♪ dramatic music ♪ [brakes screech in distance] [horn honks] [Maddow] Breaking news.
Donald Trump's tax returns have surfaced, at least a portion ofDonald Trump's 2005 tax return.
He made more than $150 million in that year.
This describes the types of income, -but not the sources.
It's particularly relevant for us to say, “Where did you get the money?” ♪♪♪ [Craig] I've been covering financial services for The New York Times for seven years.
[dog whines] All of my 2016 was writing, you know, various stories on Donald Trump and his finances.
Last night, David K.
Johnson went onThe Rachel Maddow Show.
He had pages of Donald Trump's 2005 tax returns.
There's not much there, but one thing that really stuck out to us was just how big his income number was for that year.
It was over $150 million.
That just didn't jive with anything we knew about that time in his life.
And that, that began this huge odyssey that we've been on.
♪♪♪ ♪ soft, dramatic music ♪ [horn honks] We came in and got a group together.
It included David and Russ.
The numbers seemed so outrageous and perplexing.
I'm wrestlingwith that, as well, but I think that'sour main enemy right now.
Russ, he's a great reporter who also has got just a great way with data.
all the disparatepieces of it.
David just has an incredible gift to source people and to get people to talk.
I think we should justdig backwards and.
-See where we go.
♪ soft, dramatic music ♪ [Baquet] There are a handful of large questions about Donald Trump, you know, whether it's was there any collusion with the Russians, what are his attitudes, his private attitudes, towards women and others? One of the biggest is, how wealthy is he, and how did he acquirehis wealth? He chose not to makehis finances as publicas his predecessors.
He chose not to makehis tax returns public.
I mean, presidents usually makeyears of tax returns public.
It just made us all feeluncomfortable as journalists that a presidentof the United States would serve with us knowingso little about his finances.
I mean, he became president, I think, in large partthrough a very simple idea– Donald Trump, self-made billionaire.
And so, we're trying to peel backsome really big layers on a very important figurein the history of our country.
[keyboard clacking softly] [Craig] We started looking at the 2005 tax return and trying to understand what was there just from the three pages that we had.
You know, people are talking about where his money is coming from, and everybody's like, “Russia, Russia, Russia, Russia.
” First of all, we just wanted to focus on money from his father.
People, I don't think, are just aware of how much money came to him.
[applause] [Donahue]You're a star, Mr.
Trump, and you're a businessman.
I have here a collectionof some of your, uh, quotes.
“Trump–There is no one my age who has accomplished more.
Everyone can't be the best.
” I'll tell you this.
You know, I kind of, after reading your book, I kind of like your father better than you.
-[Donald] He's a nice guy.
-[laughter] You have good taste.
He's a good guy.
This is Fred Trump.
He built middle-incomehousing in Queens and Brooklyn.
-And little Donald would go along and rummagearound the construction sites.
I must say, there's, there is some personalinformation in here, -not a lot, but—[Donald] I like to, you know, leave it outas much as possible.
-That's what you get, right?-Well, that's getting more and more difficultwhen you're– If you're gonna be wortha billion dollars, you got to start answeringsome questions here.
[Craig] As we started to dig in to what the possible sources of revenue were, that number, that huge number that we saw on Donald Trump's taxes, we realized that a big portion of that was likely proceeds from the sale of his father's empire.
♪ soft, dramatic music ♪ Fred Trump died in 1999.
And in 2004, Donald Trump and his siblings sold almost all of Fred Trump's empire.
The only story that had been done on it had the price for 600 and some million dollars.
That was sort ofthe first inkling of just how much Donald Trumpgot from his father, and the incredible partabout that story was, you know, everythingDonald Trump seems to do gets so much publicity.
You know, he's launching, like, lines of vodka and Trump steaksand Trump water, but the family did not wantattention drawn to that sale.
[indistinct conversations] [Craig] We spent months going through public records, just trying to figure out what was transferred and what the price was.
Where's the mortgage document?Just so we've got it noted.
It's in, um, it's on the drive, yeah, under Property Records, and then there'sa separate folder for 220.
[keyboard clacking] [Craig] And we started to realize not only was there that one big payday, there was dozens of streamsof revenue from Fred to Donald.
[Maryanne] Good afternoon.
Good afternoon, members of the committee.
It is my privilegeto appear before you.
[Buettner] Donald Trump's sister, Maryanne Barry Trump, was a federal judge for a number of years.
Like all federal judges, each year that she was a judge, she had to filea financial disclosure form.
That lists, like, every asset that she controls.
So I took those 2, 200 pages of financial disclosure formsshe filed and then made this chart.
She listedall the trust funds by name.
She named the actualbusiness entities that she was gettingrevenue from.
Those wereher father's businesses, so that was a great aid to us.
All the siblings gotthat same amount.
So what we saw for her wasa good proxy for Donald Trump.
But it's clear he got more thana couple hundred million dollars from his fatherjust in one swoop and then millions of dollarsevery year, it looks like, for decades prior to that.
[Barstow] Donald Trump, one of his sort of go-to sound bites is, “I started with a million-dollar loan from my father, and I had to pay him back with interest.
” It has not been easy for me.
And, you know, I started off in Brooklyn.
My father gave me a small loanof a million dollars.
I came in to Manhattan, and I had to pay him back, and I had to pay him backwith interest.
A million dollarsisn't very much compared to what I've built.
In his kind of versionof how he got rich, he parlayed this million-dollarloan from his father into a $10 billion fortune.
And our work has found that he's way off.
We've identified more than200 separate streams of revenue that was flowing from Fred Trump to Donald Trump.
Their dad turned his kids into his bankers, taking loans from them.
He was paying them interest, so we started to unwind all these things, and it was– it was nuts.
-All right, so, where are we?-So where are we? The bottom line–in today's dollars, we've tracked $402 million.
from Fred to Donald.
The flow and transfer of wealth was constant and substantial throughout Donald's life.
Donald was making $215, 000a year by the age of 3.
[Barstow] It's actuallyso difficult to imagine how he would have gottenthe wealth that he has today without, you know, -if you take this away.
If you take the element of riskout of entrepreneurialship, it's not really entrepreneurialanymore, right? I mean, he never had any realrisk of losing everything.
[Buettner] You know, everybusiness of his that I've been able to get a look at doesn't actually make money.
But when you realize thathe doesn't need to make money, he needs to have his namecontinue to be out there to look like he's a highly successful personwho's everywhere.
[reporter] Real-estate developerDonald Trump opened his new casino today.
[Letterman] Ladies and gentlemen, the author of The Artof the Deal, ” Donald Trump.
Somehow, it's justworked out well for me.
[birds chirping] ♪ soft, dramatic music ♪ [Craig] We were moving forward to publishing a story, but we all knew we needed a fact-checking to stress-test everything we had.
I went out and got the full will of Fred Trump.
We found these buildings that Fred transferred to his children.
And that's when we started to realize that there was all these other things going on.
[train rails screeching] [Baquet] Can we talk?I want to talk.
[Barstow]Our story has morphed.
-Since the last time we talked?-Yes.
-And it's this basic question of how they valuedtheir dad's estate.
And here's, like, the remarkable, sort of bottom line thingthat we've discovered.
They put a value of $13.
6 million on a whole bunchof apartment buildings that, in fact, we believewere worth $244 million.
[Susanne chuckles] What that means is, as opposed to the $9 millionin estate taxes, they would've paid$173 million.
This is Tysens Park Apartments, which were sold for $46 million.
Look what happens when they're asked to put a value.
-Literally?-Literally, no value.
They didn't fill inthe line.
No, they didn'tfill in the line.
And it's not likea white-out situation here.
-It's like they just didn't fill in a line.
We have no explanation for that.
It's really bizarre.
Who was the executorof his estate? The executorof Fred Trump's estate are the Trump kids, so the President, Robert, Maryanne.
Like, these numbersare so crazy.
-[Barstow] We're just trying– I mean, it's almost like, what are we missing? -[clears throat]-What don't we understand? -Is there some—[Purdy] I mean, we've already gone to experts.
And what do, and what do experts say? They said thatit's major red flags, that they can't explain itand it's very troubling.
We've had a lotof really strong language that this is, like, not– it doesn't add up.
♪♪♪ [Purdy] This is a big story.
It's a really big story on a big subject.
And it will, I think, reshape the portrait of the President of the United States.
I mean, we have information that no one else has.
That's our business, right, I mean, so we want people to know it.
And the sooner the better.
[cheers and applause] [Donald] We're here todayto announce historic tax relief to the American people.
This is a once-in-a-generationopportunity, and I guessit's probably something I can say that I'm very good at.
I've been waiting for thisfor a long time.
[reporter] While the Senate is inching closer to passing tax reform, voting yesterday to begin debate, but this isn't a done deal yet.
Republicans are now scrambling to negotiate changes, hoping to get enough votes to finally get this done.
This is a delicate and messy process.
Some lawmakers are even complaining they don't know what version they're debating right now.
[Baquet]He's actually sort of flirting with an examinationof his tax history and how they use the tax laws'cause of things he's saidin the last couple of weeks.
So if there's a wayto accelerate the completion, I think it would be–'cause my fear is you're gonna missan amazing news window to write about Donald Trumpand his taxes.
It might even influencethe debate over tax reform, if people got a sense of what– you know, how one wealthyfamily, over generations, were able to useAmerica's tax laws to avoid paying taxes, enrich themselves.
That's gonna be such apowerful moment in the debate.
I hear what you're saying, and I totally get it.
We're all, like– Been around, we've been inthe rodeo long enough to know, like, how this works.
But I would say actually the tax storyis this different beast.
We've been piecing togetherfrom the public records and the other documentthat we already have in hand, the basic notion, and we're seeing things that are clearly over the linein terms of legality, things that look likejust fraudulent behavior.
We need to talkto more people.
♪ somber music ♪ We identified a list of peoplethat we felt, be they accountantsor, you know, relatives or people at the IRS, that could have these documents.
And the editors were lookingat us, going, “That sounds just crazy.
It's not gonna work.
” And it was kind of like, “There's no wayit's gonna help.
” These storiescan be frustrating.
There's no question that this has gone on for a long time.
But we stake the reputation of the paper, ourselves, and the rest of the media on big stories.
We just want to get it right.
[Craig] If you could justwalk me through, and we can talk a little bitmore about the specifics of the actual casewe're dealing with, right? No, no, completely– no, no, completely on background, yeah.
[Craig]These were approaches that took weeks of work to prepare for and second approaches that took weeks of work to prepare for.
We started knocking on doors.
Nobody invited us in.
And it was– there was really, really dark moments.
[Buettner] You know, it feels like you're kind of casting around in the dark.
You see your time going in blocks of months, and, like, are we coming to something that's important enough to warrant that? [Barstow]You know, in stories like this, you're always hoping for thesekind of magic moments where a door thatyou've been knocking on and hasn't been openingsuddenly opens.
You know, and that's, that's precisely what happened in this case.
[Craig] It was just thisAlice in Wonderland moment where we got these documents.
We didn't want anybody to see this stuff.
So we had them set up a room, and only the three of us have access to the room.
[Barstow] We were incredibly fortunate to find sources who were able to give us access to over 200 different tax returns.
where that file is.
[Barstow] There are tax returnsof Trump companies, Trump partnerships, Trump trusts.
♪ soft, dramatic music ♪ [Craig]Fred Trump's estate tax return is in the building right now.
It's incredible that we have it, and that opened a door to understanding a huge transferof wealth that happened and gave usso much more information to be able to understandthe tax games that were played.
And then once you sort ofpull the string, the whole thing unraveled.
So, by the 1990s, Fred Trump is in his 80s, he's getting older.
He had very little debt, and he had so much cash.
And so this was a problem for Donald Trump and his siblings because if he dieswith his cash, they're gonna have to pay55 percent gift tax on it.
They're gonna losemore than half of it.
♪♪♪ In August 1992, they set upa company called All County.
[Barstow] All County was this company owned by the Trump children, including Donald, and the stated purpose was it was gonna be likethis central purchasing agent for all the stuff that Fred needed to do to fix up his buildings.
So if they needed a new boiler, right, All County would go out, take advantage of the economies of scale.
Fred Trump would benefitbecause he'd get a lower price.
But then we realized that All County, owned by the Trump children, was paying for boilers, and then they werecharging Fred, for the very same boilers, this big mark-up.
They were padding the invoices.
They would buy a boiler for $10, 000, and then they'd turn around and they'd sell it to Fred for $15, 000.
And that's when you start realizing, “Oh, wait a minute.
They're using All County to disguise cash giftsfrom Fred Trump as if they're legitimatebusiness transactions.
” [Craig] All County had no employees.
It had five shareholders– Donald Trump and his siblings and a nephew.
The five of them would just split the mark-up on everything, and this went on for years.
It was bringing in a lot of money, like millions and millions of dollars.
This is a fascinating vehicle that was kind of concoctedby the Trumps in order to suckmillions of dollars of cash out of Fred Trump's empireand into their pockets in a way that evadedthe 55 percent gift tax.
[birds crying] [Craig] The other really just amazing part about All County is that it had just an insidious, corrosive downside for anybody living in those buildings because they used bogus receipts to raise the rent on their tenants, who are, you know, low-income class New Yorkers.
It's just unbelievable.
We've run the sort of the factsthat we've uncovered past some of the top tax expertsin the country, and every single one of them hassaid, “Wow, this is tax fraud.
” [Craig] It is illegal.
You have, if you have a business, there has to be some economic purpose to it other than tax avoidanceor tax evasion.
[Craig] To have the opportunityto rewrite essentially 50 or 60 years of a person's life who's now sitting inthe White House is incredible.
Like, his financial historyhas been wrong, we understand now, since forever.
Nobody has figured this out and put these pieces together.
My whole life, I've been covering financial journalism, following the money trail.
Money, power, and greed– what more could a reporter want? ♪ soft, dramatic music ♪ Since early September, we've been reaching out to Donald Trump and his family, hoping that they would engage us, and initially, we got no comment.
[indistinct conversations] And then, in the last few days, a lawyer for the President reached out, not a lawyer who knows a lot about the Trump businesses and Fred Trump's empire, but rather a lawyer who is known for sending frightening letters.
He sent us a short note back just saying that we should be on notice, that they will sue us for defamation if we proceed with publication.
♪♪♪ -[cellphone rings]-[Barstow] What time did you guys wake upthis morning? I didn't really sleep.
[laughs] [Buettner] Largely due to the quality of the documentation we have, we are gonna proceed with confidence.
But whether people are gonna care, you never know kind of how that's going to go until you hit the button.
-Let's do it.
Rock and roll.
[exhales sharply] ♪♪♪ Andy, are they gonnahit “publish” on this asset? I feel like I'm getting marriedor something here.
-[laughter]-This is so.
I'm not sure which.
[Craig]Is this where the FBI come in? Give it time.
It's all queued up.
[indistinct conversations] -Which one?-The bottom.
♪♪♪ [mouse button clicks] -[Craig] Wow.
-[man] All right.
-[Craig] It's live.
♪ upbeat music ♪ [indistinct conversations] [reporter] Here is breaking news.
The New York Times has just published what appears to be an exhaustive article on President Trump.
[reporter #2] It paints a detailed picture of how the President used potentially illegal tax schemes.
[reporter #3] A report that dramatically challenges Trump's carefully crafted imageas a self-made billionaire.
-[woman] Sue, congrats.
Look at that traffic.
[Baquet] So, this is just from Twitter.
[cellphone rings] [phones ring, chime] ♪♪♪ [Maddow] The New York Times published a freaking 40-page-long, 13, 000-word, mind-bending exposé about the President.
Joining us now is Susanne Craig.
Congratulations on this.
-[Craig] Well, it's interesting.
Our investigation startedthe night that you had the tax returnsfrom 2005 on your show and then just got deeperand deeper and deeper into it.
♪ upbeat music ♪ [Craig]It's fraudulent what they did.
It was systematic over decades.
I think that's an important thing to know about the President of the United States.
This story, there's a lot of answers in it.
I don't think all the answers are there.
You have to keep going.
♪♪♪ ♪ soft, dramatic music ♪ ♪♪♪ ♪♪♪ ♪♪♪ ♪♪♪ ♪♪♪.