Oh Hey, Donald Trump Stole Casino Employees' Retirement Funds? That's Weird
Beneath the phony superficial glitter is the real superficial glitter.
While Donald Trump's threats to tear down the very fabric of our democracy with his freakishly small hands (which smell of stolen vulvae) have been the big headlines lately, the parade of stories about Trump's weird combination of rapacity and ineptitude in business dealings continues apace. For instance, see this Mother Jones story about how Trump's failures in the Atlantic City casino business left workers with worthless retirement accounts, while Trump, of course, made millions.
We already knew Trump's single venture into running a publicly traded company, "Trump Hotels & Casino Resorts" (THCR), was a spectacular failure (except for Trump). Now, MoJo's Patrick Caldwell brings us another snapshot of how Trump's business acumen affected Trump employees who worked at the failing hotel/ casinos , and were encouraged to invest their retirement savings in Trump stock. Caldwell reminds us that Trump likes to say his multiple bankruptcies are just part of doing business, and if some banks got hurt, so what?
"These lenders aren't babies," he said during a Republican primary debate last fall. "These are total killers. These are not the nice, sweet little people that you think, okay?"
Of course, it wasn't only big mean Hillary-funding International Bankers who took it on the chin: after telling Trump employees it would be a really smart move to put all their savings in company stock, THCR later forced the employees to sell their nearly worthless stock as the company slouched toward bankruptcy. A 2014 class-action lawsuit by stiffed Trump employees said over 400 employees lost more than $2 million in total from their retirement accounts. But don't worry! Donald Trump is fine! The lawsuit was dismissed because a judge determined the company hadn't acted illegally, and losses are just one of those things you face if you put all your money in a single stock (the other option for Trump employees with 401(k) accounts was mutual funds -- and Trump employees who resisted their bosses' recommendations to put everything into Trump stock did OK).
"I didn't realize he was as stupid as he is," says a former casino worker at Trump Plaza who asked not to be named. "Honestly. I thought, way back when, the guy was way brighter than we were. He was running the company and we were working for him. We thought he was brilliant. When we invested in it, we thought, how could this stock go so low?"
One might get the impression Trump's mostly an expert in screwing people, now mightn't one? But it's not like anyone was really hurt -- it's all in the art of the deal, and if you don't come out on top, then you're just not as smart as the guy who did, now are you?
Starting in 1996, workers at Trump's casinos were allowed to invest their 401(k) savings directly into Trump stock [...] But that same year, THCR sold $1.1 billion in junk bonds to offset some of Trump's personal debt and buy two more ill-fated casino properties in Atlantic City. As the company floundered in the years leading up to its second bankruptcy in 2004, the stock price plummeted. According to the class-action complaint, "Between 1996 and August, 2004, employees were encouraged to invest in THCR shares as the price fell from $30/share to $2/share."
You know, it's kind of like the Trump casinos were using their employees' retirement savings as some sort of tokens, with which to gamble at a losing game. There's probably a metaphor there.
It's worth noting that Donald Trump had no direct involvement in the company that managed the Trump employees' retirement accounts; the workers were simply one more group of collateral damage chumps ripped off while Trump was busy saving his own smirking ass. Nothing personal, and as long as they weren't black roulette dealers or insufficiently-beautiful women, Trump himself would have taken no notice of them at all. With bankruptcy imminent, the portfolio management company forced the employees to sell their stock, which had dropped precipitously in value:
More than 400 employees still held Trump stock when the forced sale arrived. The stock had been trading at $0.80 on the day of the announcement but had dropped by more than a quarter, to an average of $0.57, when the employees were forced to sell their 924,698 shares the next month. For an employee who'd put $1,000 into her retirement account in 1997 when shares averaged $9.65 apiece, those savings had now withered to just $59.
Imagine that! As for the class action suit, it was dismissed by a New Jersey judge, who said the "Plaintiffs' assertion that Defendants breached their fiduciary duties amounts to nothing more than a claim based on perfect hindsight." Them's the breaks, folks. You shoulda known better than to believe your employer when they told you your best option was to put all your money into Trump Hotels & Casino Resorts stock. Market's a volatile place, and stuff happens.
Oh, and how did Donald Trump manage to scrape by during those bankruptcies?
He kept a $2 million annual salary after the company emerged from bankruptcy and took in more than $44 million in compensation over the course of the 14 years he served as chairman of THCR.
"I don't think it's a failure," he said of the bankruptcy in 2004. "It's a success."
Just imagine what a terrific job he'll do "protecting" Social Security!
[ Mother Jones ]