WASHINGTON – Revelations that President Donald Trump is personally responsible for more than $400 million in debt cast a shadow over his presidency which ethics experts say raises national security concerns he could be manipulated to influence policy American by organizations or individuals to whom it is accountable.
New scrutiny from Trump, who claims great success as a private businessmancome after The New York Times reported that tax records show he personally carries an astronomical amount of debt, including more than $300 million in loans that will come due over the next four years.
Sen. Elizabeth Warren, D-Mass., was blunt about the potential implications. “He may be vulnerable to financial blackmail from a hostile foreign power and God knows what else,” said Warren, a frequent critic of Trump.
The Times said tax records also show Trump paid no federal income tax in 11 years between 2000 and 2018, raising questions about the fairness of a president – who claims to be a billionaire – pay less tax than most Americans.
However, the politically damaging revelations about Trump’s tax evasion are perhaps of less concern than the word that the president is holding hundreds of millions of dollars in soon-to-be-due debt, ethics experts have said.
“Americans should be concerned about the president’s debt because it is a national security risk to our country,” said Donald Sherman, deputy director of the nonprofit government watchdog group Citizens for Responsibility and Ethics in Washington. (CREW). “This is information that the president has aggressively and repeatedly tried to keep out of the public eye.”
Trump, citing ongoing Internal Revenue Service audit, refused to follow post-Watergate precedent set by other presidents to release his tax returns, so the complexity of his financial interests and who he does business with has remained opaque. He is fighting ongoing court battles with the New York attorney general, the Manhattan district attorney and two House committees that want the records.
Richard Painter, who served as Republican George W. Bush’s chief White House ethics counsel, also noted that Trump-owned companies have filed for bankruptcy six times, raising the question: why did lenders been willing to continue to risk loans of such a huge amount?
“Why would the banks take on the risk on these loans? said the painter. “Or did someone else quietly take on the risk of this loan for the bank to realize?”
Trump, according to his latest financial disclosure statement, said he had 14 loans on 12 properties.
One lender, Germany-based Deutsche Bank, continued to do business with Trump even after it defaulted in 2008 on a loan for its Chicago hotel and condo development. Trump filed a lawsuit against the bank and others he accused of his failure to repay.
But Deutsche Bank’s private banking division continued to lend Trump, including $125 million to finance the purchase and renovation of his Doral golf resort in 2012, according to earlier reports.
Trump suggested on Monday that his leverage was hardly unusual relative to his assets, saying in a tweet that he was in fact “extremely under-leveraged.”
“I have very little debt relative to the value of assets,” he wrote, adding that he could release a financial statement detailing all assets, properties and debts.
Trump in an appearance on Monday ignored a reporter’s question about when he might issue such a statement, and the White House did not comment on when he might follow up. He said several times before his election that he would publish his actual taxes, but never did.
Kathleen Clark, a government ethics expert at Washington University in St. Louis, said a separate financial statement from Trump would shed little light on his business dealings if he didn’t disclose who his business partners are in his various holdings.
“The Trump Organization consists of hundreds of LLCs (limited liability companies) that have been listed on its financial disclosure forms,” Clark said. “One of the things that Trump has taken advantage of and that the oligarchs and money launderers have taken advantage of is the opacity of LLCs, … the ease with which individuals can hide their assets, can hide their financial interests .”
Trump refused to cede his business interests after his 2016 victory and left day-to-day management of his family’s real estate and other assets to his sons Donald Jr. and Eric. Yet the president has personally benefited from U.S. and foreign government activity at his properties since his election and hasn’t shied away from promoting his hotels and golf courses.
Republicans have hosted at least 88 political events at his properties, the president has visited his hotels and golf courses more than 500 times, and at least 13 foreign governments have hosted events at Trump properties, according to a tally by CREW.
The administration drew criticism last year when Vice President Mike Pence, while visiting Dublin for meetings, stayed at the Trump International Golf Links and Hotel more than 180 miles away in Doonbeg, Washington. Ireland. And Trump scrapped a plan to hold a meeting of the Group of 7 world leaders at one of his properties in Florida last year after bipartisan criticism.
In the run-up to his 2016 election victory, Trump downplayed his bankruptcies as a smart business strategy and even called himself a “debt king.”
“I’ve always loved debt, I have to be honest with you,” Trump said at a campaign rally. “I don’t like it for the countries, but I like it individually. If things are going well, that’s great, if not, you’re going to renegotiate.
The New York Times, citing tax records it obtained, also revealed that Trump paid no federal income tax for 11 of 18 years, and only $750 a year for 2017 and 2018, so that he was claiming millions of dollars in business losses.
On Monday, top Democratic lawmakers called Trump’s tax avoidance infuriating, but seized on his debt as perhaps more concerning.
House Speaker Nancy Pelosi said on MSNBC that ‘our responsibility is to protect and defend and we need to make sure we know what exposure the President of the United States has and what impact that has on security decisions. national for our country”.
Painter said that if Trump tried to appoint someone with his massive debt load to a high-level government position, the nominee would almost certainly have a hard time getting a security clearance. Indeed, the inability or refusal to pay debts and a history of non-compliance with financial obligations could disqualify any federal employee from receiving a security clearance, according to government guidelines.
Peter Schweizer, President of the Government Accountability Institute, said: “The question is also whether the loans are linked to real assets such as buildings etc. or whether the politician has obtained special favors to obtain loans. . Politicians and their families may engage in business transactions, the question is whether the loans are unusual and unique compared to others in the market.
Trump is not the first president to face debt, either in office or later in life.
Thomas Jefferson, whose peak net worth in current dollars reached $236.8 million according to research by 24/7 Wall Street, died in debt. The debt was accrued during and after his presidency – as well as by relatives – and his family sold dozens of slaves from their Monticello estate to satisfy their debts.
On the other hand, Barack Obama, in his second term, encouraged American homeowners to refinance their mortgages as rates fell far below what he was paying, but he said he and his wife were waiting.
“When you’re president, you have to be a little careful with those transactions, so we didn’t refinance,” Obama said at the time.
Madhani reported from Chicago
An AP graphic on the taxes of former presidents: https://interactives.ap.org/embeds/zUUtX/5/
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