It’s no secret that Donald Trump’s success is built on a pile of debt. In fact, it’s probably fair to call him the king of debt. We know for a fact that his various businesses carry hundreds of millions in outstanding payments to credits. It has become so bad that reports have suggested that no credible Wall Street investment bank will loan the US President money.
According to Trump’s financial disclosure records and various news reports, he carries the type of debt that would easily give those he owes money to a lot of leverage over his status as President of the United States.
Because Trump has refused to release his tax returns, it’s impossible for the public to know exactly who he owes money to. The President must only share his business-based tax information, which includes loans of at least $713 million.
Buried in a bunch of paperwork is a troubling loan that ethics experts believed could be influencing his presidency.
According to the disclosure, in 2012, Trump borrowed more than $50 million from a company called Chicago Unit Acquisition LLC.
The President claims he owns the LLC and loaned the money to his own business.
If his assertion is corrected and Trump owns the Chicago Unit Acquisition LLC, the company should be listed on Trump’s disclosure as worth at least that much. However, he could be using it to offset debt he racked up from a private investor.
So where did this $50 million debt note come from?
Trump is supposed to report any assets over $1,000 and Kathleen Clark, a law professor at Washington University in St. Louis, tells Mother Jones that Trump could be using the debt to cancel out other obligations, essentially making the business worthless, and thus not reported.
What’s troubling is that the president essentially could be on the hook to some unknown entity or some single investor for over $50 million. Unfortunately, financial disclosure rules do not require Trump to list the loans and liabilities of companies he owns.
“I think the American people are at risk because we don’t know know with whom Donald Trump is entangled financially,” Clark explains to Mother Jones.
“If I owe a lot of money to someone, I will probably want to do what I can to keep that person or institution happy. We don’t know the terms of this debt and we don’t know whether Donald Trump will be tempted to look out for his own financial interest in addressing the concerns of his creditor, whoever that is.”
The Wall Street Journal recently noted that Donald Trump pays $4.4 million a year in interest in connection with his loan from Chicago Unit Acquisition LLC. If Chicago Unit Acquisition is paying that much interest, we would assume it would have at least that much in annual revenue, though none is reported.
The Wall Street Journal also went one step further, hiring two research firms to search for paperwork connected to this loan, but nothing could be found.
Here’s Trump’s Story About The Loan
Trump in 2016 told The New York Times that he purchased the debt from a group of banks he had previously borrowed money from for his various business ventures.
Trump Organization’s chief legal officer failed to say why Trump wouldn’t simply retire the debt instead of paying a massive annual interested rate. “I am not sure it’s appropriate for us to discuss our sort of internal financial reasoning behind transactions in the press,” Greenblatt told the Times. “It’s really personal corporate trade secrets, if you will. Neither newsworthy or frankly anybody’s business.”
Trump listed Chicago Unit Acquisition LLC in 2015 as having a value between $1,000 and $25,000.
When the New York Times asked Trump why the value was so low his response was puzzling. “We don’t assess any value to it because we don’t care. I have the mortgage. That is all there is. Very simple. I am the bank.”
Ethics Lawyers Are Puzzled
Ethics lawyers are puzzled, noting that if there are no loans offsetting the value of Chicago Unit Acquisition LLC, Trump’s disclosure should list the outstanding debt as an asset for the company.
That brings up the question of whether Trump’s disclosure report is not complete or if he has partnered with an unknown secret creditor who could have the power at this point to influence the White House.
With President Trump still refusing to release his tax returns, likely because his personal fortune is less than he has claimed, it’s impossible at this time to figure out why a $50 million loan is being shrouded in secrecy.
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James Kosur is the former Editor-In-Chief and co-founder of Hill Reporter. He recently served as an editor for Business Insider and various other publications. James and his partners sold Hill Reporter to a new owner in July 2019.