The Situationist

Archive for May 14th, 2011

The Situation of Donald Trump

Posted by Adam Benforado on May 14, 2011

Michael Barbaro had an article in the New York Times earlier this week exploring several lawsuits against Donald Trump stemming from his educational ventures and real estate endeavors.  With respect to the latter,

[o]ver the last few years, according to interviews and hundreds of pages of court documents, the real estate mogul has aggressively marketed several luxury high-rises as “Trump properties” or “signature Trump” buildings, with names like Trump Tower and Trump International — even making appearances at the properties to woo buyers. The strong indication of his involvement as a developer generated waves of media attention and commanded premium prices.

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But when three of the planned buildings encountered financial trouble, it became clear that Mr. Trump had essentially rented his name to the developments and had no responsibility for their outcomes, according to buyers. In each case, he yanked his name off the projects, which were never completed. The buyers lost millions of dollars in deposits even as Mr. Trump pocketed hefty license fees.

What particularly interested me about the story was how Trump’s lawyers framed the issue with the hopes of avoiding liability.

The first frame was to suggest that buyers who lost their life savings investing in properties were themselves to blame.  It was their flawed dispositions — their own personal failings — that led to their downfalls: “Alan Garten, a lawyer for Mr. Trump’s company, said that, regardless of what Mr. Trump himself or any marketing materials had suggested, his role was disclosed in lengthy purchasing documents that buyers should have carefully scrutinized.”  As Mr. Garten explained further, these were losers just trying to play the victim card: “They are people who lost money and are looking for somebody to blame.”

The second frame was a fall back position, necessary because the dispositional account of fair disclosure and lazy consumers is not supported by the facts:

The marketing materials left little doubt that Mr. Trump was a driving force behind the 52-story tower: “We are developing a signature landmark property,” Mr. Trump declared in a news release unveiling it, which described him as a partner. In a marketing video, Mr. Trump called it “my first project on the Gulf of Mexico,” and even showed up to mingle with potential buyers at a lavish, catered event. “I love to build buildings,” Mr. Robbins recalled Mr. Trump telling the audience.

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A confidential agreement, later made public in court filings, told a different story: Mr. Trump was not one of the developers or builders. For $4 million, plus a share of any profits, he had licensed his name. As for the mingling with buyers? He was required to do it, up to two times, in the agreement, which spelled out that the appearances last “for no more than six (6) working hours each.”

According to the document, the very existence of the license agreement was to be kept confidential. And it remained that way, buyers said, long after they bought their units.

So what is the second frame?  It turns out to be a situationalizing one: okay, fine so perhaps the victims aren’t themselves to blame, but don’t then point the finger at Mr. Trump.  After all this was essentially an unpreventable accident.  Thus, Mr. Garten “suggested that the housing market collapse, not Mr. Trump, was the cause of [the buyers’] troubles.”  As the Donald explained, in truth, this was really a blessing in disguise: “They were better off losing their deposits” because it allowed buyers to avoid the bursting of the housing bubble and the loss in home values.

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