WASHINGTON – Not long ago, Donald Trump set a $1 billion fundraising goal for his presidential battle against Hillary Clinton.
Now he says there’s “no reason” to raise that much, and his operatives fear they will struggle to raise even $300 million. He brought in only $3.1 million in May to Clinton’s $27 million, leaving him with $1.3 million in the bank to her $42 million.
He has virtually no campaign apparatus, has sacked his campaign manager and has one-tenth Clinton’s staff. Yet he managed to spend more than $1 million in payments in May to Trump companies and in travel reimbursements to his family members.
Republicans are panicky, for good reason. We have seen this movie before. It’s called the Trump Taj Mahal Atlantic City.
In that, the first of his enterprises’ four bankruptcies, he convinced regulators he could raise plenty of money to complete the $1 billion project, claiming his golden name meant he wouldn’t have to rely on high-interest junk bonds, as other developers did. But then he issued junk bonds. Gamblers didn’t show up and spend the money he needed. Costs got out of control. Six months after the Taj opened in April 1990, it was in default, and nine months after that it went bankrupt, followed by two other Trump casinos.
The former head of the casino regulatory authority told The Washington Post’s Robert O’Harrow Jr. that Trump had built a “Potemkin village.” Atlantic City never quite recovered, but Trump came out fine. He told O’Harrow: “I got out great.”
Now Trump is doing to the Republican Party what he did to Atlantic City.
Substitute voters for gamblers, “contributors” for bankers and the Republican Party for gambling regulators, and the arc has been eerily similar. Call it the Taj Technique.
Trump did well at first, winning control of the Taj – much as he won the primaries – with what one regulator called a blend of “hyperbole, contradictions and generalities,” making grand promises that his name alone guaranteed success. He threatened to walk away from the project if he didn’t get full ownership – not unlike his threat to bolt the GOP if he didn’t secure the nomination. The massive resort got brisk business at first because of the free publicity Trump generated – much as he benefited from free publicity during the primaries.
But once he gained full ownership of the Taj, he quickly failed in his vow to secure prime lending, just as he quickly abandoned his fundraising goals after locking down the nomination. Then, as now, he made sure the Taj generated money for other Trump businesses. Then, as now, he alienated many who had supported him, and regulators suspected deception – but they continued to support his ownership of the floundering casino (much as GOP leaders support his nomination) because they were already in too deep.
It’s worth rereading O’Harrow’s definitive January account of the Taj Mahal bankruptcy. The tale of overpromising and underdelivering will sound familiar to those who watched Trump’s triumph in the primaries and subsequent swoon.
Trump had based his purchase of the Taj on a basic untruth: He didn’t need junk bonds. “I can build at the prime rate,” he told regulators. “I mean, the banks call me all the time. ‘Can we loan you money?’” He said, “It’s easier to finance if Donald Trump owns it.”
But Trump blithely walked away from this pledge, claiming this year that doing so was his “prerogative” and that “I would do it again.”
Trump ignored stark and repeated warnings that he would not be able to attract enough gamblers to pay the bills – just as many warned last year that Trump’s coalition of angry white men was not large enough to win a general election.
Trump expanded the Taj into the biggest, costliest casino ever built at the time. He got fired a securities analyst who warned, correctly, that after the initial “free publicity,” the Taj “won’t make it.”
The analyst was correct, and Trump ultimately had to sell his yacht and give up some casino interests. But his investors, large and small, suffered the most, and Atlantic City didn’t rebound the way Trump did.
Now that Trump has clinched the nomination with outlandish promises and free publicity, polls show that the “market” isn’t there for his mix of bigotry and strongman promises. Donors are fleeing, and party officials would like to cut him loose but could lose even more if they abandoned him now.
In short, the promissory notes are coming due, and Trump doesn’t have the cash to back up his big boasts.
Follow Dana Milbank on Twitter @Milbank.