The secret of a great success for which you are at a loss to account is a crime that has never been found out, because it was properly executed. — Honoré de Balzac
As the nation's legal system comes to a near-meltdown while attempting to hold a former president accountable for alleged high crimes and a lifetime of misdemeanors, we fixate on the target of our attention like never before. Yet we might be wise to take a look at how our admiration of wealth makes personalities like Donald Trump possible.
While there's now a tendency to blame everything on him, it would be worthwhile to pull back a bit and see that Trump is just one man in a pantheon of hard-charging moguls we have elevated to near-demigod status by conferring a kind of omnipotence on them. We can't really move on past Trump unless we confront our own dark side, which has made him and those like him possible.
The truth is, there's a platinum-plated conveyor belt at the heart of the American Dream machine greased by our societal greed. In my home state of New Jersey, where so much wealth is concentrated, there's a real admiration for these personalities who know what they want and will go to any lengths to get it. We loved Tony Soprano in Jersey for a reason. Call it our shadow self writ large. As far as I know, New Jersey is the only state to have elected two former Goldman Sachs partners as governors. (Furthermore, both are Democrats: current Gov. Phil Murphy and Jon Corzine, who was both our governor and before that a U.S. senator.)
There's a platinum-plated conveyor belt at the heart of the American Dream machine — and the sad tale of the New Jersey Meadowlands mega-mall is the perfect illustration.
There's perhaps no greater example of how our state's political leadership — of both parties — has been enamored of great wealth than the way Trenton has been played by a procession of developers who have promised a mega-mall in the New Jersey Meadowlands. It was first branded under former Gov. Jim McGreevey as Xanadu and then was relaunched by Gov. Chris Christie as the American Dream Meadowlands.
We have never seemed to do enough due diligence on these projects, on the irrational justification that "the stakes are so high."
Consider how relieved the state was back in the summer of 2006 when Tom Barrack, CEO of Colony Capital LLC, rode into the Meadowlands to "rescue" the fiscally floundering Xanadu, aka American Dream project, which had been originated by the Mills Corporation, a Virginia developer that ran afoul of an SEC probe and ultimately went bankrupt.
The Mills board of directors included Charlie Black, of the infamous K Street global lobbying firm Black, Manafort, Stone and Kelly — and yes, that would be Paul Manafort and Roger Stone. That firm's client list included Donald Trump and several quasi-dictatorial strongmen in developing countries, like Angola's Jonas Savimbi and Ferdinand Marcos of the Philippines.
Mills, a heavy donor to both political parties, had managed to convince McGreevey and the New Jersey Sports and Exposition Authority, led by George Zoffinger, that Xanadu — with its proposed indoor 14-story ski dome and 2.2 million square feet of entertainment and retail space — could help revive the state's sports complex and help it retain the NFL's New York Jets, the NBA's New Jersey Nets (as they were then known) and the NHL's New Jersey Devils.
In a 2006 story headlined "Reprieve for Troubled Xanadu Entertainment Complex in Meadowlands," the New York Times reported that Colony Capital was a privately held corporation that "owns hotels and casinos around the world, including the Hilton and Resorts casinos in Atlantic City. Its principal, Tom Barrack, was described on the cover of Fortune magazine last October as 'the world's greatest real estate investor.'"
"Barrack has done deals with Saudi princes, Texas oilmen, a Caribbean dictator — even with Donald Trump," that sycophantic Fortune profile recounted. "He bought the Fukuoka Dome, Japan's Yankee Stadium, in part because he calculated that the titanium in the retractable roof was worth as much as the purchase price. He bought and sold New York City's Plaza hotel, turning a fast $160 million profit, as well as London's tony Savoy chain, netting another $270 million. Even Trump defers: 'Tom has an amazing vision of the future, an ability to see what's going to happen that no one else can match.'"
Describing Barrack as a "swashbuckler who moves at a furious gallop yet exudes an aura of calm," Fortune recounted how in 1976 he had parlayed his ties with the Saudi princes into a hugely profitable three-way deal with the murderous Haitian dictator Jean-Claude "Baby Doc" Duvalier:
Barrack's princes said they could arrange to have the kingdom grant the discount to Haiti; all they needed was for Haiti to reciprocate by extending diplomatic relations and most-favored-nation status to Saudi Arabia. At the palace, where the rotund Baby Doc perched on a throne, Barrack pitched the virtues of the deal. In the middle of his appeal, Baby Doc interrupted. "Can I try on the watch?" he asked, referring to a diamond-studded, $200,000 Piaget timepiece one of the princes was wearing. The prince agreed. When Barrack wrapped up, Duvalier had another question: "Can I keep the watch?" Baby Doc got the Piaget and opened the door for Saudi oil to come to Haiti.
By August 2010, Barrack's Colony had to throw in the towel on finishing the beleaguered mall project, which had already burned through $2 billion. Along the way, public pension retirement funds from Iowa, Mississippi, Alaska, Texas and New York all got burned to the tune of hundreds of millions, chasing after the promised high rate of return from investments in the Xanadu/American Dream project that never seemed to materialize.
Meanwhile, the State of New Jersey, through both Democratic and Republican administrations, continued to double down on its "investment" in the project, reasoning that it was simply in too deep to get out. This meant the ploughing of hundreds of millions of dollars into the project in the form of state subsidies, both direct and indirect, as well as in state highway and railway improvements through the Port Authority of New York and New Jersey.
Of course, this was done over the consistent and prescient objections of environmental advocate Jeff Tittel, then of the Sierra Club. By 2011, it was up to Gov. Chris Christie to enlist the legislature to double down on more state support of the swamp mall on behalf of yet another developer, Triple Five, the Canadian conglomerate that built the Mall of America in Minnesota.
New Jersey kept on doubling down on its "investment" in the swamp mall, reasoning — like so many victims of cons and scams — that it was in too deep to get out.
"This is the American Scheme, because it is about taking care of developers at the expense of the taxpayers of New Jersey," said Tittel, who was director of New Jersey Sierra Club at the time. The state Senate, he said, had taken "the side of special interests over the financial health of our state.Teachers, police and firemen are being laid off, but we are going to give hundreds of millions of dollars in corporate welfare to a Canadian developer."
Under the terms of the deal, according to Tittel, Triple Five got tax increment financing that "would allow for tax monies to be reinvested into the development rather than paid to the state, while the facility will still require state and municipal services such as police."
This May, Bloomberg News reported that American Dream, under the management of Triple Five, had lost $60 million in 2021, drawing $173 million in revenue against $232 million in expenses. According to Bloomberg, the beleaguered project generated sales of $305 million, which was 15 percent of the $2 billion predicted in 2017 for the first year of operation.
On top of the outside construction loan, American Dream reportedly holds "$290 million in sales tax supported municipal bonds and $800 million of municipal debt backed by payments in lieu of property taxes. The mall reported $2.6 billion in total liabilities and about $500 million in equity."
And what became of onetime swashbuckler Tom Barrack? Last week, amid the tempest swirling around the FBI search of Trump's Mar-a-Largo compound, it was easy to miss the criminal proceedings in Brooklyn in which a judge rejected Barrack's motion to remove his home confinement ankle bracelet before his federal corruption trial gets underway next month.
Barrack was an adviser to Trump's 2016 campaign, headed up his scandal-plagued Inaugural Committee and acted as an outside adviser with high-level access to Trump's administration involving matters in the Middle East. "Barrack introduced Trump to his former campaign manager, Paul Manafort, and facilitated conversations that strengthened Trump's ties to Saudi Arabia and the United Arab Emirates, helping to realign the Middle East," reported Forbes in 2018.
In July of last year, however, Barrack was indicted along with two other men for allegedly engaging "in a conspiracy to illegally advance and promote the interests of the United Arab Emirates in this country," according to prosecutors.
"These arrests serve as a warning to those who act at the direction of foreign governments without disclosing their actions, as well as those who seek to mislead investigators about their actions, that they will be brought to justice and face the consequences," said acting U.S. Attorney Jacquelin M. Kasulis for the Eastern District of New York.
Barrack's lawyer argued that Barrack's $250 million bond, one of the largest ever put up, should be sufficient to assure his appearance in court, according to the Daily News. The judge didn't buy it.
"Even with the current financial and travel restrictions, Barrack is a heavily resourced man with an extensive network of contacts throughout the world," Judge Brian Cogan wrote. "Facing a potential prison term of at least a decade, at age 75, it would not be surprising for Barrack to determine that he would rather take his chances and flee, despite his extensive family ties and longtime residence in his community. This risk only grows as trial approaches."
Will what befell Tom Barrack also befall his old friend, the former president? In any case, the problem is bigger than Trump. It's the archetype of the swashbuckling, unprincipled mogul that we elevate, and that has repeatedly caused us grief.
