On this week’s episode of my podcast, I Have to Ask, I spoke to Adam Davidson, a staff writer at the New Yorker. Prior to joining the magazine, he co-hosted NPR’s Planet Money, which he helped found. At the New Yorker, he has been focusing on President Trump’s tangled business empire, which may now be in the crosshairs of federal law enforcement. Below is an edited excerpt from the show. In it, we discuss why people still don’t understand how Trump functions as a businessman, the real role Michael Cohen plays in Trumpworld, and why the Russia story and the Trump Organization story might really be the same story.
You can find links to every episode here; the entire audio interview is below. Please subscribe to I Have to Ask wherever you get your podcasts.
Isaac Chotiner: You have a new piece in which you mention the Iraq war and the financial crisis, both of which you covered, and write, “I thought of these earlier experiences this week as I began to feel a familiar clarity about what will unfold next in the Trump presidency. There are lots of details and surprises to come, but the end game of this presidency seems as clear now as those of Iraq and the financial crisis did months before they unfolded.” Then you add, “We are now in the end stages of the Trump presidency.” What is it that’s gone on in the last few weeks or months that’s made you think this?
Adam Davidson: For a year and a half now, I’m one of several reporters who’ve been studying intently Donald Trump’s businesses, his relationships with people around the world. And as a rule, this group of reporters finds it increasingly shocking just how flagrant the Trump Organization was in dealing with some of the shadiest—frankly, in cases, purely evil—people who made their money in wildly illegal and corrupt ways.
I do think most Americans, including Trump’s hardcore supporters, have a general sense that this is a guy who isn’t going to be a stickler for the rules, and has probably done some sort of technically illegal things or shady things. But I don’t think the full lawless and also kind of pathetic and lame nature of the Trump business has entered the national narrative in the way I think it should.
Before the Department of Justice announced that they were going to be seriously investigating Michael Cohen, it seemed at least possible that [Robert] Mueller’s investigation would end sort of in a draw, that he clearly would be able to show—because he already has—that there was collusion between some parts of the Trump world and some parts of the Kremlin. But I could imagine a situation where he says, “Well, we couldn’t really nail Donald Trump himself. There’s no evidence that he himself directed or participated in this,” and Trump’s supporters and Fox News would declare a victory, and we’d enter a new phase of the Trump presidency: a post-crisis phase.
Once we got to Michael Cohen and the raid and information that they’ve been monitoring his email and, presumably, his phone traffic for months, that told me that there is no post-crisis phase of the Trump presidency, that we now have two investigations. And this new one—the one that involves Cohen—is going to get a lot closer to the core of who Trump is and that much like earlier cases—like the Iraq war, like the financial crisis—I think it takes a long time for national narratives to shift and change. But they do eventually shift and change. I think this one will shift to a very different understanding of who this Donald Trump guy is.
If you’re correct that the national narrative is going to shift in some way, I think the tougher question is how that manifests itself politically. In terms of ending the Trump presidency, it would require a political act, like impeachment and removal from office, and it’s hard to see, even if the national narrative shifted, exactly how we would get that.
Yeah, and it’s certainly an uphill battle, and if you wanted to make a smart bet, the bet would be he’s not removed from office. But I have been in this situation before: On the day that George W. Bush landed on the aircraft carrier with “Mission Accomplished,” support for the Iraq war and for George W. Bush was 70 percent.
I think that the political problem is a public opinion problem. I guess that’s the prediction I’m making—that public opinion will change enough that it will fundamentally alter the political dynamics. Now there will, of course, be districts that are firm Trump districts, and those congresspeople or even senators are not going be able to shift.
But I think that a thorough accounting of the people Trump did business with, what the business was, and especially if we do find—and I’m suspecting, but I can’t say for sure—that Michael Cohen will have recordings or emails that show that the Trump Organization knew they were basically helping fairly evil people continue their crimes by putting the Trump brand on their projects so as to make them less suspicious, I think we’re going find it very hard for an awful lot of Republicans to support.
That’s a prediction.
Do you think Donald Trump is a good businessman, as a businessman, setting aside ethics?
No, definitely not.
He has, in sort of financial terms, either lost money or certainly barely made money over the course of his career. So if you start with control of $200 million of your father’s money, and one alternative is you just invest that safely in the stock market, and the other alternative is you do whatever business you do, he has lost compared to that sort of benchmark, at least for much of the time frame that he’s been in business.
So that is just a sign of, “OK, he’s a rich man,” but it’s different to start as a rich man and end up as sort of roughly exactly as rich. That’s less impressive to real business people.
The other thing is, especially in the real estate industry, you want to see someone amassing wealth—that over time, their holdings, their empire, is bigger, not smaller, and they’re not going to be taking as wild a risk as they were when they were younger because they’ve been able to amass a kind of sustainable wealth, a bundle of assets that are really worth something.
We certainly see that. There’s certainly plenty of people in New York real estate who, over the course of Trump’s career, have done exactly that. He hasn’t. He’s this brash guy doing big, loud projects in the 1970s, and he’s a brash guy doing less big, less loud projects in the 2000s, and by 2010, he’s basically a failed real estate guy who then starts a new career as, basically, a pitchman.
So given where he comes from, given the industry he’s in, given the places that he’s been along that journey, he’s richer than I am, and I know his followers seem to see that as really relevant. But if you look at his peers, if you look at any sensible benchmark, this is not a guy who’s really impressing a lot of people.
Regardless of how many bankruptcies he had, or how he’s compared to other real estate developers, he made himself into a universally recognized brand. It seems to me that even most of us who were given $200 million of our father’s money could not do that, so I’m wondering what you think that is and how you think that fits or doesn’t fit with what you say is his not-very-good business sense.
Over the course of Donald Trump’s life, branding has become much more central to how American businesses strategize, how they measure their success, etc. To say the obvious thing that everyone points to, Coca-Cola is sugar water that has the Coca-Cola brand on it. But even Boeing and others are very aware of the brand as a central part of their value, and we’ve learned a lot about how to manage brand.
Brands are a new thing. They’re commonly understood to have started probably with Ivory soap, maybe 130 years ago—1879, I think—and have developed into one of the central tools of American business. I think there’s been a dramatic sea-change over the course of the ’70s and ’80s and how we manage brands, how we think about brands.
If the test is simply, “Have people heard of it?” then I guess a lot of people have heard of him. But if the test is, “Has he been able to monetize that brand? Has he been able to turn that into real brand value and sustaining brand value and growing brand value, so that each year the brand itself is worth more?” that is not the case.
There are, I think, 14 Trump hotels in the world, and that’s a fairly stable number. When you look at the projects that he’s been doing over the last decade, there was an attempt at a Trump Baku, Azerbaijan, an attempt at a Trump Mumbai, an attempt at a Trump Uruguay. It’s nothing like the incredible expansion of Four Seasons or Ritz-Carlton.
From a branding standpoint, it’s a pretty pathetic business, and we saw that in the just throwing his name on anything, no matter how peripheral or lousy the product is. I think one of the many things we can learn from Trump support is that a lot of people conflate fame with success, and trappings of wealth with actual wealth.
I think most people think of Michael Cohen, essentially, as Trump’s fixer who pays off women who Trump has slept with or God knows what, and that’s the role he plays. Do you have a sense of the larger role Michael Cohen may play in Trump business dealings or what he means to the Trump empire?
His main job was not as a lawyer of any kind. His main job was as a deal-maker, as a guy who would travel the country and the world looking for possible projects, looking for partners who might want to get the Trump name on their hotel or buildings.
Within the Trump Organization, that was a very clearly distinct role—the deal-maker versus the lawyer role—and that was his primary role. So the reason I think he’s so significant is there’s this period of very rapid expansion into these overseas licensing deals. It’s sort of remarkable. Between 2006 and then really speeding up in 2010, ’11, ’12, into 2016, they’re just going all over the world. By “they,” I mean three people—Don Jr., Ivanka, and Michael Cohen—and they are signing deals with really famously corrupt people in famously corrupt parts of the world, doing virtually no due diligence that we can tell or that they can claim, and taking some enormous legal risks, all the while saying, “Well, we didn’t know they were bad. We didn’t know the details,” etc., etc.
So he will have the email traffic that will tell us what, exactly, is happening. What, exactly, did they know about these partners? How aware were they of these partners’ illegality? Or how careful were they to not know? Because in an American law, being deliberately … it’s called willful blindness. So if I do business with you, and you constantly show up with all the telltale signs of a notorious criminal, and I never ask you, and I ask everyone not to tell me, that’s deliberate ignorance. That’s willful blindness and that’s, essentially, legally the same as actually knowing.
So I think we’re going to learn an awful lot about this very troubling business operation.
We know the role Michael Cohen played in trying to get a Trump Tower built in Moscow several years ago. You’ve been looking at the Russia story and at the Trump business story, and earlier you referred to journalists who are on the beat of the Trump business story. To what degree do you think that these are going to eventually meld and become the same story?
I think the bigger story is the Trump business story, and the Russia stuff is a subset of that. Look, Donald Trump is somebody who’s been trying to score big through business since the 1970s or 1960s. He’s a guy who’s been trying to make it politically for a couple years. So I’m pretty sympathetic to the argument that this really was not a presidential run. This was an effort to burnish his brand, to sell more properties around the world, and specifically to get a Trump Tower Moscow. I think that was a major, major goal for Donald Trump for reasons that still don’t quite make a lot of sense.
I think that’s the key lesson of this Cohen investigation: that we’re not stopping with Russia. The Justice Department, I strongly believe, is going to have to keep looking, keep studying, keep learning about this global operation.
You said that you thought it was weird that he was so interested in Trump Tower Moscow. Why was that weird?
I can understand why he would want it. Why he seemed obsessed with it is a little confusing. There’s been some good reporting that his deal in Georgia that Michael Cohen managed was part of an attempt to create what they were calling a ring of Trump properties around Moscow—so Michael Cohen brought the Georgia deal, but promised Donald Trump that would be the first of many in the former Soviet Union.
I can understand why he might want it. I don’t understand why it’s such an obsession compared to, say, I don’t know, China or India. He does also have a lot of business in India, and, frankly, he’s been much, much more successful in India than in Russia by far. So why he just remained obsessed with, like, “Why can’t I get Russia? Why can’t I get Russia?”
When the Paul Manafort charges broke and it became clear how much illegal activity he was engaged in, separately from his work on the Trump campaign, it was pretty striking that a guy like this could go around, and commit this many financial crimes overseas, and still be a lobbyist and work in Washington. Have you been shocked at how much white-collar crime seems to go unprosecuted or investigated until it is closely examined?
Yeah. It’s been really upsetting. I think one of the key lessons of all of this is just how little we prosecute white-collar crime in general, and particularly international white-collar crime. The Foreign Corrupt Practices Act is the law that outlaws Americans bribing foreign officials, and there’s a couple dozen cases a year. Most of those are self-reports, meaning some big American company says, “Oh, one of our low-down affiliates did this bad thing. We’re turning that person in so that we don’t have any corporate responsibility, and we’ll pay a fine.”
The greatest analysis of money laundering is that it’s something like 10 percent of the economy. It’s widely understood to be a central pillar of the real-estate business in New York and L.A. and Miami, and it’s very rare for money laundering to be prosecuted. Even terror financing, even sanctions violations, we do remarkably little, and that is very upsetting. I think that it is a reminder of our two-tiered legal system. Almost by definition, people doing large financial crime are people with large amounts of money, and they are able to operate with some degree of impunity.
I will say, even in that Trump is an outlier, that the Trump Organization took risks, did work with partners that very few Americans would ever consider working with. So I don’t want to give the impression that he’s just run-of-the-mill, he’s just like everybody else, because that’s something I hear a lot, and that always drives me crazy. He’s not.
That’s not because, necessarily, all business people are moral. It’s because business people are supposed to be good at balancing risk and return. Take the Mammadovs that he did this deal in Azerbaijan with. As far as we can tell, Trump made $5 million or so from that deal. If he had done his due diligence and if he had learned, as he would have, that they were likely to be money laundering partners of Iran’s Revolutionary Guard, he faced a life-changing amount of fines and potential criminal liability. If you’re a billionaire, as he claims, then you shouldn’t do that for $5 million. It’s an absurd risk to take. It makes no sense at all, and we see him taking such risks again and again and again. So he really is an outlier. He’s not like everybody.
When I think this is all over, I’ll quit journalism and just go into international money laundering.
You didn’t even get paid for coming on this podcast. When Trump is in his second term, gliding along with 70 percent approval, we’ll have you on and ask what went wrong.
Sounds great. I said it’s the end stage of his presidency. I didn’t tell you that the end stage is seven years long.
One more thing
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