From the back seat of a stretch limousine heading to meet the first contestants for his new TV show “The Apprentice,” Donald J. Trump bragged that he was a billionaire who had overcome financial hardship.
“I used my brain, I used my negotiating skills and I worked it all out,” he told viewers. “Now, my company is bigger than it ever was and stronger than it ever was.”
It was all a hoax.
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Months after that inaugural episode in January 2004, Mr. Trump filed his individual tax return reporting $89.9 million in net losses from his core businesses for the prior year. The red ink spilled from everywhere, even as American television audiences saw him as a savvy business mogul with the Midas touch.
Twelve years later, that image of the self-made, self-saved mogul, beamed into the national consciousness, would help fuel Mr. Trump’s improbable election to the White House.
But while the story of “The Apprentice” is by now well known, the president’s tax returns reveal another grand twist that has never been truly told — how the popularity of that fictional alter ego rescued him, providing a financial lifeline to reinvent himself yet again. And then how, in an echo of the boom-and-bust cycle that has defined his business career, he led himself toward the financial shoals he must navigate today.
Mr. Trump’s genius, it turned out, wasn’t running a company. It was making himself famous — Trump-scale famous — and monetizing that fame.
The President’s Taxes
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By analyzing the tax records, The New York Times was able to place a value on Mr. Trump’s celebrity. While the returns show that he earned some $197 million directly from “The Apprentice” over 16 years — roughly in line with what he has claimed — they also reveal that an additional $230 million flowed from the fame associated with it.
Tax records show that Donald Trump earned $197 million directly from “The Apprentice,” and $230 million from licensing and endorsement deals that followed. Bill Tompkins/Getty Images
The show’s big ratings meant that everyone wanted a piece of the Trump brand, and he grabbed at the opportunity to rent it out. There was $500,000 to pitch Double Stuf Oreos, another half-million to sell Domino’s Pizza and $850,000 to push laundry detergent.
There were seven-figure licensing deals with hotel builders, some with murky backgrounds, in former Soviet republics and other developing countries. And there were schemes that exploited misplaced trust in the TV version of Mr. Trump, who, off camera, peddled worthless get-rich-quick nostrums like “Donald Trump Way to Wealth” seminars that promised initiation into “the secrets and strategies that have made Donald Trump a billionaire.”
Just as, years before, the money Mr. Trump secretly received from his father allowed him to assemble a wobbly collection of Atlantic City casinos and other disparate enterprises that then collapsed around him, the new influx of cash helped finance a buying spree that saw him snap up golf resorts, a business not known for easy profits. Indeed, the tax records show that his golf properties have been hemorrhaging millions of dollars for years.
In response to a request for comment, a White House spokesman, Judd Deere, did not dispute any specific facts. Instead, he delivered a broad attack, calling the article “fake news” and “yet another politically motivated hit piece full of inaccurate smears” appearing “before a presidential debate.”
Unlocking the mysteries of Mr. Trump’s wealth has been attempted many times with varying degrees of success — an exercise made difficult by the opaque nature of his businesses, his penchant for exaggerations and lies, and his willingness to threaten or sue those who question his rosy narratives. He has gone to extraordinary lengths to maintain secrecy, most notably his refusal to honor 40 years of presidential tradition and release his tax returns.
This article is based on an examination of data from those returns, which include personal and business tax filings for Mr. Trump and his companies spanning more than two decades. Every dollar is disclosed for the first time: $8,768,330 paid to him by ACN, a multilevel marketing company that was accused of taking advantage of vulnerable investors; $50,000 from the Lifetime channel for a “juicy nighttime soap” that never materialized; $5,026 in net income from a short-lived mortgage business; and $15,286,244 from licensing his name to a line of mattresses.
In addition, it draws on interviews and previously unreported material from other sources, including hundreds of internal documents from Bayrock Group, an influential early licensing partner whose ties to Russia would come back to haunt the president as questions swirled about his own dealings there.
Together, the new information provides the most authoritative look yet at a critical period in Mr. Trump’s business career that laid the foundation, and provided something of a preview, of his personality-based and fact-bending presidency.
A Second Chance
As trouble loomed in the new millennium, Mr. Trump found an opportunity that would change his life forever.
Divorced for the second time, and coming off the failure of his Atlantic City casinos, Mr. Trump faced escalating money problems and the prospect of another trip to bankruptcy court. On his income tax returns, he reported annual net losses throughout the 1990s, some of it carried forward year to year, a tide that would swell to $352.8 million at the end of 2002.
Few people knew this, however, because he kept up the relentless self-promotion that had served him well: a half-serious 2000 presidential campaign that lasted four months but got him on Jay Leno; a TV ad touting McDonald’s new $1 “Big N’ Tasty” burger; another ghostwritten book.
But if Mr. Trump was still living off his residual fame, his biggest splashes were behind him. Something had to change. And as fate would have it, Mr. Trump got a boost from an unexpected source, one that would do much to shape his future, if not that of the country itself.
Mark Burnett, a British television producer best known for the hit series “Survivor,” approached him with an idea for a different reality show, this one based in a boardroom. In Mr. Burnett’s vision, a cast of wannabe entrepreneurs would come to New York and compete for the approval of the Donald, with the winner to work on a Trump project. Mr. Trump eagerly agreed to host “The Apprentice” and went on to ham it up as the billionaire kingmaker, yelling “You’re fired” each week until one contestant was left.
Some of Mr. Burnett’s staff members wondered how a wealthy businessman supposedly running a real estate empire could spare the time, but they soon discovered that not everything in Mr. Trump’s world was as it appeared.
When the show was conceived, Mr. Trump told an NBC executive, “Even if it doesn’t get ratings, it’s still going to be great for my brand.” Richard Perry/The New York Times
“We walked through the offices and saw chipped furniture,” Bill Pruitt, one of the producers, told The New Yorker in 2018. “We saw a crumbling empire at every turn. Our job was to make it seem otherwise.”
Mr. Burnett wasted no time spinning the illusion of a successful and high-minded Mr. Trump, telling The Times in October 2003 that the new show was all about “Donald Trump giving back” by educating the public on how his can-do spirit had provided jobs and economic security.
“What makes the world a safe place right now?” Mr. Burnett said. “I think it’s American dollars, which come from taxes, which come because of Donald Trump.”
Selling the Image
A surge in popularity brought Mr. Trump’s reality-TV persona to ring tones, hamburgers, even laundry detergent.
Mr. Trump himself had not owed federal income taxes in years, thanks to the regular large business losses that smothered whatever income he had.
But the ratings success of “The Apprentice,” and the advertising dollars it generated, quickly pushed him into the unfamiliar position of declaring positive adjusted gross income on his I.R.S. Form 1040. After netting $11.9 million from the show in its first year, he really hit the jackpot in 2005 with $47.8 million, the tax records show. He made so much that over three years he paid a total of $70.1 million in income taxes (later refunded, with interest, via an aggressive accounting maneuver now under audit).
The windfall, which continued — though in ever-dwindling amounts — until Mr. Trump became president, reflected an unusual arrangement that entitled him, as the show’s star, to half its profits. That included money from product placements on each episode that sometimes numbered more than 100 a month, with household names like Pepsi paying millions of dollars split between Mr. Burnett and Mr. Trump.
When they conceived the idea in 2002, however, the show’s success was far from certain. If nothing else, as Mr. Trump told an NBC executive at the time, it would allow him to market his other endeavors: “Even if it doesn’t get ratings, it’s still going to be great for my brand.”
Those benefits began flowing almost immediately. As early as July 2004, internal marketing plans for various Trump projects called for “exposure through casting on ‘The Apprentice,’” and by 2006, his New York hotel, Trump SoHo, was featured as the winning contestant’s project.
Product endorsements and speaking engagements rolled in as never before.
In the two years preceding the debut of “The Apprentice,” Mr. Trump’s side income was mostly confined to $500,000 for appearing in the Big N’ Tasty burger ad and a small amount of book royalties. But over the next two years, his tax records show, he collected $5.2 million from 11 different ad campaigns and speaking gigs, all propelled by his growing popularity as a reality-TV businessman.
Mr. Trump was not terribly discriminating in his choice of endorsements. He slapped his name on everything from steaks and vodka to a board game and cologne. For the benefit of “consumers interested in experiencing the Trump lifestyle at an affordable price,” as a news release put it, he signed a licensing deal with the Serta mattress company that eventually netted him more than $15 million. Another $15 million would pour in from Trump neckties, shirts and underwear by clothiers like Phillips-Van Heusen.
A licensing deal with the Serta mattress company would eventually bring him more than $15 million.
No endorsement was too small. Warner Music paid $100,000 to feature Mr. Trump in a collection of cellphone ringtones, with the Donald uttering phrases like, “You’re getting a phone call, and believe me, it better be important. I have no time for small talk, and neither do you.”
Unilever, which was looking to promote a new version of its All brand laundry detergent, concocted an entire multiplatform marketing campaign around Mr. Trump. In addition to $850,000 the company paid him directly, tax records reveal, he earned $250,000 more from a public-relations firm Unilever hired to help run an ad campaign coined “Softness fit for a Trump.”
Unilever staged a publicity stunt outside Trump Tower in Manhattan, where Mr. Trump hoisted a laundry basket with an ad for “All Cleans & Softens” stuck to the front. He had taken a break from the rigors of “The Apprentice” to wash donated clothes for charity, Unilever claimed.
He was paid to promote laundry detergent in an ad campaign whose slogan was “Softness fit for a Trump.” Ezio Petersen/UPI, via Alamy
As part of his agreement, Mr. Trump cold-called journalists to talk up All detergent, telling a Boston Globe reporter, “Unilever is a great company” and “This is a product my mother used.” He also recorded voice-overs for an online game that was part of an All sweepstakes, in which a tiny digital version of Mr. Trump did laundry and squawked one-liners like, “The Donald can do the work of 40 dry cleaners!”
The sweepstakes winner was Tracy Wright, a young mother from Brazil, Ind., who had bought her jug of detergent from a local Walmart. She got an all-expenses-paid trip to New York, where she had her picture taken with Mr. Trump.
“We met him the day after ‘The Apprentice’ season finale, so he was incredibly friendly,” she told her local newspaper. “He was in a great mood.”
Business Wisdom, at a Price
Around the world, the self-made-billionaire myth became a product to lure those in need of money.
With his penchant for using what he called “truthful hyperbole” to play on people’s desires, Mr. Trump had always skated close to the edge of fraud. Soon, he would be accused of crossing the line completely.
In his zeal to squeeze ever more dollars out of Mr. Burnett’s golden goose, Mr. Trump signed on to an array of questionable products and services, including some that claimed to sell insights into his business expertise. The first year of “The Apprentice” was barely over when Mr. Trump pocketed $300,000 to speak at an event in Dayton, Ohio, where attendees paid $2,995 to learn the secrets of instant wealth from a company that was later accused in a lawsuit of running a Ponzi scheme.
In his monologues, he made a virtue of his first round of casino failures, portraying himself as a victim whose grit and intelligence saved the day. People ate it up.
“His presence gives me reassurance,” Lillie Moss, who raided her retirement fund to buy an investment kit at the Dayton event, said of Mr. Trump.
The tax records show that another series of speaking engagements, sponsored by the Learning Annex, paid Mr. Trump $7.3 million for events with titles like “Real Estate Wealth Expo: One Weekend Can Make You a Millionaire.” A book he co-wrote with the Annex’s founder, “Think Big and Kick Ass: In Business and Life,” earned him royalties of $1.4 million.
The Learning Annex sponsored a series of events, like this one in 2005, that paid Mr. Trump $7.3 million, tax records show. Ruth Fremson/The New York Times
Unmentioned in the mythologizing were the millions in bailout money from his father or the losses he was reporting to the I.R.S. Nor was there any sense of the gigantic payday — revealed only through an examination of the tax data — that Mr. Trump was enjoying in exchange for lending his imprimatur to an increasingly cynical array of business ventures.
As the years went on, and the success of “The Apprentice” made Mr. Trump a household name far beyond New York, the chasm between truth and hyperbole widened. It was one thing to bray about his late mother — a multimillionaire with a maid and a Rolls-Royce — using All laundry detergent. Now, he was flogging things that could hurt people economically.
In what would be his most lucrative side deal, he teamed up with a multilevel marketing company, ACN, whose clients were told they could make a living from home by selling video phones, satellite television and other services. Investigated in several countries, ACN has left a trail of complaints that people were suckered into spending far more than they earned trying to peddle the company’s products.
Regulators in France concluded that “only 1 percent of people recruited could claim a satisfactory income,” and that the rest lost money or, at most, made about $35 a month, according to court records. Montana officials came to a similar conclusion, finding that the average participant in that state paid ACN about $750 in various fees but got back only $53.
ACN, which has never admitted wrongdoing while settling legal actions by state regulators, claims its business model is misunderstood; on its website, it once posted a page helpfully titled “The Difference in ACN and a Pyramid Scheme.” A class-action lawsuit pending against Mr. Trump and his family asserts that the Trump brand became central to ACN’s business strategy, citing one plaintiff who signed up after she “watched clips of ACN appearing on ‘Celebrity Apprentice.’”
ACN sold DVDs of Mr. Trump promoting its products, and devoted part of its website to its “Trump partnership,” featuring photos of him appearing at ACN events and his glowing testimonial: “ACN has a reputation for success. Success that’s really synonymous with the Trump name and other successful names, and you can be part of it.”
By the time Mr. Trump featured ACN’s video phone on “The Apprentice” in 2011, the technology was close to obsolete, and yet he played it up, saying, “I think the ACN video phone is amazing.”
Mr. Trump was paid $8.8. million over 10 years by ACN, a multilevel marketing company that was accused of taking advantage of vulnerable investors.
His tax returns reveal just how much the company was paying him for the happy talk: $8.8 million over 10 years, including $1 million in 2009 — the nadir of the Great Recession, when desperate people were drawn to promises of a fast payday. In fact, Mr. Trump actively capitalized on the economic anxiety.
In a separate deal he struck that same year, this one to promote the multilevel marketing of vitamins by a company that was rebranded the Trump Network, he gave speeches that persuaded some people to spend almost $500 for a starter kit and try to recruit friends and relatives. Mr. Trump said in a video that people “need a new dream.”
“The Trump Network wants to give millions of people renewed hope, and with an exciting plan to opt out of the recession,” he said.
Within a couple of years, the company behind the Trump Network, Ideal Health, was sold, and its owners declared bankruptcy. Still, it was long enough for Mr. Trump to make $2.6 million selling hope in a vitamin bottle, according to his tax records.
In 2016, he agreed to pay $25 million to settle litigation over Trump University, an unaccredited seminar that persuaded people to pay as much as $35,000 to learn the real estate trade. But that legal reckoning was the exception in a decade-long run by Mr. Trump and his company, described in the class-action suit, filed in 2018, as a “large and complex enterprise with a singular goal: to enrich themselves by systematically defrauding economically marginalized people looking to invest in their educations, start their own small businesses and pursue the American Dream.”
Low Risk, High Yield
Mr. Trump lent his name to buildings he didn’t own, collecting big fees as his investors lost millions.
In his sales pitches, Mr. Trump frequently boasted that he “owned buildings all over” Manhattan. Actually, although at one point “Trump” was emblazoned on at least 17 buildings, Mr. Trump owns all or a portion of only a half-dozen. Many of the others he had developed decades earlier and then sold, before his casino bankruptcies made credit harder to come by.
With the prospect of building suddenly less viable, Mr. Trump explored licensing his name to other developers’ projects. The idea gained traction after an obscure developer, Bayrock Group, started leasing office space on the 24th floor of Trump Tower, directly below Mr. Trump’s headquarters. At about $400,000 a year, and a total of $2.2 million by the time the lease ended, according to the tax records, it proved a good investment for Bayrock, which used its proximity to pitch project ideas to Mr. Trump.
Bayrock was a bit of a mystery. Its founder, Tevfik Arif, was a former Soviet-era official from Kazakhstan whose 2003 financial statement, showing $70 million in assets, had a caveat saying his own accountant could not vouch for it. Mr. Arif’s right hand was Felix Sater, a Russian émigré with ties to mobsters, who sometimes went by another name to obscure his criminal past.
Mr. Trump partnered on a condo-hotel business with Bayrock Group’s Tevfik Arif, center, and Felix Sater, right, a Russian émigré with a criminal past. Mark Von Holden/WireImage
Still, it was all good enough for Mr. Trump, who signed on to pursue an exciting concept: condo-hotels, in which buyers of units could rent them out when not using them. Even better, Bayrock mostly just wanted his name; the construction money would come from somewhere else.
Bayrock proposed to bring the Trump brand to hotels around the country and overseas, where Mr. Trump’s flamboyant taste for gold and glitz played well among wealthy foreigners with a caricatured notion of American success.
Years later, in a lawsuit deposition, Mr. Trump said that he discussed “numerous deals all over the world” with his new partners, and that “this was going to be Trump International Hotel and Tower Moscow, Kyiv, Istanbul, etc., Poland, Warsaw.”
At the same time, Mr. Trump asserted that because he was not actually the developer, he knew very little about what Bayrock was doing just two floors below his office. But internal Bayrock documents reviewed by The Times show that the company, right from the start, went looking for financing from Russia to pay for its Trump-branded hotels.
A draft plan from November 2003 titled “Russian fee agreement” called for an unnamed broker to provide $50 million for three Trump hotels in the United States and potentially “raise capital for all” of Bayrock’s Trump projects. A former Bayrock executive said the proposal never panned out, although the company later received $50 million from an Icelandic bank suspected of having Russian ties.
Trump SoHo, to which Mr. Trump licensed his name in an essentially risk-free project, reflected a milestone in the evolution of his business model. Todd Heisler/The New York Times
Ultimately, despite multiple attempts, the Trump-Bayrock partnership would find success only with the Trump SoHo condo-hotel in Manhattan. But it was a milestone in the evolution of Mr. Trump’s business model during the “Apprentice” era, showing that he could find easy profits from licensing his name not only to neckties and bedding but to entire buildings — and use the TV show to market them.
Unlike his Chicago tower, where he became embroiled in lawsuits over hundreds of millions of dollars in construction loans, Mr. Trump’s SoHo hotel was essentially risk-free for him. His tax records show that, between licensing and management fees, Trump companies involved in the project ultimately netted as much as $9 million, even though they did not build or finance it.
Awash in new licensing offers while riding the “Apprentice” wave, Mr. Trump in 2007 inaugurated the Trump Hotel Collection, with an emphasis on foreign projects. It was largely aspirational: A new website listed “future properties” in Toronto, Mexico, the Dominican Republic, Panama, Scotland and Dubai, among other locations.
But the fees were already pouring in. Mr. Trump’s profits from licensing deals, which in 2003 barely registered, climbed to $1.3 million two years later and then skyrocketed, hitting $29.7 million in 2010 before steadily declining, according to his tax records.
Because of how the licensing agreements were drafted, with sizable fees up front, Mr. Trump stood to gain even if a project failed. Of the 10 “future properties” initially listed on the hotel collection’s website, three never got off the ground, and five others either were not completed or later severed ties with Mr. Trump. Yet he still managed to collect a total of $46 million from them.
Questions have repeatedly been raised about Mr. Trump’s choice of projects, which often fell apart amid allegations and disputes.
In Rio de Janeiro, where his tax records show he deducted $14,000 for the cost of a background investigation when signing onto a hotel deal, Mr. Trump was later forced to pull out amid a bribery investigation into the developer. In Azerbaijan, where there is a history of corruption, developers with ties to a cabinet minister paid Mr. Trump $5 million to brand and manage a hotel that was never completed after a major backer dropped out of sight.
And buyers of units in a planned Trump condo-hotel in Mexico were burned after putting up some $32 million in deposits, only to see the project canceled with no refunds. In a lawsuit that was eventually settled, some of the buyers claimed they had been duped into believing Mr. Trump was an active participant in the project.
Buyers of units in a planned condo-hotel in Mexico put up some $32 million, only to see the project fall through with no refunds. Guillermo Arias/Associated Press
“In doing so,” the lawsuit said, “defendants induced buyers to rely on the ‘Trump brand’ and the Trump name as a legitimate, dependable, luxury real estate developer.”
In what became a recurring theme, Mr. Trump’s defense was that he had merely licensed his name, and therefore had no responsibility for the project’s collapse. As he explained in a deposition for another lawsuit, this one by investors in a failed Trump hotel in Fort Lauderdale, Fla., “the developer is really the one that is responsible.”
“We’re like a hotel company, Ritz-Carlton or Four Seasons or Waldorf Astoria,” Mr. Trump said. “We are a name.”
A Spending Spree
Flush with new cash, Mr. Trump bought luxurious golf courses that would fall deep into the red.
While Mr. Trump’s tax returns tell the story of how reality TV and its reflected glow made him rich, they also shed some light on an enduring question that has generated much head-scratching, if not dark speculation: Where did he get hundreds of millions of dollars to buy and prop up his golf resorts?
Mr. Trump had only two open golf courses and two more undergoing renovations at the time of his plunge into television, but golf — a pastime that he “spent an inordinate amount of time on,” his niece, Mary Trump, wrote in her recent family tell-all — always seemed destined to become his next financial sand trap.
“I have the best buildings in Manhattan. I have the best casinos in New Jersey. I build a great product,” Mr. Trump boasted to a reporter in 2002. “I actually have more fun building courses than I do playing.”
Beginning in 2006, and continuing over the next decade, he would accumulate 11 more golf courses, forming a new core of what he describes as his empire.
The amount of capital Mr. Trump has spent on his golf properties is staggering and has echoes of his earlier, ultimately disastrous, embrace of casinos. During a three-year period starting in 2014, he pumped $144.5 million into his Turnberry golf course in Scotland, his tax returns show, even as the property has continued booking losses year after year. He has put $213 million into his Doral resort in Florida, with similar results.
The new influx of cash allowed Mr. Trump to acquire new golf courses, which have been hemorrhaging millions of dollars for years. He has pumped hundreds of millions into his Doral resort in Florida, above. Scott McIntyre for The New York Times
Meanwhile, Mr. Trump’s main source of income — “The Apprentice” and licensing deals — went into a steep decline starting in 2011, falling, along with the show’s ratings, from $51 million that year to $21 million by 2014, and eventually to less than $3 million in 2018.
Which is where those unsubstantiated theories of secret payments from Russia or the mob come in.
His tax records provide more mundane answers. They reveal that as he was pouring money into the golf resorts, he also pulled money out of other places in ways that suggested an immediate need. In 2012, he borrowed $100 million against his equity in Trump Tower in Manhattan, one of his more valuable properties. A year later, he withdrew $95.8 million from his share of a real estate partnership that owns buildings in New York and California. And in 2014, he sold $98 million in stocks and bonds.
These one-time maneuvers, coupled with the more than $427 million from “The Apprentice” and licensing deals, would probably have provided enough cash to cover his golf course investments. But they cannot be repeated, and in at least one case — the Trump Tower mortgage — they need to be paid back.
In addition, he has huge balances on loans, soon to come due, from Deutsche Bank, including $160 million on his Washington hotel in the Old Post Office building and $148 million on the Doral golf resort. Neither of those businesses is turning a profit.
In a series of tweets on Monday morning, a day after The Times published the first part of its investigation of his tax-return data, Mr. Trump sought to refute any negative impression of his wealth, insisting that he has “very little debt compared to the value of assets,” and suggesting that he might release statements “showing all properties, assets and debts.” It is unclear what sort of statements he was referring to; the public financial disclosures he must file as president already list his assets and debts.
As the president enters the final weeks of his re-election campaign trailing in virtually all the polls, he is a man politically and financially challenged.
Many of the old financial escape hatches have closed. After he announced his candidacy in 2015 with racist comments about Mexicans, NBC, which carried “The Apprentice,” cut ties with him and he sold his interest in the Miss Universe pageant, another reliable moneymaker. Hotel licensing deals have mostly dried up.
Last month, as he prepared for a Republican convention that would market him as America’s savior in this dark and disordered hour, Mr. Trump turned to two entertainment industry veterans with experience generating the kind of razzle-dazzle that had worked so well in the past.
Both had helped produce “The Apprentice.”
Tax Records Reveal How Fame Gave Trump a $427 Million Lifeline - The New York Times
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