Michael Kruse is a senior staff writer for POLITICO.

In the spring and summer of 1991, a handful of state watchdogs in Atlantic City, New Jersey, considered whether to put an end to Donald Trump.

The members of the Casino Control Commission, in a series of hearings in the Arcade Building on the corner of Tennessee Avenue and Boardwalk, had to determine whether Trump was sufficiently “financially stable” to merit renewals of his licenses to own and operate his three casinos in the perpetually ground-down regional gaming capital. The stakes hardly could have been higher.


Trump was in his mid-40s and only four years earlier had published the pure brand boost of The Art of the Deal, but now he was in trouble. He needed the licenses to keep his casinos open to have any shot at staving off personal bankruptcy and a potentially permanent reputational stain. No licenses would have meant no casinos would have meant less collateral for the banks as Trump tried to dig out from under billions of dollars of debt. And the regulators had overwhelming reason to question his financial stature and overall fitness to continue. In addition to Trump’s dismal individual straits, the cash flow at his debt-riddled casinos wasn’t enough to make them profitable as the industry sagged in the throes of a recession. Trump’s “financial viability,” Steven P. Perskie, the chairman of the commission, stated at a meeting in May, “is in serious peril.” He and his fellow commissioners had a choice to make: renew Trump’s licenses and hope his bottom line improved—or strip him of them and risk delivering a debilitating blow to Atlantic City’s wheezing economy.

Donald Trump shows off his Taj Mahal Casino Resort on its opening day, April 5, 1990 in Atlantic City. | AP Photo/Chaarles Rex Arbogast; AP Photo/Mike Derer

Today, more than a generation later and a year out from the 2020 election, Trump in the White House is staring at a fundamentally similar scenario—the growing probability that his fate will be decided by a group of regulators, albeit of a different, more high-profile ilk but nonetheless obligated to determine whether he can remain in office long enough for voters to decide whether he deserves a second term. Just as there are people who are empowered to stop him now—members of Congress, in particular Republicans—there were people who could have stopped him then. And didn’t.

What the casino commissioners—Perskie and Vice Chair Valerie H. Armstrong along with W. David Waters, James R. Hurley and Frank J. Dodd—opted for instead was a different form of oversight, enacting stricter monitoring, mandating a regimen of daily, weekly and monthly updates and reports from Trump and his upper-tier staff. Some of the commissioners, too, engaged in occasional harrumphing and finger-wagging, logging into the record words like “incomplete,” “confusing,” “disappointing” and “disheartening,” sounding at times like precursors to GOP lawmakers’ mostly toothless tsk-tsking toward Trump these past few years. In the end, though, worried about the prospect of shuttered casinos, thousands of jobs lost and general area economic disarray that might have rippled on account of his ousting, they essentially let him skate.

“I move that the commission find the Trump Organization financially stable,” Perskie said at a decisive meeting in late June.

“Aye,” said Dodd.

“Yes,” said Armstrong.

“Aye,” said Hurley.

“Yes,” said Waters.

“And I vote yes,” Perskie said.

Why did five professionals with a combined decade and a half of experience on the commission, attorneys, former state lawmakers, ex-judges and judges-to-be, a World War II veteran, a co-author of the Casino Control Act this entity was created to enforce, discount the mountains of evidence before them and vote above all to let Trump go on?

Two of them are dead. Two of them didn’t return messages. But I did talk to the top regulator. “We had the ability, which we utilized, to inject ourselves into the situation and control what we needed to control … and because we had the ability to do that, and because we chose to do that, we were able to avoid having to do what arguably we could have done, which was to pull the plug,” Perskie told me this week.

“It wasn’t about saving Trump,” he added. “It was about preserving the public interest.”

I spoke also to nearly a dozen Trump watchers and employees from the era. What they saw in the vote of the casino regulators was a version of the decision made also by Trump’s lenders from a cluster of banks, who cut him slack and lengthened his leash not in spite of but in many ways because of his massive debts.

“He was just too big,” said Jack O’Donnell, a former Trump casino executive who resigned in 1990 and wrote a deeply unflattering tell-all book in 1991.

“He was too big to fail,” said Marvin Roffman, a veteran casino analyst who had been outspoken in his predictions that the debt Trump took on to fuel his Atlantic City endeavors was going to lead to collapse and was fired because of it after his company bowed to pressure from the angered developer.

“I think they, the regulators,” O’Donnell continued, “did look at him as a licensee, and say, ‘My lord, he’s got three properties here now with, you know, 10,000-plus employees, and what kind of chaos does it present to the industry if we yank this guy’s license?’”

From left: Commissioners W. David Waters, James Hurley, Frank "Pat" Dodd, Chairman Steven Perskie, Commissioner Valerie Armstrong. | NJ Casino Control Commission

This dilemma is detectable between the lines of the hundreds of pages of transcripts of the nine hearings from April to August. Eventually, though, at least one of the commissioners would say so explicitly. “One banker told me confidentially,” Dodd said two years later, “that it would be like foreclosing on Uruguay—you bring the whole country down.”

“They were worried about if he went down, Atlantic City would go down with him,” Trump biographer Tim O’Brien told me. “He was the star of Atlantic City, and it became like regulatory capture”—a term that refers to instances in which a governmental body kowtows to a dominant interest in an industry it’s assigned to regulate.

There was as well something more subtle at play, perhaps, something that speaks more to human nature than selfless concern for casino workers on the edge. If the commissioners had cracked down totally on Trump, it would have accentuated how often before they had given him a pass. To all of a sudden cut him down would have forced questions about the manner in which for years they so reliably had built him up.

“He sniffed that weakness, that they were not going to really, you know, enforce anything,” fellow Trump biographer Gwenda Blair said. “They were not going to take away his license. They couldn’t. It sounds awfully simple-minded, but that’s it. He figures it out so that for people to go against him it’s going to make them look bad: It’s going to make them look bad that they ever approved his casinos, it’s going to make the bankers look bad that they ever gave him his loans, it’s going to make the Republican Party look bad that it ever got behind him.”

This chapter provided a prime and lasting lesson for Trump. As much as the 1980s cemented in the American cultural firmament his name, his image and his vibe of barefaced excess, it was the ‘90s, actually, when he incorporated into his repertoire an uncanny ability that would be no less key. Survival. From his marital infidelities to his iffy fiscal picture, the first half of the decade was for Trump a rolling borderline catastrophe—and yet what he ended up internalizing was a sense of his own invulnerability. In no other span did he learn so much in so concentrated a fashion about what he could get away with and how.

“He learned in Atlantic City that people would always roll over for him.” — Bryant Simon, Atlantic City historian

“He learned in Atlantic City that people would always roll over for him,” said Bryant Simon, a local historian and the author of Boardwalk of Dreams.

“He might have thought,” O’Donnell added, “he could get away with anything.”

But pulsing, too, through this episode involving Trump’s regulators from the past are lessons for his regulators of the present. As the latter calculate the advantages and downsides of challenging the most powerful elected official on the planet, they would be wise to recall that Atlantic City’s decision to save Trump was part of a broader effort to save the city itself. And it didn’t work.

Some 120 miles south of Trump Tower and Manhattan, on the wind-whipped New Jersey shore, Atlantic City from the start was a hub of chintzy glitz, of lowbrow, vaudevillian stunts and gags, the cotton candy hawked on the sand-sprayed boardwalk a meager cover for the endemic corruption, the bossism and the racketeering, the grift and the graft. The state’s voters in 1976 had opted to make gambling legal within the confines of the moribund municipality, extending its lengthy history as a lodestone, in the words of O’Brien, in his book Bad Bet, for a “platoon of con artists and snake-oil salesman ready to fleece the unwary.”

Trump wanted in. And Atlantic City wanted Trump.

Trump inside his new Taj Mahal in Atlantic City in 1990; bottom: with Michael Jackson. | Joe Dombroski/Newsday RM via Getty Images; Photo by Jeffrey Asher/ Getty Images

In 1981, just a year after he opened the career-floating renovation of the Grand Hyatt at Grand Central station, two years before the completion of his tower on Fifth Avenue, and still relying largely on his father’s clout and Roy Cohn’s help, Trump demanded an expedited regulators’ investigation into his personal and professional past—so he could be licensed atypically quickly. He was “clean as a whistle,” he told them. “If it takes a year, I’m out of here,” he warned. Six months later, the investigation was over; six months after that, he had his first license. And that was after he didn’t tell the regulators the truth that he had been “the subject of an investigation” by a government agency—four times. It was supposed to be disqualifying. “FAILURE TO ANSWER ANY QUESTIONS COMPLETELY AND TRUTHFULLY WILL RESULT IN DENIAL OF YOUR LICENSE APPLICATION,” the application’s cover cautioned. But it wasn’t for Trump.

His first casino, Harrah’s at Trump Plaza, simply Trump Plaza after he bought out his partner, opened in 1984. It was, he said, as documented by Ovid Demaris in his 1986 book, The Boardwalk Jungle, “the tallest, most spectacular, best-looking casino in town”—brimming with “brass, glass and class.” Cohn was on hand to stoke the hype. “He’s just surrounded,” he said, “by a complete aura of success.”

His second, Trump’s Castle, opened in 1985.

In 1986, a regulator pushed back. It was Armstrong, and she all but labeled Trump a liar. Trump had promised to pay for a road-widening initiative when he acquired the Castle from Hilton, and now he wasn’t making good on the pledge, testifying that Hilton’s attorneys hadn’t made the obligation clear, and that the project, anyway, was “a disgrace” and “a disaster.”

“There is a cloud over this license which must be dispelled,” Armstrong said. “Every week this commission denies licenses to people,” she reminded her colleagues, “because they refused to treat the commission with honesty and openness.” What Trump was saying now, she emphasized, lacked “candor and honesty.” In this case, Armstrong voted against renewing Trump’s license. But hers was the only such vote.

“There is a cloud over this license which must be dispelled.” — Valerie H. Armstrong, former casino commissioner

The longer this went, the more obvious it became: In Atlantic City, Trump almost always got what he wanted.

“There were years of them really allowing him to continue to operate,” O’Donnell said.

“He represented capital, right? In a city starved for capital,” Simon said, adding that “his celebrity mattered—somebody famous, investing in the town, giving it his stamp of approval.”

Seeking to be seen as the Las Vegas of the East rather than a tired, small-time resort spot, city shot-callers regarded the up-and-coming Trump as a necessary, even exciting partner—somebody who had if nothing else a genius for generating publicity and pizazz. They sought not only infusions of cash but a share of his shine.

“They wanted him in Atlantic City so bad,” David Sciarra, an attorney from the state’s public advocacy office who countered Trump in the ’86 case, told me. “He came in, took advantage of the situation—and essentially they rolled over.”

And in the late ‘80s, Trump did nothing but get bigger and bigger, with the soaring sales of The Art of the Deal, his shopping-spree acquisitions of a yacht, an entire airline and New York’s Plaza Hotel, and increasing chatter about running for president. Riding high, he was licensed for a third casino, even after Armstrong called his bid “laced with hyperbole, contradictions and generalities.” The opulent Taj Mahal opened in 1990 and made Trump by far the largest operator in Atlantic City—not just the only owner of two properties but the only owner of three.

Leif Skoogfors/CORBIS/Corbis via Getty Images; Yann Gamblin/Paris Match via Getty Images

This was the context in which the hearings of the spring and summer of 1991, over whether to renew Trump’s gambling licenses, took place. But the facts were stark. Trump’s financial status was more than bleak. That year, he was projecting personal income of $1.7 million. In 1992, that number was slated to drop to $700,000. In 1993, $300,000. The Taj had been financed with $675 million in junk bonds. The Plaza had lost $10.6 million in 1990 compared with making a profit of $24.6 million in 1989. The Castle had lost $43.5 million in 1990 compared with losing $6.7 million in 1989.

The commission’s own “Report on the Financial Position of Donald J. Trump” in April noted his “severe cash flow difficulties” and “severely limited financial resources.” It concluded, “Mr. Trump can not be considered financially stable.” But it added, “However, in response to the current financial difficulties, Mr. Trump and representatives of the Trump Organization are negotiating with Mr. Trump’s primary lenders with respect to a restructuring of Mr. Trump’s financial obligations.” If all on that front went well, the report went on, “The Trump Organization might be financially stable.” Perskie and the other commissioners zeroed in on that might.

They listened to testimony from the new CEO of Trump’s casinos and the new presidents of the Plaza and Castle about changes in management that had been made and their implementation of more efficient operations. They listened to testimony from Trump Organization Chief Financial Officer Stephen Bollenbach about the deals Trump continued to cut with the banks. They listened to testimony from Wilbur Ross—an investment banker who was representing the Taj bondholders in what would become the facility’s Chapter 11 bankruptcy filing and is now Trump’s Secretary of Commerce. And they listened to Joseph Fusco, Trump’s attorney in the matter, who reminded them in May how they had gotten here—how they had licensed Trump for the Plaza seven years before, how they had licensed Trump for the Castle six years before, how they had licensed Trump himself almost 10 years before. In May, Fusco stressed Trump’s “continuing good faith efforts to consummate agreements with his lender banks and the apparent likelihood that the obligations will be satisfactorily restructured.” In June, he pointed out that Trump and his casinos “comprise one-fourth of this New Jersey industry.” Trump, he said, had “achieved plans,” “workable plans.” Trump was present but did not testify.

By June 20, the five commissioners were ready to vote on the financial stability of the Trump Organization, the Taj Mahal and the Plaza. (A vote on the third would come later.) Perskie cited “the public interest” and reiterated the need for “strict scrutiny and supervision.” Armstrong expressed her displeasure. She said the Trump Organization remained “extremely limited in its financial options.” She complained about “facile generalizations” in the testimony of Trump’s chief deputies. And she described the evidence they presented as “incomplete and confusing.” But then she got to the nub. “Nevertheless,” the vice chair said to Perskie, “and subject to a rigorous schedule of continued monitoring, I can accept your conclusions that significant progress has been made in negotiating deals with the individual banks, and that the record as a whole reveals minimal but sufficient flexibility to justify a finding of financial stability.” She added: “While I am thus able to endorse a finding of financial stability as to these three entities, I must note that I found the entire presentation at this hearing disappointing and disheartening.”

On November 13th, at the home of Steven Perskie in Margate. Perskie is known as the architect of the Casino Control Act and is interviewed about this year's collapse of the Atlantic City gambling industry. | Matthew Strabuk

Perskie called for the votes. The motions passed unanimously.

“While a considerable amount of work still needs to be done, especially with respect to the Castle, the progress that has been made is, in many respects, remarkable in light of the complexity of these matters,” Perskie said in wrapping up the hearing. “Obviously, it has taken longer than we would have liked to reach this point, but I have no doubt that all of the parties, including the Trump entities and their creditors, have at all times proceeded and negotiated in good faith. The parties have exhibited a real commitment to abide by our rigid standards. We expect nothing less in the future. Nonetheless, they are to be complimented for their efforts.”

This week, Perskie and I talked about whether he has regrets. “I do not regret, and never have, the decision that we made at that time,” he said. “I regret what happened after it.”

Trump’s close calls in Atlantic City, unsurprisingly, left him not chastened but emboldened. Before the year was even over, he talked confidently about his “comeback,” envisioning future appearances on the cover of Time. He was strutting again in public.

That November, Trump went on a double date with Bill O’Reilly, who back then was a host of the tabloid TV show “Inside Edition.” Marla Maples, the other woman in the publicity-circus breakup of his marriage to the mother of his first three children, apparently was friends with O’Reilly’s girlfriend, and the four of them went to a Paula Abdul concert. It was an eye-opening experience, according to O’Reilly, who would tell this story in his 2000 book. Because Trump didn’t want to stay in their seats in a luxury box. He wanted to walk around the floor. The trip into the teeming crowd, O’Reilly recalled, was “screaming, crowding chaos. … We all got shoved. Most of the guys, of course focused on Marla, who was dressed or sewn into a tourniquet-tight black outfit. They stared in a way that is usually seen only in prison. And then there were those who simply screamed the name ‘Donald’ over and over. He loved it,” O’Reilly wrote. “What I’d seen, if I haven’t made it clear, was Trump’s addiction to fame in full force. … He feasted on that nutty adulation.”

O’Reilly’s pre-United States of Trump takeaway: “Is this society crazy? Yes, it is.”

“He’s Ba-ack,” Business Week said of Trump in 1992.

Trump with second wife Marla Maples in Atlantic City in 1991. | AP Photo/Don Slabicki; Ron Galella/Ron Galella Collection via Getty Images

“Stronger than I was before,” Trump told the South China Morning Post in 1993.

“You’ve got to hand it to Donald Trump. He’s one of the few shooting stars from the ‘80s who can boast of a comeback in the ‘90s,” ABC News’ Sam Donaldson said on “Primetime Live” in 1994.

“I think he is the world’s greatest promoter and P.R. person,” Ross told Vanity Fair that year. “He has captured the public imagination and turned it into a resource for himself. People may joke that he’s always promoting himself, but he’s figured out a way to make it more than an ego trip. He’s turned it into money.”

Other people’s money. Because in 1995 and ’96, Trump took his casinos public—selling stock in himself. “Shareholders and bondholders have to be total fools to ever think that Donald Trump will put their interests ahead of his own,” one financial columnist wrote. Analysts issued warnings: “We are not entirely confident that Mr. Trump will respect the interests and preserve the capital of equity investors in his properties.” Even the prospectus made it plain. While it touted “The Trump Name” and its “widespread recognition,” it also sounded guarded notes: “There can be no assurance that Trump will be successful in repaying or rescheduling his indebtedness or that his assets will appreciate sufficiently to provide a source of repayment for such indebtedness.” It mattered little. “Defying reason,” as Forbes put it, people invested in Trump.

Trump could not have survived without his casinos, and he could not have survived, either, without the casino regulators who let him keep going. In Atlantic City, there were losers everywhere. Trump was not one of them. Unshackled, leaving in his wake what he would call his “blip” or his “glitch,” he now had a runway for what was to come, for a second act and then some—newly armed with useful lessons.

“I think I learned a lot by coming close to the edge,” he told the New York Daily News in 1996.

About himself. “I was able to react really well under pressure,” he told Agence France-Presse, “because you’re talking about potentially losing everything.”

About the press. “As nasty as the press can be,” he told Vanity Fair, “they know that once they’ve cut you down, the best story is to build you back up.”

Top: A liquidation sale at the former Trump Taj Mahal Casino and Resort, in 2017. The property will be redeveloped in a Hard Rock Cafe-owned resort, but signage and branding (bottom) found in rooms and hallways reminds of the previous occupancy. | Bastiaan Slabbers/NurPhoto via Getty Images;

About the American people. “The general public loves Trump again,” Trump told USA Today. “They really never stopped loving Trump.” Added a stock analyst quoted in the article: “There’s a lot of brand equity in Trump’s name in middle America.”

Trump was back. Free to run for president for a few months as a Reform Party candidate in the 1999. Free to be presented by NBC on “The Apprentice” as the acme of all-American business acumen. Free to run for president for real in the Republican primary beginning in 2015. Down the Trump Tower escalator he came.

In the end, the city’s problems proved much larger than the man whom officials once thought was the key to Atlantic City’s success. That boardwalk town suffered still from the same array of ills: overreliance on casinos and underinvestment elsewhere, plus ever-increasing competition from the proliferation of gambling options throughout the Northeast and beyond. Trump got out after the last of his five casino bankruptcies in 2009. The city was a husk of what it wanted to be when it OK’d casinos and kept greenlighting Trump—the result of “a decades-long losing streak,” as the Washington Post put it last year.

In his campaign, pressed periodically about his record there, Trump congratulated himself while criticizing the place that saved him. “I had the good sense to leave Atlantic City,” he said in the first GOP debate. “I left Atlantic City before it totally cratered, and I made a lot of money in Atlantic City, and I’m very proud of it.” In Atlantic City, there were lots of losers. Not Trump, he said. “Atlantic City fueled a lot of growth for me,” he told the New York Times in 2016. “The money I took out of there was incredible.”

“I left Atlantic City before it totally cratered, and I made a lot of money in Atlantic City, and I’m very proud of it.” — Donald Trump

It has come up less during his presidency. There have been more immediate crises to worry about than his history in Atlantic City. At this juncture, though, as Trump attacks power-checking Democrats and angles to maintain sufficient acquiescence from the members of his own party who matter the most, it’s imperative to consider anew the calculations that allowed him to skirt accountability in the spring and summer of 1991. They pack fresh relevance now.

“They should have taken his license, given it to a trustee, and today we wouldn’t be dealing with Donald Trump in the White House,” David Cay Johnston, the Pulitzer Prize-winning reporter who covered Atlantic City and the hearings of ‘91 for the Philadelphia Inquirer, told me. But “they could not bring themselves to go back and acknowledge that they got it completely wrong. They had to protect their position.”

“Jesus, fast-forward to today,” added Sciarra, the public advocate from the ‘80s. “It’s exactly the same core modus operandi, with the way he operates and the way people in authority, people who have a responsibility to make sure laws are properly carried out, whether it be taxing authorities, regulatory authorities, Congress, whatever it might be, you know—just unwilling, or unable, or just fail to properly hold him to account.”

Christine Todd Whitman, the former governor of New Jersey, told me Republicans in Congress—especially in the Senate, if and when Trump’s fate comes down to their votes in an impeachment trial—need to do what the casino commissioners in Atlantic City did not. “They need to stand up to him,” she said. “He needs to be held accountable for his actions.”

The Hard Rock Casino, which used to be Trump Taj Mahal, in June, 2018 in Atlantic City. | Jessica Kourkounis/Getty Images

Perskie argued against the premise of so clean an analogy. “There are significant differences because we had options that the Congress doesn’t have,” he told me. “My perspective from a great distance is that the regulators today have a more black-and-white situation. They have to decide whether conduct does or does not constitute an impeachable standard. They’re going to say yes or they’re going to say no. They can’t say maybe.”

Even so, the broad-brush parallels being what they are, I asked people who know Trump and know Atlantic City if they had any advice for Republicans currently in Congress.

“What they should be thinking about, in my opinion, is that if they think they’ve seen the worst, they’re wrong,” O’Donnell said. “This behavior, so to speak, this outrageousness, whatever you want to call it, this lack of loyalty, is going to escalate.”

“What you could say is, and which is true in Atlantic City, is you gave him a break,” said Simon. “And all he cared about was himself. And in the end, you could give him a break, if you’re a Republican, but he will do you in.”

“Anyone who thinks that Donald Trump is important to their long-term viability is either not very bright or kidding themselves,” O’Brien said. “He never shows any gratitude for the people who cut him slack. He just blames things on them.”

The lesson, then, from 1991?

“That if they tether their future to Donald Trump in the belief that without him they won’t have a bright or successful future,” he said, “they might as well just step right off the cliff with him.”