A tyrannical, billionaire hotelier, Leona Helmsley was known as New York's "queen of mean." A lonely cheapskate who did time for tax evasion, she was ridiculed for a weird and wonderful act of kindness – when she died in 2007, she left a $US12 million ($15.8 million) trust fund for her Maltese dog, Trouble.
For all Helmsley's failings, there was another, accidental act of kindness that ought to have served as a warning to today's generation of American voters – in crossing swords with Donald Trump in 1989, she elicited an unseemly and abusive tirade that might have served as a break on the self-important real estate mogul's pretensions to the presidency.
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Trump: 'No tax for almost 20 years'
The New York Times reports that Republican presidential nominee Donald Trump's 1995 income tax return suggests he may have paid no income taxes for up to 18 years.
Trump was outraged that Helmsley had balked at transferring the lease to part of a $US56 million plot of land he had acquired for a new hotel to go with his casino combine in Atlantic City. Their spat resonates today because, as reported at the time by The Washington Post, an acid-drenched letter that Trump wrote to Helmsley was a display of Trump's "previously hidden capacity for venom."
Invoking the name of her husband, Trump wrote: "Without the veil of Harry Helmsley, you would be a non-entity. You would not be able to randomly fire and abuse people in order to make yourself happy… When God created Leona, the world received no favours… Over the last number of years, I have watched as you have virtually destroyed my friend and a once great and respected man, Harry Helmsley."
Warning that he would denounce her in the press, the Trump letter needles Helmsley over the great deal he got when she sold him the landmark St Moritz Hotel in Manhattan – claiming he'd lifted earnings to five times what she ever made; and he'd pocketed profit of more than $US100 million on subsequently selling the property.
To Trump the run in with Helmsley was just business – just as his rooting for the US housing crisis, so that he could make money as millions of Americans lost their homes in the 2007-14 housing crisis, was just "business"; and how loading $US1 billion in corporate loses on US taxpayers in 1995, thereby avoid paying income tax for as much as 18 years, was proof of his business "brilliance".
The realisation that Trump could have pulled off such a heist on the taxman, albeit legal, is still percolating in the mind of voters – but combined with his loser's performance in the first campaign debate, it's put his polling in free-fall as his Democratic challenger, Hillary Clinton, stays on a new upward trajectory.
Trump has insisted throughout the campaign that he could not release his tax returns, as all candidates have done for decades, because he was under audit by the Internal Revenue Service.
But in effectively confirming a report on his taxes by The New York Times, based on a leak of three vital pages from his 1995 tax filings, Trump has spawned a widely held, alternate view – the real reason is that his returns would confirm that this self-appointed defender of hardscrabble America has not been paying his way.
An intense, renewed media focus on how Trump has conducted himself in business, leaving a trail of victims as he has made off with millions, is putting a severe dent in his claim to be the saviour of the nation – uniquely qualified by his amazing success in business, he says.
Commenting on Trump's 1995 loss – of $US916 million, to be precise – Steven Rosenthal, who is a real estate tax specialist at the Urban-Brookings Tax Policy Centre, told The New York Times: "It's clear he was a spectacularly disastrous businessman." Economist Douglas Holt-Eakin has difficulty wrapping his head around the quantum of the Trump loss – "I don't understand how you can lose a billion dollars and stay in business."
Ironically, when Rosenthal looked for a quote that might encapsulate Trump's tax story, he turned to Trump's old New York rival Helmsley, who famously snapped: "only the little people pay taxes."
There is much mirth over claims by Trump's campaign surrogates that he is a business "genius". And on the news that he's probably not paying tax, some of his tweets are seen in a dubious new light – like, "everyone is starting to feel the new tax hikes…" "Barack Obama wants to raise all our taxes, [he] only pays 20.5% on $790K salary…" and "the Washington Post loses money [a deduction] and gives owner Jeff Bezos power to screw public on low taxation of Amazon! Big tax shelter."
Everyone is starting to feel the new tax hikes. You get what you vote for!
— Donald J. Trump (@realDonaldTrump) January 14, 2013
@BarackObama who wants to raise all our taxes, only pays 20.5% on $790k salary. http://t.co/bqF26mQf Do as I say not as I do.
— Donald J. Trump (@realDonaldTrump) April 13, 2012
The @washingtonpost loses money (a deduction) and gives owner @JeffBezos power to screw public on low taxation of @Amazon! Big tax shelter
— Donald J. Trump (@realDonaldTrump) December 7, 2015
The self-acclaimed "outsider" is being revealed as an accomplished "insider," who fights hand-to-hand when it comes to pulling in political favours and gaming the system he declares to be so rotten. He was a master in accumulating unbearable billions in debt, but managed to scarper with millions while other cleaned up behind him.
The embarrassing reality is that Trump was such a failure, that he was effectively bailed out by the government – in a manner that is denied to ordinary working Americans who pay their taxes as they go and who are obliged to wear any losses they make along the way. When government and city hall weren't bailing Trump out, his father, who threw millions his way, was rescuing him.
Trump likes to say that big business is failing the country. But with so much help from government, the mogul from New York could never argue that the country has failed him.
Emerging too, is an ugly picture of how Trump gets his way – on issues petty and existential.
Apart from his monstering of Helmsley, Trump threatened the job of the New York official who stood in the way of one of his many claims for tax breaks; Trump calculatedly smeared a reporter from The Wall Street Journal who wrote accurately on his looming corporate collapse in the 1990s; and Trump demanded and got the sack for the investment advisor who correctly warned clients that the Trump casinos were, ahem, a house of cards.
In the 1980s, the "brilliantly" successful Trump wore a path to New York's City Hall, demanding huge deals for his developments. Leaning on his father's political connections, and later his own, he came away with at least $US885 million in tax breaks, grants and subsidies for his luxury apartments, hotels and office complexes; which meant he could sell at higher profits, because of the lower taxes on his properties.
Deputy mayor Alicia Glen recalls: "Donald Trump is probably worse than any other developer in his relentless pursuit of every single dime of taxpayer subsidies he can get his paws on."
No bucket of money could be ignored. In the aftermath of the September 11 attacks, Washington allocated $US500 million to help small business in Lower Manhattan to recover. A Trump property at 40 Wall Street, several blocks away from the World Trade Centre, suffered no damage but Trump still put out his hand and walked away with $US150 000. Even the Polish labourers who worked on the site of his flagship Trump Tower in midtown Manhattan were fair game – he was paying them $US4 an hour, but he still short-changed them by hundreds of thousands of dollars.
And neither was he afraid to bite the hand that fed him – a deal with the New York City council required the payment of rent for city-owned land on which he built a hotel – but a 1989 audit review found that the city was being short-changed by millions through Trump's "aberrant and distortive" accounting methods.
By 1990, Trump piled up massive debt as he went on a spending spree – a $US29 million yacht; $US407 million for Manhattan's Plaza Hotel; $US365 million for a dodgy airline. He had $US3.4 billion in debt, a good deal of which was in junk bonds; and a good deal for which he was personally liable - $US833 million.
In 1990, his several casinos and hotels in Atlantic City and the airline each were loosing tens of millions of dollars. He was behind by millions in his New York property taxes and as an $US18 million interest payment loomed at the end of the year, his father bought $US3.3 million in chips from one of the casinos, to give him operating cash.
His banks forced him to dump assets – including the Plaza, the yacht and the airline. They put him on a personal household expenses budget – only $US450,000 a month. Ultimately, he surrendered half of his stake in three casinos and there would be four bankruptcies as the businesses went into a tailspin.
When all seemed lost in 1995, Trump floated the casinos, selling shares and at the same time reversing his personal debt into the public company which, at the same time, paid him an estimated $US45 million over 15 of the years in which he's believed to have not paid tax.
As he does with his presidential bid, Trump sold himself in Atlantic City as the outsider who could fix everything, achieve anything – but while revenue at the city's other casinos picked up by 18 per cent in the six years to 2002, Trump's gambling revenue fell by one per cent.
He was cannibalising a shrinking gambling market and just months after the opening of his "eighth wonder of the world" Taj Mahal casino in 1990, he was informed that his debts were $US295 million more than the total value of all his casinos, hotels, office buildings, his airline and the rest.
When the dust settled it was the big lending institutions and small time investors who most felt the loss – stock and bondholders lost more than $US1.5 billion and shares that had peaked at around $US35 traded at less than $1.
Describing Trump as a "brutal and ruthless negotiator," Professor Bryant Simon of Temple University told The Washington Post of the litany of contractors and suppliers who got only a fraction of what they were due – "people paid the price."
Beth Rosser, whose father's New York building company worked on the Taj Mahal, told the Times that it took three years to have their bills paid – but they got just 30 cents in the dollar.
"Trump crawled his way to the top on the back of little guys, one of them being my father," she said. "He had no regard for thousands of men and women who worked on those projects – he says he wants to make America great again, but his past shows the complete opposite of that."
Sebastian Pignatello was an investor who believed in Trump, to the extent of sinking $US500 000 in the casino business. But with hindsight, he told the Times: "People underestimated Donald Trump's ability to pillage the company."
An investigation by The New York Times concluded: "The Trump casino business was a protracted failure." Acknowledging that all Atlantic City gambling took a hit, it makes this point: "In reality, [Trump] was failing in Atlantic City long before Atlantic City itself was failing."
Trump had no regrets. Earlier this year, he told the Post: The Taj Mahal was a very successful job for me. It was not personal. This was just business – I got out great."
Trying to spin his billion-collar tax break as a measure of business success and not failure, at a Colorado rally this week, Trump declared – "few others were able to do what I did."
The "what" was left unstated – was it to dig the financial hole in which he found himself, or was it to use the backs of American taxpayers as a ladder to step out of it?
Neil Barsky, the former Wall Street journalist smeared by Trump, wrote recently: "The disconnect between the public's perception of Trump as a self-made mogul and the reality of his being a rich kid who lost other people's money and made far less for himself than he claims is still his Achilles heel."
Others in the American billionaire class are working to fix that – and in light of the revelation of Trump's standing as a non-taxpayer, their views might resonate more in the last month of the campaign.
Former New York mayor Michael Bloomberg, told the Democratic convention in Philadelphia in July: "I'm a New Yorker, and New Yorkers know a con when we see one.
"Throughout his career, Trump has left behind a well-documented record of bankruptcies, thousands of lawsuits, angry shareholders and contractors who feel cheated, and disillusioned customers who feel ripped off. Trump says he wants to run the nation like he's run his business. God help us," Bloomberg said.
And at a Clinton rally in Omaha in August, the revered Warren Buffett told a cheering crowd that a monkey throwing darts at the stock pages in 1995, when Trump first offered stock in his Atlantic City hotels, would have come out far ahead of anyone who listened to Trump's "siren song."
Even his alma mater has turned. Giving speeches, Trump likes to say: "I'm really smart – went to Wharton School of Finance." But in July, more than 2000 Wharton alumni, faculty and students signed an open letter, saying they were "deeply disappointed … and outraged that an affiliation with our school is being used to legitimise prejudice and intolerance."
Trump endlessly celebrates his unpredictability. But a great consistency has been his capacity to tell lies and to misrepresent facts – that he does it in the election campaign is nothing new. It's pathological.
On CNN, he told Larry King that he'd been paid $US1 million to make a speech – actually, the fee was $400,000. Trying to get a loan, he told a bank he was worth $US3.5 billion – doing its homework, the bank concluded he was worth just a quarter of that amount. Membership at Trump Golf Club in Westchester, New York, he says, is worth $US300,000 – no, just $US200,000. And when he boasted on CNBC that the Trump International Hotel and Tower in Las Vegas had sold all of its 1282 units in less than a week, he overlooked that 300 remained unsold.
Challenged on the unit sales in a court hearing, Trump was unfazed – "I'm talking to a television station – we do want to put the best spin on the property."
In his campaign to be elected president of the US, Trump figures he's talking to a nation of idiots and he's spinning a lot. Who knows, he might get away with it. It won't be the first time.