IS OUR MOGUL WORSHIP SWAMP FEVER FINALLY BREAKING?
By Bob Hennelly
“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.”
As the nation’s legal system comes to a near meltdown as it attempts to hold a former President accountable for alleged high crimes and a lifetime of misdemeanors, we fixate on the target of all 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 a tendency to now blame everything on him, it would be worthwhile to pull back a bit and see that he’s just one man in a pantheon of hard charging moguls that we have elevated to near demigod status because we confer a kind of omnipotence on them. We can’t really move on past Trump unless we confront our own dark side that makes him and those like him possible.
The truth is there’s a platinum plated conveyor belt at the heart of the American Dream machine that our societal greed greases. In a state like New Jersey, where much wealth is concentrated, there’s a real admiration for these personalities that know what they want and will go to any lengths to get it. We love Tony Soprano for a reason. Call it our shadow self writ large.
We’ve elected two former partners from Goldman Sachs to be our Governor.
THERE’S GOLD IN THE MIRE
There’s perhaps no greater example of how our state’s political leadership of both parties are so enamored by great wealth than the way Trenton has been played by a procession of developers who have promised a mega mall in the Meadowlands. It was first branded during the McGreevey era as Xanadu and then it was relaunched by Gov. Chris Christie as the American Dream Meadowlands.
We just never seem to do enough due diligence on them because ‘the stakes are so high.’
Consider how relieved the State of New Jersey was back in the summer of 2006 when Tom Barrack, CEO of Colony Capital LLC, rode into the New Jersey Meadowlands to “rescue” the fiscally floundering Xanadu, aka American Dream mega-mall. The project had been originated by the Mills Corporation, the Virginia developer that ran afoul of an Securities Exchange Commission probe and ultimately went bankrupt.
The Mills Corporation board of directors included Charlie Black, of the infamous K street global lobbying firm Black, [Paul] Manafort & [Roger] Stone whose client list included Donald Trump and the likes of strongmen like Angola’s Jonas Savimbi and Ferdinand Marcos of the Philippines.
Mills, a heavy political donor to both political parties, had managed to convince Gov. James 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 plus retail space could help revive the state’s sports complex as well as help it retain the Jets, Nets and the Devils.
MOGUL TO THE RESCUE
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 and 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 same sycophantic Fortune profile recounted in 2006. “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 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,” recounted Fortune. “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, Barack’s Colony had to throw in the towel on finishing the beleaguered mall project that had already burned through $2 billion and was built on land belonging to the New Jersey Sports and Exposition Authority. Along the way, public pension retirement funds from Iowa, Mississippi, Alaska, Texas and New York all got burned for hundreds of millions chasing after the promised high rate of return from Xanadu, then American Dream Meadowlands, that just never seemed to materialize.
Meanwhile, the State of New Jersey, through both Democratic and Republican administrations, continued to double down in its “investment” in the project, reasoning that they were too deep to get out. This resulted in the ploughing of hundreds of millions of dollars in the form of state subsidies, 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 Jeff Tittel, then with 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 Triple 5, the Canadian developers of the Mall of America.
“This is the American Scheme, because it is about taking care of developers at the expense of the taxpayers of New Jersey,” said Jeff Tittel, Director of New Jersey Sierra Club at the time. “Today the Senate took the side of special interests over the financial health of our state.Teachers, police, and fireman 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 American Dream, under the management of Triple 5 of Mall of America fame, lost $60 million in 2021 drawing in $173 million in revenue against $232 million in expenses. According to Bloomberg, the beleaguered project generated sales of $305 million, 15 percent of the $2 billion predicted in 2017 for the first year of operation.
On top of the outside construction loan, American Dream is holding “$290 million 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 Tom Barrack, just one in its long line of Xanadu/American Dream pitchmen?
Last week, with the tempest swirling around the search of former President Trump’s Mar-a-Largo compound, it was easy to miss the criminal proceedings in Brooklyn where a judge rejected Barrack’s motion to remove his home confinement ankle bracelet when his federal corruption trial gets underway next month.
Barrack, a longtime Trump associate, advised his 2016 campaign, headed up his sketchy Inaugural Committee and acted as an outside advisor to the highest levels of the Trump administration involving matters in the Mideast. “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.
Back in July of last year, 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 largest ever put up, should be sufficient 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.”
Trump’s not the problem. It’s the archetype of the ‘swashbuckler’ we elevate.