Trump Insights: Family Legacy

Two government investigations revealed that [Fred Trump, Donald’s father] consistently bent the rules to wring excess profits out of programs designed to house war veterans and middle-class Americans. Fred’s most creative business activity involved not the construction of his cookie-cutter housing but the development of a web of corporations to obscure what he was doing with his government-subsidized financing.

When called to account, he owned up to his greedy and unseemly behavior and offered the immoral explanation that the system let him do it. There was nothing wrong with violating the spirit of taxpayer-supported housing programs so long as it was legal.

[He] explained how he had paid himself the general contractor’s fee that had been included in the estimate he submitted [for his Beach Haven project, a federally backed residential building in Brighton Beach, Brooklyn] and how he fattened his own wallet by having one of his corporations do business with another of his. [This] was the equivalent of a man mowing his own lawn and then insisting he should be paid for the chore.

He submitted a plan to the government that called for extra high construction costs, which allowed him to borrow more money and get the government’s approval to charge extra high rents. The final tally on the project showed that Beach Haven at been built for $4 million less than the estimate. The extra high rents set when the project was approved remained in place, even after the excess profits were revealed…and the cash left overstayed in a Trump bank account.

At home, Trump the elder demonstrated his methods and priorities as he conducted business late into the night. One of his telephone tricks involved lying about his identity — he called himself “Mr. Green” — in order to gain some advantage over the people he called.

When he did interact with his offspring, he taught them to be ruthlessly competitive and aggressive. Donald was to be both a “killer” and a “king.” As befit his status, he was driven along his paper route in a big limousine. Not surprisingly, he became an argumentative, bullying and physically aggressive little boy.

Friedrich Trump [Fred’s father, an immigrant born and raised in Germany who came to the U.S. in 1885 and spent his first six years in New York] followed news of a mining boom to the West. In Seattle’s red-light district, he thrived as the owner of a restaurant that offered warm meals and prostitutes in private rooms. It wasn’t quite the Horatio Alger myth come to life, but in a country that equated wealth with virtue, Friedrich was becoming a true and virtuous American.

Trump [who moved to Alaska, hoping to repeat his early success on the Yukon trail] began by operating one of the tent restaurants that specialized in meals made of horses that had expired on the trail. Soon came a real establishment built out of shingles and planks — the new Arctic Restaurant and Hotel — where once again he made prostitutes available.

Occupying land he didn’t actually own, Trump kept his place open day and night and made far more money than all but the most successful prospectors. As the boom ended, he left the New Arctic to a partner, who would soon lose the business… and the 32-year-old Friedrich Trump traveled to New York, [where] he used his Yukon riches to invest in real estate.