As a businessperson, Donald J. Trump appears to be a far cry from the deal-making savant he claims to be. The New York Times reported earlier this year that between 1985 and 1994, Trump’s company reported $1.17 billion in losses, more than nearly any other U.S. taxpayer.
However, a story from Times Finance Editor David Enrich reveals that, while hustling to keep from defaulting on loans for his casino and real estate holdings in the early 2000s, Trump recognized the motivational power of incentive travel.
Enrich, who is writing a book about Trump’s long-term relationship with Deutsche Bank, tells the story of Trump enlisting help from a division of the German financial services company to sell hundreds of millions of dollars’ worth of junk bonds for his failing casinos.
In an interview on the National Public Radio show “Fresh Air,” Enrich said Trump and Deutsche Bank executives went on a road show to meet with prominent institutional investors in Boston, New York and elsewhere. “It seemed like it was going really well. There were crowds at the meetings, which are normally extraordinarily dry, boring sessions,” Enrich said. “He was wheeling and dealing, ranting and raving. Even the secretaries were coming into these road show meetings.”
Turns out that a lot of people wanted to see Trump in the flesh, but almost none were interested in giving money to a businessperson who, by then, had established a pattern of stiffing his lenders. “Everyone wanted to experience the Donald Trump show, but that did not mean they were willing to entrust him with any of their money,” Enrich said.
A disappointed Trump asked Deutsche Bank executives for an opportunity to speak with the junk bond salespeople. In his pep talk, he said he understood peddling bonds for his casinos was a tough sell, but he implored them to try their best and if they hit their target, all of them would be his guests for a weekend at Mar-A-Lago, Trump’s Palm Beach resort.
That was just the incentive the sales team needed. According to Enrich, they redoubled their efforts and sold nearly $500 million worth of Trump’s junk bonds. The Deutsche Bank relationship manager called Trump and said, “We got this done for you. Just don’t forget about what you promised our guys.”
Trump said he didn’t recall making that promise and guessed the salespeople didn’t remember it if he did. “Donald, this is all they’ve been talking about for the past two weeks. You’ve got to come through on this,” the executive replied, according to Enrich.
Trump ultimately flew about 15 salesmen from the New York Deutsche Bank office to Florida on his Boeing 727, where they spent a weekend golfing, wining and dining with the would-be president.
A year later, in 2004, Trump Hotels & Casino Resorts defaulted on the bonds. Deutsche Bank’s clients suffered steep losses and that arm of the investment banking division stopped doing business with Trump.