Donald Trump accused of 'owing' Puerto Rico $33m after golf club bankruptcy

Accusations come after US President blames Atlantic ocean for lack of aid to island

Tom Embury-Dennis
Wednesday 27 September 2017 16:55
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Donald Trump at a press conference outside the White House with Spain Prime Minister Mariano Rajoy
Donald Trump at a press conference outside the White House with Spain Prime Minister Mariano Rajoy

Donald Trump is facing fresh scrutiny over the bankruptcy of a golf club he managed in Puerto Rico after blaming the Atlantic Ocean for his Government’s inadequate response to Hurricane Maria’s devastation.

The US president said “a thing called the Atlantic Ocean” made it “tough stuff” for FEMA, the US federal disaster relief agency, to respond to a crisis that has left 3.4 million people without electricity.

Those comments have led to renewed claims that the 70-year-old "owes" the islanders money himself after the failure of the Coco Beach Golf Club, renamed the Trump International Golf Club Puerto Rico after the businessman took it over.

The golf club collapsed following the recession, leaving Puerto Rican taxpayers out of pocket to the tune of $32.7m, according to a bankruptcy court filing from the government..

Amy Siskind, a prominent Hillary Clinton campaigner, has said Mr Trump needs to “pay them back”.

“When Trump's Puerto Rico golf course went bankrupt, he left Puerto Rican taxpayers with a $33m bill! And he's blaming them?” she said on Twitter.

When Mr Trump accused Democrats of wanting to “shut [the] government if we don’t bail out Puerto Rico” in April, an apparent reference to Senator Bill Nelson’s efforts to address a health care funding crisis on the island, the Florida Democratic Party hit back.

It suggested the billionaire was partly to blame for the island’s economic crisis due to the bill that was left for the failed golf course.

"Trump conveniently left out the fact that his golf course on the island defaulted, like so many of his other failed business schemes,” the statement read. “The failure left Puerto Rican taxpayers with a nearly $33 million bill, another example of Trump's many scams that make him wealthier and con hardworking families.”

While the bankruptcy did leave taxpayers with a huge bill, Politifact – an American fact checking organisation – judged that Mr Trump could at most only be held partly responsible, despite promising to turn the business around.

John Pottow, a law professor at the University of Michigan, told the website: “To the extent you want to blame people, sure, blame the President.”

But Craig McCann, a financial analyst, said the course was heading towards bankruptcy with or without Mr Trump’s involvement.

"This resort just got hammered and is haemorrhaging money before the Trump Organization’s involvement," he said.

The reality TV mogul signed two deals with the club in 2008, one a licensing agreement to name it Trump International Golf Club Puerto Rico, and a management agreement which gave Mr Trump control of the club in exchange for a slice of the profit.

By 2012, he had taken more than $600,000 in management fees from the club.

Mr Trump's son Eric told Bloomberg News in 2015 that the family had "zero financial investment" in the golf course. "This has absolutely nothing to do with Trump. This is a separate owner. We purely manage the golf course," he said.

Mr Trump has been criticised for not paying enough attention to the American territory since successive storms battered the island, destroying infrastructure and leaving the country without electricity.

He has since made plans to travel and visit the island next week. Mr Trump said on Tuesday the island had been “literally destroyed”, but predicted “they’ll be back”.

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