One of the near universal characteristics of rich guys who stay rich is that they are notorious skinflints. Nothing wrong with that. Frugality is a virtue. Greed and miserliness, on the other hand, are not virtues. When greed and miserliness are combined with a very wealthy and narcissistic bully you have Donald Trump. Several reports today indicate that Donald Trump has a policy of not paying his bills in full and routinely gouges smaller vendors, in many cases putting them out of business, while caving to larger businesses that have the wherewithal to fight Trump in court:
During the Atlantic City casino boom in the 1980s, Philadelphia cabinet-builder Edward Friel Jr. landed a $400,000 contract to build the bases for slot machines, registration desks, bars and other cabinets at Harrah’s at Trump Plaza.
The family cabinetry business, founded in the 1940s by Edward’s father, finished its work in 1984 and submitted its final bill to the general contractor for the Trump Organization, the resort’s builder.
Edward’s son, Paul, who was the firm’s accountant, still remembers the amount of that bill more than 30 years later: $83,600. The reason: the money never came. “That began the demise of the Edward J. Friel Company… which has been around since my grandfather,” he said.
In this case the work was performed and approved by the general contractor. At some point, Trump and his brother decided that Friel was small enough to stiff, made a claim that the work was “inferior” and refused to pay the full amount. The Wall Street Journal (paywall) has a laundry list of companies that provided services to Trump after which he decided their services were not up to standards or “too high.”
(Let me digress for a moment. During my “starving student” phase of life, I worked a morning shift at a Jack-in-the-Box fast food place. One day (one day only) they tried to train me as a cashier. The restaurant policy was that if you didn’t like your food you got your money back. The number of people who would eat 90% of a burger and then demand a refund was incredible. And, apparently, asking “at what point did you decide you didn’t like the food” was not a question that should be asked. I don’t know how you can contract for services and, after receiving the service, decide that the price is “too high.”)
Payment disputes aren’t unusual in the construction industry, where aggressive developers sometimes leave behind dissatisfied vendors and contractors. Billionaire casino magnate Sheldon Adelson, chief of Las Vegas Sands Corp., for example, has been involved in payment disputes with contractors concerning his Venetian casino on the Las Vegas Strip. Sands declined to comment.
Yet Mr. Trump’s withholding of payments stood out as particularly aggressive in the industry and in the broader business world, said some vendors who had trouble getting paid.
It is “a strong-arm tactic that is frowned on,” said Wayne Rivers, a small-business consultant in construction. The tactic is more common in Northeast construction than in other regions, he said, and is abnormal in much of American business.
Mr. Trump pushed the approach beyond construction and into day-to-day casino operations, said Jack O’Donnell, president of Mr. Trump’s Plaza casino in Atlantic City in the late 1980s. “Part of how he did business as a philosophy was to negotiate the best price he could. And then when it came time to pay the bills,” he said, Mr. Trump would say that “ ‘I’m going to pay you but I’m going to pay you 75% of what we agreed to.’ ”
“In our business it’s very difficult to operate that way. You’re dealing with people on an ongoing basis. Every time you order with them you can’t screw them because they won’t be your suppliers anymore,” Mr. O’Donnell said. Executives at the casino paid vendors fully despite Mr. Trump’s directives, he said, and “it used to infuriate him.”
Again and again and again you see small vendors screwed to the wall, and sometimes forced into liquidation, because Trump knew he could save a few dollars by beating up on people who simply did not have the resources to fight back.
And it isn’t just vendors. The list of unpaid people includes hotel and resort staff.
Trump frequently boasts that he will bring jobs back to America, including Tuesday in a primary-election night victory speech at his golf club in suburban New York City. “No matter who you are, we’re going to protect your job,” Trump said Tuesday. “Because let me tell you, our jobs are being stripped from our country like we’re babies.”
But the lawsuits show Trump’s organization wages Goliath vs David legal battles over small amounts of money that are negligible to the billionaire and his executives — but devastating to his much-smaller foes.
In 2007, for instance, dishwasher Guy Dorcinvil filed a federal lawsuit against Trump’s Mar-a-Lago Club resort in Palm Beach, Fla., alleging the club failed to pay time-and-a-half for overtime he worked over three years and the company failed to keep proper time records for employees.
Mar-a-Lago LLC agreed to pay Dorcinvil $7,500 to settle the case in 2008. The terms of the settlement agreement includes a standard statement that Mar-a-Lago does not admit fault and forbids Dorcinvil or his lawyers from talking about the case, according to court records.
There is a very bright line between driving a hard bargain to get to the “willing buyer; willing seller” stage and demanding high quality work and using withholding of agreed upon payments as a part of your business plan.
In Catholic Tradition, there are four mortal sins which are classed as “sins that cry to Heaven for vengeance.” These are sins that are called out in the Bible in those terms. One of those is found in James 5:4:
Behold, the hire of the labourers who have reaped down your fields, which is of you kept back by fraud, crieth: and the cries of them which have reaped are entered into the ears of the Lord of sabaoth.
This, more broadly applies to cheating workers of their just wages.
Trump has said over and over that he’s on good terms with God and hasn’t had any need to seek forgiveness. He probably should revisit that idea.