Donald Trump | Chicago Trump International Hotel and Tower Photo illustration by Salon/Getty Images
This article originally appeared here on Salon.com
President Donald Trump had $287 million in debt forgiven by his lenders after failing to repay loans tied to his Chicago hotel and other projects, according to a new report.
Trump’s federal income tax returns obtained by The News Times showed that most of the debt was tied to Trump International Hotel & Tower — “another disappointment in a portfolio filled with them.”
Lenders gave Trump years of extra time to repay the debt, and Deutsche Bank even loaned him $99 million — more than previously known — to pay off his $99 million debt to another division of the bank, according to The Times. But Trump still did not repay the debt, and lenders ultimately forgave much of what he owed.
The New York Attorney General’s Office is now investigating the debt forgiveness as part of a larger probe into Trump’s company, according to the report. The IRS considers canceled debts as income, but Trump, who paid no federal income tax for years, appears to have paid no taxes on the funds.
Alan Garten, the Trump Organization’s chief legal officer, denied any impropriety.
“These were all arm’s length transactions that were voluntarily entered into between sophisticated parties many years ago in the aftermath of the 2008 global financial crisis and the resulting collapse of the real estate markets,” he told the outlet.
But Trump publicly insisted that he had made a “great deal” with his lenders in order to avoid having to cover his hotel’s losses.
“I was able to make an appropriately great deal with the numerous lenders on a large and very beautiful tower” he tweeted. “Doesn’t that make me a smart guy rather than a bad guy?”
When Trump set out to build the tower in 2001, he arranged for two of his LLCs to borrow more than $700 million for the project, according to The Times. Most of the money came from Deutsche Bank, which was one of the few lenders willing to do business with Trump after a series of bankruptcies and defaults.
The bank agreed to lend the LLC $640 million after Trump said that his daughter Ivanka would be in charge of the project, according to the outlet. Trump personally guaranteed $40 million of the loan.
Another firm, a hedge fund called the Fortress Investment Group, agreed to loan Trump an additional $130 million, which he would pay back once the first loan was repaid. Lenders could seize the building if Trump defaulted under the terms of the agreement, according to the report.
Deutsche later sold off parts of the loans to overseas banks, while Fortress sold off parts of the loans to other equity and hedge funds, including Dune Capital Management, which was then run by now-Treasury Secretary Steven Mnuchin.
Trump was projected to earn income from the