A quote attributed to Jared Kushner will fuel suspicions about the Trump Organization’s business model, in Bob Woodward’s new book Fear: Trump in the White House.
In 2006, Donald Trump quietly gave up his self-proclaimed mantle of “King of Debt,” and started making all his investments in cash, with no external loans, as the Washington Post uncovered earlier this year. The model goes against industry trends: To minimize risk, developers typically put a small amount of their own cash into projects, with banks funding the rest.
But it’s not clear how Trump Org has mustered the cash to spend more than $400 million on 14 real estate projects since 2006, not to mention paying debts and backing plans to spend $200 million more on building a small town in Scotland.
Eric Trump told the Post that his father could fund all this because he had “incredible cash flow and built incredible wealth…he didn’t need to think about borrowing for every transaction. We invested in ourselves.” But in Fear, Woodward casts doubt on that claim. He recounts a campaign-trail conversation between Kushner and then-Trump campaign CEO Steve Bannon. As Trump gained ground on Hillary Clinton in the polls, Bannon told Kushner they needed Trump to donate $50 million to his own campaign for a big television ad buy.
“He’ll never do it,” Kushner reportedly responded, unless Bannon could prove they would win.
“Maybe we can get $25 million out of him,” Kushner added, according to Woodward. “He doesn’t have a lot of cash.”
In October, just three weeks ahead of the election, they brought that proposal to Trump, Woodward reports. “No way,” he said. “Fuck that. I’m not doing it.”
The next day, Kushner and Bannon reduced their request to a $10 million loan, which would be repaid to Trump as small cash donations came in from his supporters. After two days of negotiating the sum, Trump eventually acquiesced, writes Woodward: “Okay, fine, get off my back. We’ll do $10 million.” They signed a terms sheet that stipulated Trump would be paid back when the campaign had more cash.
The anecdote is the latest in a series of puzzles about the Trump Organization’s cash flow. The only major revenue stream to have opened since 2016 is Trump’s controversial hotel in Washington, DC. The hotel has reportedly been successful since opening in 2017, raking in $2 million in its first four months—despite its own expectations of early losses. A nice turnaround, but nowhere near enough to finance the kind of cash spending Trump promises to do in Scotland.
Fusion GPS founder Glenn Simpson, who commissioned former British spy Christopher Steele’s famous dossier while doing opposition research on Trump, famously questioned whether the Trumps might have outside funding. “If you’re familiar with Donald Trump’s finances and the litigation over whether he’s really a billionaire, you know, there’s good reason to believe he doesn’t have enough money to do this and that he would have had to have outside financial support for these things,” Simpson said in Congressional testimony (pdf).
In 2013, Eric Trump allegedly told a golf journalist, “We don’t rely on American banks. We have all the funding we need out of Russia.” He has since described that quote “completely fabricated.” The White House has also called early excerpts of Fear “fabricated stories.”