Business Since Birth: Trump’s Children and the Tangle That Awaits
Donald J. Trump and his
family in October during the opening ceremony for the Trump
International Hotel in Washington. The hotel is in the federal
government’s Old Post Office Building.Credit
Stephen Crowley/The New York Times
When Donald J. Trump
hosted a foreign leader for the first time as president-elect, the
guest list included a curious entry: Mr. Trump’s daughter Ivanka, who looked on last month while he and Prime Minister Shinzo Abe of Japan chatted on a white couch high above Manhattan.
Some 6,700 miles from Trump Tower, in Tokyo, another exclusive gathering was already underway: a two-day private viewing of Ivanka Trump products, teeming with Trump-branded treasures like a sample of the pale pink dress Ms. Trump wore to introduce her father at the Republican National Convention.
Ms.
Trump is nearing a licensing deal with the Japanese apparel giant Sanei
International, both parties told The New York Times. The largest
shareholder of Sanei’s parent company is the Development Bank of Japan,
which is wholly owned by the Japanese government.
Discussions
for the deal have been active for about two years, Ms. Trump’s company
said. In that time, she has become something of a local fascination. “At
the moment,” said Sayumi Gunji, a lifestyle-magazine editor who
attended the viewing, “Ivanka is even more popular here than Mr. Trump.”
The circumstances highlight the remarkable tangle
awaiting the Trump family, its sprawling business empire and those who
have interacted with the family at home and abroad — a web of
complications that seems certain to persist even if Mr. Trump makes good
on his promise to remove himself from his company’s business
operations.
Since
his election, Mr. Trump has chafed at the suggestion that keeping his
business in the family could create problems, despite several episodes
during his transition that seemed to mix business and diplomacy. While
he has insisted that he faces no legal requirement to turn over the
company, the Trump Organization has said it is preparing an “immediate
transfer of management” to Mr. Trump’s three eldest children — Donald
Jr., 38; Ivanka, 35; and Eric, 32 — along with a team of executives.
Last
week, the president-elect said on Twitter that he would make an
announcement with the children on Dec. 15 about “leaving my great
business in total in order to fully focus on running the country.” Doing
so is “visually important,” he wrote, “to in no way have a conflict of
interest with my various businesses.”
Yet
an examination of the professional histories of the three children —
who also serve on the presidential transition team — shows how deeply
the Trump family, Trump business and Trump politics are interwoven,
raising significant doubts about how meaningful a wall can ever be
erected between Mr. Trump and his heirs at the Trump Organization.
For
years, the three siblings have operated with few rigid dividing lines
in their international travels as ambassadors of the Trump brand,
allowing them to lean heavily on the reputation and financial backing of
their father while establishing their own credibility in business.
It is not merely that the Trumps are at peace commingling family and business. They have known no other way.
Officially,
all three siblings are executive vice presidents for development and
acquisitions. Practically, they have served as their father’s advance
guard: the polished public faces of the next Trump generation,
conducting initial meetings with prospective partners and reporting back
to Mr. Trump.
“We
don’t take titles particularly seriously at the Trump Organization,”
Ms. Trump said in a deposition this year. In depositions in 2011, both
brothers likened the company to a “mom and pop” operation.
Since the three joined the business, shortly after each graduated from college, lines have had a way of blurring.
When
Donald Trump Jr.’s investment in a concrete paneling business in South
Carolina faltered in recent years, leaving him personally responsible
for a loan of more than $3 million, the Trump Organization helped bail
him out.
Before Eric Trump,
who oversees Trump golf courses and a Virginia winery, faced
questioning in a lawsuit from aggrieved club members in Florida, his
father signed a letter saying that unhappy patrons would be “out.”
Photo
Ivanka Trump promoting her
Ready-to-Wear Collection in 2012 in New York. Her company’s products,
including clothing, jewelry and handbags, are sold around the world.Credit
Slaven Vlasic/Getty Images
Ivanka
Trump, the only sibling to match her father’s instinct for
self-commodification, has used the Trump Organization’s payroll,
information technology and human resources for her separate brand. Her
website’s domain was registered by Trump Organization lawyers.
“It
is, of course, an advantage to be my father’s daughter,” Ms. Trump told
an audience in Malaysia, via videoconference, in 2008. “I think it has
afforded me many great opportunities.”
All
three children declined to be interviewed for this article and did not
respond to written questions sent to the Trump Organization about their
outside business ties. In its statement about the transfer of
management, the Trump Organization said that “the structure that is
ultimately selected will comply with all applicable rules and
regulations.”
Still,
for an enterprise premised in large measure on the relentless marketing
of a surname, the most famous Trump cannot help looming largest in
perpetuity, experts in government ethics say, opening the door to conflicts inside and outside the United States.
“Giving
to the Trump family would be seen by many foreign leaders as the way to
get in with the Trump administration,” said Meredith McGehee, an
adviser to the Campaign Legal Center, a nonprofit group, who worried
that companies might be tempted to direct business to the Trump children
to curry favor with their father.
Already, complications abound.
The
children each hold a stake in the lease that allows the organization to
operate the Trump International Hotel out of the federal government’s
Old Post Office Building in Washington. Mr. Trump, as president, will
appoint the head of the General Services Administration, which manages
the property, while his children oversee a hotel with millions of
dollars in ties to the agency.
During the transition — in which Ms. Trump’s husband, Jared Kushner, is also a key player — diplomatic standards have sometimes been muddied, assuming the freewheeling feel of Mr. Trump’s campaign and business life.
Photo
Donald Trump Jr., left, and
Eric Trump, right, with the Philippine developer Jose E. B. Antonio in
2012. Mr. Antonio, who was recently named a special envoy to the United
States, is collaborating with the Trumps on a tower in Manila.Credit
Pat Roque/Associated Press
In
addition to attending the meeting with Mr. Abe, Ms. Trump was present
for her father’s initial conversation with President Mauricio Macri of
Argentina. The children also met recently with Jose E. B. Antonio, a
Philippine developer who is collaborating with the Trumps on a tower in
Manila and who in October was named a special envoy to the United States
by the Philippine president, Rodrigo Duterte.
The
business partnership grew out of a friendship between Mr. Antonio’s son
Robbie and Ms. Trump. Eric Trump is also listed on an advisory
committee for one of the younger Mr. Antonio’s ventures: a company
making luxury modular homes.
Even
nonbusiness expeditions have grown more fraught since Election Day.
Over Thanksgiving weekend, Donald Trump Jr. traveled to hunt wild goats
in Turkey, where the elder Mr. Trump has “a little conflict of
interest,” he acknowledged in a radio interview last year, because of “a
major, major building in Istanbul” — actually twin Trump Towers.
Security for the hunt was high, with private guards and Turkish
intelligence officers, according to an official involved in the trip who
was not authorized to discuss it.
Long
before their father’s election, the Trump children’s international
trips often included audiences with heads of state. “Met with the
president,” Donald Jr. said after an outing in Colombia, describing his
work life as part of a Trump-branded video in 2011. “Did a bunch of other stuff.”
At times, the president-elect has grown incredulous when pressed on the specter of conflicts.
In an interview
last month with The Times, he wondered aloud what harm might come from,
say, taking a picture with business partners for a project his children
were leading. He suggested some critics would prefer that he “never,
ever see my daughter Ivanka again.”
He allowed, though, that his election had changed at least one thing.
“The brand is certainly a hotter brand than it was before,” he said. “I can’t help that, but I don’t care.”
Photo
Ms. Trump and her brothers Donald Jr., center, and Eric in a construction elevator in New York in 2007.Credit
Timothy A. Clary/Agence France-Presse — Getty Images
Growing Up in the Business
Grooming began early in the Trump family.
For
as long as they can remember, the children visited job sites, as Mr.
Trump had done as a boy with his father, Fred. They sat in on meetings
with executives and government officials, where, between fits of
deal-making, Mr. Trump held forth on his daughter’s progress in school.
They came to learn that the surest way to reach Mr. Trump was to call
the office.
“I always joke, I have been working in the company for 37 years,” Donald Jr. said in a Fox News special, “Meet the Trumps,” this year, “because we had that kind of level of access and because he was always there with us.”
His first job, as a teenager, was at the Trump Castle marina in Atlantic City, where he earned minimum wage, plus tips, as a dock attendant.
One
of Ivanka Trump’s earliest architectural feats came when she was 6,
according to family lore: She stole her younger brother’s Lego set, she recalled in 2007,
and built a model of Trump Tower in his room. Four days later, she
said, her father scolded her — for rendering the structure with five
setbacks instead of four.
Despite
this lengthy tutelage, Mr. Trump resisted a presidential run in 2012 in
part because he did not believe his children were ready to succeed him.
(The president-elect also has a daughter Tiffany, 23, from his second
marriage, and a son Barron, 10, with his current wife, Melania.)
While
the eldest three have been presented, with Trumpian gusto, as business
successes of the highest order, there have been some stumbles —
cushioned often by the built-in advantages of being a Trump.
The
succession plan itself has not always been smooth. For a time, Donald
Jr., who did not speak to his father for a year after his parents’
divorce, was ambivalent about joining the business, spending a year
after college in Colorado working in a bar and hunting in his spare
time.
Since
joining the Trump Organization in 2001, moving quickly to learn the
intricacies of financing and construction, he has said repeatedly that
he does not expect preferential treatment.
“He
puts on zero in the way of airs,” said Mel M. Immergut, a lawyer in New
York who has long known the younger Mr. Trump and said he did not
support the elder’s candidacy, or anyone else’s.
But
as Donald Jr. has sought to establish his own business identity, he has
borrowed from his father’s playbook — and, occasionally, his payroll.
He
and Ivanka were paid speakers at a “creating wealth” forum that was
described as free but featured event promoters seeking to enlist
attendees for expensive courses on how to get rich.
He
has positioned himself as a spokesman for a hodgepodge of companies,
including Cambridge Who’s Who, a publisher that produces a registry in
which consumers pay to be listed. The younger Mr. Trump spoke about the
company during interviews on Fox Business Network and TheStreet.com.
Cambridge, which has drawn hundreds of complaints from customers who say they were misled by its promises, said it had benefited from its partnership with Donald Jr. through “leveraging relationships built by the Trump empire.”
In
2011, Donald Jr. also became the public face of a Tulsa, Okla.-based
company, MacroSolve, that primarily sued other companies, like Facebook
and Walmart, over claims that they had infringed on its patent for a
mobile device application. After several setbacks in court, the company
has changed its focus.
Yet
it is his foray into South Carolina manufacturing that offers perhaps
the most unfiltered view of Donald Jr.’s independent business dealings.
Photo
Titan Atlas Manufacturing in
North Charleston, S.C. When Donald Trump Jr.’s investment in the
business faltered in recent years, leaving him personally responsible
for a loan of more than $3 million, the Trump Organization helped bail
him out.Credit
Kate Thornton for The New York Times
In
2010, the younger Mr. Trump helped found a company in the depressed
suburb North Charleston called Titan Atlas Manufacturing, which made
cast panels for prefabricated houses.
Titan Atlas’s chief executive was an old friend
named Jeremy Blackburn, who, before the company’s formation,
acknowledged while settling a lawsuit that he had been part of a scheme
to defraud a businessman who claimed he had lost $1 million. In an
email, Mr. Blackburn said he had done nothing wrong.
Along
with the North Charleston project, Mr. Trump and Mr. Blackburn sought
business deals in Mexico and Colombia, traveling with executives of the
Trump Organization and Yun Capital, an investment firm involved in Trump
Organization projects abroad. In 2011, Yun Capital registered the
trademark JB Development on Mr. Blackburn’s behalf, filings show.
By
2012, Titan Atlas was mired in debt, prompting a suit from a
Philadelphia law firm it had hired to represent it. The firm claimed it
was owed $400,000 in unpaid fees.
After
Mr. Blackburn filed for personal bankruptcy, the law firm turned its
attention to Donald Jr., issuing a subpoena for him to testify about
Titan Atlas’s assets.
The
Trump Organization jumped to his defense. In a letter on company
letterhead, Alan Garten, the organization’s general counsel, threatened
to file a disciplinary complaint about a lawyer at the firm if he sought
to bring Donald Jr. into the case.
In
an interview, Mr. Garten said he had been “asked to assist” in
resolving the matter even though it fell outside the purview of the
Trump Organization.
“If
Don makes an investment in a company and legal assistance is needed,
I’m happy to get involved,” Mr. Garten said, adding, “I have always
viewed my role as representing not just the company but its principals.”
The
firm in Philadelphia pressed ahead with its suit despite the threat. On
the eve of Donald Jr.’s testimony, though, a confidential settlement
was reached.
Separately,
in late 2014, the Trump Organization formed an entity that took over a
$3.65 million loan made by Deutsche Bank in 2011 to Titan Atlas. The
younger Mr. Trump had been a co-signer on the loan. A spokeswoman for
Deutsche Bank, which is a major lender to the Trump Organization,
declined to disclose the details of that transaction.
Mr. Garten described Donald Jr. as a “passive” investor in Titan Atlas.
Asked
why the Trump Organization had taken over an unrelated business loan to
the younger Mr. Trump, Mr. Garten said he “can’t speak to that.”
“This was an investment made by Don,” Mr. Garten said. “Ultimately, it was not successful.”
Photo
Ms. Trump and her father
placed their hands in concrete during a 2008 ceremony for the Trump
International Hotel and Tower in Chicago.Credit
Charles Rex Arbogast/Associated Press
Lifting Her Father’s Brand, and Her Own
The
siblings occupy neighboring offices on Trump Tower’s 25th floor, one
level below their father. They often gather for a breakfast meeting at
the Trump Grill. They hold equivalent titles at the Trump Organization.
There is little doubt, though, whom Mr. Trump admires most.
Ms.
Trump’s image as a stylish businesswoman, and now mother, has long
lifted her brand, steering Ivanka Trump products into stores from
Alabama to Kuwait and establishing her as the second-most famous Trump.
Department stores throughout the country sell Ivanka Trump shoes, Ivanka
Trump clothes, Ivanka Trump handbags.
She
has traveled widely — sometimes with her father or brothers, often
without them — as a fresher face of the family brand, at times convening
with foreign dignitaries: an adviser to the Ukrainian president; a
governor of Rio de Janeiro; Queen Rania of Jordan.
Often
wearing the kinds of heels and sheath dresses sold under her name, Ms.
Trump stars in an impeccably curated Instagram feed, filled with product
placement, pictures of her children and the promotion of a hashtag:
#womenwhowork.
With
Mr. Trump’s election, at least one licensing partner quickly sensed an
opportunity. After Ms. Trump appeared with her father on CBS’s “60
Minutes,” reporters received an email promoting the bracelet she had
worn on the program: a $10,800 bangle from her own line.
Amid
criticism that Ms. Trump was using her father’s victory for financial
gain, her company announced that it was “proactively discussing new
policies and procedures.” Ms. Trump has also said she will separate her
personal Twitter and Instagram accounts from those of her brand, which
she wholly owns.
Given
its international renown, that brand is likely to flourish under a
Trump administration regardless of social media strategy.
In
2013, before the debut of a major clothing partnership, about $75
million worth of handbags, shoes and other products bearing Ms. Trump’s
name sold at wholesale, according to a company document reviewed by The
Times. Of that, Ms. Trump’s company would have received roughly $4
million to $6 million, according to people familiar with the business’s
financial data who were not authorized to speak publicly.
The company declined to comment on the figures but pointed to public statements
from G-iii, the company that makes Ivanka Trump clothing, which
estimated the line’s revenue at $100 million in the past fiscal year.
In
Japan, where news of her inclusion in the meeting with Mr. Abe inspired
a media frenzy, she has become an object of intrigue for her glamorous
image and powerful position in the Trump orbit. Japanese news reports
often refer to her as Mr. Trump’s “beloved” and “beautiful” daughter.
The
expected deal with Sanei, the Japanese apparel company, is the result
of a longstanding relationship between Sanei and Abigail Klem, an
executive for Ms. Trump’s company who previously worked for Diane von
Furstenberg, a label that Sanei licenses in Japan, according to Ms.
Trump’s team. Her company said the terms of the agreement had been
decided before the election.
To
date, Ivanka Trump apparel and jewelry have been available to Japanese
shoppers through a small number of independent import sites. One of
them, waja.co.jp, has reported a 28-fold increase in sales since the
election, according to local media.
On the home front, one of Ms. Trump’s ventures was less successful.
Photo
Ivanka Trump Fine Jewelry
opened on Madison Avenue in New York in 2007. The store, which had legal
troubles, later moved to SoHo and closed without fanfare.Credit
John Marshall Mantel for The New York Times
In
2007, Ms. Trump opened Ivanka Trump Fine Jewelry on Madison Avenue, a
short walk from Trump Tower. Her brothers had offered guidance, at least
briefly, during a tour before the opening, flagging a structural
misalignment in a bathroom.
Like
many other Trump family endeavors, the jewelry business was a licensing
deal. Rings and necklaces in the Ivanka Trump line came through a
partnership with a diamond wholesaler based in New York.
In
2011, as Ms. Trump’s store migrated to a space in SoHo, troubles
mounted. Ms. Trump’s partner, Madison Avenue Diamonds, which operated
Ivanka Trump Fine Jewelry, was sued by a former supplier, KGK, which
claimed to be owed more than $2 million. The partner’s lawyers accused
KGK of incorporating fake stones into Trump-branded jewelry, saying that
some gold pieces had “at times turned wearers’ skin green.”
By
the time the problem was discovered, the lawyers wrote, Ivanka Trump
Fine Jewelry had already sold 119 of the more than 250 problematic
pieces, “potentially creating a public relations disaster” that would
endanger the business.
KGK
won its suit for reasons unrelated to the stones, whose authenticity
was never proved or disproved in court. The supplier denied the
allegations in court documents.
Y.
David Scharf, a lawyer for Madison Avenue Diamonds, said that
“extensive efforts were taken to remove the nonconforming items from the
market” and that all requests for exchanges had been honored. There was
an attempt to contact anyone who had purchased the products in
question, Mr. Scharf added, but not every customer could be reached.
The
licensing arrangement has allowed Ms. Trump to maintain a safe distance
from any turmoil, and Ivanka Trump jewelry is still sold worldwide. But
the SoHo store closed without fanfare last year.
Photo
The Trump Winery in
Charlottesville, Va., which has won local acclaim for its sparkling and
still wines, is overseen by Eric Trump.Credit
Steve Helber/Associated Press
‘We Made It Great Again’
There is not, at least so far, much of an Eric Trump brand to license.
By
most accounts, though, the youngest child of Donald J. Trump and Ivana
Trump has been an effective steward of the Trump Winery in Virginia,
which has won local acclaim for its sparkling and still wines.
Eric Trump, who oversees the family’s golf courses, has also shown that he is comfortable with conflict.
Shortly
after the Trump Organization bought a luxury spa and golf course in
Jupiter, Fla., in 2012, some club members filed a lawsuit claiming that
the company had violated their rights by barring them from the facility,
among other matters. The Trump Organization has said it did nothing
wrong, and the case remains undecided.
The
legal dispute centered on the contracts signed by members with the
Jupiter facility’s previous owner, Ritz-Carlton. To join, members paid
initiation fees ranging from $35,000 to $210,000, deposits that were
refundable when they resigned. But that process could take years, and
under Ritz-Carlton rules, those on the resignation list could still use
the club if they paid annual fees and other costs like food and beverage
minimums.
When
the Trump Organization acquired the club, it also assumed liability for
those refunds, a pool of deposits totaling $41 million. But the company
was eager to convert deposits into cash that could be used to improve
the club.
Soon,
a letter arrived, signed by Donald J. Trump. It offered to reduce
members’ annual fees if they agreed to convert refundable deposits into
nonrefundable ones and suggested that members who wanted to resign were
“out.”
“I do not want to them to utilize the club, nor do I want their dues,” the note read.
But
Mr. Trump testified in a deposition last year that although he had
signed the letter, Eric Trump was in charge. “Eric is much more familiar
with this club,” his father said. “He runs it.”
Eric
Trump contended in his pretrial testimony that members seeking to
resign had been allowed to use the club so long as they paid annual
dues. “The status quo was maintained,” he said in a 2015 deposition.
Photo
Eric Trump before testifying
in August in federal court in West Palm Beach, Fla. He acknowledged that
his earlier statements about his family’s club in nearby Jupiter had
been incorrect.Credit
Lannis Waters/The Palm Beach Post
During
a two-day trial in August, he was forced to backtrack. Members and club
employees testified that those on the resignation list had been barred
from using the club even while they received bills.
Presented
with this evidence, Eric Trump acknowledged that his earlier statements
had been mistaken. Juggling different policies at the family’s assorted
clubs was difficult, he explained.
But on balance, the younger Mr. Trump testified, the estate had thrived on the family’s watch.
“We took something that had gone really bad,” he said, “and we made it great again.”
But as Donald Jr. has sought to establish his own business identity, he has borrowed from his father’s playbook — and, occasionally, his payroll.He and Ivanka were paid speakers at a “creating wealth” forum that was described as free but featured event promoters seeking to enlist attendees for expensive courses on how to get rich.He has positioned himself as a spokesman for a hodgepodge of companies, including Cambridge Who’s Who, a publisher that produces a registry in which consumers pay to be listed. The younger Mr. Trump spoke about the company during interviews on Fox Business Network and TheStreet.com.Cambridge, which has drawn hundreds of complaints from customers who say they were misled by its promises, said it had benefited from its partnership with Donald Jr. through “leveraging relationships built by the Trump empire.”In 2011, Donald Jr. also became the public face of a Tulsa, Okla.-based company, MacroSolve, that primarily sued other companies, like Facebook and Walmart, over claims that they had infringed on its patent for a mobile device application. After several setbacks in court, the company has changed its focus.Yet it is his foray into South Carolina manufacturing that offers perhaps the most unfiltered view of Donald Jr.’s independent business dealings.
In an interview, Mr. Garten said he had been “asked to assist” in resolving the matter even though it fell outside the purview of the Trump Organization.“If Don makes an investment in a company and legal assistance is needed, I’m happy to get involved,” Mr. Garten said, adding, “I have always viewed my role as representing not just the company but its principals.”The firm in Philadelphia pressed ahead with its suit despite the threat. On the eve of Donald Jr.’s testimony, though, a confidential settlement was reached.Separately, in late 2014, the Trump Organization formed an entity that took over a $3.65 million loan made by Deutsche Bank in 2011 to Titan Atlas. The younger Mr. Trump had been a co-signer on the loan. A spokeswoman for Deutsche Bank, which is a major lender to the Trump Organization, declined to disclose the details of that transaction.Mr. Garten described Donald Jr. as a “passive” investor in Titan Atlas.Asked why the Trump Organization had taken over an unrelated business loan to the younger Mr. Trump, Mr. Garten said he “can’t speak to that.”“This was an investment made by Don,” Mr. Garten said. “Ultimately, it was not successful.”
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