The Trump Brand Just Took Another Hit
Policy + Politics

The Trump Brand Just Took Another Hit

REUTERS/Joshua Roberts

It looks like Donald Trump’s vaunted business brand just took another hit.

The presumptive GOP presidential nominee is still enmeshed in the controversy over lawsuits charging fraud from students of the now defunct Trump University, as well as Trump’s racially charged comments that the federal judge overseeing one of those cases lacks objectivity because of his Mexican heritage.

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Now the billionaire New York real estate businessman has been hit by two devastating reports by USA Today and The Wall Street Journal documenting unsavory business tactics spanning the past four decades. According to the reports, Trump’s businesses stand accused of regularly failing to pay contractors, vendors, tradesmen and hotel and casino employees, with claims worth millions of dollars.

Trump has frequently portrayed himself on the campaign trail as a champion of the working class who will bring back jobs to economically distressed areas of the Midwest and Northeast. 

Yet the USA Today analysis found that the billionaire’s businesses have been involved in more than 3,500 lawsuits over the past 30 years involving disputes over payments. At least 60 of the lawsuits and hundreds of other liens, judgements and other government filings reviewed by USA Today involve people who accused Trump businesses of failing to pay them for work they performed.

The preponderance of the plaintiffs were small businessmen and ordinary Americans, ranging from a New Jersey glass company and carpet dealer to painters, plumbers, dishwashers, bartenders and even several lawyers who once represented Trump in some of these suits.

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One alleged victim of Trump’s hardball business tactics was a Philadelphia cabinet-builder, Edward Friel Jr., who landed a $400,000 contract to build the bases for slot machines, registration desks, bars and other cabinets at Harrah’s at Trump Plaza during the Atlantic City casino boom of the 1980s, according to the USA Today report.

The family cabinetry business, founded in the 1940s, completed its work in 1985 and submitted a final bill to the general contractor for the Trump Organization, the builder of the resort. The final bill came to $83,600, but the contractor refused to pay it. That loss sent the small company on a downward spiral, according to Paul Friel, the firm’s accountant and the son of the owner.

“That began the demise of the Edward J. Friel Company … which has been around since my grandfather,” he said.

More recently, Trump Miami Resort Management LLC last month settled with 48 servers at Trump’s Miami golf resort over failing to pay overtime for a special event, according to USA Today. Those settlements averaged about $800 for each worker and went as high as $3,000 for one, according to court records. While the money was peanuts for Trump and his business interests, it meant a lot to the low-income workers.

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Meanwhile, two different paint firms brought claims against Trump’s Doral golf resort in Florida for failing to pay for services, with one case settled and the other pending. The judge in the case that was settled became so exasperated with the Trump organization that he threatened to order the foreclosure of Doral unless it paid the paint company $30,000 for its work.

The Wall Street Journal documented similar tales of woe of contractors and workers who did business with Trump’s businesses. The newspaper said that a review of court filings from jurisdictions in 33 states revealed a pattern throughout Trump’s career “of sometimes refusing to pay what some business owners said Trump owed them.”

For example, Larry Walters, who supplied drapes to Trump’s hotel in Las Vegas eight years ago, told the newspaper that the developer, Trump Ruffin, refused to pay for additional work it demanded. “When Mr. Walters then refused to turn over some fabric, sheriff’s deputies burst into his factory after Trump Ruffin sued him,” writes the Journal. “Trucks took the fabric away.”

Trump boasts that he is a negotiator par excellence who made his fortune by outfoxing or beating down competitors, union leaders and ordinary workers – the very skills he promises to bring to the White House to “Make America Great Again.” He reportedly revels in his reputation as a skinflint who frequently refuses to pay outstanding legal and construction bills.

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Because the Trump organization is extraordinarily aggressive and willing to go to court at the drop of a hat to contest a payment, many small companies and vendors with modest resources can’t afford to engage in protracted legal proceedings and often settle with Trump or absorb the losses. Other bigger firms with the legal wherewithal have been willing to challenge him and have succeeded in getting their money.

“If they do a bad job, they have to suffer,” Trump told The New York Times earlier this year.  “If they overbill me or if they don’t do a good job, I take plenty of time to pay them and I negotiate with them.” In his interview with The Wall Street Journal, Trump said that: “I love to hold back and negotiate when people don’t do good work,” while paying others on time if he and other company officials are satisfied with the work.

“I pay thousands of bills on time,” he told the Journal, adding that suggesting otherwise is “disgusting.”

Moreover, some suppliers have come forward with testimonials that they never had a problem in their dealings with Trump or getting paid on time. Bart Halpern Inc., a New York City fabric company that sold upholstery, drapery and pillow material to Trump projects, is one of them. Bozena Dziewit, the company’s director of hospitality sales, said the firm was always paid on time and that “We always have a very good experience.”