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How Much Did Trump Win by Losing?

Check out highlights from Elon Musk’s appearance on Sway, the Times Opinion podcast hosted by Kara Swisher. And read on for a scoop on Jessica Alba’s Honest Company exploring a sale. (Want this in your inbox each morning? Sign up here.)

The New York Times: President Trump’s finances have remained under wraps for years. But a major investigation by The Times’s Russ Buettner, Sue Craig and Mike McIntire has cracked open his business, revealing from tax records that he paid just $750 in federal income taxes in 2016 and 2017 and nothing for most of the past 15 years.

Here’s what the report shows about the state of the Trump Organization — and the enormous financial and legal pressures Mr. Trump faces.

Huge losses across the Trump empire: Mr. Trump’s golf resorts, including Doral in Florida and three in Europe, have lost $315.6 million since 2000. The Trump Corporation, a real estate services company, has lost $134 million in that time.

o Those reported losses were used to offset profits from Mr. Trump’s brand-licensing business, which netted $427 million from 2004 to 2018. Other moneymakers include Trump Tower and a 30 percent stake in two office towers run by Vornado.

Ticking time bombs: Mr. Trump hasn’t repaid any principal for the mortgage on Trump Tower, which means $100 million will come due in 2022. He personal guaranteed company loans totaling $421 million, most of which comes due within the next four years. And a defeat in a dispute with the I.R.S. over a $73 million tax refund could mean he owes $100 million (plus interest).

Questionable financial maneuvers: Mr. Trump appears to have used aggressive accounting, particularly by writing off about $26 million in “consulting fees” as business expenses to reduce income. Those included $747,622 in consulting fees that match income reported by his daughter Ivanka, a Trump Organization executive at the time. (He also expensed $70,000 in hairstyling during his run on NBC’s “The Apprentice.”)

The fallout: Mr. Trump insisted at a news conference that he had “paid a lot” in taxes. Democratic lawmakers renewed demands for his tax returns and criticized him for paying less in taxes than most Americans. Representative Alexandria Ocasio-Cortez tweeted, “In 2016 & ’17, I paid thousands of dollars a year in taxes *as a bartender.*”

What may lie ahead: “Should he win re-election,” our colleagues write, “his lenders could be placed in the unprecedented position of weighing whether to foreclose on a sitting president.”


Today’s DealBook Briefing was written by Andrew Ross Sorkin in Connecticut, Lauren Hirsch in New York, Ephrat Livni in Washington and Michael J. de la Merced and Jason Karaian in London.


ImageOn Elon Musk's mind: Tesla's share price ... and the end of the world.
On Elon Musk’s mind: Tesla’s share price … and the end of the world.Credit…Aly Song/Reuters

The Tesla C.E.O. sat down with our Times Opinion colleague Kara Swisher for the latest episode of her new podcast, Sway, out this morning. The riveting conversation ranges from his company’s stratospheric stock price to the end of the world. Find the highlights below — and check out the full podcast.

On politics:

Mr. Musk remains noncommittal about how he intends to vote: “Let’s just see how the debates go.” But he told Kara that climate change — which he has called the planet’s biggest threat — is on his mind: “I want to see if Biden has it together. If he does, he probably wins.”

On Tesla’s stock price:

He noted that he had described it as “a bit high,” well before where it’s trading now. (It closed at $407.34 on Friday.) But he added, “Do I think Tesla will be worth more than this in five years? I think the answer is yes.”

On the future of energy:

He said that the end of vehicles relying on fossil fuels is near, but also expressed sympathy for the industry’s workers: “For a lot of the people in the oil and gas industry, especially if they’re on the older side, they kind of bought their companies and did their work before it was clear that this was a serious issue.”

On managing:

Long criticized for being a micromanager, Mr. Musk says that he does want to delegate responsibilities. But he said, “The practical reality of it is that I cannot delegate, because I can’t find people to delegate it to.”

How the world ends:

Mr. Musk worries about a lot, including meteors, “supervolcanoes” and increasingly severe climate variation. “And then,” he adds, “eventually the sun’s going to expand and engulf Earth.”


Jessica Alba is putting her company on the block.Credit…Thos Robinson/Getty Images for The New York Times

The natural beauty and baby care company has hired Morgan Stanley and Jefferies to run a sale process that it hopes will value the company at more than $1 billion, DealBook’s Lauren Hirsch has learned. (Morgan Stanley declined to comment, and Jefferies and The Honest Company didn’t respond to requests for comment.)

Its valuation will be a test of its turnaround. After making a splash with natural products and celebrity backing — and raising funds at a $1.7 billion valuation as it considered an I.P.O. — it ran into trouble in 2016 when reports questioned its ingredient-labeling practices. Growth stalled, and the company’s valuation had dropped to less than $1 billion by 2017.

It has embarked on a turnaround. The company hired as its C.E.O. Nick Vlahos of Clorox, who focused on expanding R.&D. operations and rolling out a clean-beauty line. And it now sells in physical stores like Walgreens.

o It now has about $300 million in sales and is profitable, Lauren hears.

Who might bid? Potential suitors include larger consumer companies looking to expand their foothold in the clean-beauty market or a special-purpose acquisition vehicle that could merge with Honest and give it a public stock listing.

TikTok scored a win over the Trump administration in court. A federal judge granted it an 11th-hour preliminary injunction against the federal government’s order to ban its video app from Apple’s and Google’s app stores.

Florida has eased much of its lockdown. Gov. Ron DeSantis lifted restrictions on restaurants and other businesses on Friday, and banned fines against people who wear masks. The move revived debate over economic closures, particularly as health experts fear a second wave of infections.

Alphabet settled lawsuits over sexual harassment claims. The parent company of Google agreed to give its board more oversight over future cases of sexual misconduct, and pledged to spend $310 million over the next decade to bolster corporate diversity programs. The tech giant faced shareholder claims after revelations of a big pay package for a senior executive, Andy Rubin, accused of sexual harassment.

Uber can keep operating in London. A judge in Britain found that the ride-hailing company met a “fit and proper” standard to stay in business, after the city’s transport regulator revoked its taxi license over safety issues.

What to watch this week: The first U.S. presidential debate is tomorrow at 9 p.m. Eastern. Shares in the data-mining company Palantir and the workplace organization app Asana will begin trading on the Big Board on Wednesday, via direct listings. Wednesday is also when payroll grants for U.S. airlines expire — unless Congress acts.


Judge Amy Coney Barrett is widely considered a potential ally of business.Credit…Carlos Barria/Reuters

President Trump named Judge Amy Coney Barrett on Saturday as his choice to replace Justice Ruth Bader Ginsburg on the Supreme Court.

Some relevant opinions from Judge Barrett’s time on the Seventh Circuit Court of Appeals:

o Gig workers: Judge Barrett ruled that drivers couldn’t sue the online food delivery platform Grubhub for overtime pay because they didn’t fall under a federal exemption to mandatory arbitration for some workers involved in interstate commerce.

o Business torts jurisdiction: She blocked an electronics parts maker’s trade secrets suit because the link between the company’s accusations and the defendants’ ties to Illinois, where the suit was filed, were too tenuous.

o Consumer class action: She decided in a Telephone Consumer Protection Act decision involving AT&T that the company’s feedback tool didn’t qualify as a prohibited auto-dialer that improperly sent customers texts.

How she may rule on business issues: Judge Barrett follows the philosophy of Justice Antonin Scalia, who was a staunch ally of corporations. She would miss a copyright showdown between Google and Oracle, for which oral arguments are next month. But if confirmed, she could be seated in time for a December hearing on U.S. companies’ liability for foreign human rights violations, brought by former child laborers in cocoa fields against Nestle and others.


From USAFact’s $10 million promotional campaign.

Before the first presidential debate, Steve Ballmer, the billionaire former C.E.O. of Microsoft and current owner of the L.A. Clippers, is introducing a $10 million campaign to persuade Americans to rely on verified data. It’s through USAFacts, the website he founded in 2017 to collect and present government data to the public in an accessible way.

Here are excerpts from Andrew’s conversation with Mr. Ballmer from late last week.

Why are you doing this?

People are going to spend all this money on political advertising, candidates, blah blah blah, and I just said, “Look, we’ve got to put some money into data in politics.” We’ve got to tell people there’s data there, data that you can act on. In a way, it’s the weirdest thing I’ve ever done.

It feels like people don’t seem to always care about accurate information, so long as it confirms their own point of view.

I found this quote that I think is one of the great quotes of all times: “A popular government, without popular information, or the means of acquiring it, is but a prologue to a farce or a tragedy, or perhaps both.” That’s James Madison from the founding of this country, essentially saying you’ve got to give people the facts.

Your entire effort appears to be something the government should be doing itself: making data accessible to Americans. You’re also focused on making sure politicians have real data. Does that frustrate you?

A business would ask: Can we re-engineer the process of data collection? Can we agree on a standard taxonomy for police and criminal justice data from the states, and just standardize the reporting? That is not a high-expense thing. There’s a one-time conversion cost. Are we going to do that?


o Two U.S. shale producers, Devon and WPX, are reportedly in talks to combine in an all-stock deal that would value the combined company at $6 billion. (Reuters)

o Caesars said it was in advanced discussions to buy the bookmaker William Hill in a potential deal worth GBP2.9 billion ($3.7 billion). (Sky News)

o The shoe brand Allbirds raised $100 million in a new round of funding led by the money manager Franklin Templeton, reportedly at a valuation of $1.7 billion. (WSJ)

Politics and policy

o Cash-strapped U.S. cities and states are turning to private donors like Mark Zuckerberg for hundreds of millions of dollars to fund election operations. (NYT)


o The Trump administration put new export limits on Semiconductor Manufacturing International Corporation, China’s most advanced computer chip company, deepening the tech cold war. (NYT)

o How a team of eBay operatives conspired to harass a blogger. (NYT)

o The electric vehicle maker Nikola said its founder had devised plans for its flagship truck in its basement. Tesla says he bought them from a designer in Croatia. (FT)

Best of the rest

o London-based bankers and traders are balking at being moved to the E.U. as part of Brexit planning. The reason: coronavirus travel restrictions. (FT)

o Scientists may have figured out why children fight off the coronavirus better than adults. (NYT)

o The world has Steve Wynn and Sheldon Adelson partly to thank for the career of DJ D-Sol. (Financial News)

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Originally posted on The New York Times. All rights reserved.

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