Synopsis
Book by Blair Gwenda
Extrait
DONALD TRUMP: MASTER APPRENTICE
On a warm fall afternoon, the world's most famous businessman sat next to a pile of 12-inch-tall male dolls. If this were somewhere other than New York City - the South American jungle, say, or ancient China - they might have been mud-and-twig fetishes designed to ward off evil or ceramic objects destined to accompany him into the afterlife. But it was Times Square in September 2004, and Donald Trump was launching a sales campaign at Toys R Us for a plastic action figure modeled in his likeness - more or less. Laser technology had provided the billionaire's pursed mouth and bushy eyebrows, but a shoe-polish brown pompadour had replaced the famous orange comb-over and there were no genitals.
No matter; despite its single-breasted suit and wing-tip shoes, the Apprentice Talking Donald Trump Doll is not really a replica, or even a toy. Instead, it's a pint-sized, personal mentor for viewers of the hit reality television series, "The Apprentice," on which fresh-faced young contestants compete for a job with the Trump Organization. Embedded in the doll's chest is a digital sound chip that allows it to declare, in Trump's own voice, "Have an ego," "Think big," and other pithy bits of advice similar to those he offers each week on the show.
What the doll doesn't reveal are the sources of Donald Trump's own extraordinary success. These include a number of lucky breaks, among them his father's real estate wealth and political connections, his surname (changed by a prescient German ancestor from "Drumpf" to Trump) and his ex-wife Ivana's gift of a catchy nickname, "The Donald," which became instant newspaper fodder.
But of equal importance are what we might call The Donald's Five Commandments: Do whatever it takes to win. Don't spare the chutzpah. Turn everything into an advertisement for yourself. No matter what happens, claim victory. And above all, always use the superlative. While he's heeded business basics like "Location, location, location," his own personal mantra is "Exaggerate, exaggerate, exaggerate."
Following these guidelines, he's carved out a career in self-aggrandizement that has netted him fortune, fame and enthusiastic fans. Hundreds of them showed up for the one-time-only opportunity to plunk down $26.99 for a doll and The Donald's autograph in metallic gold across the face of the doll's box. They knew him from "The Apprentice" as the archetypal boss: ready to pounce on mistakes, dismissive of excuses and ever aware of the bottom line. What they didn't know was that behind this most recent claim to fame lay a life history with more twists and turns than any television producer could possibly imagine. Nor did they know that Trump himself had been a lifelong apprentice to a powerful man whom he had admired, rebelled against, studied, competed with, and eventually surpassed. "I wanted to do what my father did, but bigger, better, stronger, higher, everything, right?
Fifteen years earlier, that mentor had watched with a bewildered look as Donald sat in another Manhattan toy store, F.A.O. Schwartz, and autographed a Monopoly-like board game with his name and face on it. The man was Donald's father, Fred Trump. Like his son, he was in real estate. Also like his son, he was immensely wealthy. But he had made his money building ordinary homes for ordinary people, not by constructing super-luxury apartments, running casinos, engaging in financial manipulations and turning himself into one of the most celebrated figures of the century. Whereas the erstwhile apprentice lived in the center of photographers' lenses, his master existed outside the media's glare. The two men's lives were vastly different - as different as business in the middle of the twentieth century and at its end, as different as the America of the World War II era had become as the cold war drew to a close.
This apprentice did not always follow his master's advice. When Donald ignored his father's old-fashioned, all-brick aesthetic in favor of modern, glass-walled skyscrapers, he achieved great success; when he disobeyed his father's financial precept s and signed personal financial guarantees for nearly $1 billion, he created a disaster. Only a year after the F.A.O. Schwartz event, Donald's empire lay in shambles. But unlike other magnates of the time, he emerged from financial turmoil to create a second, virtual empire. He would no longer own everything with his name on it; instead, he would market himself as the embodiment of the American dream of wealth and fame. He would be the people's billionaire: the personality brand created by the dark suit, the improbable hair-do, and the over-the-top description of every undertaking as the world's most fantastic, amazing and incredible.
Only a dozen years earlier, many had considered him finished, but his current life seemed to be, quite literally, gold-plated. To the contestants on his show as well as the world at large, he seemed the quintessential man in charge. But the reason he had survived and flourished was that he had, once again, been an apprentice, resolutely adhering to his father's most fundamental rule: No matter what happens, never, ever give up.
November 2004|CHAPTER 23: THE LEGACY
Donald Trump's unrelenting focus on his own accomplishment alienated many people; others, drawn to winners, found his self-absorption appealing. No matter the occasion, he was always competing, always concentrating on how to make whatever he was doing seem bigger and better than what anyone else had ever done. When he lost, he would say he won; when he won, he would say he won more. He called such behavior "truthful hyperbole." Broker Ed Gordon labeled it "diarrhea of the mouth." Barbara Corcoran, founder and chairman of one of the largest residential real estate companies in Manhattan, may have put it best: "He's got a gift that's good in good times and really good in bad times," she said. "It's called bullshit, and he uses it unabashedly. We've all gone to high school with someone like that - the only difference is most people have to let it go."
But as Donald Trump would be the first to say, he wasn't like most people. In The Art of the Deal, he claims that business deals are what distinguish him; by all accounts, he is indeed an artful negotiator, with his father's skill at walking into a meeting without notes or a calculator because he's got the numbers and deal points in his head. But his most original creation is the continual self-inflation that has made him a touchstone of excess. Early on, it made him his father's favorite child and treasured apprentice, a choice that sheds a certain light on the journey taken by this family - indeed, this nation - over the past century.
Despite obvious differences in lifestyle and affect, grandfather Friedrich, father Fred and Donald were similar types. All three were energetic men who would do almost anything to make a buck; all three possessed a certain ruthlessness; all three had a free and easy way about the truth and a wide range of solid, practical skills. But how these traits played out in different eras is, in its own way, a vest-pocket history of America.
During Friedrich's first two decades in the New World, he made a living by providing services that were as concrete as could be imagined. They ranged from haircuts to food to sex, and customers returned because they were satisfied with his work, not because he was the vendor. When he purchased older businesses, he did not change the sign over the door; when he started new ones, he named them after their locations. Even when he moved into real estate, near the end of his life, his intention was to create value not through his name but by buying plots of land and building homes.
Friedrich's son Fred followed in his father's footsteps but created value in his own way. By establishing a network of political contacts, he managed to obtain government housing subsidies, then released a stream of press releases designed to give a special shimmer to what were in fact conventional developments. A man of his era, he gave them innocuous generic addresses, like Shore Haven and Beach Haven. Only on the last, Trump Village, did he place his name, a precedent that his son Donald would expand on in ways that Fred never dreamed of.
Donald shared much with his father and grandfather. He, too, knew how to frame a building and retar a roof. But Friedrich's grandson would not employ this practical knowledge to build anything with his own hands; instead he would use it to hire and fire those who put up his structures and to connect with the construction crews, maintenance men and retired blue-collar workers who played his slot machines in Atlantic City. Although these skills would be helpful in negotiating contracts, the special value he would add to his projects would be his name. Seemingly the simplest of acts, it was actually quite arduous, for keeping that name going, constantly protecting and buffing it, required vigilance and intensity of the highest order.
By 2005, 14 buildings in Manhattan bore the name, although he had provided little or no financing for more than half. To all appearances, he held equity in only three or four, but rather than offering proof of more extensive ownership, he simply insisted, sometimes ferociously, that he owned practically everything labeled Trump. One perennially sore spot involved Trump Place, the vast West Side complex financed by a Hong Kong consortium. When the New York Times Magazine asked about Trump's holdings there, the consortium's lawyer delicately described him as "a major partner" who was "not merely receiving a fee" - seemingly a roundabout version of the near-unanimous belief that Trump's portion was a management fee plus a share of the profits.
Donald was less delicate. "I'm not a fucking flunky," he said. "I'm a 50/50 owner, owner, owner of the job. Okay, do you have that? I get 50 percent of the profits because I own 50 percent of the job, and it turned out to be one of the most successful jobs ever done in Manhattan." Afterward, in a Trump-style clarification, he added that he did get fees for building and managing the project. "I own that job, can I get it through your head? I own the West Side. I'm the largest owner. I own it. I'm not just a person that works, you know, for a fee. Do you understand? I'm an owner. I own a big chunk of that job, a big portion of that job. Off the record, I own 50 percent of that job. Five-Oh. You said I didn't own it, I got fees, but that's bullshit."
f0Such diligence had its rewards. In the early 1990s, when Donald's empire was in trouble, the carefully tended glow attached to his name persuaded holders of the junk bonds underwriting his casinos to cut deals leaving him in place as owner. In 1995, Several years later, his renown allowed him to take the casinos public and load them with still more junk bonds. But a decade later, the casinos faced stiff competition: neighboring Pennsylvania had legalized slot machines, and right in Atlantic City there was a new kid on the block: the $1.1 billion Borgata, the first casino built since the Trump Taj Mahal. A sleek, sumptuous Las Vegas-style resort with high-end retail shops, celebrity-chef restaurants and a popular spa - the wait list for facials was eight weeks - the Borgata was blowing the doors off every casino in town, but the dilapidated Trump properties were hit especially hard.
tThe remedy was obvious: refurbishment and more hotel rooms. But staggering interest payments on high-interest bonds had left Trump's thepublic company too strapped to replace worn upholstery and repaint scuff marks on walls - a serious no-no in an industry that relies on glitz and glamour to lure customers. Worse, there was no money in the till for. - much less to finance a much-needed expansion. Because Trump was always strapped, said Jacques Cornet, a casino analyst for CIBC World Markets, the developer had never been able to "right-size" his casinos with enough hotel rooms - a critical gap given that overnight customers spend an average of $325, compared to only $100 for someone who drives down for the day. "The logic was that if Donald could double the room count, the returns would finally be adequate," Cornet said. "It makes sense, but there's a tremendous leap of faith involved."
Evidently, the Trump name continued to give the bondholders that faith. In late October 2004, just weeks before another interest payment that many predicted THCR would not be able to make, they "took a haircut." But once again, the Trump name convinced bondholders to "take a haircut." In exchange for the right to keep using that name and likeness, plus an equity stake and a modest cash payout, they accepted a prenegotiated bankruptcy that reduced their rate of return and gave Donald yet another lease on his ever more highly leveraged financial life.
This time, the man who had insisted that he owned "mostly 100 percent of everything" declared that reducing his own equity by more than half was not such a bad thing after all. "I'll own 27 percent of a great company as opposed to 56 percent of a company that had a lot of debt," Trump said. "Which would you rather own? It's a great deal, no one else has ever done such an amazing deal. The casinos have always been a great deal for me. How much have I made off the casinos? Off the record, a lot. And nobody's ever understood that. They think, oh, gee, he hasn't done that well. But I've made a lot of money with the casinos over the years and now I'm going to make it a great company. I put a lot of debt on them and I took the money out and I bought a lot of real estate in New York. So I'm very happy at how things have turned out."
It was a remarkable turnaround for a man facing seemingly inexorable death by interest payments. "He has staved off a ticking time bomb," one long-time Trump critic, casino analyst Marvin Roffman, told Newsday. "He should go home tonight and take out his cashmere Trump bathrobe and crack open some Dom Perignon and celebrate."
But there would be another reckoning, and soon. According to the terms of the agreement with bondholders, by the following spring, Trump, who would still be the largest shareholder, would have to kick in an investment of $71.4 million, including $55 million in cash. "People are talking about whether the check will appear," said one industry observer. "Will some bank lend him more on a building in New York? Or against future expected fees on his TV show, "The Apprentice"? He can get creative - and historically, he has."
* * * *
To his grandfather and his father, Trump had been a name, a signifier of family and history. But to Donald, it meant something more. When he'd hoisted it on one undertaking after another, it wasn't simply a matter of advertising; he was turning himself into a brand. In turn, when investors backed his ventures and the public patronized them, they weren't merely making financial choices; they were buying into "Donald Trump," the personality brand created by consistently making the same extravagant claims and having the same look - including, apparently, the dark suit, the smirk, and the ever-more-improbable hairdo. "He was an early mover in this kind of personal branding," said brand guru Bernd Schmitt, a professor at Columbia Business School. "Like Bill Gates and Steve Jobs in computers, he became the most well-known brand in real estate - in public awareness and notoriety, no one else even comes close."
It was a strategy that paid off handsomely. In the early 1990s, when he was in his late forties, Donald was nearly $1 billion in the red; by the fall of 2004, when he was approaching his sixties, the Forbes 400 pegged his wealth at $2.6 billion. Along with film director Steven Spielberg and Yahoo cofounder David Filo, Trump was in a five-way t...
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