Donald Trump Father's 1966 NY State Investigations Commission Hearing Testimony Revisited

In January 1966, the father of celebrity deal-maker-turned 2016 Republican party presidential candidateDonald Trump--Fred Trump [II]-- was, coincidentally, called by New York's State Investigations Commission to testify about how he made a lot of money from theTrump family business. And in 1992, former Village Voice reporter Wayne Barrett's book, Trump: The Deals and The Downfall, recalled what happened at the hearing and what was revealed at the hearing:

"In January of 1966, Fred Trump suffered the worst public humiliation of his career. Hauled again before the State Investigations Commission--this time at a public hearing--and hounded by television cameras, he testified for several hours about such an array of abuses in Trump Village that the commission chairman, Jacob Grumet, blasted him...and asked state housing officials: `Is there any way of preventing a man who does business in that way from getting another contract with the state?'...Fred Trump was finished.

"He was grilled about an equipment-rental company he incorporated for this job, and the outlandish charges he was billing the state for secondhand trucks and back hoes. He charged $21,000 to lease a dump truck valued at $3,600. He billed $8,280 for two tile scrappers valued at $500 apiece, a ploy the commission cited as an example of Trump's `talent for getting every ounce of profit out of his housing project.'Fred [Trump] hid his ownership of the equipment company from the state, and state inspectors observed him using much of the equipment to build the adjacent shopping center, which certainly wasn't part of the state-subsidized project...

"...Only when faced with the threat of the hearings hadFred [Trump] returned to the state the $1.2 million he'd kept by overestimating his land costs. He'd banked the first land advances for over two years. He also had used the state excess to pay for the land he needed for his own shopping center and two other parcels covered in the city's description of the total site, but unused in the Trump Village development. [Then-State Division of Housing Auditor Leo] Silverman testified that Trump purchased these three large sections of the site for his own commercial development `without putting up a nickel of his own money'...Trump had overestimated his construction costs by $6.6 million [equivalent to over $48 million in 2015 dollars]. Since his builder's fee was based on a percentage of the estimated, not actual costs, he took what the commission called a $600,000 [equivalent to over $4.4 million in 2015 dollars] `windfall,' his additional fee based on the patently hyped cost predictions. When Silverman testified about this padding, tacked onto a $3.2 million fee Trump had alreadly collected as a percent of real costs, the commission was stunned..."

Donald Trump Father's Profitable Brooklyn/NYC Democratic Administration Connections Revisited

The father of 2016 Republican party presidential candidate Donald Trump--Fred Trump [II]--apparently made a lot of money during the 1950's from his friendship with the Democratic Borough President of Brooklyn between 1940 and 1961,John Cashmore, to get the Democratic City government in NYC to purchase for a public housing project a parcel of Luna Park/Coney Island land in Brooklyn that Trump's father had previously purchased. As former Village Voice reporter Wayne Barrett's 1992 book, Trump: The Deals and The Downfall, recalled:

"...Fred [Trump II] was one of a select number of [then- Democratic Brooklyn Borough President John] Cashmore friends to visit him periodically at his Park Slope home. When [then-Democratic NYC Mayor Robert] Wagner's Housing Authority chief, Warren Moscow, went to see Cashmore in 1955 to get him to support Authority projects on various Brooklyn sites, Cashmore had only one condition. `You've got to take care of my friend Fred Trump,' the borough president said. `I want you to talk about his site in Luna Park.' 

"In the end, the City paid Trump $1.7 million for the parcel, giving him a $300,000 [equivalent to over $2.3 million in 2015 dollars] profit. Then Trump bought back a commercially zoned slice of the site, paying the City almost precisely the profit he'd taken on the overall deal. Fred [Trump] effectively got this prime property for nothing, and the 9-store shopping center he built there was an immediate gold mine, serving the 1,576-unit project that the Housing Authority soon opened next to it..." 

Donald Trump Father's Senate Banking Committee Subpoena and FHA Scandal Revisited

The father of 2016 Republican Party presidential candidate Donald Trump--Fred Trump [II]--was, coincidentally, subpoenaed to testify before the U.S. Senate Banking Committee in 1954, when that committee was investigating how Federal Housing Administration [FHA]-financed builders and real estate developers apparently made windfall profits from FHA mortgage gouging during the 1940's and early 1950's. As former Village Voice reporter Wayne Barrett's 1992 book, Trump: The Deals and The Downfall, recalled:

"...By the time the...Federal Housing Administration [FHA[ Scandal finally receded in 1956, the Senate Banking Committee had likened it to Teapot Dome...The description proved apt when $51 million [equivalent to around $450 million in 2015 dollars] in mortgage gouging was identified during an FBI random survey of 285 projects.

"Fred Trump was subpoenaed before the [U.S. Senate] Banking Committee in July of 1954 and grilled about the millions in profit he had expropriated from Beach Haven...Questioned by the committee's counsel, William Simon, Trump conceded he'd paid only $180,000 underlying Beach Haven, but got the FHA to put an appraised value without improvement, of $1.5 million on it. He then gave the land to a trust in his children's name and, using the inflated value, charged the Beach Haven project $60,000 a year rent for the land for 99 years...

"Simon moved on to the windfall Trump took on the mortgage proceeds. The committee had established that Fred [Trump] had loaned $729,000 of the excess proceeds from the mortgage to affiliated corporations and kept another $3 million in the bank. This excess, which Trump acknowledged was actually over $4 million on a $16 million mortgage, was the difference between the amount he originally obtained through FHA, based on his pre-construction estimates, and the actual cost of construction. Trump conceded that he'd paid no taxes on the proceeds he was keeping and that he'd invested some of them already...

"...The [U.S. Senate] Banking Committee and FHA findings assailed the inflated cost estimates that had enriched Fred [Trump] and dozens of other builders as `outright misrepresentation.' The final report charged that the developers had `saddled tenants with the burden of meeting not only legitimate costs' but paying rents to cover the unexpended portion of the federal loans that the builders had pocketed. The investigators also condemned the `fictional division of single projects into two or more projects' to sidestep the $5 million limit on insurable mortgages, a tactic Fred [Trump] employed at both Shore Haven and Beach Haven...

"...Fred [Trump] was...threatened with a federal takeover of Shore Haven, where the Beach Haven mortgage scams exposed at the hearings had been tried first..."

Donald Trump Father's Post-1945 Wealth, Robert Moses and Cuomo Connections Revisited

Following the end of World War II in 1945, 2016 Republican presidential candidate Donald Trump's father, Fred Trump [II], apparently increased his personal wealth a lot and developed more personal, political or business connections to politically influential people, such as former New York City Construction Coordinator Robert Moses and future Democratic New York Governor Mario Cuomo--the father of current Democratic New York Governor Andrew Cuomo. As former Village Voice reporter Wayne Barrett's 1992 book, Trump: The Deals and the Downfall, noted:

"It was in this immediate postwar period that Fred Trump became...a truly wealthy man...Fred began construction on a mansion...The family moved into the 9-room mansion at 85-14 Midland Parkway in 1948...Donald [Trump] was born at the...moment that Fred was making his career change...to big-time New York apartment developer...

"...His name was...mentioned in gossip columns as a possible candidate for Queens borough president, an idea he toyed with in conversations with influential friends...

"Beyond...[political] clubhouse ties [Fred] Trump also took advantage of a very special connection that transcended machine politics: a path of access to...[then New York City Construction Coordinator] Robert Moses...By the late 1950's and early 1960's...Mario Cuomo...would trek out for luncheon business meetings to Fred [Trump]'s Coney Island office, where [Fred] Trump would serve them all cheese sandwiches..." 

Donald Trump Family's FHA-financed Housing Construction Firm Revisited

Much of the wealth that ultra-rich celebrity deal-maker and 2016 Republican Party presidential candidate Donald Trump inherited from his father, Fred Trump {II}, was apparently obtained during the late 1930's and 1940's from a Trump housing construction firm that was financed by the public funds of the U.S. government's Federal Housing Administration [FHA]. As former Village Voice reporter Wayne Barrett's 1992 book, Trump: The Deals and The Downfall, recalled:

"The financing of Trump's Depression-era housing came from the...Federal Housing Administration [FHA]...By the beginning of 1941...Fred Trump...was beginning to move his base of operations out toward the eastern shore of Brooklyn, buying up valuable tracts in Brighton Beach and Bensonhurst. He announced the development of 200 homes a block from the beach in Brighton and the purchase of a pivotal 50-acre track near Bensonhurst Park right off the Belt Parkway, where he planned another 700 houses...

"The war...brought a shutdown of FHA funding for housing in Brooklyn, forcing Trump to suspend his...Bensonhurst project and sending him off to Norfolk, Virginia, and Chester, Pennsylvania, to build FHA-backed housing hear shipyards for naval officers and related uses...He moved his base of operations to Virginia...In addition to the project Fred built...he became an investor in other Norfolk ventures and bought some outright over the years. He would remain active in the Norfolk area into the seventies, accumulating an estimated 2,400 units at his peak, traveling back and forth from New York on a regular basis...Though Fred prospered in Virginia, he shifted his focus back to Brooklyn by late 1944...

"...Between late 1944 and January of 1945, he bought 3 vast plots of land, putting together a 40-acre site. He got one parcel directly from the City. The other two were in tax arrears, and he snatched them before the City could take them, getting them cheaply and assuming the tax bill. His political connections helped keep him one step ahead of the tax man...

"...Trump's plan called for 1,344 apartments...right off the Belt Parkway and overlooking the bay...The FHA commitment to the plan of $9.1 million was divided into 3 equal parts to avoid the $5 million legal limits on project financing...

"Shore Haven was a dramatic change for the 2-story neighborhood, requiring all sorts of City zoning, sewer and street support...By the time Shore Haven was completed Trump's FHA mortgage was increased to $10.4 million, and his own claimed construction cost was raised to $9.5 million...In addition to his fee as a builder, Fred [Trump] managed to take a $1.6 million profit out of the mortgage proceeds..."

Donald Trump and Fred Trump's Historic Brooklyn Democratic Party Machine Connection Revisited

Ultra-rich celebrity deal-maker Donald Trump has been campaigning for the 2016 Republican Party presidential nomination in recent months. Yet, ironically, during most of the 20th century, Donald Trump's father, Fred Trump II, apparently enriched himself and the Trump family by developing a decades-long political and business alliance with Brooklyn Democratic Party machine politicians. As former Village Voice reporter Wayne Barrett's 1992 book Trump: The Deals and The Downfall recalled:

"...[Charlie] Kriger came from the Seneca Democratic Club, then ruled by a major power in Brooklyn politics, Frank V. Kelly...By September of 1934,Kelly would...begin a ten-year reign as the ironfisted, solitary boss of Brooklyn. Though up to then just a small-time Queens builder, Fred Trump had already apparently managed to open lines of communication with Frank Kelly's Brooklyn boys...He was seen lunching with Kelly at the Moutauk, a social club where the bachelor boss lived...

"Fred Trump discovered...in 1934...that he was up against...competition in the hunt to take over the right to service [the jailed] Lehrenkrauss's mortgages...Kriger...announced that the Trump bid was...favored by...John Curtin, a lawyer who was a personal adviser to boss Frank Kelly and had been chosen...to manage the...solvent wings of the Lehrenkrauss empire. Referee Stott was faced with a thoroughly stacked deck of support for Trump...

"...Fred Trump was back in the housing business. For the next 30 years, he would build principally in Brooklyn, attaching himself to a variety of powerful party leaders...The vigorous support he received from the Democratic Party players suggests that he was their designated winner...for an alliance between Trump and the Brooklyn organization that would last a lifetime...

"...Trump became the sole stock holder of Metropolitan Investors, the company he formed to take over the Lehrenkrauss mortgage list...Trump would also form a partnership with Charles A. O'Malley, the appraiser selected by Frank Kelly's...friends to put a value on over 1,000 Lehrenkrauss properties. In 1935 O'Malley and Fred Trump began to build...hundreds of new houses in the Flatbush section of Brooklyn..." 

Donald Trump's 1980's U.S. Presidential Ambition Revisited

The 2016 Republican presidential candidate for "U.S. Business Deal-Maker-In-Chief"--Donald Trump--apparently first indicated during the 1980's that he wanted to seek the U.S. presidency and eventually occupy the White House oval office. As former Village Voice reporter Wayne Barrett's 1992 book, Trump: The Deals and The Downfall, recalled:

"...Tom Fitzsimmons...a sometimes bodyguard and driver for Trump, had known Donald since the early seventies...Fitzsimmons...believed that Donald would become President. It was a notion the golden boy himself had begun toying with at least as early as 1985, when New York state Republican chairman George Clark visited with him at Trump Tower to try to talk him into running for governor.

"`Have you ever thought about running for high public office?' Clark asked. 

"Donald replied without a smile: `Yes. President of the United States.'

"By the end of 1987, he'd advanced this almost eerie ambition with a well-timed appearance in New Hampshire and the formation of a nascent Trump-for-President committee.

"`This is a serious test of the political waters,' his top casino executive, Steve Hyde, said at the time. `If things shake out, I wouldn't be the least bit surprised if he decided to do it.'

"Donald continued conscientiously planting the seeds, talking about the presidency quite seriously in wide-ranging interviews and buying full-page ads on national political issues..."