the company’s chief financial officer. Trump’s other son, Eric, has been listed as an adviser to the trust, according to this revised document.

The Trump Organization did not answer detailed questions about the trust. In a statement to ProPublica about the companies’ corporate structures, a Trump Organization spokeswoman, Amanda Miller, said, “President Trump believed it was important to create multiple layers of approval for major actions and key business decision.” (Sic. Read the full statement.)

There is a chance Trump will list his profits in his next federal financial disclosure, in May 2018, but the form doesn’t require it. The surest way to see what profits Trump is taking would be the release of his tax returns — which hasn’t happened. Income has to be reported to the IRS, whether it comes from a trust or someplace else.

“For tax purposes, it’s as if the trust doesn’t exist at all,” said Steven Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center. “It’s just an entity on paper, nothing more.”

It’s not clear why Trump added the language to the trust document. His original trust document, which ProPublica obtained in January, designated Trump as the “exclusive beneficiary.” It did not include any restrictions on when Trump could get the money.

Taking profits regularly could benefit Trump in a variety of ways. It would give the president yet more details on the ongoing finances of his businesses. Trump’s son Eric recently told Forbeshe plans to update his father on the company regularly, though the revised trust document states that the trustees “shall not provide any report to Donald J. Trump on the holdings and sources of income of the Trust.”

Trump could also simply find the income helpful, even as president. The trust document shows that Trump has “broad rights to the trust principal and income to support him as necessary,” Tansill said.

The General Services Administration released the document last week when it approved the Trump Organization’s plan to address conflicts involving the Trump International Hotel in D.C. (The GSA, which handles procurement for the government, owns the land and Trump has a 60-year lease for the building.) In response to criticism about Trump being, in effect, both tenant and landlord, he agreed to not take any profits from the hotel while in office.

Trump money flows

Profits will go into a separate company account, which can only be used for hotel upkeep, improvements or debt payments. Watchdog groups have derided that deal as insufficient, noting that pouring profits back into the hotel will make it more valuable in the long term.

With Trump’s hundreds of other businesses, including golf courses, hotels and branding deals, profits from each go to a holding company and eventually into Trump’s trust. Other corporate documents we obtained, reflecting changes made after President Trump’s Jan. 20 inauguration, show how money flows from a golf club outside Philadelphia to the president’s trust (as shown at left).

There soon could be many more Trump family businesses.

The Trump Organization has recently touted plans to open hotels across the country, including a second one in Washington, D.C. “It’s full steam ahead,” Trump Hotel CEO Eric Danziger said recently. “It’s in the Trump boys’ DNA.”

Golf icon by Nick Holroyd from the Noun Project.

Trump Promised To Resign From His Companies — But There’s No Record He’s Done So

Reprinted with permission from ProPublica.

At a news conference last week, now-President Donald Trump said he and his daughter, Ivanka, had signed paperwork relinquishing control of all Trump-branded companies. Next to him were stacks of papers in manila envelopes — documents he said transferred “complete and total control” of his businesses to his two sons and another longtime employee.

Sheri Dillon, the Trump attorney who presented the plan, said that Trump “has relinquished leadership and management of the Trump Organization.” Everything would be placed in a family trust by Jan. 20, she said.

That hasn’t happened.

To transfer ownership of his biggest companies, Trump has to file a long list of documents in Florida, Delaware and New York. We asked officials in each of those states whether they have received the paperwork. As of 3:15 p.m. today, the officials said they have not.

Trump and his associates “are not doing what they said they would do,” said Richard Painter, the chief ethics lawyer for President George W. Bush. “And even that was completely inadequate.”

ProPublica’s questions to the transition team were referred to an outside public relations firm, Hiltzik Strategies, which declined to comment. The president’s team did not allow reporters to view documents, which they said were legal records separating Trump from his eponymous business empire. Dillon’s law firm, Morgan Lewis, has not released the records and they declined further comment, saying it doesn’t comment on client issues.

ProPublica looked at more than a dozen of Trump’s largest companies, which are registered or incorporated in three states. Officials in New York and Delaware said documents are logged as soon as they are received. In Florida, officials told us there is typically a day or two before documents are logged into the system.

Here is what we found:

  • Business filings for Trump Organization LLC, Trump’s primary holding company, had not been changed, according to New York’s Department of State. Wollman Rink Operations LLC, which runs the Wollman Rink in Central Park through an agreement with New York City, hasn’t been updated either. Trump is listed as the sole authorized representative of the company.
  • Ivanka Trump is still listed as the authorized officer on records for two entities related to the Old Post Office in Washington, D.C., which the Trump family bought and turned into a hotel. No changes have been filed for either of the companies, which are registered in Delaware.
  • Documents on The Donald J. Trump Foundation, which Trump has said he would dissolve, haven’t been updated. The charitable foundation has been in a swirl of controversy over its collection and disbursement of funds and an active investigation by New York’s attorney general. (The foundation cannot legally dissolve until the investigation is complete, but the New York Attorney General’s office told ProPublica that Trump can resign as an officer at any time.)
  • In Delaware, where the majority of Trump’s businesses are registered, state officials told ProPublica that no amendments have been filed for four businesses tied to the Old Post Office and that the most recent filings for two businesses related to the Trump National Golf Club in Washington, D.C., were made more than a year ago.
  • In Florida, no changes have been made for years to three key Trump businesses operating there: the Trump International Golf Club in Palm Beach, the Mar-A-Lago Club, and DJT Holdings, which has controlling interest in most of Trump’s golf courses in the U.S. and abroad, according to the state’s Division of Corporations.

Even if Trump hands over his companies to a new trust, the plan fails to solve many of his bigger business conflicts, experts say. Terms of the trust that would insulate the president from the Trump Organization haven’t been made public. Trump’s decision not to divest his assets has also been heavily criticized by several former White House attorneys and ethics chiefs.

“What are the terms of the trust? Who is going to be the ethics monitor and what standards will he or she abide by?” said Norman Eisen, who served as the White House chief ethics lawyer under President Obama. “There are 1,000 unanswered questions.”

IMAGE: U.S. President-elect Donald Trump speaks during a news conference in the lobby of Trump Tower in Manhattan, New York City, U.S., January 11, 2017. REUTERS/Lucas Jackson