Donald Trump has become such a well-known personality in politics that many forget where his wealth actually comes from. The Trump Organization website states that ‘Donald J. Trump is the very definition of the American success story, continually setting the standards of excellence while expanding his interests in real estate, sports, and entertainment’. Trump started his career working with his real-estate developer father, who was known to say that everything his son touches ‘seems to turn to gold’.
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Trump went on to develop a massive real estate business and amass an enormous net worth before he ran for President. On January 20, 2017 Trump officially became the 45th POTUS and he handed the running of the Trump Organization over to his eldest sons Donald Jr. and Eric. However, with recent court proceedings, neither Donald Sr. nor his sons will be allowed to head operations at their eponymous company. Here’s everything you need to know.
Trump and his sons banned
Trump and his business took a massive blow on Friday when a months-long legal battle against him came to a head. The civil trial, which accused Trump of having inflated his worth in order to dupe banks and insurers, was brought against the former President by New York Attorney General Letitia James.
Friday’s ruling, made by Justice Arthur F. Engoron, banned Trump and his two sons from serving as an officer or director of any New York firm for three and two years, respectively. The Trump Organization, based in New York, therefore found itself without a leader. Boston College law professor Brian Quinn explained:
There is no one at the financial helm. There’s no CFO, no controller, and now you don’t have Eric Trump, Donald Trump Jr. or Donald Sr. running it.
Trump’s financial situation
Trump was also ordered to pay a whopping $355 million in penalties for ill-gotten real estate deals, including the sale of his high-end D.C. hotel, plus an approximate $100 million in interest.
According to Bloomberg Billionares Index, Trump has a rough net worth of $3.1 billion, with about $600 million in cash assets. As The Washington Post points out, ‘the fines and penalties levied by Engoron could eat into well over half of that fortune, accumulated over many years, and could prompt the company to sell more real estate if it wants to free up cash’.
Could Melania save the Trump Organization?
New York Law School adjunct professor Steven M. Cohen stated that Trump’s recent legal battles are ‘likely to put serious strain on Trump’s business in a way that hasn’t happened to date’. There is a chance that Friday’s ruling will be overturned on appeal, but if it isn’t then the business will be without a head.
There are suggestions that members of the Trump family who are not embroiled in the business’ legal issues could save the ship from sinking. Trump’s wife, Melania, could step in. According to Melania's former chief of staff, Stephanie Grisham, the former First Lady would need the right incentive to get involved:
I just don't know that she would want to take on that much responsibility unless she was guaranteed some major control or power.
I suppose she would potentially do it for [her and Trump's son] Barron's sake so he could eventually run everything if he wanted, but I don't think she would do anything if there's a potential that she would lose any kind of money or be on the hook for paying taxes, etc.
Indeed, Melania is known to be very focused on securing a stable future for her son Baron, while Trump has had more of a hands-off approach as a father.
Ivanka Trump, Trump’s daughter, could also take over. Although she was originally listed as a defendant in James' case, she was later removed from the lawsuit. She did work as a senior real estate executive before she shifted into politics, and even her husband Jared Kushner has real estate experience. Otherwise, the business with ‘look very different’, said Quinn:
It can be a family-owned business, but it won’t be a family-run business for the next several years.
Trump's lawyer have vowed to appeal Friday's ruling, but according to Reuters, 'the appeal could take more than a year, and it is not yet clear whether an appellate court would put Engoron's Friday decision on hold during the process'.
Read more:
⋙ Donald Trump: Americans puzzled by the former president's new appearance
⋙ Donald Trump sparks major controversy, says he would 'encourage' Russia to invade Western countries
⋙ Donald Trump: Famous lawyer claims the ex-president could face jail time
Sources used:
The Washington Post: Hefty fines, penalties will rock Trump family’s business and fortune
Newsweek: Melania, Ivanka Could Save Donald Trump's Businesses
Reuters: Explainer: How will Trump pay his $355 million civil fraud judgment?
