Trump's big fat Chicago con

Has debauchery been so normalized that we are willing to overlook this? I hope not.

President Donald Trump may have fabricated a loan to avoid paying taxes on nearly $50 million of income, Mother Jones reported in a bombshell investigation published on Thursday.

The controversy appears to be related to the Trump International Hotel and Tower in Chicago and a shadowy shell company Trump owns called Chicago Unit Acquisition LLC. Media reports have found that the company does not earn revenue and is essentially worthless. Trump has said on his financial-disclosure forms that he owes more than $50 million to the company, which he controls.

As always, the financial hugger-mugger here is a bit difficult for mere mortals to figure out.

Basically, Deutsche Bank put up the bulk of the money for that building, something on the order of $640 million. A hedge fund called Fortress Investment Group also put up some of the money, a bit more than $100 million. So Trump had to pay back a loan that was the better part of a billion bucks.

The building has not done well. I've talked about Trump Tower Chicago in a previous post (the bulk of which I reproduce below).

After the thing turned into a boondoggle, Trump realized that he could not pay Deutsche Bank. Naturally, Deutsche Bank sued. That lawsuit spurred Trump to mount an absolutely hilarious counter-suit for three billion dollars. Trump claimed that Deutsche Bank had engineered the 2007 economic crisis.

Here's the freaky part -- perhaps the freakiest part of Trump's whole freaky career: Trump and Deutsche Bank soon kissed and made up. I have no idea how. I have no idea why. But through some magical operation, Trump squared things with Deutsche Bank.

Lots of people suspect that Trump pulled off this trick with the help of someone with a Russian name.

But Fortress -- the other investor -- remained a problem. Somehow, Trump talked this Fortress group into accepting just $48 million on a loan that went north of $100 million.

How the hell did he do that? Magic. Can you use the same magic to get a car loan at half price? No.

Think about this situation carefully. The vast majority of the loaned money came from Deutsche Bank. Somehow, after suit and countersuit, Trump was able to satisfy those bankers. But when it came to Fortress, all of a sudden Trump screamed "I'm poor!" He could not make scheduled payments.

And so it was that poverty-stricken Donald talked Fortress into cutting his debt in half.

Here's the thing: When you negotiate a massive debt reduction of that sort, the reduction is considered income. And income is taxable.

But Donald Trump just ain't into paying taxes.

Adam Levitin, a law professor specializing in commercial real estate finance at Georgetown University, told Mother Jones the scheme was "pretty brazen."

"If he didn't actually buy the loan, this is just garden-variety fraud," Levitin said.

That fifty million in taxable income is a scandal in and of itself. In a sane world, that scandal should be enough to start impeachment proceedings. Ultimately, however, the real scandal is Deutsche Bank. What the hell happened there?

Now, as it happens, I wrote at length about Trump's Chicago adventure back in 2016. Basically, I had a small piece of the same story. For a long time now, Trump has avoided taxes by lying about that building. Below the asterisks are the words I wrote then:

* * *

I don't know why people aren't talking about this one -- if any Dem has something so shady on his resume, his political career would be over.

It all has to do with the massive Trump Tower (formally called the Trump International Hotel and Tower) in Chicago, built right beside the river -- the fourth-tallest building in the United States, and the tallest residential building in the world. I happen to think that the building is quite magnificent, from an architectural standpoint.

Trump had YUUUUGE plans for a shopping paradise at the base of the Tower.

Some dozen stories below the Trump sign is a testament to Trump’s Chicago flop.

About 70,000 square feet of space on the terrace and riverwalk levels has never been rented since the building opened in 2008. That means Trump’s organization each year leaves potentially millions of rent dollars on the table, as the vacant space generates no revenue.

Trump’s real estate experience did not guarantee the success of the commercial/retail aspect of the Chicago skyscraper, which also contains a hotel, condominiums and parking.

Trump complains about media bias. So I want to underscore that the admissions about why the Trump Tower retail space is not rented come from a legal brief filed with the Cook County Assessor by the law firm Trump’s own organization hired to seek a property tax break.

Trump’s own brief states the devastating shortcomings of the tower’s commercial and retail space.

In May, the Sun-Times’ Chris Fusco and Tim Novak reported on how Trump and his investors were able to cut millions of dollars from their Cook County property tax bills, hiring Klafter & Burke, the law firm run by clout king Ald. Ed Burke (14th), for a series of successful appeals.

In a legal brief dug up by Novak and Fusco, the commercial/retail space is described as “empty and un-leasable” with details on all its shortcomings.

“There are no direct or easy ways to reach the space from Michigan Avenue. The space has remained vacant since the hotel opened in 2008, even though the hotel has used real estate brokers from several different firms from both Chicago and New York,” the brief said.

In 2014, the real estate firm RKF was hired to market the property, but the space is “so detrimental” that no one wants it — even for offices, the brief states.

In short, Trump told the County Assessor that the offices were "unleasable," and thus deserving of a tax reduction.

At this point, you are probably asking: "But where is this 'big lie' that Cannon promised us?" It comes to this: Trump tells a very different story about these offices to any potential renters. For example, see here.

Situated at the base of the Trump International Hotel & Tower overlooking the Chicago River, this breathtaking retail space is ideal for restaurants and retailers looking for a high-profile location and direct access to Trump Tower's hotel guests, condominium residents and locals alike. Spaces range in size from 1,478 sf to 66,929 sf and can be demised or combined to fit a variety of uses.

Either Trump is lying to the assessor or he is lying to potential retailers.