Today we examine Trump Tower’s plummeting profits, investigate the wealth of Britain’s new prime minister and catch up with a hotelier at the center of Trump’s first impeachment.
Why Trump Tower’s Profits Plunged
“Donald Trump migrated to Florida after losing the 2020 election, abandoning New York for Palm Beach. The tax rates are better down south, but there’s one particular levy that the former president has not figured out how to escape. At Trump Tower, he had to pay $11.8 million in property taxes last year—more than twice the amount he was paying a decade ago,” reports Dan Alexander:
What happened? Trump’s tax breaks ran out. Back in 2012, the real estate developer took out $100 million of debt, refinancing a loan with $27 million of remaining principal and sucking out $68 million for himself. At the time, Trump Tower was throwing off $18 million of net operating income, and his lenders predicted profits would soon surge to $20 million.
But the tax situation at Trump Tower was about to change dramatically. For more than a decade, Trump had benefitted from an exemption meant for fixed-up industrial and commercial properties. That tax break, scheduled to last 12 years, started burning off at a rate of 20% annually right around the time Trump refinanced his property. As the exemption faded away, Trump’s tax bill jumped, eventually decreasing annual profits by about $2.1 million.
The underwriters involved in the new loan, issued by a firm named Ladder Capital, accounted for the expiring tax exemption. According to lending records, they estimated that Trump’s annual taxes would jump from roughly $4.2 million a year to $6.3 million. But they apparently failed to factor in another, more significant dynamic simultaneously taking place at Trump Tower.
At Trump Tower, Donald Trump saved $17.2 million from a tax break meant for industrial and commercial buildings. The benefits ran out in July 2016. (Photo by DOMINICK REUTER/AFP via Getty Images)
AFP via Getty Images
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In Case You Missed It
Inside The Fortune Of Britain’s New Prime Minister Rishi Sunak And His Wife, Akshata Murthy
“The U.K.’s new prime minister and his wife, the daughter of an Indian tech billionaire, have a collective net worth higher than the personal fortune of King Charles III,” reports Giacomo Tognini:
After winning the contest for leadership of the Conservative Party, Rishi Sunak is set to become the United Kingdom’s next prime minister. That will make him the most powerful person in the country. The 42-year-old former finance minister and investment banker is already among the U.K.’s richest, largely thanks to the fortune held by his wife, Akshata Murthy. Murthy, 42, is the daughter of N.R. Narayana Murthy, the cofounder and retired chairman of Indian tech giant Infosys, whose net worth is estimated by Forbes at $4.5 billion. Her own 0.93% stake in the publicly traded digital services consulting firm is worth $715 million, making up the vast majority of her and Sunak’s combined fortune. Altogether, Forbes estimates Sunak and his wife Murthy are worth roughly $810 million—more than a quarter of a billion dollars richer than the $500 million personal fortune of King Charles III. Sunak and Murthy didn’t immediately respond to a request for comment.
Rishi Sunak
Alamy Stock Photo
Ambassador Gordon Sondland, Key Player In Trump Impeachment, Discusses Upcoming Tell-All Book
Continuing Irresolutions
Updates on Checks & Imbalances’ previous reporting
On Tuesday, Sen. Ted Cruz (R-Texas) published his latest book, “Justice Corrupted.” Being an author has been a good side-hustle for Cruz. In 2020, he received a $320,000 advance for a previous book. Cruz’s campaign may have boosted those sales, as it dropped $153,000 at retailer Books-A-Million in the three months after that book hit the shelves.
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“A company that congressional investigators say paid for a family trip to Aruba for Rep. Alex Mooney (R-WV) last year has aided Mooney’s campaign down the stretch run in his bid for a fifth term in Congress,” the Charleston Gazette-Mail reported last week. Mooney is currently the subject of at least two ethics investigations by the House Committee on Ethics. In October 2021, the nonpartisan Office of Congressional Ethics found “substantial reason to believe” Mooney may have used campaign money for personal expenses and failed to report more than $40,000 of expenditures. The subject of the second inquiry has not been disclosed.
Trump Organization’s Criminal Trial For Tax Fraud Starts—Here Are The Consequences It Could Face
“Jury selection began Monday in the Trump Organization’s criminal trial for alleged tax fraud—which will only result in the company having to pay monetary damages if it’s found guilty, though a conviction could have more damaging knock-on effects for former President Donald Trump’s business,” reports Alison Durkee:
The Trump Organization is on trial after being indicted on charges of criminal tax fraud, scheme to defraud, conspiracy and falsifying business records, with Manhattan prosecutors alleging the company “devised and operated a scheme to defraud” tax authorities by paying executives through gifts and other “off the books” compensation…
If found guilty, the Trump Organization will only have to pay a maximum of approximately $1.6 million in fines, which CNN notes is the highest amount allowed under state law for this kind of crime.
A conviction would not result in any further direct consequences to the Trump Organization, including the dissolution of the company.
The Trump Organization is going to trial on charges of criminal tax fraud after allegedly paying executives in a way that avoided higher taxes.
NurPhoto via Getty Images
Tracking Trump
Forbes continues to update “Tracking Trump: A Rundown Of All The Lawsuits And Investigations Involving The Former President.”
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Forbes
The Palm Beach Young Republicans promoted the Saudi-backed LIV Golf tournament at Trump’s Miami resort this weekend.
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Instagram/Palm Beach Young Republicans
As advertised, former White House senior counselor Kellyanne Conway was the featured speaker at the America First Club’s fall kickoff at Trump’s West Palm Beach golf club on Oct. 13. The former president also made an appearance.
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Instagram/Ash.on.pointe
The Republican Hindu Coalition celebrated Diwali at Mar-a-Lago with the former president.
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InstagramRik Mehta
- “SPAC Tied to Trump Media Says Early Talks Were Not ‘Substantive’” (The New York Times)
- “Prosecutors Pressure Trump Aides to Testify in Documents Case” (The New York Times)
- “As the Saudi-financed LIV Golf tour holds its season finale this weekend at Trump National Doral Golf Club in Miami, 9/11 Justice is gearing up to attack the tour for its ties to the autocratic regime. The group will be running this new ad, ‘Follow the Money,’ starting today on Fox News, CNN, MSNBC and ESPN that highlights the kingdom’s oppression of women, the murder of Jamal Khashoggi, the Saudi origins of the 9/11 hijackers, and the country’s recent moves to hike oil prices.” (Politico)
Editor’s Picks
- “Abrams’ campaign chair collected millions in legal fees from voting rights organization: Fair Fight Action, the nonprofit founded by Abrams, paid her close friend and ally’s law firm $9.4 million in 2019 and 2020, with two more years of billing yet to be disclosed.” (Politico)
- “Dark money groups have spent nearly $1 billion so far to boost GOP Senate candidates” (NPR)
- “Data gaps make relief payments to WA public officials hard to trace” (Kitsap Sun)
- “Big K Street players spend more as election uncertainty brews” (Roll Call)
- “What happens when you put ideologues in charge of a university'” (Popular Information)
- “How to spot a wonky poll: Why a Democrat-aligned Super PAC is publishing funny numbers” (The Economist)
- “Arizona GOP governor candidate Kari Lake, who has spread election conspiracies, raises cash from business leaders” (CNBC)
- “Progressives place their hope – and money – in Maxwell Frost” (OpenSecrets)
- “Gov. Kristi Noem spends $4.7 million on reelection bid, while Smith, Quint spend a fraction of that” (Argus Leader)
- “Mystery Surrounds Company Paying MAGA Candidate’s Salary” (The Daily Beast)
- “South Dakota prosecutor: No charges for Noem’s airplane use” (Star Tribune)
- “Tucker Carlson is OUTRAGED that anyone would suggest that his son Buckley Carlson got his job as Communications Director for Rep. Jim Banks on anything other than pure merit. Let’s look at the facts.” (Twitter/Judd Legrum of Popular Information)
- “Any thoughts [conservator commentator] Candace [Owens] has about Ye’s money should be contextualized by the fact that she and her husband are currently trying to offload Parler onto Ye.” (Twitter/Nikki McCann Ramírez)
In Closing
“Every night, in your lonely tower
Looking down, at all of the wreckage”
Arcade Fire, “We Don’t Deserve Love”