David Cay Johnston is a Pulitzer Prize–winning journalist who wrote for The New York Times and the Los Angeles Times. He’s the author of seven books, including The Making of Donald Trump, and most recently, It’s Even Worse Than You Think, What the Trump Administration Is Doing to America. He’s also editor of dcreport.org. This interview has been edited and condensed.
Jon Wiener: That special Sunday section of The New York Times had 14,000 words, 11 pages of text and documentation, reporting on what they called “suspect tax schemes” that helped preserve what they called “a vast inherited fortune”—real estate and cash that Donald Trump got from his father, Fred. What do you consider their most important findings?
David Cay Johnston: It’s the most extraordinary thing: The New York Times said that the sitting president of the United States engaged in “outright fraud.” From the documents, the 100,000-plus pages of mostly private Trump family documents, backed up by various public records, and interviews and other work they’ve done, two things can be said: Donald Trump in particular, and the Trump family as a whole, are criminal tax cheats. They won’t ever be indicted for the crimes the Times described, because the statute of limitations for criminal prosecution is only six years, and the Times covers a half-century from the 1950s to the turn of the century. They can be prosecuted for civil fraud for every single dollar, and Donald has already had two civil tax-fraud trials. He lost both of them.
Secondly, Donald Trump’s claim that he is a self-made man, and that he’s worth $10 billion—these claims are complete and utter nonsense. They’ve been demolished now by the Times. That second story, however, isn’t getting through. Forbes magazine just came out saying Donald Trump’s wealth has fallen from four billion dollars to three billion, and every day on TV and on the radio, I hear news people talking about “the billionaire president.” But there is not now, nor has there ever been, a scintilla of verifiable evidence that Trump has a billion-dollar net worth. During the campaign he told us all he was worth more than $10 billion. I kept saying, that’s nonsense, it’s not true.
JW: What’s the evidence here?
DCJ: Once he became president, Trump had to file his financial-disclosure form. As I report in It’s Even Worse Than You Think, his lawyers asked to file that statement without signing it under penalty of perjury. The Office of Government Ethics said “No. You have to sign that statement.” Everybody has to sign, under penalty of perjury. So he did. The statement shows a net worth not of $10 billion, but of $1.4 billion. What more do you need to know to understand that Trump just makes this stuff up? And even the $1.4 billion is not to be believed. For example, he says his two Scottish golf courses are each worth more than $50 million. But we just got their new financial reports. Yet again, for another year, they’ve lost millions of dollars. They’re not worth $50 million. They may be literally worthless, except for the real-estate value—if you get permission to redevelop them. His businesses are losing money all over the place. And the rules for the presidential disclosure do not require Trump to disclose all sorts of loans that he is obligated for. If we had a real net worth statement on Donald Trump, it would probably show he’s worth a few hundred million dollars. That’s all.
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JW: Most of the New York Times report is about various strategies by which Trump’s father Fred transferred assets to his children. The Times said that Trump himself received at least $413 million in today’s dollars from his father’s real-estate empire. How do you do that? How did Fred Trump manage to transfer $413 million to his son, Donald?
DCJ: You do it by lying and cheating. Let me give you a simple example. If you live in a state like California or New York, and you give your child a car, and you put down for sales-tax purposes that it’s worth $1,000, but it’s really worth $20,000, they will catch you and they will send you a bill, because all of those records are digitized. They’re electronic. And they have been for years and years. But if it’s real estate, those records often are not digitized. They’re held by individual county governments, and sometimes by cities and townships. So what you do is you play with the value of the property. In one of the transfers of Fred Trump real estate to his children, he gave them more than 1,000 apartments. They valued it at an unbelievable discount. Say you wanted to give your child a house worth $500,000. What’s the actual value of that house? It’s not like a stock where at the end of each day you know what it’s selling for. So maybe it’s worth $550,000; maybe it’s worth $450,000. But it’s in a range around a half a million dollars. The Trumps would have valued that house at $30,000, six cents on the dollar. And they got away with it because the IRS doesn’t have those records, and doesn’t pursue them. So guess what? It’s no big surprise: Donald Trump and Fred Trump and Robert Trump and federal judge Maryanne Trump Barry didn’t get caught while they stole from us about a half a billion dollars.
JW: All of the super-rich use these tax-avoidance strategies. There’s a whole industry of financial advisers and lobbyists who work on finding new ways to undervalue assets that are transferred to children. Is what the Trumps did really any different from other very rich people?
DCJ: It’s very different. The 13 years I was with The New York Times I worked as their tax reporter. I exposed so many tax shelters that I was called “the de facto chief tax enforcement officer of the US.” There’s a difference between aggressive, creative devices to avoid taxes and what the Trumps did, which was flat-out fraud. Back to my example of the half-million-dollar house: If you say the house is worth $450,000, that’s not criminal by any stretch. But when you say it’s worth $30,000, six cents on the dollar, that’s criminal. They knew it was criminal. It’s why they hid this stuff. And it’s why we absolutely must see Donald Trump’s tax returns in this century. Every single one of them. Not just the two pages that I got for his 2005 return, which, by the way, showed his use of an illegal tax shelter so odious that when the Republicans in Congress found out about it, it took them only a few weeks to pass a law to shut it down. But you know what Congress does when they catch one of these tax shelters, like the ones I was exposing? They shut them down—but if you were already in, they let you keep your ill-gotten money. It’s as if we had a law that said, “We’re going to declare bank robbery a crime tomorrow, but if you robbed a bank yesterday, it’s okay. You can keep the money.”
JW: When the New York Times report was published, Donald Trump released a brief statement saying all of this was “old news.” Isn’t that true in part? Isn’t Trump referring to your investigations and your reporting on his money?
DCJ: No. It’s true in the sense that, for years, I’ve done little pieces of this, and so have Tim O’Brien and Gwenda Blair and the late Wayne Barrett. But this New York Times project is light years beyond where we went. And there’s not a single technical glitch in it. Every time I read a story about accounting, business practices, or tax law, I almost always wince at some concept or detail that the reporter got wrong. But in the 14,000 words in the New York Times report, there’s not a single comma that I quarreled with. And I haven’t seen anybody else point to a problem. This is the single greatest investigative news report I have ever seen, and I’m in a particularly unique position to be able to judge. I’ve been at this for 52 years. I’m the former president of the Investigative Reporters and Editors association.
JW: One last question: Is this pretty much now the whole story? Do we know what we need to know about Trump’s finances and where they came from? If not, what’s next in this story?
DCJ: If the Democrats actually turn out to vote—which I don’t think is all that certain—and if the Democrats take control of the House, and maybe the Senate, there will immediately be investigations into Trump’s finances. Congress has the right to his tax returns. They will demand those returns. They will conduct investigations. My guess is that, a year from now, we’re going to be discussing what’s in Trump’s more recent tax returns. Just keep this in mind: In the 1970s, we had two crooks at the head of our government. Nixon’s vice president Spiro Agnew resigned and pled guilty to a tax charge over what were basically bags of groceries that he didn’t report on his tax return as bribes. Bags of groceries. There was more to it, but that’s what he pled to. Richard Nixon, who famously said, “I am not a crook,” was an unindicted co-conspirator, and his tax lawyer served time in prison for backdating documents so that Nixon could take a deduction for donating his papers. Those are pebbles compared to the mountain of tax cheating by the Trumps. We have a criminal in the White House. So people need to vote. We need to make sure that the votes are honestly counted. And we need to support a thorough, professional, detailed congressional investigation. And if it warrants it, Donald Trump needs to not only be removed from office; he needs to be indicted, prosecuted, and if convicted, sent to prison.
