Donald Trump paid nearly $200,000 in taxes to China, report claims
New York Times says records reveal company bank
account in China, and documents show he paid more tax there than at home
THE
PRESIDENT’S TAXES
Trump Records Shed New Light on Chinese Business
Pursuits
As he raises questions about his opponent’s standing
with China, President Trump’s taxes reveal details about his own activities
there, including a previously unknown bank account.
Mike
McIntireRuss BuettnerSusanne Craig
By Mike
McIntire, Russ Buettner and Susanne Craig
Oct. 20,
2020
https://www.nytimes.com/2020/10/20/us/trump-taxes-china.html
President
Trump and his allies have tried to paint the Democratic nominee, Joseph R.
Biden Jr., as soft on China, in part by pointing to his son’s business dealings
there.
Senate
Republicans produced a report asserting, among other things, that Mr. Biden’s
son Hunter “opened a bank account” with a Chinese businessman, part of what it
said were his numerous connections to “foreign nationals and foreign
governments across the globe.”
But Mr.
Trump’s own business history is filled with overseas financial deals, and some
have involved the Chinese state. He spent a decade unsuccessfully pursuing
projects in China, operating an office there during his first run for president
and forging a partnership with a major government-controlled company.
And it
turns out that China is one of only three foreign nations — the others are
Britain and Ireland — where Mr. Trump maintains a bank account, according to an
analysis of the president’s tax records, which were obtained by The New York
Times. The foreign accounts do not show up on Mr. Trump’s public financial
disclosures, where he must list personal assets, because they are held under
corporate names. The identities of the financial institutions are not clear.
The Chinese
account is controlled by Trump International Hotels Management L.L.C., which
the tax records show paid $188,561 in taxes in China while pursuing licensing
deals there from 2013 to 2015.
The tax
records do not include details on how much money may have passed through the
overseas accounts, though the Internal Revenue Service does require filers to
report the portion of their income derived from other countries. The British
and Irish accounts are held by companies that operate Mr. Trump’s golf courses
in Scotland and Ireland, which regularly report millions of dollars in revenue
from those countries. Trump International Hotels Management reported just a few
thousand dollars from China.
In response
to questions from The Times, Alan Garten, a lawyer for the Trump Organization,
said the company had “opened an account with a Chinese bank having offices in
the United States in order to pay the local taxes” associated with efforts to
do business there. He said the company had opened the account after
establishing an office in China “to explore the potential for hotel deals in
Asia.”
“No deals,
transactions or other business activities ever materialized and, since 2015,
the office has remained inactive,” Mr. Garten said. “Though the bank account
remains open, it has never been used for any other purpose.”
Mr. Garten
would not identify the bank in China where the account is held. Until last
year, China’s biggest state-controlled bank rented three floors in Trump Tower,
a lucrative lease that drew accusations of a conflict of interest for the
president.
China
continues to be an issue in the 2020 presidential campaign, from the
president’s trade war to his barbs over the origin of the coronavirus pandemic.
His campaign has tried to portray Mr. Biden as a “puppet” of China who, as vice
president, misread the dangers posed by its growing power. Mr. Trump has also
sought to tar his opponent with overblown or unsubstantiated assertions about
Hunter Biden’s business dealings there while his father was in office.
“He’s like
a vacuum cleaner — he follows his father around collecting,” Mr. Trump said
recently, referring to Mr. Biden’s son. “What a disgrace. It’s a crime family.”
In a
misleading claim amplified by surrogates like his son Donald Trump Jr. and his
lawyer Rudolph W. Giuliani, the president has said the younger Mr. Biden
“walked out of China” with $1.5 billion after accompanying his father on an
official trip in 2013. Numerous news articles and fact-checking sites have
explained that the huge figure was actually a fund-raising goal set by an
investment firm in which Hunter Biden obtained a 10 percent stake after his
father left office. The firm did receive financial backing from a large
state-controlled bank, but it is not clear the fund-raising target was ever
met, and there is no evidence Hunter Biden received a large personal payout.
As for the
former vice president, his public financial disclosures, along with the income
tax returns he voluntarily released, show no income or business dealings of his
own in China. However, there is ample evidence of Mr. Trump’s efforts to join
the myriad American firms that have long done business there — and the tax
records for him and his companies that were obtained by The Times offer new
details about them.
As with
Russia, where he explored hotel and tower projects in Moscow without success,
Mr. Trump has long sought a licensing deal in China. His efforts go at least as
far back as 2006, when he filed trademark applications in Hong Kong and the
mainland. Many Chinese government approvals came after he became president.
(The president’s daughter Ivanka Trump also won Chinese trademark approvals for
her personal business after she joined the White House staff.)
In 2008,
Mr. Trump pursued an office tower project in Guangzhou that never got off the
ground. But his efforts accelerated in 2012 with the opening of a Shanghai
office, and tax records show that one of Mr. Trump’s China-related companies,
THC China Development L.L.C., claimed $84,000 in deductions that year for
travel costs, legal fees and office expenses.
After
effectively planting his flag there, Mr. Trump found a partner in the State
Grid Corporation, one of the nation’s largest government-controlled
enterprises. Agence France-Presse reported in 2016 that the partnership would
have involved licensing and managing a development in Beijing. Mr. Trump was
reportedly still pursuing the deal months into his first presidential campaign,
but it was abandoned after State Grid became ensnared in a corruption
investigation by Chinese authorities.
It is
difficult to determine from the tax records precisely how much money Mr. Trump
has spent trying to land business in China. The records show that he has
invested at least $192,000 in five small companies created specifically to
pursue projects there over the years. Those companies claimed at least $97,400
in business expenses since 2010, including some minor payments for taxes and accounting
fees as recently as 2018.
But Mr.
Trump’s plans in China have been largely driven by a different company, Trump
International Hotels Management — the one with a Chinese bank account.
The company
has direct ownership of THC China Development, but is also involved in
management of other Trump-branded properties around the world, and it is not
possible to discern from its tax records how much of its financial activity is
China-related. It normally reports a few million dollars in annual income and deductible
expenses.
In 2017,
the company reported an unusually large spike in revenue — some $17.5 million,
more than the previous five years’ combined. It was accompanied by a $15.1
million withdrawal by Mr. Trump from the company’s capital account.
On the
president’s public financial disclosures for that year, he reported the large
revenue figure, and described it only as “management fees and other contract
payments.” One significant event for the company that is known to have occurred
in 2017 was the buyout of its management contract for the SoHo hotel in New
York, which Bloomberg reported to have cost around $6 million.
Mr. Garten
would not comment on the specific amount cited by Bloomberg, but said that the
contract buyout represented a “significant portion” of the company’s revenue
and that the remaining money was not related to China.
Outside of
China, Mr. Trump has had more success attracting wealthy Chinese buyers for his
properties in other countries. His hotels and towers in Las Vegas and
Vancouver, British Columbia — locales known for attracting Chinese real estate
investors — have found numerous Chinese purchasers, and in at least one
instance drew the attention of the Federal Bureau of Investigation.
During the
2016 campaign, a shell company controlled by a Chinese couple from Vancouver
bought 11 units, for $3.1 million, in the Las Vegas tower Mr. Trump co-owns with
the casino magnate Phil Ruffin. The owner of a Las Vegas-based financial
services firm told The Times he was later visited by two F.B.I. agents asking
about the company behind the purchases, which he said had used his office
address in incorporation papers without his knowledge. It is not known what
became of the inquiry.
Mr. Garten
said the Trump Organization had “never been contacted by the F.B.I. and has no
knowledge of any investigation.”
In Vancouver,
numerous Chinese buyers of units in Mr. Trump’s hotel and tower helped increase
licensing fees from that project to $5.8 million in 2016, the year it was
completed, according to tax records. The project was built by a Canadian-based
firm controlled by the family of Malaysia’s richest man, Tony Tiah Thee Kian,
who operates hotels in China and elsewhere. CNN reported in 2018 that the
Vancouver operation was the subject of a counterintelligence review related to
Ivanka Trump’s need for a security clearance.
And not
long after winning the 2016 election, Mr. Trump reported selling a penthouse in
one of his Manhattan buildings for $15.8 million to a Chinese-American
businesswoman named Xiao Yan Chen, who bought the unit, previously occupied by
Ivanka Trump and her husband, Jared Kushner, in an off-market transaction. Ms.
Chen runs an international consulting firm and reportedly has high-level
connections to government and political elites in China.
Mr. Trump’s
tax records show that he reported a capital gain of at least $5.6 million from
the penthouse sale in 2017, his first year as president.
Jo Becker
contributed reporting.
Mike
McIntire is a reporter with the investigations unit. He won a Pulitzer Prize
for his reporting on Russian interference in the 2016 presidential election,
and has written in depth on campaign finance, gun violence and corruption in
college sports. @mmcintire
Russ
Buettner is an investigative reporter for The Times. In 2019, Russ and his
fellow reporters Susanne Craig and David Barstow were awarded a Pulitzer Prize
for their work in shattering Mr. Trump’s myth that he is a self-made
billionaire. They also received a Polk Award for the same body of work.
He
previously worked at the New York Daily News and New York Newsday.
@russbuettner
Susanne
Craig is an investigative reporter who writes about the intersection of
politics, money and government. Ms. Craig has won numerous awards during her
career, including a Pulitzer Prize in 2019 for work that shattered Donald
Trump’s myth that he is a self-made billionaire.
She has
covered Wall Street for The Times and has served as Albany bureau chief.
Previously, she was a reporter at The Wall Street Journal and worked at The
Globe and Mail in Canada. @susannecraig
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