WASHINGTON (AP) – Revelations that President Donald Trump is personally responsible for more than $ 400 million in debt cast a shadow over his presidency which ethics experts say raises national security concerns he could be manipulated to influence American policy through organizations or individuals to whom it is indebted. .
Further scrutiny of Trump, who claims great success as a private businessman, comes after The New York Times reported that tax records show he is personally in debt, including more than $ 300 million. dollars in loans that will mature over the next four years. years.
Senator Elizabeth Warren, D-Mass., Has been blunt about the potential implications. “He can be vulnerable to financial blackmail from a hostile foreign power and god knows what else,” said Warren, a frequent critic of Trump.
The Times said tax records also show Trump paid no federal income taxes for 11 years between 2000 and 2018, raising questions about the fairness of a president – who claims to be a billionaire – paying less tax than most Americans.
The politically damaging revelations about Trump’s tax evasion, however, may be less of a concern than word that the president has hundreds of millions of dollars in soon-to-maturity debt, ethics experts have said.
“Americans should be worried about the president’s debt because it is a risk to the national security of our country,” said Donald Sherman, deputy director of the nonprofit government watchdog Citizens for Responsibility and Ethics in Washington. (CREW). “This is information the president has aggressively and repeatedly tried to keep away from the public.”
Trump, citing an ongoing Internal Revenue Service audit, refused to follow the post-Watergate precedent set by other presidents to release his tax returns, so the complexity of his financial interests and with whom he does matter remained opaque. He’s waging ongoing legal battles with the New York attorney general, the Manhattan district attorney, and two House committees that want the cases.
Richard Painter, who was Republican George W. Bush’s chief White House ethics counselor, also noted that Trump-owned companies have filed for bankruptcy six times, raising the question: why have lenders been prepared to continue to risk loans of such enormous amounts?
“Why would the banks take the risk on these loans? Said the painter. “Or did someone else quietly take the risk of this loan for the bank to realize?” “
Trump, according to his latest financial statement, said he had 14 loans on 12 properties.
A lender, Germany-based Deutsche Bank, continued to do business with Trump even after he defaulted in 2008 on a loan for his hotel and condo in Chicago. Trump sued the bank and others he blamed for his inability to repay.
But Deutsche Bank’s private banking division continued to lend to Trump, including $ 125 million to finance the purchase and renovation of its Doral golf resort in 2012, according to earlier reports.
Trump suggested on Monday that his debt load was hardly unusual compared to his assets, saying in a tweet that he was in fact “extremely under-leveraged.”
“I have very little debt compared to the value of the assets,” he wrote, adding that he could issue a financial statement describing all assets, properties and debts.
In an appearance on Monday, Trump ignored a reporter’s question about when he might issue such a statement, and the White House was unwilling to know when he might follow up. He said several times before his election that he would release his actual taxes, but never did.
Kathleen Clark, an expert on government ethics at the University of Washington in St. Louis, said a separate financial statement from Trump would shed little light on his business relationship if it did not disclose who his business partners are in its various holdings.
“The Trump Organization is made up of hundreds of LLCs (limited liability companies) that have been listed on its financial disclosure forms,” Clark said. “One of the things Trump has benefited from that the oligarchs and money launderers benefit from is the opacity of LLCs, … the ease with which individuals can hide their assets, can hide their financial interests.”
Trump refused to give up his business interests after his victory in 2016, and left the day-to-day management of his family’s real estate and other assets to his sons Donald Jr. and Eric. Yet the president has personally benefited from the activity of the US and foreign governments in his properties since his election and has not shied away from promoting his hotels and golf courses.
Republicans have hosted at least 88 political events at his properties, the president has visited his hotels and golf courses more than 500 times, and at least 13 foreign governments have hosted events at Trump properties, according to a CREW tally.
The administration drew criticism last year when Vice President Mike Pence, on his way to Dublin for meetings, moved into the Trump International Golf Links and Hotel more than 180 miles from Doonbeg, in Ireland. And Trump scrapped a plan to hold a meeting of the Group of 7 world leaders at one of his Florida properties last year after bipartisan criticism.
As his victory in the 2016 election approached, Trump downplayed his bankruptcies as a smart business strategy and even called himself a “debt king.”
“I’ve always loved debt, I have to be honest with you,” Trump said at a campaign rally. “I don’t like it for countries, but I like it individually. If things go well, great, if not, you will renegotiate.
The New York Times, citing the tax records it obtained, also revealed that Trump had not paid federal income tax for 11 of the 18 years, and only $ 750 each year for 2017 and 2018, so that he was claiming millions of dollars in business losses.
Leading Democratic lawmakers on Monday called Trump’s tax avoidance infuriating, but seized his debt as perhaps of more concern.
House Speaker Nancy Pelosi told MSNBC that “our responsibility is to protect and defend and we need to make sure we know what exposure the President of the United States has and what impact that has on national security decisions. for our country “.
Painter said if Trump tried to nominate someone with his massive indebtedness to a top government post, the candidate would almost certainly have a hard time getting a security clearance. Indeed, the inability or refusal to repay debts and a history of non-compliance with financial obligations could prevent any federal employee from receiving a security clearance, according to government directives.
Peter Schweizer, President of the Government Accountability Institute, said: “The question is also whether the loans are tied to real assets such as buildings etc., or whether the politician has been given special favors in obtaining loans. . Politicians and their families can engage in business transactions, the question is whether the loans are unusual and unique compared to others in the market.
Trump is hardly the first president to face debt, either in office or later in life.
Thomas Jefferson, whose peak net worth in current dollars reached $ 236.8 million according to 24/7 Wall Street research, died in debt. Debt was accumulated during and after his presidency – as well as by relatives – and his family sold dozens of slaves from his Monticello estate to settle their debts.
On the other hand, Barack Obama, in his second term, encouraged American homeowners to refinance their mortgages when rates were well below what he was paying, but he said he and his wife were were held upright.
“When you’re president, you have to be a little careful about these transactions, so we didn’t refinance,” Obama explained at the time.
Madhani reported from Chicago.
