A key document obtained by BuzzFeed News shows how the GOP nominee took control of a taxpayer-owned landmark near the White House with only a $2.4 million equity investment. He also gave more than 22% of the project to his children Ivanka, Donald Jr., and Eric.
The stakes were allocated through separate companies bearing each of the childrens names, and the document indicates that those companies did not invest money. Nevertheless, their stakes could earn the children a big chunk of any profits generated from the taxpayer-owned site.
Trump has created a wealth generation mechanism for his kids, said Peter Smirniotopoulos, an adjunct professor of real estate at George Washington University School of Business. Smirniotopoulos said he does not support either Trump or Hillary Clinton for president.
Clearly this deal is a highly leveraged transaction, said real estate finance expert Daniel Alpert, who reviewed the new document and others related to the Trump lease. Alpert, managing partner of the investment bank Westwood Capital Partners LLC, said he did not support Donald Trump and has donated to the campaigns of Bernie Sanders and Hillary Clinton.
What is known is that Trump found ways to leverage his own wealth without putting cash on the table. According to a redacted version of the lease that was released to the public, Trump was required to put down a security deposit of $4 million but in the form of a letter of credit, not cash. Trump himself was listed as the personal guarantor of the project, records indicate, signing a $40 million guaranty which apparently also required no cash up front. That guaranty could be reduced based on how much equity Trump contributed to the project, the GSA said in a report to Congress.
