

Donald Trump greets Carl Icahn as he arrives at an election night event in New York on April 19. (Victor J. Blue/Victor J. Blue)

As Donald Trump hunted for a deal that would help him keep part of the bankrupt Atlantic City casino empire he’d built, fellow Queens-born billionaire Carl Icahn mounted an aggressive counterattack.

Icahn pushed in 2010 to wrest control of Trump Entertainment Resorts, backing lawyers who argued that one of Trump’s most prized assets — his brand — was a “disadvantage” that may no longer have been “synonymous with business acumen, high quality . . . and enormous success.”

These days, the tension has given way to apparent harmony. As Trump runs for president, he often fawns over the elite investor 11 years his senior, saying Icahn is one of “the great businessmen of the world” and sharp enough to master U.S. negotiations with China or run the Treasury Department. Icahn has endorsed Trump, saying the country would be “lucky” to have him in the Oval Office.

The shifting dynamic shows how these two merciless capitalists have, over decades of socializing and jousting, formed a more tortuous and even rocky relationship than comes across in their election-year alliance.

For Trump, who has taken pride in punching back hard at his attackers, his rapport with Icahn shows a side of the brash real estate tycoon that Americans rarely see: a willingness to show deference to someone who once insulted his business and who has, by many measures, been more successful.

Donald Trump has called Carl Icahn one of the world's greatest businessmen. The presidential candidate also said he would pick Icahn to oversee trade deals. So who is the man that some have labeled everything from an activist investor to a corporate raider. (Jorge Ribas/The Washington Post)

Icahn’s $20 billion net worth dwarfs Trump’s riches. He has taken advantage of Trump’s vulnerabilities to make tens of millions of dollars — becoming Trump’s rescuer and rival.

In Atlantic City, in the early 1990s, Icahn championed the deal that helped Trump retain some power and ownership during his Taj Mahal casino’s first brush with bankruptcy.

In the aftermath, Icahn turned his Taj investment into a massive profit. Meanwhile, Trump, who owed billions of dollars in other non-casino loans, agreed to give up his private jet and mega-yacht.

Then earlier this year, with the casino still smothered in debt, Icahn took over the Taj with a promise to return it to glory — and without Trump’s ownership or control.

“I’m not here to say Donald’s a great businessman,” Icahn, 80, said in an interview. “But I will say he’s a great consensus builder, and that’s what Congress needs at this time.”

Trump, 69, said Icahn was a friend. But Trump said he saw himself as the more effective negotiator.

“He liked me, I liked him, and we just have a good relationship,” the Republican front-runner said in an interview. “I have a lot of stuff right now that I would never have if it wasn’t for Atlantic City. . . . I walked away with a fortune.”

An unlikely partner

Icahn gained infamy in the 1980s for a string of hostile corporate takeovers during which he feasted on company shares and ignited boardroom fights so aggressively that some executives resorted to “greenmail,” paying him to go away.

In 1985, he won control of the now-defunct Trans World Airlines, stripped its assets and took it private, pocketing nearly $500 million in profit and leaving the airline with more than $500 million in debts. Former company chairman C.E. Meyer Jr. called him “one of the greediest men on earth.”



Trump and Icahn attend a boxing match between Mike Tyson and Michael Spinks in June 1988. (Ron Galella/WireImage)

In the ’80s, Trump wooed the famed plutocrat with a helicopter ride to the stadium where Trump’s New Jersey Generals of the ill-fated USFL played. In 1988, when Trump was spending wildly on his Atlantic City enclave, the two men watched a boxing match between heavyweights Mike Tyson and Michael Spinks, for which Trump had paid a record $11 million staging fee.

Trump, Icahn said, invited him to the locker room, where a shadowboxing Tyson accidentally grazed Trump’s arm, knocking him through a partition wall. Trump didn’t miss a beat, Icahn recalled, continuing to hype the boxer, shouting, “Mike, you win with Donald!”

With a laugh, Icahn said, “It made me think he’s great at running this whole thing.”

Their first big business encounter came two years later, during one of Trump’s most fragile moments.

In 1990, Trump debuted his third and largest Atlantic City casino, the Trump Taj Mahal. But he was already struggling to make payments on the $675 million in risky, high-interest loans, known as junk bonds, he had tapped during construction.

As his casinos ran into trouble, Trump also faced difficulties paying back several billion dollars in bank loans — nearly a billion of which was guaranteed by his personal wealth — that he had taken out to help fund the rest of his empire. He grappled with bankers and bondholders in the hope of working out a rescue deal that would satisfy creditors but leave him in control.

As the threat of casino bankruptcy loomed, bondholders were surprised to find an unlikely partner: Icahn. The investor had bought up the biggest stockpile of the Taj’s outstanding bonds, which were being sold at a deep discount by investors who had lost confidence that Trump would be able to pay them back. Icahn now held immense power to determine how easy or painful Trump’s restructuring would be.

Amid fierce negotiations, Trump made what was for him a rare concession: He left his seat of power, the 26th floor of Trump Tower, and rode 40 miles in his limousine to meet with Icahn at TWA’s office in suburban Mount Kisco, N.Y. Trump, who preferred to dictate the terms of engagement, “wasn’t happy,” said an associate close to both men during the negotiations who spoke on the condition of anonymity.

Trump’s angling to make a deal paid off. Icahn ultimately helped rally other bondholders, some of whom wanted to savage Trump in bankruptcy court, to support a plan that would allow Trump to repay his debts on easier terms if he handed over nearly half his ownership.

Not all bondholders agreed, as Icahn remembered it. When one woman pushed for harsher terms for Trump — saying “I just don’t like the guy” — Icahn remembered responding: “What’s that got to do with a casino? You sound like you’re angry because he didn’t ask you out on a date.”

Trump’s share of the casino, roughly 50 percent, was a relatively generous offering, given that debtors in similar cases often see their stakes get wiped out. But Icahn argued that the plan would prevent a prolonged bankruptcy-court battle and cement a plan for Trump’s repayment.

Trump was also given a chance to earn back control of the Taj, if the casino’s performance improved and he paid bondholders back in full. If things got worse? Icahn made clear that investors still had ways to boot Trump out.

Many involved in the deal believed Icahn had outmaneuvered Trump.

“Carl is a master strategist and easily one of the brightest people I’ve ever had the pleasure of working for,” said Edward Weisfelner, head of the corporate restructuring practice at the law firm Brown Rudnick, who represented bondholders and Icahn in two of the casino bankruptcies. “I couldn’t say the same about Donald.”

Trump, in the interview, said he never lost leverage in the Atlantic City deal. Because so many bankers and bondholders were owed so much — and because many agreed that an open Trump casino would make more money than a shuttered one — Trump said people such as Icahn needed him to agree to a deal just as much as he needed them.

Icahn said that negotiators thought Trump could help turn things around, if given the chance, and that he cut the embattled developer no slack.

“I barely knew Donald. . . . It had very little to do with friendship,” Icahn said. “I’m the consummate businessman. I do what I believe to be good for my business and my shareholders. Nothing more, nothing less.”

The episode with the Taj and Trump’s other loans left a mark on his grandeur. To shrink his massive bank debts, Trump agreed to relinquish his plane and other luxuries, and bankers forced Trump to limit his personal and household spending to $450,000 a month.

Icahn transformed the casino’s downfall into handsome gains. In 1993, according to the Wall Street Journal, he sold his Taj bonds for $150 million — more than double what he had paid for them three years earlier.

Putting the deal first



The Trump Taj Mahal in Atlantic City, N.J., in January. (Yana Paskova/For The Washington Post)

In the years after the Taj negotiations, both men continued to share meals and pleasantries. Trump served as chairman at an Icahn charity dinner and offered the billionaire his box seats at the U.S. Open tennis championship.

But their biggest professional encounter, after Icahn’s first rescue, proved far more contentious.

By 2009, debt continued to plague Trump Entertainment Resorts, which controlled the Taj and two other casinos.

Trump had become less involved in the company. His name was used as a lure, but he had reduced his stake and faulted company executives for mismanagement.

As the company entered bankruptcy restructuring yet again, investors offered competing plans. Trump sided with a hedge fund that pledged to give him a 10 percent stake if he let the company continue to use his name.

Icahn, who had sold off his Taj shares years earlier, saw a new opportunity to profit off the Trump company’s struggles — this time on the opposite side of Trump.

Icahn backed a Texas billionaire who was mobilizing a full takeover and whose lawyers argued that the Trump name had been tarnished by repeated bankruptcies.

In 2010, Trump took the stand in a Camden, N.J., courtroom and swatted back, saying, “Mr. Icahn has led companies into many, many bankruptcies” and reasserting that he still had one of America’s most valuable brands. “I wouldn’t switch my assets for his assets any day of the week,” Trump said.

Icahn was unconvinced. “I like Donald personally, but frankly I’m a little curious about the big deal about the name,” he told the Wall Street Journal. “If the name is so powerful, then how come they went bankrupt three times?”

Trump won his 10 percent stake and the casinos exited bankruptcy, but in public he continued to seethe. “Carl is someone that, unfortunately, will always put the deal ahead of the relationships,” Trump told the New York Times in 2011. “I am a loyalist, so I don’t see friends fighting friends. But with Carl, the friendship stops where the deal begins.”

In 2014, the casino group slid again into bankruptcy, sparking more maneuvers that dragged on until this past February, when Icahn gained full control.

The takeover took place as Trump began cruising to victories in Republican primaries. And Icahn, it seemed, had changed his view on the Trump brand — signing an agreement that said he could still use the mogul’s name.

In a statement last year, Trump said, “I am happy to have reached a deal with Carl, someone who I have great respect for both personally and professionally.”

Icahn said he thinks Trump could bring “a certain cohesion” to Washington, but he resisted Trump’s claim that the two men were friends.

“I’ve known him over the years, as an acquaintance. I like him,” Icahn said. “But I don’t see him all that much. I’m pretty much a workaholic.”

Political influence

Even before that deal was done, Trump had begun showering public praise on Icahn. Shortly after announcing his candidacy, Trump told MSNBC that he would “love to bring my friend Carl Icahn” in to run Treasury.



Icahn waits for Trump to speak at an election night event in New York on April 19. (Victor J. Blue/Bloomberg)

Icahn accepted over Twitter — then said he was joking, adding on his blog, “I am flattered but do not get up early enough in the morning to accept this opportunity.” Icahn told The Washington Post: “He never discussed it with me. The first time I heard the suggestion was on television.”

Trump, in the interview, seemed to back away from the idea. “I actually never suggested Carl as Treasury secretary, you know, as I told you because, number one, he said he wouldn’t want it,” Trump said. “He probably would want it, but he wouldn’t be the right guy for that.” Later, he added, “Now, to negotiate with Japan and China, you can’t get a better guy.”

Throughout the campaign, Icahn has vouched for Trump’s business prowess. When Trump hosted a rally during a Republican debate in January and pledged to donate to veterans’ charities, Icahn gave $500,000 directly to charities for the Army Green Berets and Navy SEALs.

Icahn declined to say whether he agreed with Trump’s hard-line views on immigration or abortion. “I don’t agree with him on everything,” Icahn said. He added that he was “definitely against” Trump when it came to the candidate’s opposition to the Common Core education standards, although Icahn said he agreed with Trump on aspects of foreign policy and finance.

It’s unclear how much influence Icahn will seek to gain during the presidential race. In October, he announced on Twitter that he would launch a $150 million super PAC “to help end the crippling dysfunction in Congress” — the same month Trump disavowed all super PACs.

Icahn said he has since changed his strategy and has no plans to start a super PAC and will instead push for political influence more quietly and without the need to register with election regulators. He said he intends to back lawmakers who share his views on cutting U.S. corporate taxes on overseas profits but would not say how much he will spend.

Icahn has also adopted some of Trump’s lessons in political showmanship.

In September, he released a 15-minute video, called “Danger Ahead,” that foretold of a coming financial meltdown, during which he plugged his expertise (“one of the best records on Wall Street”) and criticized methods of financial engineering he had long profited from, including junk bonds and stock buybacks.

The best solution for this financial mess, Icahn said, would be to bring in “a guy like Donald Trump . . . [who’s] not beholden to an establishment.”

“I disagree with him on certain issues and certainly would talk to him more,” Icahn added. “But this is what this country needs. Somebody to wake it up.”

Michael Kranish and Renae Merle contributed to this report.