Michael Hirsh is national editor for Politico Magazine.

Donald Trump has always promoted himself as a titan of real estate, one of the shrewdest negotiators on the planet, and a wizard at using other people’s money to make himself rich. Even when his acumen hasn’t been sufficient to stave off massive financial reversals—his companies have gone into bankruptcy four times—he has boasted that those near-death experiences were just another way of doing business: “Stop saying I went bankrupt,” he tweeted on June 15. “I never went bankrupt but like many great business people have used the laws to corporate advantage—smart!” In an interview with Forbes he compared himself to three modern masters of finance: “Basically I’ve used the laws of the country to my advantage and to other people’s advantage just as Leon Black has, Carl Icahn, Henry Kravis has, just as many, many others on top of the business world have.”

But a closer look at the New York magnate’s career reveals a less ballyhooed transformation from a brash builder for whom amassing and manipulating huge debt was a business model into a chastened cash-hoarder who would rather license his name than take out a loan. In a phrase, debt tamed the Donald, rather than the other way around.


Trump, a brilliant brander of his own name, pledged at his presidential rollout to “take the brand of the United States and make it great again." What he didn’t say was that the reality behind the Trump brand has undergone a virtual revolution over the decades—one he does not trumpet on the campaign trail, where he sticks to a self-promotional script he has peddled ever since he published The Art of the Deal in 1987. In fact, the evidence is that Trump was badly stung by his repeated corporate bankruptcies—only twice before in U.S. history has a company gone under four or more times and survived, according to New York University finance expert Edward Altman —and his credit standing today, while solid, remains shadowed by his past.

Trump himself and senior officials at the Trump Organization—the name of his conglomerate—agree that the candidate learned a lot from his early dealings and has grown far more conservative as a businessman, turning himself into “great credit risk” who borrows “at very competitive rates,” in the words of Trump Chief Financial Officer Allen Weisselberg. “We’ve deleveraged our entire company,” says Weisselberg, who argues that the Trump company now has about only 4 percent debt relative to its assets. “Our assets are very liquid. Over the years we were able to accumulate $400 million in cash. We never borrow money at higher than market rates. In fact, one banker said to him recently, ‘What’s wrong with you, Mr. Trump? Why aren’t you borrowing more money? Rates are so low.’”

The candidate admits he’s changed his business approach dramatically from the brazen hell-for-leather approach of his youth. “When you’re younger, you do take certain risks. I did and I had huge successes,” Trump, who’s 69, told POLITICO on Thursday. “Now that I’m successful, with an income amount of over $400 million, there’s no reason for me to take those kinds of risks. I’ve definitely become more conservative, both financially and politically.”

But that account tends to gloss over the many pitfalls and near-disasters in his career that brought Trump to where he is today. There are some Trump bumps in the road that Trump doesn’t like to talk about: that it was probably the negotiating skill of his then-CFO, Stephen Bollenbach, far more than Trump’s own savvy, that rescued him from a close brush with personal bankruptcy when he was $900 million in debt in 1990 (Trump officials insist Trump was always in charge, and he never came close to bankruptcy, as reported); that Trump’s path in business began to alter dramatically afterward, prompting him to retreat from major investments and management duties; and that after leaving behind a trail of bankrupt properties in desolate Atlantic City, Trump turned himself into a global trademarking factory living on royalties and rents from buildings, golf courses and other things with little more than his name on them (though he still owns a huge number of assets). Among the 515 corporations, trusts, limited liability companies and other associations he holds positions in are a vast array of “Trump Marks” entities from Baku to Dubai to Qatar, according to Trump’s Federal Election Commission disclosure.

Mainly what Trump has done effectively is sell himself as a person who still builds and manages a lot of things like the Trump of yore. In other words, Trump may be less of an Andrew Carnegie or John D. Rockefeller, or even a Henry Kravis, than a P.T. Barnum. As Trump freely admitted in his 1987 book The Art of the Deal, he takes the approach of a showman, saying he’s further along on a project than he really is to win over doubters. “The final key to the way I promote is bravado. I play to people’s fantasies,” he wrote. “That’s why a little hyperbole never hurts.” It is a tactic he appears to be adopting on his presidential run by generously estimating his net worth at $10 billion, and savagely attacking his opponents, Democrat and Republican alike.

Trump’s FEC disclosure, released last week, appears to bear out his claim that his personal fortune—while apparently much smaller than he says— has handily survived all of the Trump empire’s danses macabres with debt over the years. And in recent years Trump has gingerly returned to a few major personal investments, including putting what he recently told the Washington Post was $42 million of his own money into a new luxury hotel at the Old Post Office Pavilion in Washington. But even there he has apparently avoided taking on large amounts of new debt, since he hasn’t disclosed new loans. And the assets listed on Trump’s financial disclosure appear to come in way below his public declarations of wealth, amounting to at least $1.4 billion.

Experts in real estate say that one reason for the transformation from master builder to full-time self-promoter is that creditors became, for a time, leery of major investments with Trump, and he himself grew risk-averse after years of failed, underwater deals. “His deal is, pay me a royalty. You can borrow my name. I get a very small amount of subordinated carried interest,” says Joel Ross, who has been a real-estate investment banker in New York for a half century. “When you see a guy who went bankrupt once you don’t lend him money. Two bankruptcies, it’s what are you kidding, get out of my office. Four, are you shitting me? Give me a break,” says Ross. “So when I see he has only $300 million or so in debts, that’s not a lot for a guy who claims to be a multibillionaire. It says to me he doesn’t own much of anything.”

Trump officials say that’s nonsense. "In fact, Mr. Trump owns billions of dollars of real estate holdings," says Trump chief legal officer Jason Greenblatt. They also say Trump’s shift away from heavier investments in real estate and building was simply smart business strategy in the wake of the 2008 financial crash. “That was not a time to make investments,” says Weisselberg. “We were smart. We used our brand, with no capital at risk. So we invested overseas, mainly with cash. We bought [the] Turnberry [golf course in Scotland]. We bought Doral in Miami.” Says Greenblatt: “He’s sitting on huge piles of cash, waiting to pick up assets that we think are overpriced now.”

Trump’s deep and career-long acquaintance with debt goes back to his earliest days when, fresh out of the University of Pennsylvania, where he took classes at the prestigious Wharton School of Business, he persuaded his father, Fred, to leverage up from a prosaic Brooklyn real-estate empire into gold-plated palaces in Manhattan. One of his first major deals was to convert the rundown Commodore Hotel next to Grand Central Station into the Grand Hyatt. There he got help from Fred Trump, though; New York Mayor Abe Beame was a longtime friend of Fred’s dating from the mayor’s days in precinct politics and gave Donald an unprecedented and lucrative $400 million property tax abatement.

“It’s been characterized like he’s this genius student from Wharton, but if you look a bit more closely at it the reason he was able to do it was that his father traded in political favors to get the right permits. It’s false to ascribe that to any great insight,” says a senior credit-rating professional who didn’t want to be quoted by name, saying Trump’s litigiousness had a “chilling” effect on credit rating companies since 1991, when an analyst named Marvin Roffman gave a negative assessment of the Taj Mahal’s prospects and was forced to resign from his firm after Trump threatened to sue; Roffman, it later turned out, was right. “Anybody could have gotten rich off that. And you could launch several careers from that original deal” at Grand Central Station.

Still, others in the real-estate industry give Trump a lot of credit for being a visionary in those years. Arthur W. Zeckendorf, like Trump himself the scion of a New York real-estate magnate, says the Grand Hyatt project was a gutsy, bold move at the time. “The city was going bust in the 1970s,” Zeckendorf said. “Everyone was leaving. Corporations were moving out. He had the foresight to renovate an old derelict hotel into a Grand Hyatt. It changed that whole area.” Zeckendorf also said that other major Trump projects on Columbus Circle and the West Side rail yards helped to transform the West Side of Manhattan, and that Trump virtually invented the high-end condo business on his own in New York.

But Trump overreached in the end, repeatedly financing his casinos with high-risk junk bonds that led to a years-long odyssey in bankruptcy court. Four bankruptcies is a string so rare that Trump’s is only the third company in American history to declare so many times (though Trump’s were listed under different names), says NYU finance professor Altman. The reason is obvious: The U.S. bankruptcy code is designed to scare creditors away if one goes into Chapter 11 bankruptcy too many times and to discourage companies from staying in business if they fail repeatedly.

Trump was different literally because he was Trump. In the case of his hotels and casinos, he convinced creditors that his brand name was too valuable to give up, even as he was also forced to gradually hand over equity and control.

“There’s nothing in the code that says you can’t stay in business, but the code also says that a company should not be permitted to emerge from bankruptcy if there is a substantial likelihood they will need to file again or will need restructuring,” says Altman. That makes Trump “the great Houdini,” he says. “No matter how poorly the companies perform he always manages to resurface and do it again.”

Yet each resurfacing eroded more of his reputation in the industry, especially in Atlantic City. The first bankruptcy came in 1991, when Trump's Taj Mahal, a hotel-casino in Atlantic City that was in debt for billions of dollars, filed for Chapter 11; Trump himself was reportedly in the hole for $900 million (he had personally guaranteed his corporate debt) and was forced to sell his Trump Princess yacht and Trump shuttle. According to a New York developer who was privy to the negotiations with Trump over his personal debts, “The bankers in the consortium were debating whether to take him down or not. They decided not to because it was so complex and problematic. It was easier to work it out and let him stay out of bankruptcy. But the one who negotiated that was not Donald, it was Steve Bollenbach,” whom Trump had brought in as his CFO. Bollenbach, known as an ace deal-maker, went on to become CEO of Hilton Corp. (Greenblatt, Trump’s chief legal officer, denies this account, saying that while Bollenbach was important the “negotiations were led by Mr. Trump. … He always makes deals himself.”)

Again in 1992, Trump’s company filed for Chapter 11 bankruptcy on his Trump Plaza Hotel in Atlantic City, owing $550 million. By then Trump had figured out how to insulate his personal fortune. Still, as part of the restructuring, Trump had to give Citibank and other lenders a 49 percent interest in the hotel in exchange for an easier debt repayment plan. Then 12 years later, in 2004, Trump Hotels and Casino Resorts filed for bankruptcy with $1.8 billion dollars of debt. Trump reduced his share in the company to 25 percent and gave up control. In return the corporation received lower interest rates and another loan to upgrade the properties.

By the time the fourth bankruptcy rolled around in 2009, Trump personally was left with only a 5-to-10 percent stake. (Trump Resorts Entertainment filed yet again for bankruptcy in September 2014, but by then he was out of his Atlantic City investments entirely and in fact had sued to have his name removed from the company.)

Each time, Trump investors and business partners appeared to have lost badly. He first forced bondholders to take dramatic losses and handed them large chunks of equity in exchange; then, after he took the company public in 1995, his stockholders came out just as poorly: Trump Hotels & Casino Resorts has reportedly lost money every single year that Trump ran it as a public company, by the time it filed for bankruptcy in 2004 (the third) and went through another restructuring, all investors had left was 10 cents on the dollar.

The credit rating industry, during the period, began to look on the Trump name as toxic. Starting in 1996 and continuing through 2010, Standard & Poor’s rating service withdrew ratings from no fewer than seven Trump-affiliated entities after long periods in which they declined in credit status: Trump Entertainment Resorts Holdings L.P., Trump Hotels & Casino Resorts Funding Inc.; Trump Plaza Funding Inc.; Trump Atlantic City Funding Inc.; Trump Casino Holdings LLC; Trump Atlantic City Associates; Trump Casino Funding Inc. An S&P spokesman would not say why except to say that often happens when the company no longer wants to be rated, typically because it is in default or is in danger of defaulting.

What all this means is that, while Trump’s shift to purely branding his name was a savvy business move, it was also foreordained to a degree: During those years he was under severe financial pressure to get out of the building and corporate management areas.

Today a very different Donald Trump has emerged, although he is still—as he tirelessly reminds everyone—very, very rich. He’s still taking out loans, some of them fairly large at $50 million plus, but they are far fewer and the rate on most of the loans listed on Trump’s FEC form appear to reflect the normal market range, indicating that his name is still creditworthy. “We never borrow money at higher than market rates,” insists Weisselberg. Adds Zeckendorf: “He’s not going to take the big risks he took when he was younger. It’s like being a boxer. You fight a lot when you’re young but eventually you get knocked out.”

Yet others have paid a steeper price for Trump’s learning curve. When he pulled out of Atlantic City he left behind a devastated city and region, says Roger Gros, publisher of Global Gaming Business magazine. “He’s not very well respected in Atlantic City. A lot of people blame him for the multiple bankruptcies [of his hotels and casinos]. And though he never really built anything from the ground up, he used a lot of small businesses to supply the construction. A lot of them were paid less than they were owed and also went bankrupt and a lot of people lost their jobs.” Accompanying the Trump bankruptcies were civil lawsuits from roof construction and supply companies that lost millions of dollars. As of April, Atlantic City had an unemployment rate of 15.4 percent, one of the highest in the country and the beleaguered city is at risk of going the way of Detroit, defaulting on millions in debt, according to a Moody’s Investors Service credit analysis last spring.

“Is this what America would look like if he were president—what Atlantic City looks like now?” says Wayne Barrett, author of the 1992 book Trump: The Deals and the Downfall.

To be fair, Trump can hardly be blamed solely for Atlantic City’s troubles, which stemmed from competition from a slew of new casinos elsewhere in the Northeast as states relaxed gambling laws. And Trump has his defenders. “To his credit, he is extraordinarily shrewd,” says Chicago real-estate lawyer David Neff. “He knows how to use the law to his advantage. I give him all the credit in world for surrounding himself with professionals who advised him correctly and then listening to them.”

Greenblatt, Trump’s chief legal officer, said it’s profoundly unfair to blame Trump or to fault him for his investments in Atlantic City. “He made a fortune in Atlantic City. And he was praised for seeing over the horizon and getting out seven years ago.” But the bottom line is that Trump dramatically overestimated Atlantic City’s prospects in the early days. And most who did business with or invested in Trump or purchased his debt — bondholders, stockholders and contractors — came out badly.

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In the end, Trump’s decades-long dance with debt could raise questions about how he would perform as president. He himself has argued that, as a master negotiator in business deals, he should be the one across the table negotiating with Iran or China. It might be argued, in the same spirit, that a formerly indebted Trump is the man uniquely qualified to understand and take on America’s own debt problems, though that’s hardly the way the Donald would put it. Trump might add that, based on his perilous run-ins with debt, he’s also learned how to manage his risks far better.

America’s debt problem, unlike Trump’s, is in some ways a permanent condition. As the 2007-08 crisis made all too clear, a combination of the ever-elusive American dream and the tax and bankruptcy code encourage Americans to take on debt (tax deductions for mortgages, and so forth). That societal bias toward indebtedness, while stunted in the Great Recession, is not going away. Just about all of the presidential candidates' FEC filings reveal the kind of debts that most Americans would be familiar with—home mortgages, credit card balances in the five figures and tuition loans. Only for Trump has debt been an actual business tool, rather than a pestilential burden.

So now a chronically underwater America must ask itself: Who do we really want managing our debt?

Hillary Clinton — she who was once “dead broke” in the White House — is finally mostly free of debt (though she and Bill still have a mortgage to pay off on their Chappaqua, N.Y. house), according to Hillary’s most recent personal financial disclosure. Marco Rubio was carrying hundreds of thousands of dollars in mortgage debt until early June when he finally sold a house in Tallahassee, Fla., that had briefly been in foreclosure. Bernie Sanders, who never cashed a regular paycheck before he was elected to public office, owes between $25,000 and $65,000 on his Congress-issued credit cards and, not surprisingly, is angry about “the power of the banks.”

Trump, who’s has at least $265 million in debt, according to his financial disclosure, would have us believe he tells the banks what to do, in the classic financial dynamic once described by John Maynard Keynes (“If you owe your bank manager a thousand pounds, you are at his mercy. If you owe him a million pounds, he is at your mercy.”).

The question is, do we want cash-strapped guys like Sanders or Rubio or Martin O’Malley (who, between jobs, has amassed a mountain of mortgages and lines of credit to pay for his daughters’ private college tuitions)—people we can identify with but are perhaps a little too much like us? Or do we want The Donald, whom, let’s face it, almost none of us can identify with?

Some, like NYU’s Altman, say it’s difficult to see how Trump’s experience negotiating terms with creditors lends itself to managing America’s long-term debt problem, which has nothing to do with negotiating eleventh-hour deals. “If he was running a country like Greece, then I’d say yes, he’d probably be a good one to have there. If Donald Trump ran Greece, maybe they could have done better in negotiations with Germany. But if he were running the U.S. government, he would not have any great insights.”

Trump, of course, would disagree, and a substantial number of GOP voters appear to think he’d make a good president. To one of his many GOP foils (and rhetorical victims), Rick Perry, Trump ”offers a barking carnival act that can be best described as Trumpism: a toxic mix of demagoguery, mean-spiritedness and nonsense that will lead the Republican Party to perdition if pursued.”

But Trumpism, if nothing else, sells. No matter what the reality is behind the hype.