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Trump's D.C. Landmark
Looking for Mr. Goodguy
Trump's Being Sued for Fraud Again
Trump's being sued. The phrase holds almost no meaning these days since Donald J. Trump has been slapped with over 4000 individual law suits on his properties. We've been in search of a project where Trump's business partners were left satisfied. We are eagerly looking for an instance where a business associate, investor, or even previous employee in the construction industry was so very happy with the outcome of their association with The Donald that they are supporting his candidacy, but can find nary a one. However, there are plenty who vehemently oppose his run strictly on the grounds of how they were treated by him in business.
Everything Old is New Again
In this article, we focus on Trump's $200 million project - transforming D.C.'s old post office building — a taxpayer-owned landmark just four blocks from the White House — into a luxury destination called Trump International Hotel. The landmark 1899 post office tower is the second-tallest building in Washington D.C. and beautiful from the outside but, since 1970, has been the subject of tear down threats. Despite being a preservationist success saved by the wrecking ball this public landmark turned the block into a federal white elephant. Various efforts to reuse the old building to house other federal agencies failed as well as a plan for a ground-floor food court pavilion below the soaring nine-story atrium. In 2011, the General Services Administration invited interested parties to consider the prospects and 10 firms made formal proposals.
An Idea Was Born
Perhaps it was looking out the window that gave Trump the idea to run for President in the first place - after all, the historical post office building is located just four blocks from 1600 Pennsylvania Avenue. Perhaps it was dreaming that $850 a night hotel rooms was just what the District of Columbia was clamoring for that made Trump want to refurbish the old place. Either way, it's become clear that once Donald puts his mind to something, he gets it done. The "how" of it really is of little consequence to him. It's the end that justifies the means, right?
First Trump Sold Investors on Paying For It with a Fake Set of Figures
Fan Fiction vs. Non Fiction
Trump needed to raise money to get the revitalization of the building done. First he went to investors, but apparently he did so...well...by not being very honest with them. In testimony given by Raymond Flores, Trump's financial analyst on the D.C. hotel, it was revealed that while selling the idea that this new luxury property would be a gold mine, Trump used two completely different sets of books. It is one thing to oversell an investment or to inflate projected returns. It is quite another to do so when you have a totally different set of business plans you use internally that show those returns are ridiculous and unachievable.
That's right, while putting together the Trump International Hotel in Washington D.C., Trump's people were apparently forced to go about creating a bit of fiction to loosen investors' pockets - inflating expected returns by $10 million per year. $10 million more dollars of income each year that investors were told was feasible to expect, but wasn't ever going to happen. On the record Trump's financial analyst Flores was asked, "Under the base model that you said was the rosier or lender-focused projections, you show room revenue at roughly $10 million more. Correct?" Flores responded: “Yes.”
No Cooks in the Kitchen
Trump had said his DC hotel would feature two high-end restaurants and had originally signed up celebrity chefs, José Andrés and Geoffrey Zakarian, to open highly anticipated eateries in the hotel. Then Trump launched his presidential bid by calling Mexican immigrants rapists and criminals, and both restaurateurs backed out. Since Trump is being sued by DC investors for failure to deliver on promises made, Zakarian was one of those asked to testify as to why he no longer wanted to open up shop in the hotel. Zakarian told prosecutors his reason for distancing himself from the project was that he found out about Trump's two book scheme and realized the project was a fraud. So now we hear it from this celebrity chef and from the project's financial analyst. But who you gonna believe, public testimony or your lying eyes?
"It smells a little fishy,” said Robert Bartlett, professor at UCBerkeley School of Law who specializes in securities regulation and capital markets.
The 4,000-square-foot presidential suite in the Trump International Hotel Washington D.C. has
a master bedroom, large living room, dining room with a butler’s pantry and kitchen.
The master bathroom has marble from an Italian quarry. The suite includes a fitness center and walk-in closets. Price tag for one night: $15,000.
When Trump Got Caught He Tried To Hide It
His Team Called the Second Set of Books a 'Trade Secret'
Trump’s lawyers sought to keep the double-book revealing portions of the depositions out of public view, telling the judge in the case that the information was a "trade secret" but thanks to BuzzFeed filling out a Freedom of Information Act request, we can all see it for ourselves.
Hadn't heard about this triumph? No surprise. Trump's recent vocal outbursts and subsequent media attention has distracted the public from following the issue at all. The air space and column width needed to talk about the many, many lawsuits currently being levied against Trump and his holdings can be drowned out with, "Obama founded Isis" and "Hillary invented Birtherism" and poof, we don't even remember that Trump was involved in a "two sets of books" scheme at all. And good for him. Yell '2nd Amendment remedies' loud enough, and even WikiLeaks would miss this recent story on how Donald sells what he sells.
He Just Took a Little Off the Top
As Trump’s finances have been probed during his election run, time and time again his companies and their practices have been shown to be misleading and deceiving, with Trump benefiting as others lose their shirts. Using two sets of books to show projections on investments, one set in reality, one set in Narnia, is certainly one way to do it, but investors began to get wise, and Trump had to find a way to make up the difference. In 2014, Deutsche Bank agreed to lend the Trump Organization up to $170 million to continue to finance the gut renovation. Some people are wondering aloud whether or not Donald will be forced to file bankruptcy on this D.C. property, as he has so many others. Regardless of what the return on investors' money on this project will be in the end, one thing is for sure - Donald J. Trump the man will get his fees and once again walk away with heavy pockets.
So He Lied to Get It Done - How Was He At The 'Building' Part?
Continuing to Screw the Little Guy
According to a report by Politico, from June 2016, the Labor Department's been looking into wage-rule violations by the Craftsmen Group, a Trump Organization subcontractor that was restoring windows on the D.C. Post Office Landmark project. Workers on the site told POLITICO that they and others weren’t receiving pay rates mandated by law and two of them produced pay stubs to support their claims.
“It’s yet another example of Donald Trump’s relentless hypocrisy and gross mistreatment of workers,” said Josh Goldstein, a spokesman for the AFL-CIO. Turns out, technically Trump does not own the Old Post Office, but rather, is leasing it from the federal government. That makes the Old Post Office a government construction project. Government projects are covered by the Davis-Bacon Act, which requires that workers be paid the local "prevailing wage," which in this case can be determined by the rates set by unions within the geographic area where the construction takes place. That applies even when the workers are non-union, and it's true for the two workers at the Old Post Office site that POLITICO interviewed. Both said they worked as “glaziers” installing shower doors and Lynn Taylor, business manager of the Int'l Union of Painters & Allied Trades District Council 51, confirmed that workers who install shower doors were classified as glaziers. According to a sign displayed at the Trump work site, the project’s glaziers should be paid at least $24.30 an hour and possibly $27.64. But the two workers’ pay stubs showed them receiving $13 and $16 an hour, respectively. The people responsible for these violations are the subcontractor Trump hired to handle the payroll: Lend Lease Inc.
This would not be Lend Lease's first encounter with federal wage authorities. In March 2015, the company, along with its subcontractor, Cindell Construction Company, agreed to pay $400,000 to settle allegations that it filed false claims to the government “after subcontractors hired by Cindell underpaid workers failing to compensate them properly for overtime hours despite certifying compliance on weekly certified payroll filings.” In addition, Lend Lease in 2012 agreed to pay $56 million in lieu of criminal prosecution after federal prosecutors charged that the company for “intentionally and fraudulently billing clients from at least 1999 to 2009 for hours that were not worked by labor foremen.”
When the Trump Organization announced in January 2015 that Lend Lease would be the hotel’s construction manager, Trump said in a written statement that he and Lend Lease “have had great success in the past” and that he was “sure the final result of Trump International Hotel at the site of the Old Post Office will be no different.” So either Trump has not heard of the previously settled allegations where Lend Lease had to fork out millions to get out of trouble, or he's just doubling down on screwing the little guy by hiring a company that continues to show they do just that.
A rendering of what the Trump Ballroom at Trump International DC was going to look like as presented to investors.
The Unveiling of the Finished Product
As the Day of the Hotel Opening Drew Near...
The hotel is finished. The ballroom is dressed. The designers have all come in and put their finishing touches on the rooms. All that was left was for Trump to cut the ribbon, and with his usual flair, open the hotel for business. But being so busy with the campaign and all, how was he to fit it in? Well, take the press corps that follows him around anyway on a little tour, right? Marketing 101. Brilliant, he told himself, just brilliant. Now all he had to do was figure out a rouse so no one would notice he was really shooting one big international infomercial. So Trump announced he had an announcement...and the press conference would be held....at Trump International Hotel Washington D.C. Tada! Now he had to find something to announce.
The Lead Up
In the days and hours leading up to his hotel opening, Trump was being hounded on the Birtherism issue. The false meme - a racially charged conspiracy theory claiming the President of the United States was born in Kenya - had only previously lurked in the dark corners of the Alt-Right Internet until Trump forced it into the mainstream back in 2011. While drumming up publicity for his own possible run for the White House, Trump began to aggressively question Obama’s qualifications for office and kept it up for years becoming the undisputed number one backer of the so-called birther movement.
President Obama Roasts Donald Trump At White House Correspondents' Dinner in 2011
Trump's Supporters Seemed to be Interested in Birtherism, so...
He Kept F**kin' That Chicken
Trump never said where he thought the president was born, but for years he continued to demand to see the president’s longform birth certificate, college records, and other records anytime a camera drew near - even claiming to have hired "investigators" to look into it. Despite being publicly humiliated on the issue at the 2011 Washington Correspondent's dinner, Donald put out a call to the public offering millions in October of 2012 to anyone who would reveal the truth. Trump was still pulling out the tired old tactic repeatedly right up through 2016 - continuing to very publicly doubt the authenticity and veracity of the President's citizenship - all that despite the fact that Obama's birth certificate had been widely available to the public since before Obama first took office in 2008. As the days grew closer to open Trump's DC triumph, so did the pressure for him to openly admit that President Barack Obama was born in Hawaii and thereby officially put the whole chapter behind him.
The Day Trump Announced Birtherism was Dead
Trump historians will be able to point to Donald's dogged driving of the Birtherism movement as a major factor in his quick rise to political power in the United States. Despite that, after years and years of Trump leading the Birtherism movement, on September 16th 2016, for no apparent reason, and in the light of no new evidence, Trump announced he had officially "finished" the controversy.
The "Press Conference"
So Friday finally came, and Donald got everyone into a ballroom of his Washington D.C. hotel for his big announcement. The event began more than an hour later than scheduled, and for the first 25 minutes, a series of military veterans talked about why they support him for president. The line-up included Lt. General Thomas G. McInerney, who has also publicly questioned the president's place of birth, as well as a who's who of Birther loyalists. Many of the major cable networks carried these comments live, although several cut away as the event dragged on. Trump finally took the podium after managing to get another hour or so of free publicity from the networks, and his brief statement could have been written on a postage stamp. He said Hillary Clinton started the Birther movement and that on this day he was officially ending it. He then took no questions and told the cameras to follow him on a tour of his hotel. Mission Accomplished. World meet Trump International Hotel Washington D.C. Funny enough, moments after Trump left the stage, the stage itself literally collapsed like a house of cards.
The Press Couldn't Help Noticing Nothing Was Made In America
In One Room Alone
Dana Milbank of The Washington Post decided to spend the night at Trump's DC hotel. The room rate was $856, not including taxes, but a sign informed him that the maximum nightly rate for his room was $5,600. While lounging about, Milbank "found a Trump logo bathmat and towels from India, bone china from Japan, Italian cutlery and tiles, two telephones from Malaysia, a Swiss refrigerator, German coffee cups, Trump soaps and lotions from Canada, and from China came all four lamps, the coffee machine, the bathroom scale, the valet stand and the shower cap." He also could not help but notice that "the hotel's managing director is from France" or that most of the hotel workers he met during his stay "had Caribbean or African accents." #MakeAmericaGreatAgain
While taking the rick-rolled guided tour of Trump International Hotel D.C. it became clear to the press -
and those with cameras - that Trump prefers to furnish his builds with items from China and Mexico, exclusively.
Real life tweet from Donald J. Trump September 16, 2016
Should Investors Continue to Trust Trump?
At a certain point, you can assume a level of trust in major brand names that have proven themselves. It is those blue chip ventures that smart money seeks out. No matter who you are, however, when you take your hard earned dollars and choose to invest in someone else's dream, you're gonna take a risk.
If you ask Trump, he's not worried about his investors at all - or how his actions might affect their bottom line. During a presidential primary debate in 2015, when asked about his four previous bankruptcies, Trump told the nation “First of all these investors are not babies. They are killers. These are not the nice sweet little people you think. You are living in the world of make-believe." And with that, Trump let us all know that worrying about profits on his projects was not something We The People really need to fuss about. Caveat emptor, let the buyer beware, nothing to see folks, just some rich investors getting less rich, no worries here.
If Trump is planning on managing the United States the way he has managed his brand, God help us. People who might have otherwise been willing to work out deals with Donald J. Trump are fleeing him, and that should be seen as a giant red flag on his application for public office. He is literally driving away business.
This Meal Might Be Hard to Swallow
According to Russ Choma of Mother Jones, "The loss of (celebrity chefs) Andrés and Zakarian will directly affect the hotel's profitability. The contracts they signed would have been quite lucrative for Trump. Under the deals, the chefs would have owned the restaurants, footed the bill for millions of dollars in renovation costs, and been fully responsible for any losses their operations sustained. Andrés and Zakarian would have paid rent and a percentage of their profits to Trump. The hotel, meanwhile, would have benefited from hosting two destination restaurants with almost no financial risk. When the BLT Prime restaurant opens instead, it will be fully owned by the hotel, and the Trump Organization will pay to operate it. In other words, the Trump Organization will now bear all the financial responsibility and risk."
Trump's Campaign Style Hurts the Trump Brand
People all over the world are turning off to the Trump brand. Folks everywhere are saying the once golden boy is now a brassy orange and staining everything he touches. CNBC reports booking site Hipmunk's reservations for Trump hotels are down nearly 60% over this time last year. The Globe just reported results of a survey (taken by trend tracking website Skift) of more than 2,000 travel-centric Americans which found 56.9% of respondents said they were less likely to stay in a Trump hotel because of his campaign.
The shrinkage in the success of the Trump brand should be a cautionary tale for the future of the United States' standing in the world. The dip in reservations at Trump properties is just a start. When the United States is one of Trump's properties, what then? Only Donald J. Trump is responsible for this change in attitude toward him and his holdings. The buck stops with him and this tarnishing of The Trump Organization has widely been recognized - across the political spectrum - as a direct result of his racist remarks on the stump slurring 34 million Hispanics in the United States, his violence inducing rhetoric towards our immigrant population, and his proposed ban against the world's 1.6 billion Muslims. If you take Trump's off-color approach to leadership, and factor in his penchant for mismanagement, we calculate a negative outcome for everyone involved.
If they (The Trump Family) should be suing someone, they should sue Donald senior, because he fucking did this. He did this, He rendered this Chernobyl.
He did it. So they should sue their dad.
Celebrity Chef Geoffrey Zakarian,
owner of Manhattan's Michelin-starred restaurant 'Country'
and judge on the Food Network's Chopped