Trump, page 4
“And as a wife, not as a manager?”
“I never comment on romance. She’s a great mother, a good woman who does a good job.”
Donald berated her scornfully in front of her staff—first at the Castle and later, at the Plaza. Though she had achieved revenue gains at her casino, inducing some of Donald’s casino advisers to taunt him with the suggestion that it be renamed Ivana’s Castle, he had decided abruptly in the spring of 1988 that she was through as president. Tales of her tearful departure—and scenes of his patronizing humiliation of her—were recounted by Ivana loyalists years later. “I don’t need this, some woman crying,” he reportedly said at her farewell ceremony. “I need somebody strong in here.” After she’d left distraught, he’d reached her on a speakerphone while he met with her top executives in a Castle conference and insisted that she “say hello” to everyone, evoking another deluge.
Bringing her home to New York may also have doomed the marriage, for it put them in the same room—too often. His feelings about her were a mass of contradictions. He confessed to others “the guilt” he felt over having made her “totally subservient.” She later acknowledged it herself, conceding in legal documents that she’d been persuaded throughout their life together that Donald “held all the cards,” concluding: “This was apparently what he wanted me to think because it was important to him (although damaging to the children and me) for me to appear submissive.” Ironically, the acquiescence on which he had insisted wound up crushing whatever interest he had in her. “She wasn’t challenging,” he confided. “I left essentially because I was bored.”
He had had nothing but contempt for her social climbing—not recognizing her insistent pursuit of a role in New York society as a stubborn statement of her independence, a willful hunt to establish her own position in a wider circle. Gradually she must have become, in his mind, one of the stick women—bones tied together in $10,000 dresses—who haunted the dinner party circuit he abhorred. He freely castigated the very status she sought, telling reporters he couldn’t stand 80 percent of her society friends.
But what really galled him was the part she’d come to play so eagerly in a scenario he’d written himself. He had created a fantasy life of personal excess as a commercial vehicle for the Trump Organization, all part of a sales strategy that magically merged his ego and business needs. But she had begun to love living the fantasy—she was enchanted by Mar-A-Lago, the Florida citadel he’d purchased for its aerial-shot impact, and she actually took South Pacific tours on the Trump Princess, the world’s second-largest yacht he’d bought as a casino attraction, docked next to the Castle to lure big spenders. Didn’t she realize this was just shtick? While he could step outside this charade, study it, tinker with it, smile at it, she had come to believe in it. Once she let herself become a beaming walk-on in the commercial life he’d scripted, she was as surreal to him as all the rest of it.
So he had started the new decade with a new declaration: He was leaving. But neither Ivana nor he was sure if he meant it. Ivana wanted to hang on, but almost as desperately, she wanted to win this new test of nerves between them. She’d heard him trumpet his conquest of Merv Griffin in the battle for the Taj at a New Year’s party the year before, announcing “I wish I had another Merv to bat around.” She was determined it wasn’t going to be her. If the marriage ended, she would leave with the upper hand. She would also leave with a meaningful chunk of his net worth. And if they agreed to maintain the marriage, she was going to secure her future with a new nuptial agreement that gave her a fair share of his wealth.
Even before Donald took off for Tokyo for the Mike Tyson–Buster Douglas fight in early February, Ivana’s lawyer and trusted friend, Michael Kennedy, was talking to Donald. Kennedy was making it clear that Ivana, wounded by a Christmas confrontation in Aspen with a brazen girlfriend of Donald’s, did not want a divorce. But she was demanding a 20 to 25 percent slice of Donald’s estimated half-billion dollars in assets, as published by Forbes magazine. She wanted this $125 million commitment in a new nuptial agreement, and the implication was that if she didn’t get it, a public separation would ensue. In his softer moments with Kennedy, Donald said he was interested in an upward revision of the roughly $25 million agreement—$14 million in cash plus properties—that they’d signed a little more than two years earlier. But in the end, Donald brushed the suggestion aside and broke off the talks, insisting on adhering to the numbers in the 1987 postnuptial.
As soon as Donald was out of town, Kennedy, Ivana, and a hurriedly hired publicist named John Scanlon began planning a preemptive strike on Donald’s iron bunker of a nuptial contract. Timed to appear while Donald was in the air on his way back from Japan to assure Ivana unanswered, first-day news dominance, the New York Daily News’ front page was decorated by gossip columnist Liz Smith with Ivana’s prepackaged version of the breakup, complete with vague allusions to Donald’s “betrayal” and Ivana’s role as his “full-time business partner.” Donald’s business trip had gone badly—Tyson, in whom he had invested millions, lost the heavyweight crown, and his hunt for deals and cash had produced neither. Then he got Ivana’s bad news just as he landed and was enraged as much by the fact that someone else was manipulating his media as he was by its portrayal of him as a philanderer.
Hiding behind an imaginary spokesman, Donald began likening Ivana to hotel baroness Leona Helmsley, whom he’d just labeled in an interview “a truly evil human being” and a “vicious, horrible woman” who mistreated her employees “worse than anyone I’ve ever witnessed.” This poisonous assault—and other leaks to gossip columnists so odious one described them as too offensive to print—boomeranged. He contemplated taking the Leona image a step further, branding Ivana as “the equivalent of Imelda Marcos and Leona Helmsley wrapped up in one,” exposing parallels of Imelda’s shoe glut in Ivana’s own closet, while simultaneously circulating stories of her harsh management of the Plaza. “There are two Ivanas,” he whispered, promising that the public would be “repulsed” by the truth about how she spent money. “If I wanted to, I could win the war of PR,” he said, “but I don’t want to.” After his initial Helmsley potshot, even Donald may have sensed, as the suffering Ivana assumed heroic proportions in the media, that dumping on her was an image kamikaze mission.
He had tempted fate with the timing of the marital break. He, and only he, knew just how badly his empire was slipping. His advisers were warning him that his sudden and still secret problem in cajoling new financing out of the dry old holes was compounded by the spectacle he was becoming in the press. They told him that anything that made his financial statements take-home reading for the onetime trusting bankers was bad news. Even if the bankers had as strong a constitutional commitment to the sanctity of postnuptials as he, the advisers argued, they might unconsciously add up the unleveraged assets and divide them by two.
As the months wore on, Kennedy and Donald reopened their talks. They had known each other since Ivana and Donald got married in 1977, and though Donald had retained a battery of attorneys to handle his dispute with Ivana, he preferred to talk directly with Kennedy himself. At Kennedy’s request, he got a letter from his lawyer permitting their continuing dialogue, without the presence of counsel. They talked numbers, and while they understood one another’s math, they were at times talking past each other about the ultimate result. Kennedy was still in search of a new nuptial, with Ivana disdaining divorce, while most of the time at least, an undecided Donald seemed to be looking to set a new price for a final breakup.
The highest hard offer Donald made was $40 million, a $2 million-a-year allotment for twenty years plus the properties, bringing the total commitment to Ivana to well in excess of $50 million. When Kennedy balked, Donald hinted that he might raise it to $50 million in cash plus the properties. That convinced Kennedy he could get Trump as high as $75 million, and he told Ivana and her team that would be about as far as Donald would go, concluding that they were only a doable $25 million apart. Kennedy began telling people—and the newspapers reported—that Trump had made a $100 million offer. But that was just intended to give Donald face-saving room if they settled at $75 million.
Ivana and her lawyer decided to tough it out for this unattainable prize, rejecting the $50 million. Incredibly, the woman who had shared thirteen years of Trump’s life and still bore the title of executive vice president in his compact organization knew so little about the true dimensions of his wealth that she and Kennedy had rejected an already impossible offer. An angry victim of his own hyped wealth, Donald cursed at Kennedy, “You will rue the day.”
By then, the dispute between them had been in court for weeks, with Ivana having filed a civil suit. She was hardly in a position to file for divorce; she’d be left with the meager provisions of the latest nuptial contract. Instead, even though that agreement was the result of five months of intense bargaining and several drafts, she had challenged it as an illegal delusion, a product of her husband’s misrepresentations to her about their marriage and his wealth. Once she’d rejected the sidebar offer Donald made to Kennedy, she had no choice but to push ahead in her effort to overturn the nuptial, even though she knew she was playing to his strong suit. In legal papers, she now demanded half his empire, valuing it at a ludicrous $5 billion, charging that the $1.1 billion estimate listed by him when they hammered out the agreement in 1987 was a hoax. She hired detectives—heavy hitters imported in cowboy hats from Texas—but she knew so little about him they had to work without leads.
She charged in court papers that “she believed” that Donald had engaged in extramarital relations for years, to which he replied that “continuing love and affection was not a material part of the 1987 agreement,” as chilling a case-law suggestion as his lawyers could fashion. It turned out that the prescient Donald had removed the pledge, which had indeed been contained in the previous nuptials. In his mind, it may have been the price he exacted for increasing her booty so dramatically in the 1987 agreement. He had, according to Ivana, suggested as early as 1986 that an open marriage “might be interesting,” but she had rejected the notion. The idea popped up right around the time that the Village Voice revealed that Donald had been buying jewelry at Bulgari’s and using the old empty box trick to dodge the sales tax, but instead of sending the box to his home in Greenwich, he’d reportedly sent one package for a $15,000 purchase to the Greenwich home of his lawyer, Roy Cohn. The ruse address suggested it was a gift he didn’t want Ivana to know about.
In any event, Donald seemed to regard her Christmas Eve execution of the new agreement as a form of release. Apparently believing that he no longer owed her a legal obligation of love, he withdrew it, as if that were the only reason he had ever offered a display of it. In the aftermath of this agreement, their marriage grew cold and Donald’s onetime clandestine excursions became a bold and sustained high-risk adventure.
It was in the middle of this fierce exchange that another crisis hit, and Donald made a different kind of news. Hints of it had appeared since the beginning of the year. In January, a two-page ad for the Trump Princess in Yachting magazine had provoked speculation in the dailies as to why Donald was selling it. He tried to explain this sea-search for $115 million in cash by claiming he was replacing the 282-foot vessel with a bigger model. By early June, noting the drooping prices of Donald’s casino bonds, Salomon Brothers publicly urged its customers to sell any holdings they might have. A noted casino analyst, Marvin Roffman, flatly predicted in one news story that the Taj wouldn’t make it, and Donald’s threats to sue pushed Roffman’s investment firm to fire him. If that much-publicized “off-with-his-head” reaction hadn’t sent shock waves to the financial community, the actual disastrous opening of the Taj certainly did. Gigantic crowds of customers, swamping horribly mismanaged accounting and coin-changing systems, forced the roping off of most of the slots for days. Even when the machines were finally opened, the waves of players were still not generating enough revenue to come near to covering the debt service.
On the heels of the Taj debacle, Neil Barsky, the Wall Street Journal’s crafty Trump watcher who’d broken the Roffman stories, cornered Donald for a wide-ranging interview. Feigning more knowledge of Donald’s cash crush than he actually had, Barsky cajoled Donald into admitting in an April interview that he was trying to sell or refinance much of his empire. Barsky let Donald put the best face on the news, quoting him as saying he was on his way to becoming the “King of Cash,” but the story was a warning disguised as a get-well card. Barsky’s revelations were quickly followed by a Forbes downgrading of Donald’s wealth, dropping him from the $1.7 billion that the magazine had pegged him at in 1989 to $500 million. Forbes and the Philadelphia Inquirer’s Dave Johnston, Atlantic City’s top casino reporter, simultaneously uncovered a confidential financial statement Donald had submitted to New Jersey regulators. Their analysis of its crystal-clear overstatement of the value of Donald’s properties blew the lid off the business side of the Trump story.
With the grim bankers gathering around Donald’s Trump Tower conference table like pallbearers, even Michael Kennedy was beginning to get the message. When the burrower Barsky exposed the hushed meetings in a June 4 front-page article, he cited unnamed banking sources who obviously thought, like Scanlon and Ivana had months earlier, that it was better if they shaped the news coverage of their ongoing combat rather than leave it to Donald. The “cash-shortage-has-become-critical” story was immediately picked up in papers across the country. The Trump debacle was almost as big a news event as his divorce, with imaginary “Best Banker I Ever Suckered” headlines hovering over the embarrassed table, recalling the New York Post’s ballyhooed quote from a Trump lover—“Best Sex I Ever Had.”
The Barsky piece also linked the two cataclysms simultaneously shaking Donald’s life. His “private life” had become “a liability,” wrote Barsky, because the bankers were unsure “what portion of his empire could be claimed by his wife in any future divorce action.” Barsky also quoted “people close to Trump” as saying that he intended, in view of his new situation, to seek a major reduction in the amount pledged to Ivana in the postnuptial agreement. While that was an obvious ploy, the damage the divorce mess had done to the image Donald had cultivated was unquestionably connected with his sudden financial distress.
A New York Times story noted “the erosion” of the value of the “tarnished” Trump name, quoting the chairman of a corporate identity firm as saying: “It’s going to be hard to view Mr. Trump as a prudent individual. People may now think twice about flying on an airplane that bears his name.” In fact, word was that an internal marketing survey done for the Trump Shuttle had revealed that caution wasn’t the only motive for riding the competitor, Pan Am. Businesswomen were boycotting Donald’s troubled airline in disturbing numbers—apparently out of anger at his perceived boorishness.
The dissolution of his marriage had also hurt him with a far more important group of potential customers—the Japanese. In the months since his return from Tokyo, nascent deals to sell the Trump Princess; blocks of apartments in his new condo building, the Palace; and a stake in the Plaza to Japanese buyers had fallen apart, as well as attempts to get a loan against his equity in the Grand Hyatt hotel.
The immediate cause of the bank meetings, which had been initiated by Donald in late May, was his inability to make a $43 million payment due on the bonds of Ivana’s former casino, Trump Castle. He needed the bankers to loan him $20 million of that payment, and he had tried to convince them to contribute another $80 million for general operations. The consortium of his seven major New York and New Jersey banks started instead at $50 million, raising it by mid-June to $65 million but wanted to tie it to an overall restructuring of Trump’s debts. Donald had personally injected himself into the bargaining—sitting with the major banks for twelve-hour stretches, calling foreign banks that were not at the table but had smaller stakes in his loans up to 1:00 A.M. and charming those reluctant about restructuring, even taking orders for fries, shakes, and burgers and making a run to McDonald’s. As engaging as Trump was, the bankers also picked up another, less friendly message. They kept hearing that Trump was quietly negotiating a new loan with a major bank that had never lent him a nickel—Chemical was the rumor—and that he was ready to secure the loan with the last bit of real collateral he had. This was a fearsome prospect for the banks already up to their necks with Trump debt and looking to lay claim themselves, as part of any new loan and restructuring deal, to the equity he was supposedly marketing elsewhere. This mix of charm and, as it turned out, bluff about the new bank combined to push the bankers at the table toward the deal Donald wanted. The stage appeared set for a last-minute reprieve, with a bank agreement to be announced on the June 15 bond payment deadline, followed by a joyous birthday celebration the following day in Atlantic City. But, with the foreign banks particularly upset, the talks broke down that Friday over who would give how much and what they would take in return. When they did, Donald “turned white,” in the words of a participant. While Donald did win a ten-day extension on the payment from the bond trustee, he had to attend his party without his prize.
Teams of bankers continued to scour his assets for any sign of value that wasn’t already hocked, and found slim pickings. One of the few properties that at least momentarily seemed capable of attracting a price exceeding its debt was the Plaza. However, the bankers, the buyers, and Donald were all frustrated by the presence of Ivana. How would a new owner handle her? Throw her out? Be forced by public sentiment to keep her? It was just one more piece of a stymieing puzzle—as was the substantial, unleveraged equity in the Greenwich mansion and Trump Tower apartment, also protected from the bankers by Ivana’s stake in them.
Ivana did not betray a hint of recognition of the gravity of Donald’s crisis in her own daily life. On the day of his Atlantic City birthday bash, with the bank talks at a peak, she was off in London on what was reported as an extended shopping spree. On The Tonight Show Jay Leno said he’d seen a terrific photo opportunity outside the Plaza—Ivana tossing coins into the fountain and Donald diving in after them.
“I never comment on romance. She’s a great mother, a good woman who does a good job.”
Donald berated her scornfully in front of her staff—first at the Castle and later, at the Plaza. Though she had achieved revenue gains at her casino, inducing some of Donald’s casino advisers to taunt him with the suggestion that it be renamed Ivana’s Castle, he had decided abruptly in the spring of 1988 that she was through as president. Tales of her tearful departure—and scenes of his patronizing humiliation of her—were recounted by Ivana loyalists years later. “I don’t need this, some woman crying,” he reportedly said at her farewell ceremony. “I need somebody strong in here.” After she’d left distraught, he’d reached her on a speakerphone while he met with her top executives in a Castle conference and insisted that she “say hello” to everyone, evoking another deluge.
Bringing her home to New York may also have doomed the marriage, for it put them in the same room—too often. His feelings about her were a mass of contradictions. He confessed to others “the guilt” he felt over having made her “totally subservient.” She later acknowledged it herself, conceding in legal documents that she’d been persuaded throughout their life together that Donald “held all the cards,” concluding: “This was apparently what he wanted me to think because it was important to him (although damaging to the children and me) for me to appear submissive.” Ironically, the acquiescence on which he had insisted wound up crushing whatever interest he had in her. “She wasn’t challenging,” he confided. “I left essentially because I was bored.”
He had had nothing but contempt for her social climbing—not recognizing her insistent pursuit of a role in New York society as a stubborn statement of her independence, a willful hunt to establish her own position in a wider circle. Gradually she must have become, in his mind, one of the stick women—bones tied together in $10,000 dresses—who haunted the dinner party circuit he abhorred. He freely castigated the very status she sought, telling reporters he couldn’t stand 80 percent of her society friends.
But what really galled him was the part she’d come to play so eagerly in a scenario he’d written himself. He had created a fantasy life of personal excess as a commercial vehicle for the Trump Organization, all part of a sales strategy that magically merged his ego and business needs. But she had begun to love living the fantasy—she was enchanted by Mar-A-Lago, the Florida citadel he’d purchased for its aerial-shot impact, and she actually took South Pacific tours on the Trump Princess, the world’s second-largest yacht he’d bought as a casino attraction, docked next to the Castle to lure big spenders. Didn’t she realize this was just shtick? While he could step outside this charade, study it, tinker with it, smile at it, she had come to believe in it. Once she let herself become a beaming walk-on in the commercial life he’d scripted, she was as surreal to him as all the rest of it.
So he had started the new decade with a new declaration: He was leaving. But neither Ivana nor he was sure if he meant it. Ivana wanted to hang on, but almost as desperately, she wanted to win this new test of nerves between them. She’d heard him trumpet his conquest of Merv Griffin in the battle for the Taj at a New Year’s party the year before, announcing “I wish I had another Merv to bat around.” She was determined it wasn’t going to be her. If the marriage ended, she would leave with the upper hand. She would also leave with a meaningful chunk of his net worth. And if they agreed to maintain the marriage, she was going to secure her future with a new nuptial agreement that gave her a fair share of his wealth.
Even before Donald took off for Tokyo for the Mike Tyson–Buster Douglas fight in early February, Ivana’s lawyer and trusted friend, Michael Kennedy, was talking to Donald. Kennedy was making it clear that Ivana, wounded by a Christmas confrontation in Aspen with a brazen girlfriend of Donald’s, did not want a divorce. But she was demanding a 20 to 25 percent slice of Donald’s estimated half-billion dollars in assets, as published by Forbes magazine. She wanted this $125 million commitment in a new nuptial agreement, and the implication was that if she didn’t get it, a public separation would ensue. In his softer moments with Kennedy, Donald said he was interested in an upward revision of the roughly $25 million agreement—$14 million in cash plus properties—that they’d signed a little more than two years earlier. But in the end, Donald brushed the suggestion aside and broke off the talks, insisting on adhering to the numbers in the 1987 postnuptial.
As soon as Donald was out of town, Kennedy, Ivana, and a hurriedly hired publicist named John Scanlon began planning a preemptive strike on Donald’s iron bunker of a nuptial contract. Timed to appear while Donald was in the air on his way back from Japan to assure Ivana unanswered, first-day news dominance, the New York Daily News’ front page was decorated by gossip columnist Liz Smith with Ivana’s prepackaged version of the breakup, complete with vague allusions to Donald’s “betrayal” and Ivana’s role as his “full-time business partner.” Donald’s business trip had gone badly—Tyson, in whom he had invested millions, lost the heavyweight crown, and his hunt for deals and cash had produced neither. Then he got Ivana’s bad news just as he landed and was enraged as much by the fact that someone else was manipulating his media as he was by its portrayal of him as a philanderer.
Hiding behind an imaginary spokesman, Donald began likening Ivana to hotel baroness Leona Helmsley, whom he’d just labeled in an interview “a truly evil human being” and a “vicious, horrible woman” who mistreated her employees “worse than anyone I’ve ever witnessed.” This poisonous assault—and other leaks to gossip columnists so odious one described them as too offensive to print—boomeranged. He contemplated taking the Leona image a step further, branding Ivana as “the equivalent of Imelda Marcos and Leona Helmsley wrapped up in one,” exposing parallels of Imelda’s shoe glut in Ivana’s own closet, while simultaneously circulating stories of her harsh management of the Plaza. “There are two Ivanas,” he whispered, promising that the public would be “repulsed” by the truth about how she spent money. “If I wanted to, I could win the war of PR,” he said, “but I don’t want to.” After his initial Helmsley potshot, even Donald may have sensed, as the suffering Ivana assumed heroic proportions in the media, that dumping on her was an image kamikaze mission.
He had tempted fate with the timing of the marital break. He, and only he, knew just how badly his empire was slipping. His advisers were warning him that his sudden and still secret problem in cajoling new financing out of the dry old holes was compounded by the spectacle he was becoming in the press. They told him that anything that made his financial statements take-home reading for the onetime trusting bankers was bad news. Even if the bankers had as strong a constitutional commitment to the sanctity of postnuptials as he, the advisers argued, they might unconsciously add up the unleveraged assets and divide them by two.
As the months wore on, Kennedy and Donald reopened their talks. They had known each other since Ivana and Donald got married in 1977, and though Donald had retained a battery of attorneys to handle his dispute with Ivana, he preferred to talk directly with Kennedy himself. At Kennedy’s request, he got a letter from his lawyer permitting their continuing dialogue, without the presence of counsel. They talked numbers, and while they understood one another’s math, they were at times talking past each other about the ultimate result. Kennedy was still in search of a new nuptial, with Ivana disdaining divorce, while most of the time at least, an undecided Donald seemed to be looking to set a new price for a final breakup.
The highest hard offer Donald made was $40 million, a $2 million-a-year allotment for twenty years plus the properties, bringing the total commitment to Ivana to well in excess of $50 million. When Kennedy balked, Donald hinted that he might raise it to $50 million in cash plus the properties. That convinced Kennedy he could get Trump as high as $75 million, and he told Ivana and her team that would be about as far as Donald would go, concluding that they were only a doable $25 million apart. Kennedy began telling people—and the newspapers reported—that Trump had made a $100 million offer. But that was just intended to give Donald face-saving room if they settled at $75 million.
Ivana and her lawyer decided to tough it out for this unattainable prize, rejecting the $50 million. Incredibly, the woman who had shared thirteen years of Trump’s life and still bore the title of executive vice president in his compact organization knew so little about the true dimensions of his wealth that she and Kennedy had rejected an already impossible offer. An angry victim of his own hyped wealth, Donald cursed at Kennedy, “You will rue the day.”
By then, the dispute between them had been in court for weeks, with Ivana having filed a civil suit. She was hardly in a position to file for divorce; she’d be left with the meager provisions of the latest nuptial contract. Instead, even though that agreement was the result of five months of intense bargaining and several drafts, she had challenged it as an illegal delusion, a product of her husband’s misrepresentations to her about their marriage and his wealth. Once she’d rejected the sidebar offer Donald made to Kennedy, she had no choice but to push ahead in her effort to overturn the nuptial, even though she knew she was playing to his strong suit. In legal papers, she now demanded half his empire, valuing it at a ludicrous $5 billion, charging that the $1.1 billion estimate listed by him when they hammered out the agreement in 1987 was a hoax. She hired detectives—heavy hitters imported in cowboy hats from Texas—but she knew so little about him they had to work without leads.
She charged in court papers that “she believed” that Donald had engaged in extramarital relations for years, to which he replied that “continuing love and affection was not a material part of the 1987 agreement,” as chilling a case-law suggestion as his lawyers could fashion. It turned out that the prescient Donald had removed the pledge, which had indeed been contained in the previous nuptials. In his mind, it may have been the price he exacted for increasing her booty so dramatically in the 1987 agreement. He had, according to Ivana, suggested as early as 1986 that an open marriage “might be interesting,” but she had rejected the notion. The idea popped up right around the time that the Village Voice revealed that Donald had been buying jewelry at Bulgari’s and using the old empty box trick to dodge the sales tax, but instead of sending the box to his home in Greenwich, he’d reportedly sent one package for a $15,000 purchase to the Greenwich home of his lawyer, Roy Cohn. The ruse address suggested it was a gift he didn’t want Ivana to know about.
In any event, Donald seemed to regard her Christmas Eve execution of the new agreement as a form of release. Apparently believing that he no longer owed her a legal obligation of love, he withdrew it, as if that were the only reason he had ever offered a display of it. In the aftermath of this agreement, their marriage grew cold and Donald’s onetime clandestine excursions became a bold and sustained high-risk adventure.
It was in the middle of this fierce exchange that another crisis hit, and Donald made a different kind of news. Hints of it had appeared since the beginning of the year. In January, a two-page ad for the Trump Princess in Yachting magazine had provoked speculation in the dailies as to why Donald was selling it. He tried to explain this sea-search for $115 million in cash by claiming he was replacing the 282-foot vessel with a bigger model. By early June, noting the drooping prices of Donald’s casino bonds, Salomon Brothers publicly urged its customers to sell any holdings they might have. A noted casino analyst, Marvin Roffman, flatly predicted in one news story that the Taj wouldn’t make it, and Donald’s threats to sue pushed Roffman’s investment firm to fire him. If that much-publicized “off-with-his-head” reaction hadn’t sent shock waves to the financial community, the actual disastrous opening of the Taj certainly did. Gigantic crowds of customers, swamping horribly mismanaged accounting and coin-changing systems, forced the roping off of most of the slots for days. Even when the machines were finally opened, the waves of players were still not generating enough revenue to come near to covering the debt service.
On the heels of the Taj debacle, Neil Barsky, the Wall Street Journal’s crafty Trump watcher who’d broken the Roffman stories, cornered Donald for a wide-ranging interview. Feigning more knowledge of Donald’s cash crush than he actually had, Barsky cajoled Donald into admitting in an April interview that he was trying to sell or refinance much of his empire. Barsky let Donald put the best face on the news, quoting him as saying he was on his way to becoming the “King of Cash,” but the story was a warning disguised as a get-well card. Barsky’s revelations were quickly followed by a Forbes downgrading of Donald’s wealth, dropping him from the $1.7 billion that the magazine had pegged him at in 1989 to $500 million. Forbes and the Philadelphia Inquirer’s Dave Johnston, Atlantic City’s top casino reporter, simultaneously uncovered a confidential financial statement Donald had submitted to New Jersey regulators. Their analysis of its crystal-clear overstatement of the value of Donald’s properties blew the lid off the business side of the Trump story.
With the grim bankers gathering around Donald’s Trump Tower conference table like pallbearers, even Michael Kennedy was beginning to get the message. When the burrower Barsky exposed the hushed meetings in a June 4 front-page article, he cited unnamed banking sources who obviously thought, like Scanlon and Ivana had months earlier, that it was better if they shaped the news coverage of their ongoing combat rather than leave it to Donald. The “cash-shortage-has-become-critical” story was immediately picked up in papers across the country. The Trump debacle was almost as big a news event as his divorce, with imaginary “Best Banker I Ever Suckered” headlines hovering over the embarrassed table, recalling the New York Post’s ballyhooed quote from a Trump lover—“Best Sex I Ever Had.”
The Barsky piece also linked the two cataclysms simultaneously shaking Donald’s life. His “private life” had become “a liability,” wrote Barsky, because the bankers were unsure “what portion of his empire could be claimed by his wife in any future divorce action.” Barsky also quoted “people close to Trump” as saying that he intended, in view of his new situation, to seek a major reduction in the amount pledged to Ivana in the postnuptial agreement. While that was an obvious ploy, the damage the divorce mess had done to the image Donald had cultivated was unquestionably connected with his sudden financial distress.
A New York Times story noted “the erosion” of the value of the “tarnished” Trump name, quoting the chairman of a corporate identity firm as saying: “It’s going to be hard to view Mr. Trump as a prudent individual. People may now think twice about flying on an airplane that bears his name.” In fact, word was that an internal marketing survey done for the Trump Shuttle had revealed that caution wasn’t the only motive for riding the competitor, Pan Am. Businesswomen were boycotting Donald’s troubled airline in disturbing numbers—apparently out of anger at his perceived boorishness.
The dissolution of his marriage had also hurt him with a far more important group of potential customers—the Japanese. In the months since his return from Tokyo, nascent deals to sell the Trump Princess; blocks of apartments in his new condo building, the Palace; and a stake in the Plaza to Japanese buyers had fallen apart, as well as attempts to get a loan against his equity in the Grand Hyatt hotel.
The immediate cause of the bank meetings, which had been initiated by Donald in late May, was his inability to make a $43 million payment due on the bonds of Ivana’s former casino, Trump Castle. He needed the bankers to loan him $20 million of that payment, and he had tried to convince them to contribute another $80 million for general operations. The consortium of his seven major New York and New Jersey banks started instead at $50 million, raising it by mid-June to $65 million but wanted to tie it to an overall restructuring of Trump’s debts. Donald had personally injected himself into the bargaining—sitting with the major banks for twelve-hour stretches, calling foreign banks that were not at the table but had smaller stakes in his loans up to 1:00 A.M. and charming those reluctant about restructuring, even taking orders for fries, shakes, and burgers and making a run to McDonald’s. As engaging as Trump was, the bankers also picked up another, less friendly message. They kept hearing that Trump was quietly negotiating a new loan with a major bank that had never lent him a nickel—Chemical was the rumor—and that he was ready to secure the loan with the last bit of real collateral he had. This was a fearsome prospect for the banks already up to their necks with Trump debt and looking to lay claim themselves, as part of any new loan and restructuring deal, to the equity he was supposedly marketing elsewhere. This mix of charm and, as it turned out, bluff about the new bank combined to push the bankers at the table toward the deal Donald wanted. The stage appeared set for a last-minute reprieve, with a bank agreement to be announced on the June 15 bond payment deadline, followed by a joyous birthday celebration the following day in Atlantic City. But, with the foreign banks particularly upset, the talks broke down that Friday over who would give how much and what they would take in return. When they did, Donald “turned white,” in the words of a participant. While Donald did win a ten-day extension on the payment from the bond trustee, he had to attend his party without his prize.
Teams of bankers continued to scour his assets for any sign of value that wasn’t already hocked, and found slim pickings. One of the few properties that at least momentarily seemed capable of attracting a price exceeding its debt was the Plaza. However, the bankers, the buyers, and Donald were all frustrated by the presence of Ivana. How would a new owner handle her? Throw her out? Be forced by public sentiment to keep her? It was just one more piece of a stymieing puzzle—as was the substantial, unleveraged equity in the Greenwich mansion and Trump Tower apartment, also protected from the bankers by Ivana’s stake in them.
Ivana did not betray a hint of recognition of the gravity of Donald’s crisis in her own daily life. On the day of his Atlantic City birthday bash, with the bank talks at a peak, she was off in London on what was reported as an extended shopping spree. On The Tonight Show Jay Leno said he’d seen a terrific photo opportunity outside the Plaza—Ivana tossing coins into the fountain and Donald diving in after them.
