Trump and the National Enquirer’s Mutual Admiration Society

Donald Trump’s verbal assault on reporters who dared to ask question about his charitable activities displays a contempt for the media comparable to that of Richard Nixon and Spiro Agnew. Yet there is one media outlet for which the presumptive Republican nominee seems to have unbounded affection: the National Enquirer.

Much has been written about Trump’s fascination with the supermarket tabloid, usually with the assumption that it is simply an indication of low-brow reading habits. Yet there is more to Trump’s relationship with the current and former principals at the Enquirer that bears closer scrutiny.

Trump is apparently close with David Pecker, chief executive of American Media Inc., parent of the Enquirer and other tabloids. In 2010 New York’s Pace University announced that it would pay tribute to Pecker (an alumnus) and that the award would be presented by Trump, “a long-time friend and business associate.”

Last August, the New York Daily News, also noting the relationship between the two men, reported that the Enquirer had decided not to subject Trump to the kind of sensationalized reporting that it had used in the past to sink the presidential ambitions of John Edwards and Gary Hart. In fact, the Enquirer has published self-aggrandizing pieces written by Trump, attacked his Republican opponents and formally endorsed Trump, apparently the first time the tabloid has done so for a candidate.

American Media gained control of the Enquirer after the 1988 death of Generoso Pope Jr., who had purchased the publication in the early 1950s. The Enquirer had been founded in 1926 by William Griffin, a protege of William Randolph Hearst who shared the media baron’s isolationist views. Griffin was so outspoken in opposing U.S. involvement in World War II that he was among a group of people indicted in the 1940s for sedition and conspiring to impair the morale and loyalty of the armed forces. The charges against him were later dropped.

The Enquirer was struggling to survive when Pope acquired it, reportedly with the financial assistance of mobster Frank Costello, who was apparently close to Pope’s father, also named Generoso. The elder Pope was a political powerbroker in the Italian-American community as the publisher of the rightwing Italian-language newspaper Il Progresso. Until 1941 he was a supporter of Mussolini.

Along with his publishing enterprises, the elder Pope controlled Colonial Sand & Stone, which became the dominant ready-mix concrete provider in New York City. After his death, both Il Progresso and Colonial were taken over by his oldest son, Fortune Pope. Colonial retained its grip on New York’s construction industry until the 1970s and in all likelihood did business with Donald Trump’s father Fred and perhaps Donald himself during the early years of his career.

Meanwhile, Fortune’s eccentric brother Generoso turned the Enquirer into a thriving operation with a mix of sensationalism and scandal. It was not until American Media took it over that the publication began to dabble in political reporting and politics. Back in 1999, when Trump was considering his presidential bid, via the Reform Party, the Enquirer published a poll purportedly showing that the real estate developer would be a strong candidate. Trump, naturally, cited the poll in justifying his plans.

It is difficult to tell whether Pecker, who has made campaign contributions to prominent Democrats as well as Republicans, has been promoting Trump for ideological reasons or just because the colorful real estate developer and former reality TV star helps sell his publications. Pecker’s company used to publish Reality Weekly, which featured Trump during his “Apprentice” days. Earlier in his career, while at Hachette, Pecker published an in-house magazine called Trump Style that was distributed to visitors at Trump properties.

While the relationship between Pecker and Trump may have once been little more than matter of  cross-marketing, its role in the current presidential race is a lot more troubling.

Monsanto’s German Suitor Has Its Own Tainted Record

Monsanto, one of the most controversial corporations in the United States, now finds itself the target of a takeover campaign by German pharmaceutical and chemical giant Bayer. Would a change in ownership improve the behavior of the biotechnology company dubbed “Mutanto” by its critics?

Answering that question requires a look at Bayer’s own track record, which is far from unblemished. Most Americans associate Bayer with aspirin. The company created the analgesic in 1899, but during World War I the U.S. government seized Bayer’s American assets and allowed other firms to sell aspirin under the Bayer name until the German company bought back the rights in 1994.

In the 1920s Bayer was absorbed into the massive IG Farben cartel, which used slave labor and supported the Nazi regime. After the Second World War it re-emerged as one of the companies created through the break-up of IG Farben. During the 1950s it began to return to the U.S. market through efforts such as a joint venture with Monsanto (in its pre-agribusiness era) called Mobay Chemical.

As Bayer has stepped up its U.S. involvement over the past two decades it has gotten embroiled in one scandal after another. In 1997 one of its subsidiaries based in New Jersey pled guilty to criminal price-fixing and had to pay a $50 million fine. In 2000 Bayer had to pay $14 million to the federal government and the states to settle allegations that it inflated prices on drugs sold to the Medicaid program. In 2001 it was accused of price-gouging on the antibiotic Cipro, which was then in high demand because of the anthrax scare. It later had to pay $257 million to settle a federal lawsuit on Cipro overcharging.

In 2003 documents emerged suggesting that Bayer was aware of serious safety problems with its cholesterol drug Baycol long before the medication was withdrawn from the market. In 2004 Bayer had to pay a $66 million fine in another criminal price-fixing case. A 2008 explosion at a Bayer pesticide plant in West Virginia that killed two workers led to regulatory penalties including a $5.6 million settlement with the EPA. A report found that management deficiencies played a significant role in creating the conditions that caused the explosion.

That’s just the quick version of Bayer’s controversies. For more see the website of the Coalition against BAYER-dangers, a German watchdog group that has been monitoring the company for more than 30 years.

Perhaps most troubling is the fact that Bayer has already been active in the businesses in which Monsanto has gained its checkered reputation: agricultural chemicals and genetically modified seeds. Before the Monsanto bid, Bayer was in the news most often because of concerns that its pesticides were responsible for sharp drops in bee populations.

The chances that a Bayer takeover of Monsanto will get the U.S. company to clean up its act seem slim indeed. In fact, the combined company will probably be an even bigger threat.

President or Pitchman?

In submitting his new financial disclosure form to the Federal Election Commission, Donald Trump described it as “the largest in the history of the FEC.” Aside from being another example of his compulsive need to boast, the statement seems to demonstrate an astounding ignorance of what the disclosure process is all about.

It also raises questions as to what Trump’s entire candidacy is all about. Since announcing his bid for the Republican nomination last June, Trump has made countless statements about his supposed business prowess and the success of his various enterprises. He even insisted that multiple corporate bankruptcies were indications of shrewdness rather than failure, and he downplayed the long series of controversies and scandals that have marked his business career.

Trump is not the first candidate to try to use a business track record as the springboard to the presidency. Mitt Romney did essentially the same thing, though in his case he had already distanced himself from Bain Capital and had transitioned to the public sector by serving as the governor of Massachusetts.

Yet in Trump’s case, the objective seems to be more than simply asserting his qualifications based on past business activities. To a great extent, he has used his candidacy to promote his current endeavors. He uses every opportunity to tout his portfolio of businesses, and in March he literally put his wares on display by holding a news conference surrounded by piles of Trump Steaks, Trump Wine and other branded products.

He has also employed the campaign to promote the size of his personal fortune, demonstrating a preoccupation with asserting a net worth of $10 billion in the face of substantially smaller estimates by the likes of Forbes ($4.5 billion) and Bloomberg ($2.9 billion). A decade ago, Trump brought an unsuccessful $5 billion defamation lawsuit against an author who claimed that he was actually worth less than a billion.

Initially, it appeared that Trump’s unrestrained comments about Mexicans would harm his business interests as companies such as NBC Universal, Univision, Macy’s and Serta cut ties with him. Yet the newly released disclosure form suggests something different. The Washington Post concludes that “business has boomed in Donald Trump’s financial empire during the time he has run for president.”

This raises the question: Is Trump primarily interested in serving the country or serving his business interests? The candidate seems to have done little to separate himself from those interests during the campaign. In 1992 Ross Perot resigned as CEO of his computer services company while running for the presidency. Trump has made no secret of the fact that he continues to be involved in commercial endeavors.

Trump has not committed to selling off his interests should he reach the White House. He has suggested that his adult children would get more involved in managing those operations, but it is difficult to believe that he would recuse himself to any great extent. Moreover, Trump’s businesses are so bound up with him personally — his name, his image, etc. — that it is difficult to see how he could separate himself even if he wanted to.

This brings us back to the financial disclosure form. Trump apparently views it as an opportunity to “document” his net worth, but the real purpose, of course, is to identify possible conflicts of interest. In Trump’s case, with hundreds of companies under his control and licensing deals with many others, those potential conflicts are endless.

Trump appears to be oblivious to the issue. If his goal was actually to make the Trump Organization, his holding company, great again, he may very well have succeeded. It remains to be seen how the rest of the country fares.

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Note: Subsidy Tracker, the corporate welfare database I produce with my colleagues at Good Jobs First, has reached two milestones: 500,000 entries and $250 billion in taxpayer-funded giveaways.

Manufacturing McJobs at Nissan and Elsewhere

Bring back manufacturing jobs: For years this has been put forth as the silver bullet that would reverse the decline in U.S. living standards and put the economy back on a fast track. The only problem is that today’s production positions are not our grandparents’ factory jobs. In fact, they are often as substandard as the much reviled McJobs of the service sector.

The latest evidence of this comes in a report by the UC Berkeley Center for Labor Research and Education, which has issued a series of studies on how the growth of poorly paid jobs in retailing and fast food have burdened government with ever-rising social safety net costs. Now the Center shows how the same problem arises from the deterioration of job quality in manufacturing.  The study estimates that one-third of the families of frontline production workers have to resort to one or more safety net program and that the federal government and the states have been spending about $10 billion a year on their benefits.

What makes these hidden taxpayer costs all the more galling is that manufacturing companies enjoy special benefits in the federal tax code and receive lavish state and local economic development subsidies, the rationale for which is that the financial assistance supposedly helps create high-quality jobs.

The Center’s analysis deals in aggregates and thus does not single out individual companies, but it is not difficult to think of specific firms that contribute to the vicious cycle. A suitable poster child, it seems to me, is Nissan. It is one of those foreign carmakers credited with investing in U.S. manufacturing, though like the other transplants it did so in a pernicious way.

First, it tried to avoid being unionized by locating its facilities in states such as Mississippi and Tennessee that are known to be unfriendly to organized labor. After the United Auto Workers nonetheless launched an organizing drive, the company has done everything possible to thwart the union.

Second, while boasting that its hourly wage rates for permanent, full-time workers are close to those of the Big Three domestic automakers, Nissan has denied those pay levels to large chunks of its workforce. Roughly half of those working at the company’s plant in Canton, Mississippi are temps or leased workers with much lower pay and little in the way of benefits.

It is significant that in the Center’s report, Mississippi — which has also attracted manufacturing investments from other foreign firms such as Toyota and Yokohama Rubber — has the highest rate of participation (59 percent) in safety net programs by families of production workers. The Magnolia State may have experienced a manufacturing revival, but many of those new jobs are so poorly paid that they are creating a burden for taxpayers.

At the same time, Mississippi is among the more generous states in dishing out the subsidies to those foreign investors. My colleague Kasia Tarczynska and I discovered that the value of the incentive package given to Nissan in 2000 will turn out to cost $1.3 billion — far more than was originally reported. Toyota got a $354 million deal in 2007, and Yokohama Rubber got a $130 million one in 2013.

There’s a lot of talk these days about bad trade deals and resulting job losses. We also need to worry about what happens when we gain employment from international investment but the jobs turn out to be lousy ones.

Johnson & Johnson’s Self-Inflicted Wounds

Baby powder, the product along with Band-Aids that for decades gave Johnson & Johnson a benign image, is now the latest symbol of its deterioration into one of the most unreliable of large corporations. Juries have recently awarded a total of $127 million to women with ovarian cancer who charge that their disease was caused by the talc in the company’s powder.

J&J, which disputes the allegations and is appealing the verdicts, faces some 1,400 additional similar lawsuits brought by plaintiffs’ lawyers armed with company documents they say show that J&J was concerned about a link between talcum powder and ovarian cancer as early as the 1970s. It is unclear what will happen with the litigation, but the lawsuits are part of a long string of scandals that have plagued the giant medical products firm during the past decade and forced it to pay out vast sums in civil settlements and criminal fines.

The most serious of those cases involved allegations that several of its subsidiaries marketed prescription drugs for purposes not approved as safe by the Food and Drug Administration, thus creating potentially life-threatening risks for patients.

In 2010 J&J subsidiaries Ortho-McNeil Pharmaceutical and Ortho-McNeil-Janssen had to pay $81 million to settle charges that they promoted their epilepsy drug Topamax for uses not approved as safe. The following year, J&J subsidiary Scios Inc. had to pay $85 million to settle similar charges relating to its heart failure drug Natrecor.

In 2013 the Justice Department announced that J&J and several of its subsidiaries would pay more than $2.2 billion in criminal fines and civil settlements to resolve allegations that the company had marketed it anti-psychotic medication Risperdal and other drugs for unapproved uses as well as allegations that they had paid kickbacks to physicians and pharmacists to encourage off-label usage. The amount included $485 million in criminal fines and forfeiture and $1.72 billion in civil settlements with both the federal government and 45 states that had also sued the company.

At a press conference announcing the resolution of the case, U.S. Attorney General Eric Holder said the company’s practices ”recklessly put at risk the health of some of the most vulnerable members of our society — including young children, the elderly and the disabled.”

Other J&J problems resulted from faulty production practices. During 2009 and 2010 the company had to announce around a dozen recalls of medications, contact lenses and hip implants. The most serious of these was the massive recall of liquid Tylenol and Motrin for infants and children after batches of the medication were found to be contaminated with metal particles.

The company’s handling of the matter was so poor that J&J subsidiary McNeil-PPC became the subject of a criminal investigation and later entered a guilty plea and paid a criminal fine of $20 million and forfeited $5 million.

J&J also faced criminal charges in an investigation of questionable foreign transactions. In 2011 it agreed to pay a $21.4 million criminal penalty as part of a deferred prosecution agreement with the Justice Department resolving allegations of improper payments by J&J subsidiaries to government officials in Greece, Poland and Romania in violation of the Foreign Corrupt Practices Act. The settlement also covered kickbacks paid to the former government of Iraq under the United Nations Oil for Food Program.

All of this has been a humiliating comedown for a company that was once regarded as a model of corporate social responsibility and which set the standard for crisis management in its handling of the 1980s episode in which a madman laced packages of Tylenol with cyanide. While the company was then being victimized, the more recent crises have been largely of its own making.

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Note: This piece is drawn from my new Corporate Rap Sheet on Johnson & Johnson, which can be found here.

Remembering Fallen Workers and Negligent Corporations

workers memorialWorkers Memorial Day (April 28) is not one of those holidays on which to give thanks and feel good. It is a time to be angry about the fact that nearly 5,000 people each year are killed on the job in the United States in accidents that in many cases were the result of management negligence. Millions more are injured or contract occupational illnesses. The just-published 25th edition of the AFL-CIO’s Death on the Job annual report makes for sobering reading.

While this day is a time to “remember those who have suffered and died on the job,” it should also be an occasion to point the finger at those corporations which have done the most to cause those outcomes. A list can be found by consulting Violation Tracker, the database my colleagues and I at the Corporate Research Project of Good Jobs First introduced last fall.

We identified thousands of individual companies that have been hit with serious, willful and repeated violations by the Occupational Safety and Health Administration since the beginning of 2010, and we linked many of those to parent companies. These large firms, which have the resources to ensure safe conditions, probably bear the most responsibility for workplace harms. Here’s a dishonor roll of big business occupational safety culprits.

BP. The British oil giant with extensive U.S. operations is a poster boy for safety lapses. Since the beginning of 2010 it has had to pay more than $60 million to settlement OSHA cases — an amazing amount given the pitifully low levels at which the agency’s standard penalties have been kept by Congress. Most of the penalty total derived from an explosion at the company’s Texas City refinery that killed 15 workers and injured 180 others.

Louis Dreyfus Group. This French conglomerate is on the list because of its ownership of Imperial Sugar, which in 2010 had to pay OSHA $6 million to settle more than 120 violations linked to a 2008 explosion at its plant in Port Wentworth, Georgia.

Tesoro. Criticized by the United Steelworkers for its safety shortcomings, the oil refiner has accumulated some $2.5 million in OSHA penalties since 2010. A report by the U.S. Chemical Safety Board cited “safety culture deficiencies” as among the causes of a 2010 explosion at a Tesoro refinery in Anacortes, Washington that killed seven workers.

Dollar Tree. This deep-discount retailer has racked up more than $2 million in OSHA penalties since 2010 because of repeated violations for piling boxes in storage areas of its stores to dangerous heights and blocking emergency exits.

Ashley Furniture. This retailer and manufacturer was fined $1.8 million last year for 38 willful, serious or repeated violations at a plant in Wisconsin stemming from the company’s failure to protect workers from moving equipment parts. One worker lost three fingers while operating a woodworking machine lacking required safety protections. OSHA later proposed another $431,000 in fines for similar problems at another Ashley facility.

Chevron. The petroleum giant has been hit with more than $1 million in OSHA fines since 2010, most of that amount coming from a slew of serious violations relating to a 2012 fire at the company’s refinery in Richmond, California.

While remembering fallen workers let’s not forget these companies and others whose negligence was often to blame.

Emission Cheating and Lead Poisoning

Michigan Attorney General Bill Schuette announces Flint charges

Two legal cases involving egregious harm to public health have moved forward in recent days, though in very different ways. In one case an aggressive prosecutor, defying expectations, filed criminal charges against three individuals and vowed that they “are only the beginning. There will be more to come — that I can guarantee you.” In the other case, a large company reached a deal in which it will pay to modify or buy back hundreds of thousands of defective products.

The case in which the culprits are deservedly having the book thrown at them is the Flint water crisis, while in the other the boom is not yet being lowered on Volkswagen. The first involves misconduct by public officials, the second is a case of brazen corporate crime.

Admittedly, the settlement framework announced in the VW case does not necessarily reflect the full scope of the legal issues facing the automaker in connection with its systematic cheating in auto emission testing. It is not yet known whether the Justice Department’s reported criminal investigation of the matter will result in the filing of charges, nor is it clear whether the civil penalties that may be imposed on VW will come close to the theoretical maximum of $18 billion.

Yet the decision to announce the tentative buyback deal by itself creates the impression that it is the centerpiece of the resolution of the VW case. It’s being estimated that the U.S. buyback would cost the company about $7 billion. If that turns out to be the main cost imposed on VW, the automaker would be getting a bargain.

Causing financial harm to car owners is far from the only sin for which VW has to be held accountable, and it is probably not the most serious one. Of far more consequence are the environmental and public health impacts of the enormous amount of additional pollution that the VW engines have been spewing into the air. What started out as an effort to circumvent regulations will end up causing an unknown number of cases of asthma, bronchitis, emphysema, and possibly lung cancer.

There’s also the issue of deterrence. If VW and its relevant officials do not face serious consequences for their actions, people at other corporations may think they can also flout vital regulations. It’s already clear that VW’s emission fraud was not an anomaly. Mitsubishi just admitted it has been doing the same thing in Japan for at least one of its vehicles.

We don’t yet know the full story of what happened at VW much less Mitsubishi, yet it is likely that flagrant emissions deception arose out of a corporate mindset that sees regulations as obstacles to be overcome rather than legitimate rules designed to protect the public. That mindset will not change until corporations and individuals within them pay as heavy a price for their transgressions as that facing the public officials who poisoned the children of Flint.

The Wrongs of States’ Rights

The publication of the Panama Papers is a bombshell, though the fallout is being felt much more in countries such as Iceland than in the United States. It’s true that the revelations about offshore tax havens have mentioned domestic counterparts such as Delaware, Nevada and Wyoming, but officials in those states don’t seem to think that any action needs to be taken. As the headline of an article in the BNA Daily Tax Report put it: STATES GIVE GROUP SHRUG TO PANAMA PAPERS.

One reason for the tepid reaction is that the criticisms have been heard before. As BNA points out, a 2006 report from the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) listed the three states as being especially appealing to those seeking to create shell companies.

Another basis for complacency by the states is that their practices are part of a long and unfortunate tradition in the United States politely called federalism, but which is really a race to the bottom when it comes to oversight of corporations and the wealthy.

This trend dates back to the 19th Century, when the efforts of tycoons such as John D. Rockefeller to create vast industrial empires came up against the fact that state laws governing corporate charters put restrictions on the size and scope of a corporation’s activities, including the ownership of out-of-state companies. Rockefeller’s flagship firm Standard Oil of Ohio tried to get around this by creating the Standard Oil trust, in which affiliates were nominally independent but were actually controlled by a centralized board chosen by Rockefeller. Similar trusts were created in a variety of other industries.

Standard Oil’s transparent effort to circumvent state law was eventually struck down by the Ohio Supreme Court, but by that time Rockefeller and other robber barons had a new tool at their disposal: the willingness of some states to water down their chartering regulations to make them more attractive to big business.

The pioneer of this practice was New Jersey, which adopted a series of legislative measures from the 1870s through the 1890s to make its regulations more business-friendly. During this period, New Jersey became the destination of choice for trusts looking to legitimize themselves by reincorporating in a state that had no problem with bigness. That position was reinforced after Standard Oil made the Garden State its new base of operations. Muckraker Lincoln Steffens took to calling New Jersey the “traitor state.”

Other states sought to get in on this action. In 1899 Delaware adopted a corporation law that was even looser than New Jersey’s and had lower incorporation fees and franchise taxes. After New Jersey later changed course and went back to stricter corporation laws, it was Delaware that became the new mecca of corporations and has remained so to the present day.

Looser chartering procedures not only helped large corporations get larger but also made it easier for both businesses and wealthy individuals to set up the kind of shell companies highlighted in the Panama Papers. The ability and willingness of states to compete with one another to offer the most corporate-friendly practices goes well beyond company formation and governance.

Two areas in which the effects have been most pernicious are economic development and labor relations. Starting in the 1930s but especially during the past few decades, states have been willing to hand over larger and larger “incentive” packages to corporations to lure investments.  For example, in 2014, following a multi-state competition, tax haven Nevada gave away nearly $1.3 billion in taxpayer revenue to get Tesla Motors to locate an electric-car battery plant in the state.

Some states also lure companies with the promise of weak or non-existent labor unions. Ever since the Tart-Hartley Act of 1947, states have had the right to enact laws outlawing union security provisions in collective bargaining agreements. These so-called right-to-work laws tend to weaken the ability of unions to organize while saddling existing unions with lots of free riders who don’t contribute to the cost of running the organization.

It’s widely understood that the notion of states’ rights is often a smokescreen for racial discrimination, but it’s also part of what enables other retrograde practices such as union-busting, corporate welfare and tax dodging.

Trump’s Corporate Rap Sheet

For more than 30 years, Donald Trump has been almost continuously in the public eye, portraying himself as the epitome of business success and shrewd dealmaking.

He took a business founded by his father to build modest middle-class housing in the outer boroughs of New York City and transformed it into a high-profile operation focused on glitzy luxury condominiums, hotels, casinos and golf courses around the world. Operating through the Trump Organization, his family holding company, Trump also capitalized on his reality-TV-enhanced name recognition in a wide range of licensing deals.

Trump’s decision to enter the race for the Republican presidential nomination in 2015 has brought a great deal of new attention to his wide range of business activities and the controversies associated with many of them.  Those controversies — involving issues such as alleged racial discrimination, lobbying violations, investor and consumer deception, tax abatements, workplace safety violations, union avoidance and environmental harm — are summarized in my new Corporate Rap Sheet on the Trump Organization. Here are some highlights:

  • In 1973 the Justice Department filed a suit in federal court accusing Donald Trump and his father Fred Trump of discriminating against African-Americans in apartment rentals, mostly in Brooklyn and Queens. Donald Trump vigorously disputed the charges and filed a $100 million countersuit while complaining that the government was trying to pressure him to rent to “welfare clients.” Trump claimed that doing so would be unfair to other tenants and warned that it would result in “massive fleeing.” In 1975 the Trumps signed an agreement with the Justice Department in which they did not admit to past discrimination but promised not to discriminate against African-Americans and other minorities in the future.
  • In 1991 the New Jersey Division of Gaming Enforcement announced that the Trump Castle Casino Resort, then owned by Donald Trump, would pay $30,000 as part of a settlement of a case in which Trump’s father was found to have improperly lent $3.5 million to the Atlantic City casino by purchasing gambling chips not intended to be used for bets. The transaction, designed to help the casino’s cash-flow problems, was allowed to proceed when Fred Trump agreed to apply for a license allowing him to lend money to the business.
  • In 1998 the Trump Taj Mahal, then still controlled by Trump, was fined $477,000 for currency transaction reporting violations. The Taj Mahal subsequently received numerous warnings about such issues, and in 2015, by which time it was controlled by Carl Icahn, the Atlantic City casino was fined $10 million for “willful and repeated violations of the Bank Secrecy Act.”
  • In 2000 Trump and some of his associates had to pay $250,000 and issue a public apology to resolve a case brought by the New York Temporary State Commission on Lobbying over the failure to disclose that they had secretly financed newspaper advertisements opposing casino gambling in the Catskills. Trump was said to have been concerned that Catskills casinos would siphon business from the Atlantic City casinos he owned at the time.
  • In 2002 the Securities and Exchange Commission announced that Trump Hotels and Casino Resorts had “recklessly” misled investors in a 1999 earnings release that used pro forma figures to tout the company’s purportedly positive results but failed to disclose that they were primarily attributable to an unusual one-time gain rather than ongoing operations. No penalty was imposed on the company, which consented to the SEC’s cease-and-desist order.
  • In 2013 New York Attorney General Eric Schneiderman filed a civil lawsuit against the Trump Entrepreneur Initiative (formerly known as Trump University), its former president and Donald Trump personally “for engaging in persistent fraudulent, illegal and deceptive conduct.” Schneiderman alleged that the business “misled consumers into paying for a series of expensive courses that did not deliver on their promises.” The suit asked for “full restitution for the more than 5,000 consumers nationwide who were defrauded of over $40 million in the scheme, disgorgement of profits, as well as costs and penalties and injunctive relief prohibiting these types of illegal practices going forward.” The case is pending.
  • In 2006 Donald Trump and the Los Angeles developer Irongate announced plans for a luxury condominium  and hotel project in North Baja, Mexico, south of San Diego. Two years later, the San Diego Union-Tribune reported that the project still had not received all of its required permits and was falling behind schedule. In 2009, as the delayed continued, Trump removed his name from the project, which soon failed. Purchasers sued Trump, saying they were misled into thinking they were buying into a Trump development rather than one that simply licensed his name. In 2013 Trump reached a settlement with the plaintiffs; the details were not disclosed.
  • After dealers at the Trump Plaza voted overwhelmingly to join the United Auto Workers union in 2007, the management of the casino filed a challenge with the National Labor Relations Board. The UAW called the move an effort to delay collective bargaining. The stance of Trump management may have been a factor in the UAW’s narrow loss in a subsequent representation election at the Trump Marina. The vote at Trump Plaza was certified, but the UAW had difficulty negotiating a contract, even after the NLRB ordered the company to bargain in good faith. It appears that Trump managers dragged out the legal dispute until the Trump Plaza closed in 2014. In December 2015 the management of the non-casino Trump International Hotel Las Vegas challenged a vote by workers to be represented by the Culinary Workers Union Local 226 and the Bartenders Union Local 165 (photo). A hearing officer for the NLRB rejected the challenge, and the unions were certified in April 2016.
  • In April 2016 the U.S. Consumer Product Safety Commission announced that about 20,000 Ivanka Trump-branded women’s scarves made in China were being recalled because they did not meet federal flammability standards for clothing textiles, thus posing a burn risk. The importer of the scarves, GBG Accessories, has a licensing arrangement with Ivanka Trump, daughter of Donald Trump and an executive at the Trump Organization.

The full Corporate Rap Sheet on the Trump Organization can be found here.

Trump and Workplace Safety

trump_sohoLike the other Republican candidates, Donald Trump bashes federal regulation of business. He’s called the Environmental Protection Agency “a disgrace,” saying it is “making it impossible” for companies to function. Yet it’s difficult to find any statements by Trump on another favorite regulatory whipping boy for conservatives: the Occupational Safety and Health Administration.

Trump’s silence on the subject is all the more significant given that in his business career he has had personal experience with workplace safety issues. Those dealings have not always put him in the best light.

The biggest controversy he has faced in this area involves the Trump SoHo New York. During construction of the high-rise hotel in January 2008, a portion of the top two floors buckled while concrete was being poured, sending one worker, Yurly Yanchytsky, plummeting 42 stories to his death and injuring three others, one of whom survived only because he fell into protective netting (photo).

All of the workers were employees of DiFama Concrete, a subcontractor which was charged by OSHA with various violations of regulations relating to cast-in-place concrete and fall protection. The agency initially imposed 10 violations with total penalties of $104,000. The company negotiated those down to five violations and penalties of $44,000.

This was not the first blemish on DiFama’s safety record. According to the OSHA inspection database, during the previous four years the company had been cited by OSHA for about a dozen serious violations and initially penalized $97,000 (negotiated down to about $67,000). One of those cases also involved a fatality. DiFama, by the way, was founded by Joseph Fama, who had been identified as an associate of the Lucchese organized crime family. In 2005 he divested his interest in the firm because he was being imprisoned after pleading guilty to federal racketeering and extortion charges.

Trump initially distanced himself from the accident, saying that he had simply licensed his name to the project. Yet the New York Daily News reported last year that a top official at Bovis Lend Lease, the general contractor for the project, stated in a deposition that Trump had personally reviewed the agreements with the subcontractors, including the one with DiFama. The Trump SoHo is currently listed on the Trump Organization website as part of its real estate portfolio and its hotel collection.

The SoHo hotel is not the only Trump-related property to have had problems with workplace safety. The OSHA inspection database lists other violations at places such as the Trump International Hotel & Tower Las Vegas. Undoubtedly, there are many more listed under the names of the contractors and subcontractors hired on the various projects. Inspection records from the 1980s show numerous violations at the Atlantic City casinos Trump owned at the time but subsequently had to sell.

Trump has boasted that he would be “the greatest jobs president that God has ever created.” It remains unclear how important it is to him that those jobs be free from undue safety and health risks.