What a story #phonybusinessman

It was a Thursday night in late May 1990. I was a 32-year-old Wall Street Journal reporter who had written dozens of articles about Donald J. Trump’s business affairs. I was closing in on the biggest one of all — Mr. Trump was on the brink of financial ruin. He was quietly trying to unload his assets. His Atlantic City casinos were underperforming, and prices for his casino bonds were plummeting, suggesting that he would have trouble making interest payments.

“Donald Trump is driving 100 miles per hour toward a brick wall, and he has no brakes,” the banker told me. “He is meeting with all the banks right now.”

The next day, I called sources at the four banks I knew had large Trump exposures. The first three calls yielded “no comment,” but the fourth hit pay dirt, and I was invited to visit the bank late that afternoon.

Behind a large mahogany desk sat the bank’s chief lending officer. He explained that all of the banks would have to agree to a huge restructuring of Mr. Trump’s loans or Mr. Trump would have to declare personal bankruptcy. Unknown to the banks when each had lent him money, Mr. Trump ended up personally guaranteeing a staggering $830 million of loans, which was reckless of him, but even more so for the banks.

In a front-page Wall Street Journal article on June 4, 1990, I wrote: “Donald J. Trump’s cash shortage has become critical. The developer is now in intense negotiations with his main bank creditors that could force him to give up big chunks of his empire.” One banker said, “He will have to trim the fat; get rid of the boat, the mansions, the helicopter.”

Amid all the self-made myths about Donald Trump, none is more fantastic than Trump the moneymaker, the New York tycoon who has enjoyed a remarkably successful business career. In reality, Mr. Trump was a walking disaster as a businessman for much of his life. This is not just my opinion. Warren Buffett said as much this past week.

Between 1985 and 1991, working mainly for The Daily News and The Wall Street Journal, I covered Mr. Trump’s travails and interviewed him dozens of times. On several occasions he threatened to sue me, though he never did. But he didn’t hide his opinion of me. In “Trump: The Art of the Comeback,” his 1997 book, he wrote: “Of all the writers who have written about me, probably none has been more vicious than Neil Barsky of The Wall Street Journal.”

At the time, he was a glamorous New York City personality and an Olympic-level self-promoter who had persuaded banks and bondholders to extend him billions of dollars of credit to buy everything from a yacht to the Plaza Hotel to the Eastern Air Lines Shuttle.

He was also a skilled negotiator with an almost supernatural ability to pinpoint and attack his adversaries’ vulnerabilities, as several of his Republican primary opponents discovered. Since his financial emergency in the 1990s, he appears to have sworn off taking on large amounts of debt, and instead has used his brand to collect fees on real estate and other projects. This has greatly limited his downside risk, but has also capped the amount he can earn, since he often does not own the underlying equity on the projects that bear his name.

Since leaving journalism in 1993, I have been a Wall Street real estate analyst and a hedge fund manager. I have studied how businesses thrive and why they fail. Mr. Trump’s political rise has been maddening for me to watch, and I sometimes feel like the character played by Kevin Bacon in the movie “Diner” who screams the right answers to a TV quiz show as the contestants get them wrong.

“The issue isn’t that he’s crass,” I want to shout. “It’s that he’s a bad businessman!”