Shady, you think?

Donald Trump’s massive debts—he owes hundreds of millions of dollars—are the subject of continuous congressional and journalistic scrutiny. But for years, one Trump loan has been particularly mystifying: a debt of more than $50 million that Trump claims he owes to one of his own companies. According to tax and financial experts, the loan, which Trump has never fully explained, might be part of a controversial tax avoidance scheme known as debt parking. Yet a Mother Jones investigation has uncovered information that raises questions about the very existence of this loan, presenting the possibility that this debt was concocted as a ploy to evade income taxes—a move that could constitute tax fraud.

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The disclosures state that this loan is connected to Trump’s hotel and tower in Chicago, and the forms reveal puzzling details about Chicago Unit Acquisition: It earns no revenue—suggesting that Trump was not paying interest or principal on the loan—and Trump assigns virtually no value to Chicago Unit Acquisition. [...] Under basic accounting principles, a firm that is owed money and has no outstanding debt should be worth at least as much as it is owed. The loan has another odd feature: It is identified as a “springing” loan, a type of loan made to borrowers who are viewed as credit risks.

  Mother Jones

That's rich.

Known sometimes as “bad boy” loans, these agreements allow the lender to impose harsh repayment terms if certain criteria aren’t met. These are not the type of loan terms that someone is likely to impose on himself.

The Trump Organization has consistently refused to answer questions about Chicago Unit Acquisition, a limited liability company it formed in Delaware in 2005, as construction began on the Trump International Hotel and Tower in downtown Chicago. But Trump did tell the New York Times in a 2016 interview that this debt represents a loan he repurchased from a group of lenders. “We don’t assess any value to it because we don’t care,” Trump said. “I have the mortgage. That is all there is. Very simple. I am the bank.”

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Trump has not publicly identified the creditors from whom he bought this loan.

If indeed that's what happened - I don't believe it unless you tell me it was bad debt one of his kids racked up.

[A] 2008 lawsuit Trump filed in connection with the Chicago project—a case that produced voluminous records detailing the financing of this venture—suggests two possibilities. The majority of the hotel and tower project was bankrolled by Trump’s lender of choice, Deutsche Bank, which gave him a $640 million loan.

Yes, we remember Deutsche - the bank that got in trouble for money laundering and was the ONLY bank that would do business with Trump.

Fortress Investment Group, a New York City-based hedge fund, provided Trump an additional $130 million in financing. (Two other firms, Cerberus Capital Management and Dune Capital Management, partnered with Fortress on this loan.)

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Trump’s Chicago project quickly became a financial debacle—hence the lawsuit. The 2008 financial crisis struck as the project neared completion, and Trump, saddled with nearly $800 million in debt, was in jeopardy of defaulting on a $330 million payment he owed to Deutsche Bank in November that year.

Yes, and he countersued, saying he was the victim.

To fend off his biggest creditor, Trump attempted a brazen legal gambit. He sued Deutsche Bank, accusing the firm of causing the housing crisis and economic meltdown that was supposedly inhibiting his ability to sell units in the Chicago project and repay his debts.

And, strangely enough, that didn't discourage Deutsche Bank from dealing with him (in the person of Justice Anthony Kennedy's son). Uou remember Justice Kennedy - he's the guy who resigned from the Supreme Court so Brett Kavanaugh could be seated.

Trump took out a new loan through Deutsche’s private bank to cover his debt to the firm’s commercial lending side. This transaction apparently did not involve purchasing any debt, suggesting the debt that Trump claims to have bought could not be from the Deutsche Bank loan. That leaves the Fortress debt.

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In March 2012, as Trump resolved his dispute with Deutsche Bank, he finalized a separate deal with Fortress and its partners to clear his debt with them. [...] Fortress ultimately agreed to accept 50 cents on the dollar—or about $48 million—for the outstanding debt (which by that time amounted to just under $100 million). This was a steep loss for the hedge fund and its partners. The question is whether the deal was what’s known as a “discounted payoff”—in which the debt was considered repaid and the loan was canceled by the lender—or whether Trump purchased what remained of the loan. That distinction has enormous implications.

When a lender forgives a portion of a loan, the IRS considers the unpaid portion taxable income.

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The tax could be as high as 39 percent. But big-time borrowers have devised a tactic to forestall paying taxes in cases in which they’re able to buy back their debt at a discount. They purchase the debt through a corporation, parking the loan within this entity to temporarily avoid realizing income. Debt parking falls into a legal gray area. “Maybe there are respectable ways that it could work, but I would call it kind of a scam to pretend you haven’t gotten rid of the debt,” says Daniel Shaviro, a professor of tax law at New York University.

Debt parking can be permissible as long as the borrower intends to repay the loan. Parking debt indefinitely with no intention to repay it, however, violates federal tax law, according to tax experts.

For that reason, Trump’s comment to the Times that “we don’t care” about the loan raised a red flag for several tax experts. [...] They wondered whether this was an admission that he has no intention of repaying the loan—an implication reinforced by Trump’s disclosures showing Chicago Unit Acquisition generates no revenue and has practically no value.

But the story of Trump’s mystery loan gets even more complicated.

As does everything the mobbed-up grifter does.

Fortress did not sell Trump this loan. [...] Fortress canceled the debt after Trump paid about half of it. [...] That means there may have been no loan to buy, no debt to park; Trump might have invented a loan—and then parked it.

Kind of like the persona he invented and parked in the White House.

To recap: Trump claims he bought a debt related to his Chicago venture, but neither of the two loans associated with this property appear to have been purchased. The Deutsche Bank loan was refinanced. The Fortress debt, according to sources with knowledge of the transaction, was canceled. And this raises a question: Did Trump create a bogus loan to evade a whopping tax bill on about $48 million of income?

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“When you see it, if you lay all this out, it’s pretty brazen,” says Adam Levitin, a law professor specializing in commercial real estate finance at Georgetown University. “If he didn’t actually buy the loan, this is just garden-variety fraud.”

And so is he.

The Cook County Recorder of Deeds has records concerning the original Deutsche Bank loan for the Chicago project; the Deutsche Bank loan that replaced it; and the Fortress loan. But the Recorder of Deeds has no filings related to Chicago Unit Acquisition.

Not all loans are tied to property and require registration with local authorities. In those cases, a filing called a Uniform Commercial Code financing statement is typically made. [...] A search of records in New York (where the Trump Organization is based), Illinois (where the hotel is located), and Delaware (where Chicago Unit Acquisition is registered) found no UCC records related to Chicago Unit Acquisition.

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Could the Chicago Unit Acquisition loan be legitimate? The tax and real estate experts interviewed by Mother Jones had a difficult time explaining what this transaction could be. And the Trump Organization offered no explanations of its own.

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Trump has a track record of pushing the envelope when it comes to paying—or not paying—taxes. In a Pulitzer Prize–winning investigation examining the origins of the president’s fortune, the New York Times reported in 2018 that “President Trump participated in dubious tax schemes during the 1990s, including instances of outright fraud, that greatly increased the fortune he received from his parents.”

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[T]he release of Trump’s returns alone would probably not solve the Chicago Unit Acquisition mystery. Nor would a standard IRS audit.

“It would take a forensic audit,” says Martin Lobel, a prominent tax lawyer based in Washington, DC. “It is very labor intensive, and it takes someone who has years of experience to spot the problem areas.” This type of audit would entail combing methodically through every shred of paperwork underpinning Trump’s financial claims.

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“The IRS is not going to look too closely at Trump’s tax returns,” Lobel says.

But congressional Democrats, if they have their way, intend to do just that. In May, the House Ways and Means Committee subpoenaed the IRS to hand over six years of Trump’s tax returns as part of an investigation into the agency’s presidential audit program. By law, the IRS must annually audit the returns of a serving president and vice president.

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Treasury Secretary Steven Mnuchin, who oversees the IRS, has so far rebuffed the Ways and Means Committee’s efforts to obtain Trump’s returns. In July, the panel sued the Treasury Department and the IRS to force them to comply. In a recent court filing, the committee revealed a tantalizing bit of information about its inquiry: A whistleblower had come forward with “credible allegations of ‘evidence of possible misconduct’—specifically, potential ‘inappropriate efforts to influence’ the mandatory audit program.”

Trump obstructing Congress?!? Unthinkable!

Trump’s finances are currently the subject of multiple inquiries in his home state of New York. Following the New York Times investigation of the questionable tax schemes employed by Trump and his family, a spokesperson for the New York Department of Taxation and Finance said the agency was “vigorously pursuing all appropriate avenues of investigation.” New York Attorney General Letitia James has also been scrutinizing the financing of several Trump projects.

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James tells Mother Jones in a statement: “My office takes any allegations of significant tax fraud seriously. No one is above the law—not even the president of the United States.”

This is why he's so incredibly dangerous: he can't leave office without being subjected to criminal proceedings. What will he do to stay out of jail? The best that we can maybe hope for is something that, ironically, should not be allowed to happen: he makes a deal to leave office in return for not being charged with criminal conduct in New York, therefore, making him in effect, indeed above the law.