The Washington Post reporter appeared Monday on MSNBC’s “Morning Joe” to discuss his latest investigative work with his colleagues Jonathan O’Connell and Jack Gillum, who found the self-proclaimed “king of debt” went on a “buying binge” about a decade ago using at least $400 million in cash.
“It is an unusual change,” Farenthold said. “The change doesn’t happen right after his real terrible experiences with debt in the early ’90s. He comes back from those, he uses debt to buy more properties, and in 2006, a number of years after those bad experiences with debt, he starts buying in all cash.
He bought two golf courses for $80 million total and bumped in renovation, so he went from being heavily dependent on debt to buying these things in all cash.”
“I can’t tell he didn’t or did have the money, I can’t see inside the business in that way, but people told us even if you did have the money, this is a strange way to spend it,” Farenthold said. “Most investors use debt to augment their own cash.”
Golf courses don’t produce that much revenue, they’re not big moneymakers,” Farenthold said. “The only people they usually see buy golf courses in all cash, it’s two categories, one is like a really rich guy who would buy a small golf course as a trophy for himself, spend $1 million, $2 million just to sort of have a place to hang out and rule the roost or, in the big purchase, the people who buy big golf courses with cash are people like sovereign wealth funds — the sovereign wealth fund of Dubai or sovereign wealth fund of Norway, who have so much money they don’t need individual transactions to make money, they’re just looking for a place to basically park their money and diversify.”
“Trump doesn’t seem to fit into those categories,” the reporter added. “He’s trying to invest in golf, I think, to make money. People that do that say it’s better to do it with debt and co-investors just because your money goes further and you spread out your risk. You’re not sinking your own money into a small number of golf courses.”