ILYA MARRITZ: Hello. It’s Trump, Inc., from WNYC and ProPublica. I'm Ilya Marritz. For more than four years, Donald Trump has refused to share his tax returns as every other major presidential candidate has done for decades.

PRESIDENT DONALD TRUMP: You know, the only one that cares about my tax returns are the reporters. Okay. They're the only ones. 

REPORTER: You don’t think the American public is concerned about them?

PRESIDENT TRUMP: No, I don't think so. I won. I became president.

MARRITZ: He says he will — he wants to. But he's under audit.

PRESIDENT TRUMP: Well, I'm not releasing the tax returns, ‘cause, as you know, they're under audit.

[ROCK-ESQUE MUSIC PLAYS]

MARRITZ: In fact, there is nothing that says you can't make your taxes public when under audit, but that's his excuse. And he's sticking with it as he runs for reelection, all of which has amped up expectations for what might be hiding in his returns — if we ever got a look. Well, now we are getting some answers.

BRIAN STELTER: This is one of the most important stories of the past five years — not one of the most important stories of this year — but one of the most important stories of the past five years, because, as a candidate, Donald Trump fought hard to shield his tax returns.

MARRITZ: The New York Times has obtained more than 20 years of tax information for Donald Trump and Trump businesses, including his time in the White House.

STELTER: So this is the kind of information that we are going to be hearing about for days and weeks to come — and including on the debate stage — in front of 60, 70, 80 million people on Tuesday night.

MARRITZ: You probably saw the 11,000-word story they released on Sunday. The Times piece touches so much of our own reporting here at Trump, Inc. that we decided to get out our reporter’s notebooks and compare.

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HEATHER VOGELL: I’m [LAUGHS] such a dork. I sat here with my newspaper open and a highlighter. I've never sat down with a newspaper and a highlighter, which is, you know — ‘cause it — it leaks through, and so it's really not meant for that. But I didn't want to forget anything.

ILYA MARRITZ: ProPublica’s Heather Vogell — and Trump, Inc. reporter Meg Cramer.

MEG CRAMER: I turned off The New York Times push alerts on my phone, like, two years ago when I went on vacation, and I never turned them back on again. And so I — I actually found out because people started texting me, asking me if I had seen the news. Nobody, in their text, told me what the news was, so I had to go on The New York Times website to figure it out.

MARRITZ: Heather, Meg, welcome.

VOGELL: Hi, Ilya!

CRAMER: Hello!

MARRITZ: Meg, what is one big thing that you're chewing on after reading this piece?

CRAMER: I think the thing a lot of people are going to take away from this reporting is this $750 number — that, for two years, he only paid $750 in federal income taxes.

MARRITZ: It’s, like, an obvious point, but, like, all of us pay more than $750 a year in taxes.

CRAMER: But, like, looking past that $750 number, there is so much more in this reporting that starts to fill in the gaps in our understanding of what it means for Trump to be in business and in the White House at the same time.

MARRITZ: So, give me one of the things that you think is more significant than his low tax bill.

CRAMER: The thing that really struck me as I was reading this was learning that Trump is under audit. The IRS is reviewing this refund that it gave him ten years ago. And there's this open question — there has been this open question throughout Trump's presidency — of whether or not he owes the government $100 million, [PAUSE] which is a lot of money to owe the government. So while Trump himself had said that he was under audit, this reporting really adds so much to our understanding of what that actually means.

VOGELL: Yeah. I mean — I mean, I think that the audit really relates to one of my bigger takeaways from the whole, uh, piece, which is really that we have this incredible tension between, basically, different images — different projections — of Donald Trump that, um, you know, have come from him, and have come from his supporters, and the sort of reality of the finances. 

We have this, like, question of, you know — we all knew that some of his businesses were losing a lot of money. We may not have had dollar figures around it before, but we knew he was losing money. Um, and we knew that he was a serial tax avoider, um, because he'd said so himself. And so there's always been this question of, you know, how much are those losses, um, just bad business? How much is he just making bad business decisions, and how much are they part of a complex, uh, legal and tax strategy, um, that is somehow, um, putting more money in his pocket. And I think we have a lot more numbers around those questions right now.

And what's really interesting to me is that the reporting shows how this tension is really coming to a head right now that we have what really looks like it — it could be a house of cards in his financial dealings.

And the question is — is — is it going to fall soon? And one of the levers, um, that could push him toward having that type of sort of massive financial collapse, uh, potentially is this refund.

CRAMER: And President Trump has maintained that this is not a risk. In a Tweet that he sent the morning after the Times story published, he said that he and his businesses had very little debt compared with the value of his assets.

MARRITZ: Meg, maybe you can just walk us through what's in this tax refund.

CRAMER: So during the early years of The Apprentice, from 2005 to 2007, Trump made a lot of money off of his brand: you know, licensing his name, doing endorsement deals. And the Times reported that he paid a lot in taxes those years. He paid $70 million in taxes.

Then something happened in 2009, which was, Obama became president, and he signed a recession recovery bill that allows taxpayers to go back more years in the past and — and write off their losses. And Trump took advantage of this. So, on his 2009 tax return, he claims $700 million in business losses, which allowed him to get that $70 million back from the IRS.

And apparently what happens when you do that is the IRS gives you something called a “quickie refund,” which is when they send you a check and then they look into, you know, whether or not they're going to approve that claim. So any refund over $2 million needs to be approved by the IRS and this bipartisan congressional panel. And what's hanging in the balance is the question of whether or not Trump gets to keep this refund.

MARRITZ: And his is a lot bigger than $2 million.

VOGELL: And — and — and this audit is not, uh, your typical audit where, um, the IRS comes in and says, “Okay, we're going to take a look at your year 2017 tax return, and we're going to go down and count the beans and see if it's accurate or not.” This is, like, a special audit that has a very sort of special layer of oversight to it that involves this huge $73 million, uh, refund that he claimed. And, The New York Times’ incredibly deep and revealing reporting suggests that the refund stems from his, uh, backing away from his Atlantic City casino losses in a very dramatic way in 2009, claiming to abandon those businesses in order to be able to get something like a write off and to claim the $73 million refund.

MEG: And if he has to pay it back, it could be as much as $100 million because of interest

VOGELL: Now, as, as Meg said, um, the refund has been questioned and has not been confirmed by the IRS as legitimate and the Times points to some reasons why the, um, IRS could change its mind on that and ask for that money back, plus interest and fees, which could leave him with a liability of as much as $100 million or more to the U.S. government.

MARRITZ: So the Times talks about the precarious state of Trump's business. I was very struck that Trump had sold most of his stocks in 2014. He started out taking out loans on properties he had already paid for a long time ago, like the commercial space in, uh — in Trump Tower. And, to me, that really all suggests a guy who is under strain and it backed up something that Michael Cohen said when he testified before Congress, which was that the bid for the presidency was really kind of a rebranding effort.

MICHAEL COHEN: He had no desire or intention to lead this nation — only to market himself and to build his wealth and power.

MARRITZ: He called it an infomercial.

COHEN: Mr. Trump would often say, “This campaign was going to be the greatest infomercial in political history.” He never expected to win the primary. The campaign, for him, was always a marketing opportunity.

MARRITZ: Like, clearly he needed to add some sizzle to his business, because other parts of the business were starting to fail.

CRAMER: Yeah, I mean, over the next four years, he has loans coming due worth more than $300 million.

VOGELL: Yeah. I mean, in a — in a normal business, you'd expect to, um, be able to refinance all of those loans without too much trouble. What we've seen is growing property values over the last, you know, decade since the last financial collapse. And normally, hopefully, those loans would have been able to just roll over into a new loan.

That’s — that’s sort of how these guys operate. The issue, though, here, as the Times points out, is that some of those businesses, um, have not been doing very well. And so there's a question as to does he even have the sort of normal means of digging himself out of a situation like this that are open to other businessmen who are doing these sorts of deals. And now we have the pandemic. So, um, the property value question is a very good one, especially for retail and office space in Manhattan.

MARRITZ: Heather, you've spent so much time carefully reading through financial filings for Trump properties, like 40 Wall Street or the hotel at Columbus Circle in Manhattan. Some of those properties are now the subject of local law enforcement investigations. What new questions do you think this reporting should raise for prosecutors who are looking at the Trump businesses right now?

VOGELL: I think that there are more — probably — avenues for asking the same types of questions that we were asking, which is, “Is Trump Organization presenting one financial picture to the public and also, in extension, to lenders — or other people that it's doing business with — and presenting a very different picture to tax authorities, whether they are local property tax officials, are they state tax officials, or federal tax officials?”

And if you think about that, and you think about all the places that his businesses are located, in all of the different layers of government that they interact with, it — it certainly raises the question, whether there are many other places where there may be clashing pictures of losses of income and profits, um, of value of properties, um, that exist. I think, I think there probably are a lot more, um, avenues that could be looked at closely if, um, prosecutors locally, um, in some of these jurisdictions were interested — or federally.

CRAMER: One of the properties that the Times mentioned in its reporting is this mansion that the Trump family owns outside of New York City, Seven Springs. And I was — um, you know, we don't hear about this a lot, because it doesn't have the Trump name on it, it’s not really run as a business. On the Trump Organization's website, they describe it as “a retreat for the Trump family.” And the Times found that Trump has been calling it an investment property. And when something is an investment property, that allows you to take certain deductions off of it that you otherwise wouldn't be able to if it was just a private residence.

So, for example, he has claimed his property tax on the building as a business expense. So he's able to get an overall tax reduction off of the cost of his property tax, which is kind of like, you know, if you think of, like, the galaxy brain meme. It’s, like, the final panel of the exploding galaxy brain, where, like, Trump is getting a tax deduction off of his taxes.

Um, but what was interesting to me about that is that we've seen the Seven Springs mansion be used in a completely different way in these statements of financial condition that Michael Cohen brought to Congress when he testified, which are documents that supposedly show how much Trump is worth. He describes Seven Springs as an incredibly valuable property, worth up to $261 million. And it's this pattern of, you know, inflating the value of his property when he's seeking a loan, deflating the value of his property when he's paying taxes — which is something that, you know, Heather's reporting has found.

MARRITZ: And very critically with Seven Springs, we learned only recently that the New York Attorney General is investigating that property and wants to depose Eric Trump about precisely that property, uh, and will do so, uh, thanks to a court decision, before October 7th.

CRAMER: So Ilya, I was wondering what you thought about this reporting about Ivanka and these consulting fees, because I know you've done some reporting on the Trump kids and their role in the business.

MARRITZ: Yeah. So in miniature, this was one of the most interesting episodes in the whole story. It appears that Ivanka Trump has been paid as a consultant on Trump Organization projects, like hotels in Vancouver and Hawaii, but she was being paid in a separate stream, as a private consultant who happens to also be — at the time — an executive at the Trump Organization.

And, of course, we only know about this situation — we can only really kind of confirm it — because now, as a public employee, as a White House advisor, Ivanka Trump does have to file an annual disclosure form. And she did disclose that income as a consultant. I think it was a little over $700,000.

It — it raises a lot of questions because, as a filer, the Trump Organization can deduct the cost of that consulting. So that's a tax savings for them. Ivanka Trump, of course, would have to pay taxes on her earnings as a consultant. Um, filers have gotten in trouble in the past for this kind of thing.

CRAMER: And of course, you know, Trump paying Ivanka this consulting fee, that being attacks potential tax avoidance strategy, echoes the relationship between Trump and his father, Fred Trump, who devised all of these techniques for passing his wealth onto his children without paying taxes or — or with a reduced tax bill.

MARRITZ: Yeah, absolutely. We see all these echoes all — really all throughout the Times' reporting, I see all these echoes of things that we've looked at over the past four years. Uh, but that was a really strong echo for me.

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MARRITZ: The difference is, Fred Trump really was a bonafide builder and he used — basically — the construction and maintenance part of the business, uh, to do a tax avoidance strategy, passing on wealth.

Donald Trump is a branding guy, so he didn't have that lever. So he used a different lever, which was basically brand consulting.

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MARRITZ: After the break, the new questions this New York Times reporting has us asking.

[MIDROLL]

MARRITZ: And we're back. The evening the story was released, President Trump called the Times' reporting "fake news.”

PRESIDENT TRUMP: Fake news. It’s totally fake news. Made up. Fake. We went through the same stories … [FADES UNDER]

MARRITZ: He later falsely claimed the information the story was based on was obtained illegally. On Fox News, Donald Trump Jr. said the story was politically motivated.

DONALD TRUMP JR.: But, of course, The New York Times does this. They put out a selective, you know, picture of all of these things the day before debate to try to give someone like Joe Biden, you know, an attack line. They come up with one or two catchy sound bites, and that's the game.

MARRITZ: So what are some of the questions that you have after reading the story?

CRAMER: You mean, other than, “Why did Trump spend so much money on golf courses?”

MARRITZ: [CHUCKLES] That — that is a perennial. [ALL LAUGH]

VOGELL: [OVER PAPERS SHUFFLING] I mean, there was so much, it's hard to pick one.

MARRITZ: It really is.

VOGELL: Yeah, so, you know, for the last four years, we've gotten these, um, sort of slivers of a view of Donald Trump's finances and of his businesses. And they've often been very intriguing. We've not always seen where all the pieces fit together.

One of the windows that we have on his business has been his financial disclosures that he's filing every year. And, you know, those have been very difficult, um, to use as information sources, for two main reasons I can think of: one is that he's only reporting — in a lot of his businesses — he’s only reporting his revenues, he’s not reporting his expenses. So he — we have no sense of what profits he's actually pocketing. And of course that bolsters the public image of a very successful, wealthy man. The other piece is that the form only required — I think we're finding out about a lot of the inadequacies of our financial reporting, governmental ethics requirements.

And one is that the forms only require that you report sort of bands of income from certain businesses. So we've really never had kind of a fine point on any of those businesses. And, you know, understanding exactly how they're operating through those financial disclosures. They've really been very inadequate at understanding things. 

The tax records are different. The Times is giving us actual numbers that are attached to certain business ventures, and those are profit numbers, loss numbers —

MARRITZ: — deductions —

VOGELL: — not glazed over. And, you know — and one thing that jumped out to me, you know, all the reporting we've done on the — his foreign licensing deals, and the money that he's been taking in for properties that he's got, you know, hotels often located in foreign countries where he's being paid just for the use of his name.

So it looks like he's taking in potentially millions more than we understood through these deals we were aware of, but didn't have good financial information on, um, you know, located in — often — these places that are very diplomatically difficult for the United States, where there's a lot at stake, where he may be getting lobbying from leaders who are autocratic or have interests that are counter to the United States interests. Um, so I found that also fascinating, and I'm hoping there's more to come from the New York Times on that piece of it.

CRAMER: I mean, I really want to know what happens if Trump can't pay his debts. He has $300 million in debts in loans coming due within the next four years. Sort of aside from the question of “What happens if those debts come due during a second Trump presidential term?” like — like, what happens?

It seems highly unlikely, based on this reporting, that he has the money to pay off those loans. And I think it's sort of like, many times before, we've seen Trump find a way to climb out of a hole, but yeah, I guess I just don’t — I just don't know what happens in that situation.

MARRITZ: My question is kind of the converse of that, which is, you know, for the bankers at, at Ladder Capital and Deutsche Bank who hold all this Trump debt, and they've had four years to think about what they're going to do.

What are they going to do? If Trump defaults on the debt, are they going to foreclose the sitting President of the United States? And what plans do they have in place?

[SLOW ELECTRONIC MUSIC PLAYS]

CRAMER: You know, there's just — there's something we haven't mentioned yet, which is one thing we see through this reporting is that, even as Trump’s business is failing and losing money, we see the ways in which the presidency is really propping up his business, and the revenue streams that have come because of Trump’s political career — because of his time as president — have pumped a lot of money into some properties. You know, it doesn't mean those properties are necessarily succeeding, but they are failing less dramatically, perhaps, because of the ways in which Trump is benefiting from his presidency.

MARRITZ: Heather Vogel, Meg Cramer, thank you both very much.

CRAMER: Thanks, Ilya!

VOGELL: Thanks so much, Ilya.

MARRITZ: This episode of Trump, Inc. was produced by Matt Collette and Katherine Sullivan and edited by Nick Varchaver. Jared Paul is our technical producer. I'm Ilya Marritz. Thank you for listening.

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