Trump Is In Debt To 150 Financial Firms So Dems Must Push Tax Issue, Despite Futility

I am glad to see some Democrats haven’t given up taking Trump to task for not releasing his tax returns. Ron Wyden has once again introduced the Presidential Tax Transparency Act that will require the President and every Presidential candidate to release at least three years of tax data. Of course, this has no chance of getting passed, but it is important for Democrats to keep pounding away on this issue. I would suggest that Democrats also introduce this proposal as an amendment to every single bill that they are allowed attach it to. The press totally fell down on the issue of the importance of forcing Trump to release his taxes. For the future of our democracy and transparency in future elections, Democrats must not let the issue die.

The Wall Street Journal reports that Trump is in debt to over 150 financial institutions, ranging from Wall Street banks to mutual funds to other financial institutions. Part of the reason his debts are so widespread is that his mountain of debts over the years has been sliced up and sold off, a process called securitization. It is virtually the same process that Wall Street used to slice up the tranches of mortgage-backed securities, a process that they combined with massive fraudulent representation of the risks to create the financial crisis in 2008. Many of these loans are, incredibly, backed by Trump’s personal guarantee, a promise that would seem to be worth very little. Trump’s financial disclosure form from last May listed $315 million in loans held by 10 institutions. There was an additional $1.5 billion in loans to partnerships where Trump had at least a 30% interest. The Journal’s report also admits that the list they have compiled may not and is probably not complete. Among the institutions that are known to own Trump’s debts are Deutsche Bank, Wells Fargo, and Met Life, all of which present sever conflicts of interest for Trump as President right now. Deutsche Bank is a serial criminal who has been involved in everything from mortgage securities fraud to money laundering. Wells Fargo is also another serial offender who has committed massive fraud against its own customers by opening millions of accounts without authorization in order to extract extra fees. The bank has also recently failed the Too-Big-To-Fail test for the second time, opening the firm up to disciplinary actions that may require the firm to divest certain lines of business. Met Life has been fighting its designation as a “systematically important financial institution” under Dodd-Frank and is interested in seeing the law rolled back, something that Trump has proposed. These are just three examples of the conflicts of interest facing Trump. And his personal guarantee is also why Trump can never cede control of the Trump Organization. If her were to do that, these personal guarantees would be called in and could possibly push Trump into insolvency. As Trevor Potter who has served as general counsel to two Republican Presidential campaigns says, “The problem with any of this debt is if something goes wrong, and if there is a situation where the President is personally beholden or vulnerable to threats from the lenders.”

Let me lay out a hypothetical situation where terrorists decide to simultaneously target Trump properties around the world. In an instant, rather than becoming a status symbol for aspiring moguls, these properties become shunned and un-rentable as too dangerous. All of sudden, Trump’s properties’ value plummet and can no longer support these loans. One or many of these financial institutions then decide to call in Trump’s loans. And now Trump will have to pay up on his personal guarantee, which may in fact bankrupt him. I don’t think Trump will take too kindly to that but he will have the full weight of the persuasive power of the US Government to prevent those parties from calling in those loans. It is not a far-fetched possibility.

The potential conflicts of interests posed by these loans are widespread and huge, simply on their own. The bigger problem is the conflicts of interest that we don’t know about. And the only way we will find those out is through Trump’s taxes. That alone is a good enough reason for Democrats to keep pushing the tax issue, in addition to setting a standard for passing the law in the future.