Daily Times

ATLANTIC CITY: Weak from heart surgery and a sepsis infection that would soon kill her, Patricia Paone was resting at home last summer when an apparition appeared on the TV – a famous businessman who had struck a deal with her husband years before.

“He’s a crook!” she roared, according to a son who was with her that day. “I can’t listen to this.” A quarter of a century had passed since Donald Trump refused to pay $1.2 million for the paving stones her late husband installed at Atlantic City’s Taj Mahal casino. But for Paone and others like her – the dozens of contractors and their families who never got all they were owed – it could have happened yesterday.

The contractor who provided the onion domes atop the Taj had to eat $2 million in losses. The contractor who supplied the Carrara marble from Italy ended up filing for personal bankruptcy. The contractor who put in the bathroom partitions had to lay off his brother.

“Anytime I went to Atlantic City and I’d see that Trump sign, I’d think of the little guys,” says bankruptcy lawyer Arthur Abramowitz who worked with contractors for years after the casino itself went bankrupt. “It wasn’t just the money; a lot of these guys went into depression.”

Of all the real estate and casino deals in Trump’s long career, the Taj arguably sheds the most light on how the would-be U.S. president handles crises. It was his biggest gamble, the “eighth wonder of the world,” as he dubbed it. And when it went south, his moves to avoid a financial hit to his empire hobbled many small businesses with little cushion to absorb the blow.

After the Taj opened in April 1990, the self-anointed “King of Debt” owed $70 million to 253 contractors employing thousands who built the domes and minarets, put up the glass and drywall, laid the pipes and installed everything from chandeliers to bathroom fixtures. A year later, when the casino collapsed into bankruptcy, those owed the most got only 33 cents in cash for each dollar owed, with promises of another 50 cents later. It took years to get the rest, assuming the companies survived long enough to collect.

“We got next to nothing,” says Michael MacLeod, whose 40-person studio made the giant elephant statues at the entrance to Taj. “I took a big hit.”

Trump spokeswoman Hope Hicks and Trump attorney Alan Garten did not respond to a list of questions about the candidate’s Taj dealings. Marty Rosenberg, former vice president of Atlantic Plate Glass, was among two dozen contractors and their survivors caught in the aftermath of the Taj bankruptcy who were interviewed by The Associated Press. He says the way Trump handled the contractors shows the candidate is shrewd and clever, qualities his fans seem to like in the presidential candidate.

But he says Trump won’t get his vote. “If ethics or morality has nothing to do with business,” Rosenberg says, “he’s a very good businessman.”

Trump financed the Taj with high-interest “junk” bonds – a method even he disdained.

The real estate mogul told state regulators in 1988 that companies that sell junk bonds were nothing but “junk” companies. To finance the Taj, he claimed he could borrow at low prime rates from banks because, as he testified, big banks were calling him “all the time,” begging him to take out loans. Several months later, unable to tap the banks, he sold $675 million in junk bonds, agreeing to pay investors 14 percent interest annually.

Then he started spending lavishly. He ordered crystal chandeliers from Austria; hand-sewn carpets from Britain; 70 onion domes, one of them 50-foot high; the Carrara marble from Italy.

By the start of 1990, Trump was desperate for the contractors to finish so he could begin taking money from slots players and high rollers. Opening day was pushed back twice, to April 2, only six weeks before a $47 million bond payment came due.

For the contractors, the first signs of trouble came in February 1990. Regular checks for work completed stopped arriving in the mail.

Marty Rosenberg, who was installing floor-to-ceiling curtain walls of glass, picked up the phone in his Atlantic City office and called one of Trump’s men overseeing construction.

“I’ll check it out, Marty, and call you right back,” the man said. A day later, he got his answer: The money’s coming in two weeks.

The check never came.

Rosenberg, whom Trump would eventually owe $1.1 million, walked down the hall and entered his brother’s office. “We got a problem,” he said.