Trump Revealed

by Michael Kranish

  Trump played the city, the sellers, and the hotel chain off one another, using one to leverage a deal with the other. He assured Penn Central’s negotiators that he had a solid deal with Hyatt when he had no such thing, and the railroad gave him a nonbinding, exclusive opportunity to buy the $10 million property. Trump didn’t have the $250,000 he needed to secure that option, let alone financing to cover the estimated $70 million project; his father had even fronted him the money to hire an architect. But in May 1975, Trump called a press conference anyway. Joined by Hyatt cofounder Jay Pritzker, Trump presented elaborate renderings of the Commodore’s revival: fourteen hundred rooms, seventy thousand square feet of retail space, a dazzling Hyatt-style atrium, and walls of mirrored glass surrounding the aging hotel’s steel bones. Trump announced that he had a signed contract with Penn Central to buy the hotel. It was signed, but only by him; he had yet to pay the $250,000. Then came a feat of misdirection he would later boast about. When a city official asked for proof of Penn Central’s commitment, Trump sent what looked like an agreement with the sellers. Trump then used the city’s resulting approval to push his deal with Hyatt to closure.

  Now Trump needed money. With no collateral to back his debt, he struggled to persuade banks to front him a construction loan. After one rejection, Trump wanted to quit, telling his real estate broker, “Let’s just take this deal and shove it.” But Trump, who grew up watching his father build an empire based on subsidized development, was saved by New York’s first-ever tax break for a commercial property. The Urban Development Corporation—a nearly bankrupt agency launched in 1968 to build integrated housing—had the power to make properties tax-exempt. It could buy the hotel for $1, then lease it back to Trump and Hyatt for ninety-nine years—an arrangement that would save Trump’s project an estimated $400 million over the next forty years. Sunshine helped Trump land a meeting with the UDC’s chairman, Richard Ravitch, who had grown up in the construction business. Ravitch’s father, Saul, was the founder of HRH Construction, which Fred Trump had hired to build Trump Village. Now Ravitch saw that the younger Trump had a different way of doing business. Donald came to see Ravitch and told him he had bought the Commodore to convert it into a Grand Hyatt. “I want you to give me a tax exemption,” Trump said.

  A Hyatt would be great for the city, Ravitch replied, but the project didn’t qualify for a tax break because it would likely be successful on its own. Trump stood up and repeated his request: “I want an exemption.” When Ravitch again declined to support the idea, Trump said, “I’m going to have you fired,” and walked out of the office, Ravitch said. (Trump denied Ravitch’s account and called him a “highly overrated person.”) Rival hoteliers agreed with Ravitch and opposed what they saw as a sweetheart deal for Trump. The Hotel Association of New York City said its members paid more than $50 million a year in real estate taxes and asked why a brash young developer who had never built a hotel and would invest none of his own money deserved a helping hand.

  On the day before New York’s influential land-use authority, the Board of Estimate, was to vote on the tax exemption, three Manhattan lawmakers called a press conference outside the hotel to demand the city push for a better deal. When the politicians had finished, Trump, who had shown up to refute their argument, told reporters that if the city did not approve the assistance, he would walk and the Commodore would rot. To dramatize how decrepit the Commodore would be without him, Trump had directed his workers to replace the clean boards covering up hotel windows with dirty scrap wood.

  In fact, other investors were interested in the hotel and had offered to renovate it, pay more in taxes, and share more of the profits with the city than Trump would. But the alternative offer was ignored because of Trump’s contract with Penn Central—even though that deal was not yet signed and sealed.

  Ultimately, Trump’s purchase option, energy, political connections, and profit-sharing promises turned the desperate city to his side. A few weeks after the last tourists were booted out of the Commodore, the Board of Estimate agreed to waive all real estate taxes as long as Trump’s project was run as a “first-class” hotel. Trump took a victory lap in the Times, boasting about his “financial creativeness” in cobbling together tax credits, and making clear the distinction between his father’s success and his own Manhattan ambitions: “My father knew Brooklyn very well, and he knew Queens very well. But now, that psychology is ended.” Trump had asserted to the Times that he was worth “more than $200 million,” even though a year earlier, Penn Central negotiators had estimated the Trump family holdings at about $25 million, all of it under Fred’s control. In December 1976, a month after that article appeared, Fred Trump opened eight trusts for his children and grandchildren and transferred in $1 million each. Over the next five years, Donald would reap about $440,000 in income from that trust alone.

  Despite winning the Commodore battle, Trump maintained a grudge against those who had opposed him. Five years after Ravitch and Trump’s contentious meeting, the counsel of the Metropolitan Transportation Authority, where Ravitch had become chairman, told him Trump’s bulldog attorney, Roy Cohn, was calling. Cohn informed Ravitch that Trump wanted the MTA to spend taxpayer funds to connect the Commodore to the Forty-Second Street subway station. Ravitch was opposed. The next morning, Mayor Ed Koch called and asked him, “What did you do to Donald Trump? He wants me to fire you.” Ravitch pointed out what the mayor already knew: Ravitch had been appointed by the governor. He stayed on the job.

  • • •

  IN 1977, AS TRUMP scrambled for loans, New York City plunged further into decay. Its financial crisis grew more severe. A serial killer known as Son of Sam terrorized the city. During a July heat wave, a historic blackout shrouded the city in darkness, touching off devastating fires, storefront lootings, and arrests. But the real threat to Trump was far more subtle. Mayor Beame, a longtime friend of Fred Trump’s and powerful supporter of Donald’s project, lost his reelection campaign to Koch, a vocal opponent of political cronyism and largesse. Trump’s tax abatement was suddenly at risk. But he was saved again when he found a key ally in Stanley Friedman, Beame’s outgoing deputy mayor. With his goatee and a Te-Amo Toro cigar forever stuck between his teeth, Friedman was a Hollywood caricature of a big-city dealmaker. His DNA was pure New York. He grew up in the Bronx, son of a cabdriver named Moe, before attending public school, City College, and Brooklyn Law School. In Trump, Friedman saw another guy from the outer boroughs trying to establish himself in Manhattan, where they’d run into each other at social hot spots such as Le Club and Maxwell’s Plum.

  In the closing weeks of Beame’s term in 1977, Friedman worked feverishly during marathon meetings to seal the deal on the Commodore. By the time Beame left office, Trump’s taxpayer-supported hold on the hotel had been made virtually bulletproof—and Friedman had found new work, at Roy Cohn’s law firm. “Grand Central was turning into Times Square—a dead neighborhood,” Friedman said. “Regardless of whose money he was going to use—the city’s, his own, the Hyatt’s—he was going to take a shit building and put up a first-class operation. It was the first major thing done in the city in years.”

  • • •

  TRUMP DIDN’T CROSS THE bridge solely to build a business. He wanted the Manhattan life, too. He now lived in a three-bedroom spread at the Phoenix apartments on East Sixty-Fifth Street, a mile uptown from the Commodore. When Mike Scadron, his friend from New York Military Academy, visited, he was struck by the apartment’s sparse furnishings—mirrored wall, shag rug, glass coffee table, a rendering of the Commodore. Trump’s attention was on making it in the big city. He told Scadron he was going to surpass his father’s success by conquering Manhattan, where Fred Trump had never laid a brick. Another time, at the Avenue Z office, Scadron watched father and son go at it, “talking past each other. They could have been in separate rooms. Donald had something to prove.” But back at Donald’s apartment, one other item was on prominent display: a photo of Trump’s new girlfriend.
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  The story of how Trump and Ivana Zelníčková Winklmayr met has two versions. Trump recalled that the two first saw each other at the summer Olympic Games in Montreal in 1976. Ivana, according to the official story, had been a member of the 1972 Czech Olympic ski team in Sapporo, Japan. Both Trumps said so at one point. Later, Trump wrote that Ivana was an alternate on that Olympic team. But when Spy magazine interviewed the Czech Olympic committee secretary, he said there was no such person in their records.

  The more popular story about how the couple met has Trump introducing himself to Ivana in the queue outside Maxwell’s Plum, Warner LeRoy’s over-the-top East Side singles bar stuffed with Tiffany lamps and topped with a stained-glass ceiling. In New York for a fashion show promoting the upcoming Olympics, Ivana was standing with her friends waiting to get into the bar when Trump tapped her on the shoulder, told her he knew the owner, and said he could get them inside. They got in. Trump paid for the night’s festivities, whisked the ladies to their hotel, and further charmed Ivana the next day with three dozen roses.

  Ivana, raised in Czechoslovakia under Communist rule, was an only child, a model who emigrated to Canada before coming to the States. Once she and Trump started dating, her life story became as infused with Trump superlatives and hype as any of his properties. Ivana was “one of the top models in Canada,” Trump wrote. She had modeled at Montreal department stores and posed for furriers. She had also been married, briefly, to Alfred Winklmayr, an Austrian skier. But this marriage disappeared from the official narrative, going unmentioned in her 1995 memoir, The Best Is Yet to Come: Coping with Divorce and Enjoying Life Again. Winklmayr had helped Ivana move to the West, and the marriage broke up promptly thereafter.

  At age thirty, Trump was ready to settle down. His parents’ marriage was his model. “For a man to be successful, he needs support at home, just like my father had from my mother, not someone who’s always griping and bitching,” Trump said. Ivana, an immigrant like his mother, appeared to fit the mold. “I found the combination of beauty and brains almost unbelievable,” he said. “Like a lot of men, I had been taught by Hollywood that one woman couldn’t have both.” Ivana saw Trump as “just a nice all-American kid, tall and smart, lots of energy: very bright and very good-looking.” She defined Trump by what he had yet to achieve. He “wasn’t famous” and he “wasn’t fabulously wealthy.”

  On New Year’s Eve of 1976, Trump proposed to Ivana, later presenting her with a three-carat Tiffany diamond ring. But before there could be a wedding, less than a year after they met, there was the prenup—ultimately, as many as four or five contracts. The negotiations between Trump and Ivana—Roy Cohn urged Donald to begin married life with codified financial arrangements—followed a pattern that came to define Trumpism: boasts of wealth and influence, a highly public airing of grievances, and dramatic battles staged in gossip columns and courtrooms. The marriage would start—and later explode—to the accompaniment of lawyers. Cohn negotiated the prenup, which was signed two weeks before the wedding. Ivana was represented by a lawyer Cohn had recommended. At a negotiating session at Cohn’s house, Cohn wore only a bathrobe. Ivana was ready to sign off on a deal, but balked when she learned that Cohn’s proposal called on her to return any gifts from Donald in the event of a divorce. In response to her fury, Cohn added language allowing her to keep her clothing and any gifts. With Trump’s consent, Cohn also added a “rainy day” fund worth $100,000; Ivana could begin tapping that fund one month after the wedding.

  Even as Cohn helped Donald and Ivana arrange their marriage, he was leading them through the hedonistic, drug-fueled disco scene of the late seventies. Although he cherished his reputation as a teetotaler, Donald loved to be in the late-night mix of boldface names and beautiful women. In April 1977, Trump and Ivana went to the opening night of Studio 54, the midtown club that would become the iconic home court of the disco movement. The owners, Steve Rubell and Ian Schrager, relied on Cohn for legal advice, and he in turn served as an informal gatekeeper, ushering the rich and the famous past the queue of desperate night people trying to get in to party with the likes of Andy Warhol, Liza Minnelli, Truman Capote, Margaux Hemingway, and David Bowie. Cohn also used his pull to win admission for groups of young gay men; although Cohn always maintained that he was straight, his friends knew better. (Despite his sexuality, Cohn remained strongly antigay on policy matters; asked to represent a teacher fired for being homosexual, Cohn refused, telling a group of gay activists that “homosexual teachers are a grave threat to our children; they have no business polluting the schools of America.”)

  Trump became a regular at the club and later recounted seeing “things happening there that to this day I have never seen again. I would watch supermodels getting screwed, well-known supermodels getting screwed on a bench in the middle of the room. There were seven of them and each one was getting screwed by a different guy. This was in the middle of the room. Stuff that couldn’t happen today because of problems of death.”

  On the Saturday before Easter, Donald and Ivana were married by the Reverend Norman Vincent Peale—author of the 1952 motivational bestseller The Power of Positive Thinking, a pillar of America’s self-help culture, and pastor at New York’s Marble Collegiate Church, which Donald’s parents occasionally attended. Peale was the only person other than his father whom Donald called a mentor (he resisted using that term for Cohn, insisting that the lawyer was “just a lawyer, a very good lawyer”). Peale “would give the best sermons of anyone; he was an amazing public speaker,” Trump said. “He thought I was his greatest student of all time.” Trump’s parents first took him to hear Peale’s sermons as early as the 1950s, when the minister was at the apex of his fame, with a newspaper column and radio show that reached millions. “I know that with God’s help, I can sell vacuum cleaners,” Peale once said, a perspective that appealed to entrepreneurs, including Fred Trump and his son. As Donald Trump found success, Peale predicted Donald would become “the greatest builder of our time.” Trump, in turn, credited Peale with teaching him to win by thinking only of the best outcomes: “The mind can overcome any obstacle. I never think of the negative.”

  Donald and Ivana’s wedding reception was held at the 21 Club, a former speakeasy famed for its celebrity clientele. About two hundred people attended, including Mayor Beame, Cohn, and a bevy of politicians and Trump lawyers. Only one member of Ivana’s family, her father, Miloš, was on hand.

  On December 31, 1977, a year after their engagement, Ivana gave birth to Donald John Trump Jr., the first of their three children. Ivanka arrived in 1981 and Eric in 1984. The new family moved into an eight-room apartment at 800 Fifth Avenue, decorated with modern sectionals and little of the excess that would eventually become a hallmark of the Trump style. They soon offered reporters a tantalizing photo op featuring the stunning skier-model and the boyish real estate dynamo. “He’d walk into a crowded room and everyone would look at him,” said Stanley Friedman. “The whole world revolved around Donald. He was always the guy who would talk to you but was looking over his shoulder for the next person. Always working . . . He was always looking for the next deal, he was always looking for the next something.”

  That next something usually involved more work than being a father. As his own father had done, Donald saw his children mainly at the office, where they were always welcome. “I was always there for my children when they needed me,” he said. “Now, that doesn’t necessarily mean pushing the baby carriage down Fifth Avenue for two hours.” Trump “didn’t know what to do with the kids when they were little,” Ivana said. “He would love them, he would kiss them and hold them, but then he would give it to me because he had no idea what to do.” The children would come to look back on their early years with a strong confidence in their father’s love and a certain wistfulness about his priorities. “It wasn’t a ‘Hey, Son, let’s go play catch in the backyard’ kind of father-son relationship,” Donald Jr. recalled. “It was ‘Hey, you’re back from school, come down
to the office.’ So I would sit in his office, play with trucks on the floor in his office, go trick-or-treating in his office. So there was a lot of time spent with him, and it was on his terms. . . . He never hid from us, he never shied away, but it was on his terms. You know, that tends to be the way he does things.”

  • • •

  TRUMP QUICKLY ADDED IVANA to his executive staff, putting her to work as a vice president overseeing interior design at the Commodore, and later at Trump Tower, the Plaza Hotel, and one of Donald’s Atlantic City casinos. “It was unheard of for a businessman in those circles to give his wife, his new wife, someone who wasn’t somebody who had been around for a while, such great responsibilities,” said Nikki Haskell, a friend of both Trumps. “Many rich men don’t allow their wives to come to their office. Many women don’t know what their husbands do.”

  “Donald and Ivana were cut from the same cloth,” said Louise Sunshine. “They were just exactly the same kind of people—very, very determined, laser-focused, very sharp . . . very synergistic and very much alike, too much alike. It was hard to tell them apart. They could have come from the same sperm.”

  At the Commodore site, Ivana often clashed with foremen. But when the work hit snags, Donald tended to fault his project manager and assistants—not his wife. The Commodore was a difficult gut job; a massive, twenty-six-story rehab more complicated than anything his father had attempted. As demolition crews got to work in May 1978, they found conditions fouler than they had expected. Homeless men had moved into a warm, lice-ridden boiler room. The steel frame Trump had wanted to build upon was rusty and compromised. In the basements, workers released cats to chase out a horde of jumbo-size rats; the cats died, and the rats survived. Costs soon ballooned. Twenty-six stories of exterior stonework were to be curtained in mirrored glass. Whole floors were to be gutted. Suppliers and contractors were anxious to get paid. When Barbara Res, an assistant project manager at HRH Construction, which Trump hired to run the job, arrived on-site, her boss handed her the contract and instructed her to make sure every second of work was tracked and paid for: “Read this and learn it. . . . These people will kill you. Keep records of everything.”