ATLANTIC CITY, N.J. (WTXF/AP)
Hillary Clinton lashed out at Donald Trump's business practices, saying his background in Atlantic City shows what he might do to the American economy.
Clinton said Trump once called his Trump Taj Mahal the "8th wonder of the world" but it filed for bankruptcy in 2009 and the new management canceled workers' health insurance and pensions.
She said Trump stiffed many contractors for millions of dollars of work and never paid them. And she says he defaulted on bank loans and bankrupted the companies.
Clinton said of Trump, "what he did here in Atlantic City is exactly what he will do if he wins in November."
She was introduced by Atlantic City's famed Boardwalk Hall by a retired vice president of a glass company who says Trump owed his company nearly $500,000 for work that they did on one of his hotels.
Clinton ripped Donald Trump as a "shameful" businessman with a history of exploiting workers, holding up the presumptive Republican nominee's turbulent history in struggling Atlantic City as a warning for American voters.
"What he did here in Atlantic City is exactly what he'll do if he wins in November," said Clinton, standing on the seaside town's famed boardwalk just a few blocks from one of Trump's shuttered hotels.
Clinton's remarks were part of a growing effort by her campaign to tear down Trump's business reputation, which Democrats believe is overhyped and based more on his ability to attract publicity than actual private sector skills. In the coming weeks, Clinton's campaign is expected to highlight "victims" of Trump's business ventures, including contractors who went unpaid -- replicating a strategy Democrats employed successfully against 2012 GOP nominee Mitt Romney.
Clinton focused narrowly on Trump in her address, making no mention of the FBI's recommendation Tuesday that she not face charges for her controversial email practices as secretary of state. In clearing Clinton of breaking the law, FBI Director James Comey was blistering in his criticism of the Democratic nominee, saying she was "extremely careless" in handling classified information on a private email and personal internet server.
Even with Comey's tough rhetoric, Clinton aides were relieved to have the investigation formally closed so they can fully turn their attention to the fall face-off with Trump. Campaign aides say that while Trump's controversial comments about minorities and women weaken his prospects of winning the White House, he is still viewed favorably as businessman by many Americans.
For Clinton, Atlantic City provides a picture-perfect backdrop to try to undermine that reputation.
Once a casino-lined coastal jewel, Atlantic City has struggled in recent years, losing more than half of its gambling revenue during the last nine years. The casino struggles have led to job losses and credit downgrades.
Trump defended his record in the gambling town, saying he "created thousands of jobs and made a lot of money in Atlantic City, which was what, as a businessman, I am supposed to do for my company and my family." Earlier Wednesday, he blamed Atlantic City's troubles on politicians' "big mistakes."
But in even in the years when other Atlantic City casinos were growing, casinos carrying the Trump name weren't. Trump's publicly traded company, Trump Hotels & Casino Resorts Inc., went bust in 2004, Atlantic City's casino revenues were on their way to an all-time high. In fact, two of his casinos' three bankruptcies occurred in years when overall Atlantic City gambling revenue was rising.
"Isn't he supposed to be some kind of amazing businessman?" Clinton said. "So it's fair to ask, since he is applying for a job, what in the world happened here?"
She also placed blame for Atlantic City's troubles on New Jersey Gov. Chris Christie, one of Trump's biggest supporters.
"If your governor would start doing his job instead of following Donald Trump around holding his coat, maybe we could really get New Jersey's economy moving again," Clinton said.
After a months-long fight over the city's future that included threats of a state takeover, Christie signed legislation in May that kept Atlantic City solvent and staved off immediate bankruptcy. The city now has until the end of October to formulate a plan for balancing its budget in order to avoid being taken over by the state.
Christie, meanwhile, has blamed the city's issues on Democrats as well as larger structural forces, including increased competition from new gambling centers and the city's failure to rebrand itself and expand its attractions.
Following Clinton's remarks, she briefly greeted striking casino workers at Trump Taj Mahal. While the casino still bears Trump's name, it now belongs his friend Carl Icahn, the billionaire businessman magnate.
Then, hours later, President Barack Obama vigorously vouched for Clinton's trustworthiness and dedication in his first outing on the campaign stump.
(AP) What value in Trump name? For his casinos, not enough
Donald Trump has promoted his casinos as historically successful and profitable, done in only by the economic decline of Atlantic City.
"Every building in Atlantic City is in trouble. OK? This isn't unique to Trump," he said in 2010 deposition taken as part of a casino bankruptcy.
But in the years when other Atlantic City casinos were growing, casinos carrying the Trump name weren't.
When his gambling rivals in Atlantic City were adding staff, Trump casinos were laying off employees. When Trump's publicly traded company, Trump Hotels & Casino Resorts Inc., went bust in 2004, Atlantic City's casino revenues were on their way to an all-time high. In fact, two of his casinos' three bankruptcies occurred in years when overall Atlantic City gambling revenue was rising.
Presumptive Democratic nominee Hillary Clinton was appearing in Atlantic City Wednesday to attack Trump's business record there. But even before her speech, Trump sought to blunt her criticisms, saying on Twitter: "I made a lot of money in Atlantic City and left 7 years ago, great timing (as all know). Pols made big mistakes, now many bankruptcies."
Trump now owns nothing in the city but says his touch there is what he'll bring to the White House: personal involvement that engenders success.
"Generally when I get involved in a company, historically, they work," Trump told members of the Nevada Gaming Control Board in early February 2004, according to a transcript. But Trump's record in Atlantic City up until then showed otherwise.
Within a few years of its initial public offering, gambling industry stock analysts at major banks stopped following Trump Hotels & Casino Resorts Inc. The company's shrunken value was simply too small to warrant attention from big-time investors. The only people on Wall Street paying attention to the company were those who followed junk bonds and distressed debt.
The underperformance itself doesn't tell the story of what went wrong. Part of the problem, by Trump's own account, was casino expansions that swamped demand.
"In New Jersey when a hotel opens up, the market shrinks for the individual hotels, and it takes a couple of years to get back to normal," he said in the 2004 Nevada gaming hearing. "When the Taj opened, it decimated the market for a period of two years."
In addition to industry overbuilding, Trump's casinos suffered from debt loads that gobbled up their profits at the tables and slot machines. Trump arranged deals between himself and the company that analysts deemed generous, most notably the 1996 sale of his personally owned Trump Castle casino to his publicly owned company, on which the company later took a big loss. In the six months following the purchase, the stock price of Trump's public company was cut by more than half.
Management played a role, too. In April of 1990, as Atlantic City's peak season began, Trump demanded that his Plaza casino cut expenses by 20 percent, according to a memoir by John O'Donnell, the onetime president of the Trump Plaza Casino.
"Get rid of some staff," O'Donnell recalled Trump ordering, suggesting that the Plaza begin by laying off a third of the waiters at the hotel restaurant. "Just do it. It's going to be a positive, believe me."
Over the next two decades, Trump's casinos shrank noticeably, according to New Jersey casino regulatory documents.
Between 1991, the first full year of the Trump Taj Mahal's operation, and 2004, the year Trump Hotels & Casino Resorts filed for bankruptcy, employment at Trump's three casinos fell from 12,757 to 10,206, a 20 percent decline. Rival casinos increased their staffing by 13 percent during that same period, as Atlantic City casinos net winnings rose from $2.9 billion to $4.8 billion, the documents show.
Trump Hotels & Casino Resorts Inc. declared bankruptcy that year, though industrywide gaming revenues continued to rise until 2006. A deal with creditors left him with a 25 percent stake and the chairmanship of the company, renamed Trump Entertainment Resorts. But creditors insisted he step aside from an operational role. Though Trump resigned as chief executive, the company continued to pay him $2 million a year for making appearances at the casinos.
Shortly after the new company was resurrected as Trump Entertainment Resorts Inc., however, Atlantic City's overall gambling industry went into steep decline, as competition in neighboring states siphoned off its customers. From 2004 until that company's 2009 bankruptcy, both the Trump casinos and the industry at large shed an additional 20 percent of their staff.
Trump's ownership survived the 2004 bankruptcy. The bankruptcy judge found Trump's name was still worth millions to the casino and approved a reorganization plan that gave him a 10 percent stake in the company in exchange for his brand's continued use.
But a third bankruptcy in 2012 wiped out Trump's remaining stake.
"Does anybody give me credit for getting out before its demise? Timing," he wrote in an August 2014 tweet amid a new wave of local casino layoffs.