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  The Trumps went on the counterattack. Cohn sought to undermine the government’s assertion that Trump employees used coded language to refer to minorities. The government had offered evidence that a Trump employee was instructed to mark rental applications from blacks with the letter C for “colored,” and that “he did this every time a black person applied for an apartment.” The employee didn’t want to be identified in the case. He said he feared that the Trumps would have him “knocked off.”

  Cohn visited the employee and came away with a different story. Cohn drafted a new affidavit for the employee, in which he denied saying he was told to discriminate. Now the employee claimed that a Justice Department lawyer who had replaced Goldweber, Donna Goldstein, told him to “lie” or risk being “thrown into jail.” The employee described himself as a “Spanish-speaking Puerto Rican hired directly by Mr. Donald Trump.”

  Cohn then tried an unlikely gambit. Cohn, who was Jewish, said in an affidavit that Goldstein, also Jewish, was conducting a “Gestapo-like interrogation.” A Cohn colleague wrote to the Justice Department that its agents were “descending upon the Trump offices with five stormtroopers.” Cohn asked the judge to hold Goldstein in contempt. But Cohn’s comparison of Justice Department lawyers and FBI agents to Nazis backfired. “I find no evidence in the record that anything of the nature of Gestapo tactics was permitted by the FBI in doing the tasks assigned to them,” Judge Neaher told Cohn. Cohn asked the judge to find Goldstein in contempt for allegedly trying to get witnesses to change their stories. Neaher again dismissed the effort.

  Finally, in late spring 1975, Cohn sought a settlement, notwithstanding Trump’s claims that he hated to settle or Cohn’s claim that he could win by telling the government to “go to hell.” Nearly two years of fighting was about to end, and the settlement was much like what the Trumps could initially have gotten. But Trump had one more ploy. He viewed the signing of a consent order as a new chance to negotiate, and he started haggling.

  As part of the settlement, the Justice Department wanted the Trumps to place ads in local newspapers assuring prospective renters that Trump housing was open to people of all races. “This advertising, while it’s, you know—I imagine it’s necessary from the government’s standpoint, is a very expensive thing for us,” Trump said. “It is really onerous. Each sentence we put in is going to cost us a lot of money over the period we are supposed to do it.” When government officials persisted, Trump said, “Will you pay for it?” The government said the Trumps had to pay for the advertising.

  On June 10, 1975, the Trumps signed a consent order prohibiting them from “discriminating against any person in the terms, conditions, or privileges of sale or rental of a dwelling.” The Trumps were ordered to “thoroughly acquaint themselves personally on a detailed basis” with the Fair Housing Act. The agreement also required the Trumps to buy the ads assuring minorities of their equal access to housing.

  Decades later, Trump tried to put the best possible spin on the case, insisting, “That wasn’t a case against us. There were many, many landlords that were sued under that case.” This case was, in fact, filed against Trump, his father, and their company; other companies had been sued in separate cases. In any case, Trump stressed it was settled “with no admission of anything” and he “ended up making a better settlement by fighting.”

  The Justice Department claimed victory, calling the decree “one of the most far-reaching ever negotiated.” Newspaper headlines echoed the view. “Minorities Win Housing Suit,” said the New York Amsterdam News, which told readers that “qualified Blacks and Puerto Ricans now have the opportunity to rent apartments owned by Trump Management.” As it turned out, the battle was hardly over.

  • • •

  FIFTEEN MONTHS LATER, IN September 1976, Fred visited Maryland, where local authorities had for years complained that he had failed to properly maintain a housing complex he owned in Prince George’s County, just outside Washington, DC. Donald had worked there a number of times, often collecting rent, and had told his father, “Pop, this is a rough piece of property here.” When Fred arrived, local officials stunned him with an arrest warrant for a series of housing code violations at the 504-unit development called Gregory Estates, arrayed in forty three-story buildings. The violations included broken windows, rotted rain gutters, and the absence of fire-prevention equipment. Bond was set for $1,000. “N.Y. Owner of P.G. Units Seized in Code Violations,” the Washington Post reported. Fred was livid, but he arranged for the bond and eventually paid a $3,640 fine. Donald was later quoted in the Post saying it was “terrible” the company had been hit with housing code violations, but forty years later he said that he “never knew” his father had been arrested.

  • • •

  FRED RETURNED TO New York and more trouble from the feds. The authorities suspected that the Trumps were reneging on their agreement to provide housing to anyone regardless of race. The Justice Department eventually accused the Trumps of failing to comply with the settlement and continuing to make apartments “unavailable to black persons on account of race.” For three years after the Trumps signed off on the settlement, Cohn battled on their behalf against the Justice Department.

  In time, Cohn would be a constant presence by Donald’s side, serving not only as lawyer, but also as informal adviser, publicist, and intermediary with the city’s powerful. Donald, meanwhile, tried to put the racial-bias case behind him, and he began to cultivate the image he craved. As Trump ventured into Manhattan real estate, he cooperated with a New York Times profile, which began with a paragraph of a publicist’s dreams:

  “He is tall, lean and blond, with dazzling white teeth, and he looks ever so much like Robert Redford. He rides around town in a chauffeured silver Cadillac with his initials, DJT, on the plates. He dates slinky fashion models, belongs to elegant clubs and, at only 30 years of age, estimates that he is worth more than $200 million.”

  With those words, the definition of the man who would be known as The Donald was etched. The piece made a passing reference to the discrimination allegations, which Trump denied, and emphasized his genius at real estate (although one anonymous “money man” called him “overrated” and “obnoxious”).

  How Trump estimated his worth at $200 million was unclear. He was involved in real estate deals that might pay off handsomely, and this may have been the first time he projected the intangible value of his name. The company his father founded might have been worth $200 million, or Donald may have valued his ownership in various properties that highly. But he reported income in 1976 of a relatively modest $24,594, in addition to some payments from family trusts and other assets. All told, he owed $10,832 in taxes, according to a report later issued by the New Jersey Division of Gaming Enforcement. But the nuances of net worth didn’t matter, at least at the time. All that Donald J. Trump had worked for—the jet-setting, club-going, model-dating image of a savvy, tough dealmaker—all of that was now set. Trump was finally on his own, and on his way.

  5

  * * *

  Crossing the Bridge

  New York City was desperate for cash and in danger of insolvency. In the early seventies, the city lost 250,000 jobs, gutting its tax base even as the cost of city services soared. President Gerald Ford’s press secretary Ron Nessen compared the city’s dependence on federal aid to “a wayward daughter hooked on heroin.” It was a miserable time to be a developer. In 1971, the year Donald Trump first moved to Manhattan, hotel occupancy plunged to 62 percent, its lowest point since World War II. By 1975, cutbacks forced the city and state to freeze new construction of subsidized housing, the core of the Trump family business. At his father’s Avenue Z office, Donald was itching to break away from building basic housing for middle-class, outer-borough families. When Fred Trump did branch out beyond Brooklyn, it was to buy cheap plots from desperate sellers in California, Nevada, Ohio, and Virginia. Donald wanted something bigger. He had long urged his father to tap the tens of millions of dollars in eq
uity Fred had accumulated in more than eighty apartment buildings, to use that value to invest in Manhattan, where the action was. Donald had taken to walking the urban grid, sizing up buildings, daydreaming about what he could do with each lot.

  Fred Trump was wary of Manhattan’s expense and the difficulty of building there, but Donald couldn’t turn away from the place that had captivated him since childhood. As New York City crumbled, he saw the opportunity that would change his life. Penn Central, the once-iconic railroad giant, was going under. By 1970, in what was then the largest bankruptcy case in US history, the railroad had chewed through a $300 million emergency bailout from fifty-three banks. Now, its creditors were eager to chop up Penn Central and sell its most lucrative parts, including some of Manhattan’s last big open tracts—vast train yards in midtown and on the Upper West Side. The railroad’s bankruptcy trustee fielded interest from Arab sheikhs, bank financiers, and hotel land scouts. But some pieces were more attractive than others. Penn Central owned four once-renowned midtown hotels that had long ago slid into decay. Multiple offers were made for some of the properties, but the decrepit, rat-infested Commodore on East Forty-Second Street, directly next to Grand Central Terminal, didn’t receive a single bid.

  Three of Penn Central’s holdings had captivated Trump’s imagination: a strip of the Hudson riverfront, from Fifty-Ninth to Seventy-Second Streets; an unused rail yard at Thirty-Fourth Street; and the Commodore, the crummiest hotel, which Trump believed was an overlooked jewel. In the summer of 1974, Trump began making overtures for the properties, telling the New York Times that he planned to buy them for more than $100 million. Although the Times called him a “major New York builder,” he didn’t yet have the financing to buy such properties. Still, he started wooing the man in charge of selling Penn Central’s assets. Trump even sent him a television set as a Christmas present, delivered by chauffeur. The official turned the gift down. Trump had more luck wielding his father’s reputation. Donald coordinated a meeting with the railroad man and New York mayor Abe Beame, a longtime friend of his father’s. Beame wrapped his arms around the two Trumps and declared, “Whatever Donald and Fred want, they have my complete backing.”

  Trump was a construction neophyte, but he was already adept at turning around his opposition. David Berger, a lawyer who represented the railroad’s shareholders, initially opposed selling Trump the Commodore, but at a crucial moment in the negotiations, Berger flipped to support a deal with Trump. A few years later, federal prosecutors investigated whether Berger’s sudden change of heart was connected to Trump’s decision to help Berger out and join his unrelated, $100 million suit by New York landlords against nine major oil companies for fixing the price of heating oil. The federal probe ended without any indictments. Both Trump and Berger denied there was any quid pro quo.

  In March 1975, a bankruptcy judge questioned whether Penn Central’s trustees had given other developers who wanted the railroad’s land the same opportunity they gave Trump. But the court nevertheless approved a deal giving Trump an option to develop the Thirty-Fourth Street property, where he discussed building a city-funded convention center and twenty thousand apartments, in one swoop creating an empire that would rival his father’s. The apartment element of the plan soon collapsed, but Trump moved ahead on the convention center by using a prized political connection. In 1974, he hired Louise Sunshine, then chief fund-raiser for Hugh Carey’s gubernatorial campaign, to help him persuade city leaders to build their convention center on the rail yards where Trump now held the option. Donald and his father were big supporters of Carey, having donated $135,000 ($390,000 in 2016 dollars) to his campaign, more than anyone else except the candidate’s brother.

  Donald first got to know Sunshine when, after Carey was elected governor, Trump thought she could get him a license plate customized with his initials—then a rare privilege. He was right. Every morning, Donald would ride from Manhattan to Brooklyn, now in a chauffeur-driven Cadillac limo with DJT plates—his version of his father’s blue Cadillac, with its FCT plates. Sunshine became one of the young builder’s most effective advocates. “Everybody thought Donald was this brash, hard-charging young kid,” Sunshine said. “I was the one who took Donald everyplace . . . no matter who it was, because they didn’t really know Donald. I was Donald’s credibility factor.”

  Trump was not shy about using Sunshine’s political connections. He had a notion to buy the World Trade Center, which was owned by the Port Authority of New York. He asked to meet with its executive director, Peter Goldmark, and over lunch in the Port Authority’s executive café on the Trade Center’s forty-third floor, Goldmark pressed Trump for specifics on what a deal would look like. Trump stuck to generalities. As a new player in town, Trump was an unlikely candidate to take over the iconic towers, and several other developers had already expressed interest in the buildings. But Trump’s chances truly soured when he started flexing his connections. “He threatened, ‘You wouldn’t last in your job very long if Governor Carey decided you weren’t doing the right thing on this,’ ” Goldmark recalled. “ ‘You should know I have a lot of weight in Albany.’ ” Trump dropped Sunshine’s name. “As soon as he threatened, I made clear I didn’t want to talk anymore,” Goldmark said. “He’d expected me to quake and shake.” Trump denied Goldmark’s account, saying, “I really don’t talk that way.”

  In 1978, the city decided to build its convention center at the Thirty-Fourth Street site, whereupon Trump argued that his option on the property entitled him to a commission of more than $4 million. But he offered to waive the fee if the city named the facility the Fred C. Trump Convention Center. The city was considering the idea when, a month later, an official revisited Trump’s contract with Penn Central and saw that his option actually entitled him to barely a tenth of the commission he was claiming. The city ultimately paid Trump an $833,000 fee when it bought the land for the Jacob K. Javits Convention Center. Trump did not deny that account but said, “If someone came to me properly, I would have given up my commission without asking that they put my father’s name on the building. But they didn’t.”

  • • •

  WINNING THE RIGHT TO rebuild the Commodore Hotel gave Trump a corner of Grand Central, a blighted neighborhood even he believed was a disaster. Crime was rampant in midtown, and fewer and fewer straphangers coursed through the subway lines under Grand Central. The Chrysler Building, the neighborhood’s art deco landmark across the street from the Commodore, fell into foreclosure. Texaco, its core tenant, followed some of America’s top companies in fleeing to the suburbs. The nineteen-hundred-room hotel, one of New York’s largest, was an eyesore, its business gutted by the postwar shift from luxury trains to airports and interstates. When it opened in 1919, the hotel—named after “Commodore” Cornelius Vanderbilt, the robber baron who became one of America’s first tycoon celebrities—boasted a palatial lobby, then the largest room in New York City, adorned in the style of an Italian courtyard and featuring an indoor waterfall. In the lounge, workers posted updated stock prices on the walls; another room boasted its own orchestra.

  Modernizing the Commodore was going to be a massive undertaking. The hotel had no garage. Its basements, hemmed in by two subway lines, couldn’t be expanded. The rooms were too cramped to convert to apartments, and they lacked modern gas and electric lines. The rooms remained empty half the time, and the few dingy storefronts included a questionable massage parlor called Relaxation Plus. (“Nobody ever got into what the Plus meant,” Trump joked.) A real estate expert estimated that the building was worth “the true land value minus the cost of demolition”—in other words, nothing. Losing $1.5 million a year, the hotel was scheduled to be shut down in the summer of 1976, right around when the city would host the Democratic National Convention at Madison Square Garden.

  Fred Trump was dubious about his son’s plan. The father had never understood the draw of Manhattan, which commanded some of the world’s highest land prices and biggest development
headaches. “Buying the Commodore at a time when even the Chrysler Building is in receivership,” he said, “is like fighting for a seat on the Titanic.” But Donald was determined. “I’m basically an optimist,” he said, “and frankly, I saw the city’s trouble as a great opportunity for me. Because I grew up in Queens, I believed, perhaps to an irrational degree, that Manhattan was always going to be the best place to live—the center of the world.” Despite his doubts, Fred came through, pledging his own equity toward his son’s success—an early sign that although the father himself had no interest in taking on Manhattan, he would stand by his son, helping him at key moments in the formative years of Donald’s career. Fred would also personally back construction loans from Manufacturers Hanover Trust, guaranteeing that the bankers would be paid even if Donald’s venture collapsed.

  For Donald’s plan to succeed, Penn Central had to sell him the hotel, New York City’s bureaucracy had to approve his approach and give him a tax break, a management company needed to join him to run the hotel, and the banks had to front him the money to pay for the whole thing. Donald wooed Hyatt, the hotel chain owned by the deep-pocketed Pritzker family, to manage the remade Commodore. Since opening its first hotel near the airport in Los Angeles, the company had exploded in popularity, but lagged behind its rivals in one key way: it had no hotel in New York. Trump launched a charm offensive. Before lunch with Ben Lambert, a real estate investor friendly with the Pritzkers, Trump gave the potential partner a ride in his limousine (which was actually leased by his father’s company). In the backseat, he had propped up sketches of his renovation plans. Trump suggested that the hotel would benefit from dramatically reduced real estate taxes—an alluring notion, but a deal he had not yet secured.