Also see: A Trump Presidency Could End Press Freedom, Say Reporters Threatened for Reporting on His Taxes

With just over a month until Election Day, The New York Times has dropped a bombshell report that suggests Republican presidential nominee Donald Trump may have avoided paying any federal income taxes for 18 years. Trump’s campaign has not challenged the authenticity of the leaked tax documents used in the story. We get the details from three-time Pulitzer Prize-winning reporter David Barstow, who led the Times’ investigation, and David Cay Johnston, another Pulitzer Prize-winning investigative reporter and author of the new biography, The Making of Donald Trump.

TRANSCRIPT:

AMY GOODMAN: Does Donald Trump pay taxes? We begin today’s show with an explosive report from The New York Times that suggests the Republican presidential nominee may have avoided paying any federal income taxes for 18 years. The Times has obtained three of Trump’s tax returns, showing he claimed an income tax loss of nearly $917 million in 1995. The deduction means Trump could have paid zero federal income tax over an 18-year period. Since the report came out, the Trump campaign has not challenged the authenticity of the tax documents. Instead, it issued a statement, that, quote, “Mr. Trump is a highly-skilled businessman who has a fiduciary responsibility to his business, his family and his employees to pay no more tax than legally required,” unquote. On Monday, Trump claimed he successfully exploited tax loopholes created by special interests, and said he’s the best person to fix the broken system.

DONALD TRUMP: It is an unfair system and so complex that very few people understand it. Fortunately, I understand it. This is not the fault of the IRS, but the political class that is owned outright by the special interests and lobbyists. Believe me. It’s these politicians who wrote the tax code and who are constantly adding, revising and changing an already overcomplicated set of laws, all at the behest of their favorite donors and special interests, who want certain provisions put in, and they won’t take no for an answer. … I understand the tax laws better than almost anyone, which is why I am one who can truly fix them. I understand it. I get it.

AMY GOODMAN: Meanwhile, Democratic presidential nominee Hillary Clinton responded by slamming Trump on his tax record. On Monday, she told supporters in the battleground state of Ohio that Trump’s a tax evader who stiffed average Americans.

HILLARY CLINTON: Now, a lot of us were wondering, “What is he hiding? It must be really terrible.” Well, The New York Times has discovered at least part of the answer. Back in the 1990s, Trump apparently lost a billion dollars in a single year on bad investments and failing casinos. Now, how anybody can lose a dollar, let alone a billion dollars, in the casino industry is kind of beyond me. Right? But it — it’s just hard to figure. But as a result, doesn’t look like he paid a dime of federal income tax for almost two decades. Now, while millions of American families, including mine and yours, were working hard, paying our fair share, it seems he was contributing nothing to our nation. Imagine that. Not fair.

AMY GOODMAN: The New York Times report is based on an analysis of the front pages of Trump’s tax returns for the states of New York, New Jersey and Connecticut. They were sent to the paper by an anonymous source with a return address listed as originating from Trump Tower. A lawyer for Trump threatened The New York Times with prompt legal action. Trump has refused to make his tax returns public, breaking a precedent followed by every presidential nominee since 1976.

For more, we’re joined by two reporters who have long covered Donald Trump and his taxes. David Barstow is a three-time Pulitzer Prize-winning investigative reporter for The New York Times, lead author on a new article analyzing part of Trump’s tax returns. Barstow shares a byline with Susanne Craig, Russ Buettner and Megan Twohey on the Times exclusive, which is headlined “Trump’s 1995 Tax Records Claim $916 Million Loss.”

We’re also joined by David Cay Johnston, Pulitzer Prize-winning investigative reporter formerly with The New York Times, now a columnist for The Daily Beast. His latest piece is headlined, “Art of the Steal.” His biography of Donald Trump, The Making of Donald Trump.

We welcome you both to Democracy Now! So, David Barstow, let’s begin with you. Lay out what it is you had mailed — that someone mailed to the Times.

DAVID BARSTOW: My colleague, Sue Craig, who’s probably one of the few reporters at the paper who actually checks her snail mail every day, came to me one day with this envelope and these three pages in them, with her eyes wide open. She showed me the documents. I was actually on the phone in the middle of an interview. I saw the first glimpse of the tax return pages, hung up on the person I was talking to, and then, of course, we then went on this sort of mad scramble to see if we could authenticate the documents. That was about 10 days ago.

We were obviously — kind of had two warring feelings at the same time. One was, gosh, who else might have been sent these documents? What other journalists? I was thinking about you, David.

DAVID CAY JOHNSTON: Not so lucky.

DAVID BARSTOW: And then — but we were also thinking also about what happened with Dan Rather and rushing to something before we were completely confident in the authenticity of the documents.

AMY GOODMAN: When were they sent to you?

DAVID BARSTOW: As I said, we received them — I guess it was two Fridays ago, is when Sue Craig walked up to me, waving them at me.

AMY GOODMAN: And what did they show? What did they say?

DAVID BARSTOW: So, I mean, they were — first of all, these are like little fragments, in a way, because his full tax return for 1995, no doubt, was hundreds and hundreds of pages, and we only were sent three pages. But what was on those three pages was enough for us to see something quite remarkable, which was, my gosh, he’s declaring a $916 million loss on his personal income tax return in 1995. The number was so large, it actually took us sort of a minute to like figure out could it really be that big. And when we showed these returns, we — of course, we quickly brought in tax experts to help us interpret and understand the documents. They also were kind of — it took everybody a minute. We’d see people look at these documents and, you know, just to kind of contemplate that size of a number as a loss for 1995.

It also begins — it begins giving us sort of the first glimpses into other aspects of his finances. And so, one of the things we can see from these documents is that Trump managed to obtain enormous tax benefits from the financial wreckage he had left behind in the early 1990s with failed casinos, with a failed airline, with a failed or poorly timed purchase of the Plaza Hotel. And you could certainly see evidence of that in the way the numbers were described in these tax returns. So, even though it was just three pages, and none of them were actually from his federal tax return, it was enough for us to begin seeing some things that were quite startling and important, we thought, newsworthy for the readers of The New York Times.

AMY GOODMAN: And explain what this kind of massive loss, $916 million, means for taxes in the future.

DAVID BARSTOW: That’s — you know, that’s the thing that I think most ordinary people wouldn’t immediately recognize. There are these incredible provisions in the tax code that are especially beneficial to people like Donald Trump, that would allow him to use that $916 million to shelter up to 18 years of income tax from any tax whatsoever — I’m sorry, of income from any income tax whatsoever. In his case, what that works out to is he could earn up to $50 million a year tax-free over this 18-year period. And we don’t see any evidence from our examination of his businesses at that time that that’s a number that he was likely to hit at all, and thus I think it makes it extremely likely that over this 18-year period he paid no income taxes at all, even though we don’t know that for sure, because he hasn’t yet released those tax returns, either.

AMY GOODMAN: Let me go to Donald Trump responding, addressing supporters at a campaign stop in Pueblo, Colorado, yesterday. He said he resuscitated his businesses through sheer talent and grit.

DONALD TRUMP: Today, my company is bigger, stronger, far greater assets than it’s ever had before, more premium properties. We’ve never done better. It’s the strongest we’ve ever been. And we employ thousands of people and over the years have employed thousands and thousands of people, which is the thing that, frankly, makes me most happy. That did not happen by chance or luck. It happened by action and talent, a lot of talent. I was able to use the tax laws of this country and my business acumen to dig out of the real estate mess — you would call it a depression — when few others were able to do what I did.

AMY GOODMAN: So that was Donald Trump. Your response, David Barstow?

DAVID BARSTOW: I mean, I think this is the argument that he has really been laying out gradually over the campaign. You heard it, for sure, on Monday night in the presidential debate with Hillary Clinton, when she pointed out or raised the question of, “Hey, perhaps one of the reasons why he’s not releasing his tax returns is because he doesn’t want you to know that he doesn’t pay any federal income taxes,” to which he replied, “That would make me smart.” And I think he’s actually continued that argument. On Wednesday, he was on The O’Reilly Factor, and he argued to Bill O’Reilly that he thinks that the American voters are actually looking for that kind of thinking, that they’re looking for someone like him who is so expert in gaming the tax code and was clever enough to be a billionaire, on the one hand, and, on the other hand, not pay a dime in federal income taxes. So it’s an interesting argument that he’s making. And it’s an interesting question of whether or not that indeed is what the American people are looking for right now.

AMY GOODMAN: So, you, in trying to confirm the authenticity of these documents, not only consulted tax experts here, but you actually went down to Florida to meet with Trump’s accountant?

DAVID BARSTOW: I did. His name is Jack Mitnick. He has represented the Trump family — or, represented the Trump family over the span of four decades. He described starting work on Donald Trump’s taxes when Donald Trump was 18 years old. And I presented these documents to Mr. Mitnick to see if he could authenticate them. He immediately recognized them. This is, in fact — according to Mr. Mitnick, this was the last tax return he ever worked on for Donald Trump. He parted company with the accounting firm that he worked for the following year and went to a different accounting firm.

The thing that really jumped out — I mean, the thing that I guess gave me the most amount of comfort was he was able to explain an anomaly in the way the numbers were presented on one of the tax forms. An issue was this $916 million loss. The first two digits, the nine and the one, were slightly different font and slightly misaligned from the following seven digits. And that made us, of course, incredibly worried that perhaps somebody had simply doctored Mr. Trump’s tax returns. When I pointed that out to Mr. Mitnick, he kind of smiled and chuckled, and he said, “Oh, yes, I remember. The tax software program that I was using at that time had difficulty actually printing out a number that large. It would only print out seven digits. So what I had to do is I had to then run the thing through my IBM typewriter, and I typed in the first two digits, the nine, one.” And I think that was the moment when we became — I certainly felt like, OK, these — these are real.

AMY GOODMAN: Now, he said that he understood that Trump was living a life of unimaginable luxury?

DAVID BARSTOW: He was. He has complicated feelings about Donald Trump. He — first of all, he clearly is someone who had real admiration for Fred Trump, Donald Trump’s father. He described Fred Trump as a man who didn’t mind getting a little mud on his shoes, a man who paid attention to detail, a man who was really on top of his business. And the way he described Donald Trump was a sort of undisciplined, showboating, kind of brash guy, the guy we all have kind of come to know over this campaign. And he mentioned, in fact, that every year when Donald and Ivana would come in to do their taxes with him, it was always Ivana who asked the really, you know, picky detail questions.

But he said that what Donald did understand and grasped very clearly was that they could use the IRS tax code to protect his wealth. And that was the point that, you know, he — from that sort of simple understanding flowed, basically, all of the tax strategies. But, yes, Mr. Mitnick was well aware of the kind of the irony of the fact that here’s this man living this incredible lifestyle at this moment in time, and yet at the same time he’s not paying any taxes.

AMY GOODMAN: And there are other lines, of course, in the tax return, like line number six, business income or loss. And that amount is?

DAVID BARSTOW: A little over 3 million bucks.

AMY GOODMAN: That’s a little different than people would think Donald Trump’s income is, the way he describes it.

DAVID BARSTOW: It’s — I mean, the numbers — all these numbers are so fascinating. I mean, you kind of —

AMY GOODMAN: $3.4 million, his income.

DAVID BARSTOW: Yeah, it’s not — it’s not —

DAVID CAY JOHNSTON: There’s no evidence that — let’s be clear about this.

AMY GOODMAN: David Cay Johnston.

DAVID CAY JOHNSTON: I covered Trump when he went through these difficulties back then, and — which began in 1990. There’s no evidence that Donald Trump is a billionaire, and these three pages provide very strong evidence that he’s not a billionaire or anything close to it. He’s a wealthy man. He had about $7 million of interest income, which suggests he owned corporate bonds worth somewhere between $100 and $150 million.

But the — there are a number of things he did here that he’s not telling people about. First of all, those losses represented real damage suffered by other people.

Secondly, the state of New Jersey Casino Control Commission, after two commissioners complained of official favoritism to Donald Trump by the New York State Attorney General’s Office, took his side against his bankers. And his bankers then had to give him huge discounts on his loans. Well, if you borrow money from a bank and pay back less than you owe, that’s income, and you have to pay taxes on it. Donald escaped that, I’m sure, and that’s what my column in The Daily Beast explains, by instead of paying the taxes, agreeing in the future not to take tax benefits out of other buildings that he owned, his casinos. He then took these buildings, put them into a company sold to the public in the market — the first time he had done this. The stock opened up at $35. It quickly went, over a couple of years, to 17 cents. It never made money. It lost $1.1 billion more. But Trump got $82 million of pay from that company.

So, throughout this system, what Donald Trump did was he mismanaged his properties, he overpaid, he got the banks — and therefore the investors in the banks — to suffer the losses. He then took his own given-away tax benefits to avoid tax, put them into the publicly traded company and stiffed the investors in that company. And this is how Donald Trump has done business his entire life.

AMY GOODMAN: We’re going to break and then come back to this discussion. That’s David Cay Johnston. We’re also speaking to David Barstow. David Barstow led The New York Times team analyzing part of Donald Trump’s tax returns, the big bombshell news this week. David Cay Johnston is author of The Making of Donald Trump, just wrote a piece for The Daily Beast called “The Art of the Steal.” This is Democracy Now! We’ll be back on Donald Trump in a minute.