How Donald Trump got fired by a California casino

COACHELLA, Calif. — Fifteen years ago, Donald J. Trump, a real estate mogul with a penchant for profit, came to Southern California, hoping to make a deal. Trump wanted to invest in Spotlight 29, a bingo parlor run by the Twenty-Nine Palms Band of Mission Indians, a tribe of only 12 people. Spotlight 29 was the smallest casino in the Coachella Valley, but Trump saw the potential for big money.

So he went for it. Over the next few years, Trump used his reputation to help raise money for a vastly expanded casino, adding slot machines, table games, a swanky nightclub and a private lounge for high rollers. In return, the tribe hired Trump as casino manager while he taught them how the gaming industry worked.

In 2002, Spotlight 29 was re-branded with a flashy new name — Trump 29.

The relationship ended three years later. Trump’s multi-billion dollar resort company was in bankruptcy, and the tribe was looking to cut a deal of its own. Leaders terminated his management contract early, buying out Trump for a measly $6 million — less than the contract had earned him in a single year.

Trump's name came off the building. The businessman never returned.

The dissolution of Trump 29 made for a twist ending. Some Indian gaming advocates had worried that the larger-than-life tycoon would exploit the tribe, who were relative novices in a cutthroat industry. But today, with the benefit of hindsight, sources agree that it was the tribe who walked away with the better bargain.

“When Trump came in, we all thought, ‘Oh gosh, he is going to really run the tables on the tribe,’ and it was actually just the opposite that happened,” said Victor Rocha, an Indian gaming advocate from Temecula. “But it shouldn’t have been a surprise. If you look at anything that guy has done in this industry, he has a lead thumb — it’s the opposite of a golden touch.”

Today, the brash and boisterous businessman is the leading candidate for the Republican presidential nomination, on a seemingly inevitable path to challenge Hillary Clinton for the White House. Trump's campaign platform has been light on specifics, but he has promised to lead the country through “great deals” on healthcare, trade and diplomacy.

Trump, however, is not the flawless negotiator that he portrays himself to be, according to interviews with two biographers who have studied the mogul for years. His company has gone bankrupt four times, his luxurious casinos have lost money and he has abandoned a housing project before construction could even begin. The end of Trump 29 adds to a pockmarked resume — suggesting that he's far better at projecting success than he is at actually achieving it.

“Purely on his track record as a real estate developer and casino operator, Trump hasn’t demonstrated that he’s a particularly good dealmaker,” said Timothy L. O’Brien, author of “TrumpNation” and a former New York Times reporter. “He has demonstrated that he’s a world-class self-promoter and survivor. But neither of those things make him a good businessman.”

Representatives of Trump's presidential campaign did not return multiple requests for an interview.

Trump's troubles in the gambling industry began to show in the late ‘80s, when he took control of the Taj Mahal Casino, a lavish but unfinished resort in Atlantic City. He already owned two other casinos in town and he planned to dominate the market.

Instead, Trump saddled the business with junk bonds because he couldn’t secure a prime rate loan. He was forced the following year to give up half of the casino's ownership to creditors, paving the way for his company's first bankruptcy.

“He never really buckled down and learned the nuts and bolts of running a casino," O'Brien said.

In addition to being a questionable businessman, Trump was a rabid opponent of Indian gaming — when it served his interests.

In 1993, Trump lambasted the Mashantucket Pequots, who'd just opened a casino in Connecticut, at a meeting of the House Native American Affairs subcommittee. He accused the tribe of being greedy. He claimed that the mafia had infiltrated tribal casinos across the country. He even questioned if the Pequots were really Indians, saying "they don't look like Indians to me."

A congressman said it was perhaps the most irresponsible testimony he had ever heard. Trump later said his remarks had been taken out of context: he had been describing the casino's managers, not the tribe, as non-Indians.

"I cannot be criticized if I am right," he countered.

A decade later, at about the same time that Trump was making deals in Coachella, he was also publicly apologizing for secretly financing offensive advertisements against another tribe. This time his target was the St. Regis Mohawks, who were developing a competing casino in Southeastern New York.

“He has always been hostile to tribal gaming because he considers any competition a personal affront,” said Michael D’Antonio, author of "Never Enough," a Trump biography. “He’ll use any method to destroy a competitor even if it’s spreading rumors and lies.”

All of this — the failed casinos, the stereotyping, the incendiary ads — made Trump and the Twenty-Nine Palms tribe strange bedfellows. As the deal for Trump 29 came together, the California Nations Indian Gaming Association warned that businessmen like Trump looked at tribes for resources, not relationships.

The tribe went ahead with it anyway.

Darrell Mike, who became tribal chairman in 2007, said his predecessor brokered a deal with Trump because they believed his famous name would bring “spectacular” business to the casino. Years later, when those expectations were still unfulfilled, the tribe decided they'd had enough.

Mike described the split not as a deft business move but as a "marriage that didn't work out." But he acknowledged that the divorce had left the tribe on strong footing, with full control of a newly renovated casino.

“Today, looking at it now, we are here and we are doing it ourselves. Sometimes in business things don’t work out so well,” Mike said. “But, yes, for my tribe and my family…we did get a good deal.”

Trump’s deal in the desert began in 2000, when California voters significantly expanded legal Indian gambling by passing Proposition 1A. One day after the vote, the Twenty-Nine Palms tribe announced it would team up with Trump to expand Spotlight 29.

Here's how it was supposed to work: Trump would help the tribe finance a $60 million expansion of the casino, which included a personal loan worth $11 million. Trump’s company —Trump Hotels and Casino Resorts — would manage the casino for five years, collecting about 30 percent of the revenue. The casino would be renamed Trump 29, but the tycoon would serve only as the manager, and the casino would remain fully owned by the tribe.

The deal was approved by the National Indian Gaming Commission in 2002, and Trump took over management as planned. His face was plastered on billboards on Interstate 10, touting Coachella as the place where “the desert meets the Donald.” At the opening celebration, held under the shimmering lights of disco balls, showgirls in skin-tight silver dresses held a red ribbon. Trump and the tribal chairman cut it together.

"I think Las Vegas is in serious trouble because of what is happening in California," Trump said then, gesturing through a new nightclub and into the expanded building. "You'll have hundreds of these casinos."

"We are going to be able to learn from him and also grow with him," said then-chairman Dean Mike. "We are going to have a fabulous place here."

Analysts said it would take a few years for the re-branded casino to find its footing, but predicted it would eventually earn more than $20 million per year — netting Trump about $7 million annually.

The projections proved right. According to filings with the U.S. Securities and Exchange Commission, Trump’s management contract was worth $2.7 million in 2002 and $3.2 million in 2003. It ballooned to $7.5 million 2004.

The timing couldn't have been better, as Trump needed the money. His casinos in Atlantic City were buried in $1.8 billion in debt, and while his company was facing bankruptcy, he collected millions from a Coachella casino that he didn’t even own.

But not everyone was happy.

“The tribe didn’t want to pay his fee anymore,” said a former casino employee who spoke on the condition of anonymity because he is not permitted to discuss the buyout. “They didn’t really appreciate that Trump had put up money, had put in slots, and had helped get the money to rejuvenate the place. That was done, the casino was up and making money, and they didn’t think they needed him anymore.”

Trump Hotels and Casino Resorts declared bankruptcy in October 2004, shedding about $500 million of debt. The Twenty-Nine Palms tribe seized the moment, invoking a buy-out clause that ended the management contract and took control of the casino away from the vulnerable businessman.

Trump was paid $6 million in the buyout, but missed out on two and half years of management revenue, which would have been worth about $20 million if casino revenues held steady. The buyout fee had been set at more than $11 million, according to SEC filings, so the tribe must have talked it down in negotiations.

“That was some real ‘Art of the Deal’ stuff, wasn’t it?” said Rocha, the Indian gaming advocate. “They figured out pretty quickly that this guy was not what he said he was, and they could do a better job. And they have.”

Trump 29 was once again named Spotlight 29.

Today, more than a decade later, Spotlight 29 continues to operate in Coachella, run by the same small tribe and drawing in travelers from Interstate 10. The casino floor still features a giant flaming wall — which Trump said he helped design personally — and a nightclub that was added during Trump's expansion. Spotlight 29 has continued to grow since Trump left. The tribe has also opened a second casino, Tortoise Rock Casino, near the giant Marine base on the other side of Joshua Tree National Park.

Mike, the current tribal chairman, said almost all signs of the Trump era are gone. He keeps a bobble-head as a reminder.

Reporter Brett Kelman can be reached at (760) 778 4642, brett.kelman@desertsun.com or @TDSbrettkelman on Twitter.

Reporter Jesse Marx can be reached at jesse.marx@desertsun.com or @marxjesse on Twitter. His public PGP key can be found at keybase.io/jessemarx.