December 2, 2016

Holy Conflict of Interest! The Firm Holding Much of Trump’s Debt May Be Up for Sale.

Would you want to buy up a US president’s debt?

Mark Lennihan/AP

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Coming to an auction block near you: Donald Trump’s $100 million mortgage on Trump Tower?

As Mother Jones has detailed for months, Trump owes hundreds of millions of dollars to a variety of lenders, giving his bankers a huge amount of potential leverage over the man who will soon occupy the most powerful office in the world. Already there are concerns about Trump’s biggest lender, the troubled Deutsche Bank, which he owes at least $364 million. On Friday, Reuters reported that his second-biggest lender, a small Wall Street firm called Ladder Capital Strategies, may be putting itself up for sale to the highest bidder. Public records show Trump owes the firm at least $282 million, on four lines of credit. This means that other big money players—Wall Street firms, American banks, overseas banks, financial institutions partly owned by foreign governments—could move to buy up the debts of a US president and create a host of conflicts of interest.

Ladder Capital holds mortgages on Trump Tower and 40 Wall Street, worth $100 million and $160 million respectively, and two smaller Trump properties in New York City. All the loans Trump has taken out since 2012 have been from either Deutsche Bank and Ladder Capital. That includes his most recent loan, a $7 million mortgage from Ladder Capital that Trump took out on three condo units in the Trump International Hotel Tower on New York City’s Columbus Circle. That loan was taken out in July, weeks after Trump’s most recent personal financial disclosure was filed.

Reuters reported that Ladder Capital is considering a sale and has hired Citibank to help manage the deal. Reuters cited sources who said the bank was looking at a sale as it “grapples with new regulations making selling on mortgages more difficult.” The firm’s primary business model is to package the loans it issues and sell them to other investors. Recent Securities and Exchange Commission filings show Ladder Capital has packaged the Trump International Hotel Tower mortgage as part of a large sale of mortgages. Despite this, on Trump’s personal financial disclosures, Ladder Capital is still listed as the lender Trump owes the money to.

It’s not immediately clear how a potential sale of Ladder Capital might affect Trump’s loans. But it raises the specter that some of Trump’s biggest loans will be available for anyone to purchase.

Between Deutsche Bank and Ladder Capital, Trump owes at least $646 million, and he has seven other loans listed on his financial disclosure form that could be worth another $125 million. Additionally, a real estate partnership Trump participates in borrowed $950 million from a group of lenders that includes the state-owned Bank of China. Trump’s involvement in that loan may violate the Constitution’s emoluments clause, which forbids top government officials from accepting financial benefits from a foreign government. The possibility that a foreign government could purchase Ladder Capital and its portfolio of loans, including Trump’s, would cause other complications for Trump and the conflicts of interest already saddling his soon-to-be presidency.

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WHO DOESN’T LOVE A POSITIVE STORY—OR TWO?

“Great journalism really does make a difference in this world: it can even save kids.”

That’s what a civil rights lawyer wrote to Julia Lurie, the day after her major investigation into a psychiatric hospital chain that uses foster children as “cash cows” published, letting her know he was using her findings that same day in a hearing to keep a child out of one of the facilities we investigated.

That’s awesome. As is the fact that Julia, who spent a full year reporting this challenging story, promptly heard from a Senate committee that will use her work in their own investigation of Universal Health Services. There’s no doubt her revelations will continue to have a big impact in the months and years to come.

Like another story about Mother Jones’ real-world impact.

This one, a multiyear investigation, published in 2021, exposed conditions in sugar work camps in the Dominican Republic owned by Central Romana—the conglomerate behind brands like C&H and Domino, whose product ends up in our Hershey bars and other sweets. A year ago, the Biden administration banned sugar imports from Central Romana. And just recently, we learned of a previously undisclosed investigation from the Department of Homeland Security, looking into working conditions at Central Romana. How big of a deal is this?

“This could be the first time a corporation would be held criminally liable for forced labor in their own supply chains,” according to a retired special agent we talked to.

Wow.

And it is only because Mother Jones is funded primarily by donations from readers that we can mount ambitious, yearlong—or more—investigations like these two stories that are making waves.

About that: It’s unfathomably hard in the news business right now, and we came up about $28,000 short during our recent fall fundraising campaign. We simply have to make that up soon to avoid falling further behind than can be made up for, or needing to somehow trim $1 million from our budget, like happened last year.

If you can, please support the reporting you get from Mother Jones—that exists to make a difference, not a profit—with a donation of any amount today. We need more donations than normal to come in from this specific blurb to help close our funding gap before it gets any bigger.

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