In January, Fred Trump is brought before the New York State Investigations Commission for a public hearing into his use of Trump Village to steal millions from the state. One of the many issues discussed in the investigation is that Fred Trump used state government funding intended for middle-income housing to build a shopping center instead.
He was grilled about an equipment-rental company he incorporated for this job and the outlandish charges he was billing the state for secondhand trucks and back hoes. He charged $21,000 to lease a dump truck valued at $3,600. He billed $8,280 for two tile scrappers valued at $500 apiece, a ploy the commission cited as an example of Trump’s “talent for getting every ounce of profit out of his housing project.” Fred hid his ownership of the equipment company from the state, and state inspectors observed him using much of the equipment to build the adjacent shopping center, which certainly wasn’t part of the state-subsidized project.Trump: The Deals and The Downfall by Wayne Barrett
Only when faced with the threat of the hearings had Fred returned to the state the $1.2 million he’d kept by overestimating his land costs. He’d banked the first land advances for over two years. He also had used the state excess to pay for the land he needed for his own shopping center and two other parcels covered in the city’s description of the total site, but unused in the Trump Village development. [Then-State Division of Housing Auditor Leo] Silverman testified that Trump purchased these three large sections of the site for his own commercial development “without putting up a nickel of his own money.”Trump: The Deals and The Downfall by Wayne Barrett
Trump had overestimated his construction costs by $6.6 million [equivalent to over $48 million in 2015 dollars]. Since his builder’s fee was based on a percentage of the estimated, not actual costs, he took what the commission called a $600,000 [equivalent to over $4.4 million in 2015 dollars] “windfall,” his additional fee based on the patently hyped cost predictions. When Silverman testified about this padding, tacked onto a $3.2 million fee Trump had already collected as a percent of real costs, the commission was stunned.Trump: The Deals and The Downfall by Wayne Barrett
Trump: The Deals and The Downfall by Wayne Barrett
Photograph: Jack Smith/NY Daily News Archive, via Getty Images