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FTR #428 Gold Warriors: An Interview with Peggy Seagrave

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Intro­duc­tion: Fol­low­ing direct­ly and sup­ple­ment­ing FTRs #426 and #427, this inter­view with Peg­gy Sea­grave high­lights many of the key points of dis­cus­sion in the remark­able new book authored by Peg­gy and her hus­band Sterling–Gold War­riors: Amer­i­ca’s Secret Recov­ery of Yamashita’s Gold. (The Sea­graves authored The Yam­a­to Dynasty, which was the focal point of FTR#‘s 426, 427.) Cen­tered on the piv­otal­ly impor­tant (but lit­tle known) “Gold­en Lily” oper­a­tion exe­cut­ed by the Japan­ese pri­or to and dur­ing World War II, this pro­gram sets forth the role played by this war loot in the post­war world. In addi­tion to pro­vid­ing much of the foun­da­tion for the post­war Japan­ese econ­o­my (the world’s sec­ond largest), the plun­der secret­ed by Japan in the Philip­pines pro­vid­ed a vast finan­cial reserve that was used to finance US intel­li­gence oper­a­tions dur­ing the Cold War. More­over, this vast pool of clan­des­tine wealth was the source for a num­ber of over­lap­ping funds used to fix elec­tions in a num­ber of coun­tries, con­trol the Japan­ese polit­i­cal estab­lish­ment in the post­war peri­od and but­tress major finan­cial insti­tu­tions around the world. In addi­tion, this “black gold” was par­tial­ly recov­ered by the late Philip­pines dic­ta­tor Fer­di­nand Mar­cos, who uti­lized the loot to finance his regime and to manip­u­late both Japan and the Unit­ed States. The cor­rupt­ing influ­ence of this vast pool of wealth con­tin­ues to be felt around the world.

Pro­gram High­lights Include: The role of the Japan­ese under­world in that nation’s mil­i­tary and cor­po­rate impe­ri­al­ism; the reha­bil­i­ta­tion of key Japan­ese war crim­i­nals, who served as king­mak­ers in the post­war “reformed,” “demo­c­ra­t­ic” Japan; the secret pro­vi­sion at the 1944 Bre­ton Woods con­fer­ence to use Axis plun­der to finance anti-Com­mu­nist oper­a­tions; the roles of Sec­re­tary of War Hen­ry Stim­son’s pro­teges John J. McCloy, Robert Lovett and Robert B. Ander­son in admin­is­ter­ing the post­war dis­burse­ment of the Gold­en Lily assets; the recov­ery of the Gold­en Lily caches in the Philip­pines by OSS (and lat­er CIA) offi­cer Sev­eri­no Diaz Gar­cia San­ta Romana; CIA Gen­er­al Edward Lans­dale’s part­ner­ship with San­ta Romana in the manip­u­la­tion of the Gold­en Lily loot; the mar­riage of the Gold­en Lily plun­der with Nazi gold in order to form the piv­otal Black Eagle Trust; then Vice-Pres­i­dent Richard Nixon’s col­lu­sion with the Japan­ese to fix the US Pres­i­den­tial elec­tion; the role of the “M‑Fund” in the cor­rup­tion of post­war Japan and the per­pet­u­a­tion of Japan­ese oli­garchy; the use of Gold­en Lily loot to finance right-wing mili­tias in the Unit­ed States; the role of the Black Eagle Trust in manip­u­lat­ing inter­na­tion­al cur­ren­cy stan­dards; the appar­ent role of act­ing NYSE head John Reed in secret­ing away Gold­en Lily gold accounts for Citibank; the delib­er­ate frus­tra­tion of repa­ra­tions law­suits by for­mer POW’s against Japan­ese cor­po­ra­tions; US State Depart­ment offi­cials’ pro­fes­sion­al con­nec­tions to cor­po­ra­tions that were defen­dants in those law­suits.

1. (Note: the entire pro­gram is based on the book Gold War­riors. Although some text excerpts are pre­sent­ed here, the usu­al com­plete foot­not­ing process is omit­ted for obvi­ous rea­sons. Read­ers are emphat­i­cal­ly encour­aged to obtain and read the book. Be sure to vis­it the web site.) Begin­ning with dis­cus­sion of the struc­ture of Japan­ese impe­ri­al­ism in the 20th cen­tu­ry, the pro­gram sets forth the pro­found oper­a­tional rela­tion­ship of Japan’s major cor­po­ra­tions, its under­world syn­di­cates and the Patri­ot­ic soci­eties. The zaibat­su-the giant Japan­ese fam­i­ly trusts that dom­i­nate that nation’s econ­o­my use both the yakuza-the dead­ly Japan­ese crim­i­nal orga­ni­za­tions-and the Patri­ot­ic soci­eties (such as the Black Drag­on and Black Ocean soci­eties) as coop­er­a­tive agents in the process of con­quest and eco­nom­ic plun­der. In this regard, Japan’s mil­i­tary func­tioned in seam­less coor­di­na­tion with these enti­ties (as well as the Emper­or and his fam­i­ly) as part­ners in the con­quest, bru­tal­iza­tion and loot­ing of Asia pri­or to, and dur­ing World War II. (For more on the zaibat­su, see Mis­cel­la­neous Archive Show-avail­able from Spit­fire-as well as FTR#‘s 290, 426, 427. For more about the Patri­ot­ic Soci­eties, see FTR#‘s 291, 296, as well as RFA#7‑available from Spit­fire.)

2. One of the prin­ci­pal ele­ments of dis­cus­sion con­cerns the role of Princes Take­da and Chichibu in stash­ing vast amounts of loot­ed in wealth in the Philip­pines, for even­tu­al recov­ery and use on behalf of Japan’s post­war eco­nom­ic recov­ery. (See FTR#‘s 290, 427.)

3. Sup­ple­ment­ing the focal point of FTR#426, the pro­gram sets forth the delib­er­ate sub­ver­sion of Japan­ese reform by Gen­er­al Dou­glas MacArthur and his staff, act­ing on behalf of polit­i­cal and eco­nom­ic inter­ests that sought a preser­va­tion of the sta­tus quo. In order to main­tain the Japan­ese busi­ness and polit­i­cal infra­struc­ture, the Emper­or and the roy­al fam­i­ly were absolved of war guilt and noto­ri­ous war crim­i­nals such as Nobo­suke Kishi, Yoshio Kodama and Royichi Sasakawa were reha­bil­i­tat­ed. Kishi, Kodama and Sasakawa became key movers on the post­war Japan­ese polit­i­cal stage. (For more about Kodama and Sasakawa, see FTR#‘s 291, 296, as well as RFA#7‑available from Spit­fire.) Anoth­er of the sig­nif­i­cant play­ers for Japan dur­ing the war-Kakuei Tana­ka-evolved into one of the major con­trollers of the post­war clan­des­tine monies, the “M” Fund in par­tic­u­lar. (For more about the M‑Fund, see FTR#290.)

4. One of the more impor­tant post­war US intel­li­gence oper­a­tives was a for­mer OSS and CIA agent Sev­eri­no Diaz Gar­cia San­ta Romana-nick­named “San­ty.” The dis­cov­er­er of much of the gold hid­den in the Philip­pines by Prince Chichibu and Gen­er­al Yamashita under “Gold­en Lily” (see FTR#427), San­ta Romana worked with Gen­er­al Edward Lans­dale to secret the gold into for­eign bank accounts. There, it was sub­se­quent­ly uti­lized for a num­ber of pur­pos­es, in par­tic­u­lar the financ­ing of post­war US intel­li­gence oper­a­tions. As Ms. Sea­grave explains, a piv­otal event in the recov­ery of the Philip­pines Gold­en Lily caches was the tor­ture of Gen­er­al Yamashita’s dri­ver, who even­tu­al­ly yield­ed the where­abouts of the repos­i­to­ries.

5. At the epi­cen­ter of the events set forth in Gold War­riors, a vast engine of clan­des­tine wealth known as the Black Eagle Trust grew from the syn­the­sis of the San­ta Romana recov­er­ies with Nazi loot recov­ered at the close of the war in Europe. Named for the black eagle imprint­ed on ingots of Nazi gold bul­lion, the Black Eagle Trust was the out­growth of plan­ning engaged in at the Bret­ton Woods con­fer­ence in 1944. (Bret­ton Woods laid the ground­work for the post­war inter­na­tion­al econ­o­my.) Stem­ming from plan­ning by the influ­en­tial Sec­re­tary of War Hen­ry Stim­son and his pow­er-elite pro­teges John J. McCloy, Robert Lovett and Robert B. Ander­son, the Black Eagle Trust was used to finance US covert intel­li­gence oper­a­tions through­out the Cold War. Black Eagle gold was used to fix elec­tions in many coun­tries and to pro­vide an under­pin­ning for many of the world’s most impor­tant finan­cial insti­tu­tions. In addi­tion, oth­er (relat­ed) funds had much to do with the behind-the-scenes maneu­ver­ing on the Japan­ese, Philip­pine and U.S. polit­i­cal stages.

6. Next, the pro­gram focus­es on the deci­sive role of Gold­en Lily loot and oth­er “black” (clan­des­tine) monies played in the affairs of post­war Japan. The most impor­tant of these funds was the “M‑Fund,” deriv­ing its name from Gen­er­al William Fred­er­ic Mar­quat, a key MacArthur aide involved with the admin­is­tra­tion of Japan’s post­war econ­o­my. As dis­cussed above, that econ­o­my was entire­ly deriv­a­tive from the insti­tu­tions of Impe­r­i­al Japan. (The M‑Fund is dis­cussed in FTR#290.) Ini­tial­ly admin­is­tered by the U.S., the M‑Fund was dis­bursed in con­junc­tion with res­ur­rect­ed Japan­ese war crim­i­nals and prof­i­teers, such as Msrs. Kishi, Kodama and Tana­ka. Even­tu­al­ly, then Vice-Pres­i­dent Richard Nixon effect­ed the trans­fer of con­trol of the M‑Fund back to the Japan­ese, in exchange for kick­backs from this mul­ti-bil­lion dol­lar fund to Nixon’s cam­paign to win the pres­i­den­cy. After becom­ing Prime Min­is­ter, Tana­ka used the vast wealth of the M‑Fund to sys­tem­at­i­cal­ly manip­u­late the polit­i­cal topog­ra­phy of Japan. A cen­tral vehi­cle for this con­trol was the issuance of bonds, such as the “57’s”, named for the year of Emper­or Hiro­hi­to’s reign. These cer­tifi­cates could be redeemed or deemed “coun­ter­feit” at the dis­cre­tion of the con­trollers of the fund‑a delib­er­ate caprice that was used to dev­as­tat­ing, Machi­avel­lian effect. Among those ruined by the “57’s” was for­mer Deputy Attor­ney Gen­er­al Nor­bert Schlei (see FTR#290.)

7. “A relat­ed legal bat­tle was that of for­mer U.S. Deputy Attor­ney Gen­er­al Nor­bert Schlei, who had to fight for his sur­vival after being stung by the U.S. Trea­sury Depart­ment for ask­ing too many ques­tions about Japan’s secret M‑Fund. While Schlei was indict­ed, pros­e­cut­ed, bank­rupt­ed, and pro­fes­sion­al­ly ruined for try­ing to nego­ti­ate a finan­cial cer­tifi­cate based on the M‑Fund, for­mer Sec­re­tary of State Alexan­der Haig-accord­ing to eye­wit­ness­es-went to Japan and nego­ti­at­ed a sim­i­lar cer­tifi­cate suc­cess­ful­ly, with the help of a per­son­al let­ter from Pres­i­dent George H.W. Bush. Why one man suc­ceed­ed while the oth­er was destroyed is a chill­ing sto­ry of finan­cial col­lu­sion between Wash­ing­ton and Tokyo.” (Gold War­riors-Amer­i­ca’s Secret Recov­ery of Yamashita’s Gold; by Ster­ling Sea­grave and Peg­gy Sea­grave; Ver­so [HC]; Copy­right 2003 by Ster­ling Sea­grave and Peg­gy Sea­grave; ISBN 1–85984-542–8; p. 9.)

8. In addi­tion to the M‑Fund, the relat­ed Yot­suya and Keenan Funds were employed by the MacArthur group, Lands­dale and their Japan­ese allies to manip­u­late Japan­ese and Asian affairs in a cyn­i­cal (and often bloody) fash­ion. Admin­is­tered by MacArthur’s fas­cist intel­li­gence chief Gen­er­al Charles Willough­by, the Yot­suya Fund was used in con­junc­tion with the Japan­ese crim­i­nal syn­di­cates to eff­fect some of the more grue­some machi­na­tions of the ear­ly Cold War peri­od in Japan. (For more about Willough­by, see-among oth­er programs-RFA#‘s 10, 11, 15, 37-avail­able from Spit­fire, as well as FTR#‘s 54, 120.) “Gen­er­al Willough­by, MacArthur’s ‘lov­able fas­cist’ and head of G‑2 at SCAP, con­trolled the Yot­suya Fund and worked ener­get­i­cal­ly with Kodama and his legions of yakuza to sup­press any kind of left­ist activ­i­ty or pub­lic protest dur­ing the occu­pa­tion. Because democ­ra­cy tol­er­at­ed dis­sent, the con­cept of democ­ra­cy had long been regard­ed by Japan’s rul­ing elite as ‘a poi­so­nous idea from the West’. In Japan, even the mildest kind of dis­sent was not tol­er­at­ed. Dur­ing the McCarthy era in Amer­i­ca, the sup­pres­sion of dis­sent became syn­ony­mous with anti-com­mu­nism. But the witch­hunt in Japan dur­ing that epoch was far more severe and bloody.” (Ibid.; p. 110.)

9. The Keenan Fund was yet anoth­er of these pools of “black” mon­ey. “The Keenan Fund, by con­trast, was con­trolled by a civil­ian: Joseph B. Keenan, anoth­er MacArthur inti­mate who was chief pros­e­cu­tor in the Tokyo war crimes tri­als. . . .Sim­ply put, it was used to bribe wit­ness­es at the war crimes tri­als, or to grease the inter­me­di­aries who per­suad­ed the wit­ness­es to fal­si­fy their tes­ti­mo­ny.” (Ibid.; pp. 111–112.)

10. Even­tu­al­ly, the late Philip­pine dic­ta­tor Fer­di­nand Mar­cos learned of the Gold­en Lily plun­der and the use of the clan­des­tine funds by MacArthur and the Japan­ese. He then used this infor­ma­tion to recov­er some of the trea­sure entombed the Philip­pines, and to black­mail both the Japan­ese and the Amer­i­cans. It should be not­ed that this black­mail evolved into deep polit­i­cal col­lu­sion, in which the Mar­cos-con­trolled Gold­en Lily loot was traf­ficked around the world as part of var­i­ous U.S. and Japan­ese covert machi­na­tions.

11. In addi­tion, some of the Gold­en Lily caches in the Philip­pines were recov­ered by var­i­ous “pri­vate” orga­ni­za­tions, them­selves inti­mate­ly linked to ele­ments of U.S. intel­li­gence and reac­tionar­ies evolved from the MacArthur infra­struc­ture. Among the par­tic­i­pants in these recov­er­ies were the John Birch Soci­ety and Gen­er­al John Singlaub-the lat­er close­ly asso­ci­at­ed with the for­mer World Anti-Com­mu­nist League and the off-the-shelf intel­li­gence oper­a­tions asso­ci­at­ed with the Iran-Con­tra affair. (For more about the John Birch Soci­ety, see RFA#‘s 10–12-available from Spit­fire. For more about WACL, see RFA#‘s14, 15, 36, 37. For more about the Iran-Con­tra affair and the machi­na­tions of Singlaub and Com­pa­ny, see RFA#‘s 29–35. All of these pro­grams are avail­able from Spit­fire.)

12. “Includ­ed here are hand­writ­ten let­ters and dia­grams show­ing how a group of senior U.S. Gov­ern­ment offi­cials and Pen­ta­gon gen­er­als hoped to use Gold­en Lily trea­sure to cre­ate a new pri­vate FBI and a mil­i­tary-indus­tri­al com­plex con­trolled by them, in part­ner­ship with the John Birch Soci­ety, the Moonies and far-right tycoons. This is con­firmed by tape record­ings of a 1987 con­fer­ence in Hong Kong that includ­ed retired U.S. Army Gen­er­al John Singlaub and Gen­er­al Robert Schweitzer of the Nation­al Secu­ri­ty Coun­cil under Pres­i­dent Rea­gan.” (Ibid.; p. 11.)

13. Recent­ly, for­mer Citibank CEO John Reed took over as act­ing head of the New York Stock Exchange. While pre­sid­ing over Citibank’s oper­a­tions, Reed was the focal point of lit­i­ga­tion by the heirs to San­ta Romana, who had secret­ed sig­nif­i­cant amounts of “black gold” in accounts at Citibank. The resid­ual assets from Gold­en Lily, the Black Eagle Trust, the M‑Fund etc. con­tin­ue to occu­py a deci­sive posi­tion in the clan­des­tine affairs of gov­ern­ments and finan­cial insti­tu­tions around the world.

14. In what the Sea­graves describe as the “last bat­tle of the Pacif­ic War,” sur­viv­ing vic­tims of Japan­ese atroc­i­ties, includ­ing Amer­i­can for­mer POW’s sued for com­pen­sa­tion for their wartime suf­fer­ing. The fed­er­al gov­ern­ment effec­tive­ly blocked these suits, main­tain­ing that inter­na­tion­al diplo­mat­ic rela­tions took prece­dence over legal ethics and moral­i­ty.

The real issue is con­flict of inter­est. Dur­ing the Clin­ton Admin­is­tra­tion, U.S. Ambas­sador to Japan Thomas Foley was adamant in reject­ing com­pen­sa­tion for POW’s and oth­er slave labor­ers, insist­ing that ‘The peace treaty put aside all claims against Japan.’ His Deputy Chief of Mis­sion, Christo­pher J. LaFleur, echoed this dog­ma at every oppor­tu­ni­ty.

It was a mat­ter of some inter­est to vic­tims that Foley’s wife was a well-paid con­sul­tant to Sum­it­o­mo, one of Japan’s biggest zaibat­su con­glom­er­ates, heav­i­ly involved in wartime slave labor and a tar­get of the law­suits. The moment Foley end­ed his tenure as ambas­sador and returned to Amer­i­ca, he signed on as a paid advi­sor and lob­by­ist to anoth­er huge con­glom­er­ate-Mit­subishi-one of the biggest wartime users of slave labor.

Of greater sig­nif­i­cance, per­haps, is that Lafleur is mar­ried to the daugh­ter of for­mer prime min­is­ter and finance min­is­ter Miyaza­wa, one of the three Japan­ese who secret­ly nego­ti­at­ed the 1951 treaty with John Fos­ter Dulles. (Miyaza­wa also is con­sid­ered by pro­fes­sor Lausi­er and oth­ers to be the finan­cial over­seer of the M‑Fund.) Con­flict of inter­est does not seem to be an obsta­cle in diplo­mat­ic appoint­ments to Tokyo.) (Ibid.; p. 12.)

Discussion

2 comments for “FTR #428 Gold Warriors: An Interview with Peggy Seagrave”

  1. Great Inter­view I’ve lis­tened to it mul­ti­ple times over the years. This book was great any­one inter­est­ed in Japan, fas­cism, drugs, bank­ing and the CIA should get a copy.
    Here’s my review
    https://www.globalresearch.ca/gold-warriors-americas-secret-recovery-of-yamashitas-gold/5642011

    Posted by Hugo Turner | June 2, 2018, 4:02 pm
  2. The Trump casi­no is open for busi­ness. Re-opened real­ly. Not his Atlantic City casi­nos. Those all went bank­rupt. No, it’s a much high­er stakes casi­no: secret­ly brib­ing this his­tor­i­cal­ly cor­rupt pres­i­dent. Although, after the Supreme Court’s pres­i­den­tial immu­ni­ty rul­ing, it’s not even clear you’d have to do it in secret. And any­one on the plan­et can play in it. As long as they have deep pock­ets and an abil­i­ty to some­how direct the con­tents of those pock­ets into Don­ald Trump’s bank accounts.

    It’s that gross cor­rup­tion, increas­ing­ly out in the open, that brings us to a fas­ci­nat­ing pair of sto­ries about the incred­i­ble cor­rup­tion poten­tial found in the ‘crown jew­el’ of Pres­i­dent Trump’s com­mer­cial real estate port­fo­lio: The 40 Wall Street build­ing.

    Or at least the for­mer ‘crown jew­el’ in Trump’s port­fo­lio. It turns out Trump has been over­stat­ing the val­ue for this prop­er­ty so egre­gious­ly that it end­ed up the cen­ter­piece of the New York state’s civ­il law­suit against Trump over the sys­tem­at­ic defraud­ing of banks he engaged in for years with rou­tine mis­rep­re­sen­ta­tion of his prop­er­ties’ val­u­a­tions. A law­suit he end­ed up los­ing and that result­ed in $489 mil­lion fine (with inter­est) that could be more than enough to wipe out Trump’s cash reserves. And that’s on top of the $114 mil­lion mort­gage Trump still owes on the prop­er­ty.

    Even worse, giv­en the cra­ter­ing of com­mer­cial real estate post-pan­dem­ic, the income gen­er­at­ed from the prop­er­ty may not be enough to even cov­er the mort­gage pay­ments. Adding to the cri­sis is the fact that Trump has such a tox­ic rep­u­ta­tion at this point many of the remain­ing ten­ants have indi­cat­ed they would like to relo­cate at the ear­li­est con­ve­nience. It’s the kind of sit­u­a­tion that had Don­ald Trump fac­ing the poten­tial loss of his for­mer crown jew­el.

    Or at least that would have been the case had Trump lost the 2024 elec­tion. At this point, who knows how he’ll be able to turn the sit­u­a­tion around. Or if he’ll some­how end up get­ting the fine dropped entire­ly. Giv­en that it’s a state-lev­el fine, Trump can’t just par­don him­self and the opin­ion from New York Attor­ney Gen­er­al Leti­tia James last month was that Trump still had to pay the fine, pres­i­dent or not. We’re obvi­ous­ly in unchart­ed ter­ri­to­ry here when it comes to what a pres­i­dent can and can­not do.

    But that mas­sive civ­il fine and the depressed val­u­a­tion of what was once Trump’s crown jew­el is just part of what makes the 40 Wall Street prop­er­ty so grim­ly fas­ci­nat­ing in the con­text of a Trump sec­ond term. Because there’s anoth­er very strange dimen­sion to this sto­ry: it turns out Don­ald Trump’s own­er­ship of the 40 Wall Street tow­er does­n’t actu­al­ly include the ground beneath the tow­er. Instead, the orig­i­nal builders signed a long-term lease with the investors who own the land. As a result of that unusu­al own­er­ship arrange­ment, it’s actu­al­ly pos­si­ble for those investors to take con­trol of the entire tow­er should Don­ald Trump fail to make his rent pay­ments.

    Now, as we’re going to see, a sce­nario that involves Trump hand­ing over own­er­ship of the tow­er to the land own­ers appears to be high­ly unlike­ly at this point. In part because the investors appear to be on very friend­ly terms with Trump.

    So who are these investors? That’s not 100% clear, which is also part of this sto­ry. It turns out two LLCs own the land, and tech­ni­cal­ly it would be pos­si­ble for the true own­ers of those LLCs to change hands with­out any pub­lic dis­clo­sure. But we do have a vague idea of some of the orig­i­nal investors: Stephanie von Bis­mar­ck, Joachim Fer­di­nand von Grumme-Dou­glas and sib­lings Ani­ta, Chris­t­ian, and Wal­ter Hin­neberg.

    The pur­chase by the five Ger­man investors was made on Decem­ber 7, 1982. Today, the Hin­nebergs appear­ing to con­trol the LLC that owns 80 per­cent of 40 Wall Street, with Joachim von Grumme-Dou­glas own­ing the oth­er per­cent. It’s unclear if Stephanie von Bis­mar­ck is still an own­er.

    As we’re going to see, these weren’t ordi­nary investors. The Hin­nebergs come from one of the largest ship­ping-bro­ker dynas­ties on the plan­et. And Stephanie von Bis­mar­ck and Joachim Fer­di­nand von Grumme-Dou­glas both appear to be close­ly relat­ed and both hail from promi­nent Ger­man aris­to­crat­ic fam­i­lies. The Hin­nebergs also appear to be not just very chum­my with Don­ald Trump but they’ve been involved with orga­nized sim­i­lar kinds of ‘anti-elite’ polit­i­cal move­ments in their home city of Ham­burg, Ger­many. And, again, we don’t actu­al­ly know who else is involved with this invest­ment group. These are poten­tial­ly just the pub­lic faces.

    But there’s anoth­er very inter­est­ing piece of his­to­ry relat­ed to these Ger­man investors: Don­ald Trump was­n’t the first per­son to lease the tow­er from these investors after they pur­chased the land in 1982. Pri­or to their pur­chase, the group of investors — George Com­fort, Hen­ry Loeb and Clif­ford Michel — had been leas­ing the tow­er from the land own­ers. But just three weeks after the Ger­man land pur­chase, the investors leas­ing the tow­er trans­ferred the lease­hold to an enti­ty that was lat­er found to serve as a vehi­cle for hid­ing the wealth of Philip­pine dic­ta­tor Fer­di­nand Mar­cos. Fol­low­ing Mar­co’s exile in 1986, the US gov­ern­ment even­tu­al­ly seized con­trol of the tow­er.

    So with the trans­fer of the lease to Fer­di­nand Mar­cos just three weeks after the pur­chase of the land beneath the tow­er, we have to ask: was this mys­tery Ger­man invest­ment group direct­ly involved with the laun­der­ing of the vast Gold­en Lily WWII plun­der that Mar­cos had been recov­er­ing? Because that tim­ing sure is remark­able. They buy the land, and Mar­cos gets the lease. Was that all just hap­pen­stance? Because if not, that is a real­ly inter­est­ing detail on the his­to­ry Mar­co’s vast inter­na­tion­al Gold­en Lily-relat­ed mon­ey-laun­der­ing oper­a­tions.

    That’s all part of what makes the evolv­ing sto­ry about 40 Wall Street so a dark­ly fas­ci­nat­ing sto­ry to keep an eye on. Not only do we still not know the com­plete iden­ti­ties of the mys­tery land own­ers who poten­tial­ly have enor­mous lever­age over Trump — and there­fore favors to ask of him — but it’s also pos­si­ble this same mys­tery investor group has some sort of rela­tion­ship to the Fer­di­nand Mar­co Gold­en Lily chap­ter of his­to­ry. A chap­ter of his­to­ry that remains wild­ly under-appre­ci­at­ed to this day in terms of the role it played in the financ­ing of the elite inter­na­tion­al far right and the real ‘Deep State’. An inter­na­tion­al far right that has more or less cap­tured con­trol of the US gov­ern­ment at this point. So while we can be con­fi­dent Pres­i­dent Trump is going to be engag­ing in an orgy of gross cor­rup­tion when it comes to his pri­vate busi­ness con­cerns and all the con­flicts of inter­est that entails, keep in mind that when it comes to the cor­rup­tion involv­ing Trump’s ‘crown jew­el’ at 40 Wall Street, the cor­rup­tion could end up being a lot more his­tor­i­cal­ly sig­nif­i­cant:

    Curbed

    The Weird Worth of 40 Wall Street
    Don­ald Trump’s most trou­bled real estate could soon become a slick machine to cur­ry favor with the pres­i­dent.

    By Andrew Rice, a fea­tures writer at New York Mag­a­zine
    Addi­tion­al report­ing by Paula Aceves
    Oct. 31, 2024

    In April of last year, dur­ing his sea­son of indict­ments, Don­ald Trump sat for a depo­si­tion and defend­ed his worth. The ses­sion was held at the New York State attor­ney general’s office in low­er Man­hat­tan, in a large con­fer­ence room with a south­ern expo­sure that looked out on 40 Wall Street, Trump’s near­by cop­per-crowned Art Deco office tow­er. The build­ing also hap­pened to be at the cen­ter of that day’s lit­i­ga­tion: a civ­il law­suit accus­ing Trump of defraud­ing banks by over­stat­ing the val­ue of his prop­er­ties. Trump gri­maced as Attor­ney Gen­er­al Tish James opened the depo­si­tion with a promise of a “fair and impar­tial” process. Over sev­en con­tentious hours, he brushed aside her team’s ques­tions about val­u­a­tion. With Trump, it has always seemed the strength of assets proves the qual­i­ty of the man.

    “We have the Mona Lisas of prop­er­ties,” Trump tes­ti­fied, com­par­ing him­self to an art col­lec­tor for whom cash flow is a sec­ondary con­cern. He con­sid­ered 40 Wall to be one of his mas­ter­pieces — maybe the can­ni­est deal of his career. Trump had acquired the sky­scraper for just $1.3 mil­lion dur­ing a real-estate reces­sion in the 1990s, after which he con­vinced a bank to lend him mon­ey for ren­o­va­tions and rode the Man­hat­tan office mar­ket back up. Kevin Wal­lace, a lawyer from James’s office, hand­ed Trump a doc­u­ment pre­pared for his cred­i­tors in 2013, which list­ed the val­ue of 40 Wall Street at $530 mil­lion — more than 400 times his orig­i­nal pur­chase price.

    “It’s, I think, today worth more than that,” Trump said.

    ...

    In real­i­ty, the build­ing behind the cur­tain is once again worth next to noth­ing. Like many Man­hat­tan sky­scrap­ers, 40 Wall has been dev­as­tat­ed by the post-pan­dem­ic office-mar­ket crash. Its cur­rent oper­at­ing income, as reflect­ed in dis­clo­sures to its mort­gage ser­vicer, appears not to even cov­er its loan pay­ments, and the building’s mar­ket val­ue today is almost cer­tain­ly less than the $114 mil­lion bal­ance Trump will owe when the mort­gage comes due next year. One real-estate investor said Trump’s most ratio­nal move would be to “throw in the keys to the lender,” like oth­er New York office land­lords who have seen their tro­phies turn into emblems of dis­as­ter.

    Trump has built his iden­ti­ty around punch­ing back and win­ning, what­ev­er the odds. But while that approach has brought him a stun­ning come­back in pol­i­tics, putting him on the cusp of a sec­ond term as pres­i­dent, his orig­i­nal busi­ness — New York real estate — is on the ropes. Ear­li­er this year, James won her fraud law­suit, and the penal­ties the judge assessed, $489 mil­lion (and count­ing, with inter­est), could be more than enough to wipe out Trump’s cash reserves if they stand up on appeal. His fam­i­ly com­pa­ny, the Trump Orga­ni­za­tion, has been hol­lowed out by crim­i­nal pros­e­cu­tions and is now oper­at­ing under the super­vi­sion of a court-appoint­ed mon­i­tor. The com­pa­ny has been busy over­seas, cut­ting deals to license Trump’s per­son­al brand to devel­op­ments in places like Oman and Dubai, and host­ing tour­na­ments affil­i­at­ed with the Sau­di-gov­ern­ment-backed LIV golf tour. But at home in New York, Trump’s name has become a repel­lent. Con­do boards have vot­ed to rip it off their build­ings. The city of New York was glad to see him final­ly out of his deal to oper­ate a pub­lic golf course in the Bronx so it could remove the “Trump Links” sig­nage that was so con­spic­u­ous from the White­stone Bridge. Guc­ci, the anchor ten­ant in the aging mall at Trump Tow­er, man­aged to get Trump to slash its rent in 2020, but the retail­er is once again rumored to be plot­ting a move, since its par­ent com­pa­ny recent­ly spent near­ly $1 bil­lion to pur­chase anoth­er build­ing across the street. Trump’s most lucra­tive real-estate invest­ments, his pas­sive stakes in a pair of New York and San Fran­cis­co office build­ings run by Vor­na­do Real­ty Trust, are also worth less than they were before the pan­dem­ic.

    No Trump prop­er­ty, how­ev­er, has expe­ri­enced a fall like 40 Wall, which was once con­sid­ered to be the sin­gle most valu­able prop­er­ty in his port­fo­lio. “What a fuc king mess that build­ing is,” says one real-estate pro­fes­sion­al who is famil­iar with its state. “You could charge a nick­el a foot and no one wants to pay the Trump Orga­ni­za­tion rent.” Of the 75 ten­ants list­ed on 40 Wall’s rental rolls in 2015, the last time it refi­nanced its mort­gage, more than 40 have left. Around two dozen oth­ers have long-term leas­es that appear to be set to expire in the next two years. Although the Trump Orga­ni­za­tion claims 40 Wall is still 75 per­cent leased, a few floors are entire­ly vacant and sit­ting on the sub­let mar­ket. Its ground-lev­el retail space is almost total­ly emp­ty. In today’s world, the 1930s-vin­tage sky­scraper is like­ly best suit­ed for con­ver­sion to res­i­den­tial use; to sur­vive as an office build­ing, it needs expen­sive upgrades. Either way, it will require a land­lord and lenders will­ing to invest hun­dreds of mil­lions in cap­i­tal, a poten­tial­ly tall order for a con­vict­ed felon whose largest source of per­son­al wealth is his founder’s stake in the prof­it­less com­pa­ny that owns Truth Social, a meme stock that fluc­tu­ates with his poll num­bers. And that’s before you even get to the deal­break­er: the fact that Trump doesn’t own the land beneath his own build­ing and must pay rent to a secre­tive group of for­eign investors who have a con­trac­tu­al option to jack it up in a few years.

    Per­haps it seems dis­cor­dant in this of all weeks to dwell on the fate of a mere build­ing. But to look out the win­dow and exam­ine 40 Wall is to imag­ine a pair of diver­gent sce­nar­ios. In one, Trump is the los­er. His bil­lion­aire bene­fac­tors desert him, his stonk goes to zero, his super-PAC dona­tions dry up, the Saud­is and oth­er for­eign gov­ern­ments lose inter­est in woo­ing his busi­ness, his pros­e­cu­tions and his sen­tences go for­ward, his fines from civ­il judg­ments stand and his legal fees drain his for­tune, the rule of grav­i­ty pulls his com­pa­ny into dis­tress, and he gives up the keys. Or he could win, in which case his fight to save 40 Wall could go in a very dif­fer­ent direc­tion, open­ing up nov­el ways for Pres­i­dent Trump to lever­age his office.

    *****

    When I brought up 40 Wall Street to peo­ple in the real-estate busi­ness, even usu­al­ly talk­a­tive sales­men went silent. A bro­ker at Cush­man & Wake­field, which act­ed as 40 Wall’s leas­ing agent before the firm dropped Trump’s busi­ness after the Jan­u­ary 6 assault, wrote back: “Bet­ter that I don’t.” Anoth­er bro­ker who did a lease deal in the build­ing, when reached on his cell phone, told me his train was going into a tun­nel before the line went dead. He nev­er picked up again. Of the sources who did agree to talk, sev­er­al used the same metaphor in ask­ing for anonymi­ty, call­ing Trump a “third rail,” as if just say­ing the name in pub­lic might get them zapped. Of the more than three dozen 40 Wall ten­ants con­tact­ed for this sto­ry, the vast major­i­ty declined to com­ment.

    ...

    A com­mer­cial office bro­ker had described the build­ing to me as “slow and sleepy.” Soft music tin­kled in the white mar­ble lob­by, where there was hard­ly a soul walk­ing in or out on a sum­mer work­day. I got off the ele­va­tor at Jay Suites, on the 28th floor, which was dec­o­rat­ed with a framed poster of Roger Moore sip­ping a mar­ti­ni. Past a giant red sculp­ture of a bear, I found my room, a gener­ic unit with a sad plant, a large white­board, and a bro­ken clock. One glass wall looked onto the hall­way, where I could watch my tem­po­rary co-work­ers going about their days, phones pressed to ears.

    ...

    The val­ue of 40 Wall was espe­cial­ly depressed by its unusu­al own­er­ship struc­ture. The bankers who con­struct­ed it had not pur­chased the ground on which it sat, instead opt­ing to sign a long-term lease with the under­ly­ing landown­ers. (The lease cur­rent­ly runs until 2059, with two renew­al options that go on through the 22nd cen­tu­ry.) The own­er of a ground lease acts in every way like a building’s own­er — keep­ing up with main­te­nance, pay­ing prop­er­ty tax­es, col­lect­ing rent — but does not hold the deed to the under­ly­ing land, and if the lease­hold­er stops pay­ing its ground rent or oth­er­wise vio­lates the lease terms, the landown­er can fore­close. The lease­hold­er that sold to Trump, a com­pa­ny from Hong Kong, had found 40 Wall impos­si­ble to man­age. “All they want­ed to do is get the build­ing sold and go back to Chi­na,” recalls a for­mer Trump Orga­ni­za­tion employ­ee who worked on the deal. And so the sell­er was will­ing to accept the num­ber Trump offered: bare­ly more than zero.

    Then Trump did his thing. He slapped his name on the build­ing. He met the ground own­ers, a group of silent Ger­man investors who had pur­chased the land in 1982. (Accord­ing to the Real Deal, 80 per­cent of the land is owned by a com­pa­ny rep­re­sent­ing the Hin­neberg fam­i­ly, who run a Ham­burg ship-bro­ker­age com­pa­ny, while the oth­er 20 per­cent belongs to a group that includes Stephanie von Bis­mar­ck, a descen­dant of the Iron Chan­cel­lor.) Trump host­ed mem­bers of the fam­i­ly for din­ner at his triplex in Trump Tow­er and “just charmed them to death,” the for­mer employ­ee said. Trump rea­soned that most ground own­ers are just look­ing for a reli­able return with­out has­sle and expense. He promised sta­bil­i­ty in exchange for con­ces­sions that made it eas­i­er for him to rent the build­ing and to take out loans to ren­o­vate it. He also nego­ti­at­ed a pro­vi­sion that said he could con­vert 40 Wall into con­do­mini­ums if he chose. Trump went to Deutsche Bank and pitched it on lend­ing him $125 mil­lion for improve­ments. The exec­u­tive who struck the deal memo­ri­al­ized it by com­mis­sion­ing a scale mod­el of 40 Wall to dis­play in his office, and Trump became a long­time Deutsche Bank client.

    Trump pro­mot­ed the build­ing and filled it with ten­ants, many of whom were drawn by the cachet of a Wall Street address and the landlord’s image as a win­ner. Trump used it as the head­quar­ters for some of his enter­pris­es, like Trump Mort­gage, his sub­prime home lender, and Trump Uni­ver­si­ty, which would lat­er set­tle claims it had defraud­ed stu­dents. In 2016, a Bloomberg News inves­ti­ga­tion found that 40 Wall’s past ten­ants have includ­ed a remark­able num­ber of swindlers and felons. (Since then, the exec­u­tives run­ning an engi­neer­ing firm that is one of the largest ten­ants plead­ed guilty to bribery charges relat­ed to gov­ern­ment con­struc­tion con­tracts.) But 40 Wall also attract­ed plen­ty of small busi­ness­es and start-ups that were drawn to low­er Man­hat­tan by its com­par­a­tive­ly low rents. By 2015, the build­ing was around 95 per­cent full.

    ...

    This Trump effect is hard to quan­ti­fy. After Jan­u­ary 6, news orga­ni­za­tions report­ed that a hand­ful of ten­ants, includ­ing the Girl Scouts of Greater New York, were try­ing to vacate the build­ing. Four years lat­er, the Girl Scouts remain; its lease runs until 2035, accord­ing to the data firm Costar, so it’s stuck. But office leas­es typ­i­cal­ly last around ten years, which means many of the ones Trump signed before he was elect­ed have been run­ning out. Whether for eco­nom­ic or polit­i­cal rea­sons, many ten­ants are mov­ing else­where. Duane Reade vacat­ed the cor­po­rate head­quar­ters it had on the 21st and 22nd floors when it aban­doned its store. The engi­neer­ing firm Thorn­ton Tomaset­ti moved in 2020, cit­ing a desire to con­sol­i­date its offices in anoth­er build­ing after a merg­er, and is still try­ing to find some­one to sub­let its 60,000 square feet. (Its bro­ker declined to dis­cuss the space.) As ten­ants depart, CompStak’s fig­ures show the Trump Orga­ni­za­tion has signed few leas­es to replace them.

    ...

    *****

    Trump has always been able to con­vince lenders to take risks on him. Back when 40 Wall was full, he man­aged to take out mort­gages on the prop­er­ty, even though banks gen­er­al­ly hate to extend loans to ground-leased build­ings. (They are con­sid­ered to be shaky col­lat­er­al because the prop­er­ty is not entire­ly owned by the debtor.) When Trump last refi­nanced the mort­gage on 40 Wall, in 2015, he han­dled it like a fam­i­ly mat­ter. Allen Weis­sel­berg, his long­time chief finan­cial offi­cer and right-hand man, called up his son Jack, who worked at finance firm Lad­der Cap­i­tal. The Weis­sel­bergs nego­ti­at­ed a ten-year loan of $160 mil­lion at an inter­est rate of 3.7 percent.The Man­hat­tan office mar­ket was sta­ble, Trump had suc­cess­ful­ly oper­at­ed the build­ing for decades, and the lender assessed that there would be lit­tle chance of a default. The loan would lat­er be bun­dled with oth­er com­mer­cial mort­gages into a pub­licly trad­ed bond, shift­ing its risk to investors. “Don­ald is on board and ready to go,” Jack Weis­sel­berg emailed his col­leagues in April 2015. That June, Trump rode down his esca­la­tor and announced he was run­ning for pres­i­dent.

    A decade lat­er, as the 40 Wall mort­gage matures, every­thing is dif­fer­ent. The Trump Orga­ni­za­tion as a com­pa­ny has been crim­i­nal­ly con­vict­ed of tax fraud. Trump and his com­pa­ny face the huge civ­il fraud penal­ty hand­ed down ear­li­er this year by Judge Arthur Engoron, and Tish James has sig­naled that if he refus­es to pay, she could move to seize his real-estate assets, includ­ing 40 Wall. Engoron’s deci­sion also banned Trump from involve­ment in run­ning his fam­i­ly busi­ness. (All the penal­ties are on hold while Trump’s appeal makes its way through the courts.) Allen Weis­sel­berg has served two sep­a­rate terms in jail, one for tax eva­sion and the sec­ond for com­mit­ting per­jury at the civ­il fraud tri­al. In August, the rat­ing agency Fitch down­grad­ed its out­look on the mort­gage bond that includes Trump’s loan, cit­ing its con­cerns about 40 Wall’s sol­ven­cy as a major fac­tor. Last year, Bloomberg report­ed that the building’s loan had been trans­ferred to a spe­cial ser­vicer, a sign of dis­tress, although the deci­sion was lat­er rescind­ed.

    Between 2019 and last year, 40 Wall’s annu­al net oper­at­ing income — the fig­ure the real-estate indus­try uses to deter­mine a building’s mar­ket val­ue — fell by about a third to $12 mil­lion, accord­ing to dis­clo­sures made to bond­hold­ers. Through the first six months of 2024, the build­ing was on pace to gen­er­ate less than $8 mil­lion in net income this year, not enough to even pay all the $9.8 mil­lion Trump owes in debt ser­vice. Like many office land­lords who bor­rowed before the pan­dem­ic, Trump now has a build­ing that is worth less than its mort­gage bal­ance on paper. “40 Wall is not alone,” says Kent Swig, a real-estate exec­u­tive who has rede­vel­oped many build­ings in low­er Man­hat­tan. “Two-thirds of the $2 tril­lion in debt that is com­ing due over the next two years is under­wa­ter.”

    Any new mort­gage would be much more expen­sive, because inter­est rates have more than dou­bled since 2015. A lender would also demand to see a plan to return 40 Wall to health. It is con­sid­ered to be “Class B” real estate, in an office mar­ket that is pun­ish­ing any­thing that is not at the top. “The com­mon areas of the build­ing are old and have not been upgrad­ed,” says a com­mer­cial bro­ker. “That would involve a pret­ty sig­nif­i­cant — pos­si­bly nine-fig­ure — invest­ment.” Because the build­ing has dimin­ished in val­ue, Trump would also have to be will­ing to pay down his exist­ing mort­gage with cash and to take out a small­er loan. “Which is not what Trump does,” says a Man­hat­tan build­ing own­er. “He’s a debt per­son.” And that is pre­sum­ing he could find a bank will­ing to refi­nance the loan at all, which is far from cer­tain because he also has anoth­er prob­lem: his ground lease, which con­tains a con­trac­tu­al time bomb.

    Cur­rent­ly, Trump pays the ground own­ers just $2.5 mil­lion a year. But 40 Wall’s lease con­tains a clause that says the rent will peri­od­i­cal­ly reset to reflect the land’s fair mar­ket val­ue, as defined by a for­mu­la that is very favor­able to the ground own­ers, giv­en the extra­or­di­nary increase in Man­hat­tan land prices over the past few decades. The first reset was sup­posed to hap­pen years ago, but dur­ing the 2008 finan­cial cri­sis, Trump was able to push off the day of reck­on­ing. In his civ­il-fraud-case depo­si­tion, Trump tes­ti­fied that he had rene­go­ti­at­ed “very favor­able terms” and said he fore­saw that he would one day con­vert 40 Wall into a lux­u­ry res­i­den­tial build­ing. “If the city ever comes back,” he said, “you can con­vert the entire tow­er of 40 Wall Street into con­dos and make an absolute for­tune, far more than the five-or-six-hun­dred mil­lion prob­a­bly that the build­ing is worth now.” Maybe he’d for­got­ten that dur­ing the last lease nego­ti­a­tion, he gave up his option to uni­lat­er­al­ly do a con­do con­ver­sion. The long-post­poned reset is now sched­uled to hap­pen in eight years, with­in the term of his next mort­gage.

    For the pur­pos­es of reval­u­a­tion, the reset for­mu­la pre­tends there is no land­marked office build­ing on the prop­er­ty and sets its val­ue as if it were emp­ty for devel­op­ment. An appraisal pre­pared the last time Trump refi­nanced esti­mat­ed that in those cir­cum­stances, the 40 Wall land would be worth around $160 mil­lion, yield­ing a reset annu­al rent of around $10 mil­lion — more than the building’s cur­rent net oper­at­ing income. The land might be even more valu­able today. Woody Heller, a real-estate exec­u­tive who han­dled a pre­vi­ous sale of 40 Wall back in the 1990s, said that in some cir­cum­stances, a rent reset can “destroy the eco­nom­ics” of a build­ing, and for that rea­son, “a lease­hold with a fair mar­ket val­ue reset is very hard to refi­nance.”

    “It’s like your head is on a chop­ping block,” a vet­er­an invest­ment-sales bro­ker in Man­hat­tan said of the sit­u­a­tion fac­ing any land­lord with an impend­ing rent reset. “The guil­lo­tine is being held up by a piece of twine that is fray­ing. That thing is about to fall, and when it falls, you’re dead.”

    That may sound over­dra­mat­ic. Matthew Kwatinetz, a pro­fes­sor of real-estate eco­nom­ics at New York Uni­ver­si­ty, says that usu­al­ly ground-lease dis­putes get worked out with a com­pro­mise or a set­tle­ment in arbi­tra­tion. “The rea­son some­one does a ground lease is because they don’t want to run the build­ing,” he says, and that is espe­cial­ly true at a time like this, when the real-estate mar­ket is dif­fi­cult. But there is always the risk that the ground own­er will try to use the rent reset as a lever to evict the lease­hold­er. “What’s their incen­tive?” said the invest­ment-sales bro­ker. “They get the build­ing back. They get a much more valu­able asset.” After evict­ing, the land own­er can resell the prop­er­ty or hold onto it in the hope that the mar­ket rebounds.

    ...

    Ear­li­er this year, the ground lease on a 920,000-square-foot office build­ing near Times Square, which sold for $332 mil­lion in 2006, was pur­chased by a Texas fam­i­ly for just $8.5 mil­lion in an online auc­tion. If $9 a foot is the going rate for a ground lease, then the com­pa­ra­bly sized 40 Wall would not be worth much on the open mar­ket. That explains why many real-estate investors say Trump would be wise to sim­ply give 40 Wall to the bank when his mort­gage comes due, rather than pay­ing back the bal­ance of more than $100 mil­lion. Com­mer­cial real-estate loans are gen­er­al­ly “non-recourse,” mean­ing the own­er is not per­son­al­ly respon­si­ble for repay­ing in the event of a default. Although it is the­o­ret­i­cal­ly pos­si­ble that a lender could go after Trump per­son­al­ly for the bal­ance, invok­ing what is known as a “bad boy clause” — he was found to have com­mit­ted fraud in mis­rep­re­sent­ing his net worth — such lit­i­ga­tion would be cost­ly and far from cer­tain to suc­ceed. Most like­ly, Trump would walk away free. He would take a tax hit, and an ego hit, but 40 Wall would become some­one else’s prob­lem.

    It is not in Trump’s nature, though, to ever con­cede defeat. For all his spec­tac­u­lar ups and downs in the real-estate busi­ness, in his entire career he has trans­ferred only three prop­er­ties back to his lenders, all dur­ing his crash in the ear­ly 1990s. (The only large fore­clo­sure was at the Plaza Hotel.) And it is easy to imag­ine how Trump might see a strat­e­gy for sav­ing his per­son­al invest­ment in 40 Wall. It hap­pens to be the same route he is tak­ing to solve all his prob­lems: He just has to win the elec­tion.

    If that hap­pens, Trump can sweep away his fed­er­al pros­e­cu­tions and put off any sen­tence for his New York State con­vic­tion indef­i­nite­ly. The legal pres­sure on his finances will ease, and he will have new delay options and new immu­ni­ty argu­ments to take to the Supreme Court as he attempts to avoid pay­ing the ruinous judg­ments in his civ­il cas­es. (Besides the civ­il fraud case, Trump owes $88 mil­lion in dam­ages to E. Jean Car­roll from her sex­u­al-assault and defama­tion law­suits.) He will like­ly be able to string out the legal col­lec­tion process for years — pre­sum­ing the judg­ments stand up. At a New York State appeals court hear­ing held in Sep­tem­ber, a pan­el of judges sound­ed skep­ti­cal of Engoron’s civ­il-fraud deci­sion, and the size of Trump’s penal­ty could be adjust­ed down­ward. As a vic­to­ri­ous pres­i­dent-elect, Trump would also be free to liq­ui­date his stock in Truth Social at its peak mar­ket. (Over the past week, the val­ue of Trump’s stake has risen from rough­ly $4 bil­lion to $6 bil­lion on mar­ket opti­mism about his chances.) He would have more than enough finan­cial room to pay off the mort­gage on 40 Wall.

    But why would he both­er? “Who’s going to fore­close on the pres­i­dent of the Unit­ed States?” says a real-estate investor who is famil­iar with 40 Wall. “Nobody.” Peo­ple will sure­ly be lin­ing up out­side the Oval Office to extend Trump cred­it. The last time he was pres­i­dent, Trump ele­vat­ed some of his for­mer lenders — Wilbur Ross, Tom Bar­rack — to posi­tions of influ­ence. When he strug­gled to find a finan­cial insti­tu­tion to issue him a $175 mil­lion bond so he could appeal the civ­il-fraud judg­ment, a sym­pa­thet­ic bil­lion­aire who had made his mon­ey in sub­prime car loans stepped in to help. “He has a lot of friends with a lot of mon­ey,” Kwatinetz says. “There will be some­one who will back him for finan­cial rea­sons or polit­i­cal rea­sons.”

    Trump’s first elec­tion brought about unprece­dent­ed con­tro­ver­sy sur­round­ing his busi­ness rela­tion­ships, con­flicts of inter­est, for­eign influ­ence, and the con­sti­tu­tion­al emol­u­ments clause. Those issues have now been most­ly resolved in Trump’s favor. He turned his hotel on Penn­syl­va­nia Avenue into a resort for pres­i­den­tial favor seek­ers, then flipped it for a $100 mil­lion prof­it. You can imag­ine how the restored Pres­i­dent Trump could do some­thing sim­i­lar with his Wall Street office build­ing, mar­ket­ing it to lob­by­ists, defense con­trac­tors, and oth­er peo­ple who crave a rela­tion­ship with the pres­i­dent. Kwatinetz says the build­ing is a great office loca­tion “for peo­ple that want to flip the bird to the New York City Estab­lish­ment.” Or for that mat­ter, for for­eign inter­ests. Trump paused his over­seas busi­ness deal­ings for the dura­tion of his first term, but he and his chil­dren revved them back up as soon as he left office, and they are mak­ing no promis­es about self-imposed lim­its the sec­ond time around. (“Frankly, we got crushed any­way,” Eric Trump recent­ly told the New York Times.) There would be lit­tle to stop a reelect­ed Pres­i­dent Trump from, say, tak­ing a friend­ly invest­ment or a loan from a Sau­di sov­er­eign-wealth fund.

    With the build­ing recap­i­tal­ized, Trump would be able to rene­go­ti­ate with the Ger­mans from a posi­tion of strength. In his 2004 book Trump: How to Get Rich, he described a warm ongo­ing rela­tion­ship with the Hin­nebergs, call­ing them “among the finest peo­ple with whom I’ve ever done busi­ness,” but the cur­rent state of rela­tions between the par­ties is unknown. (“I have been sworn to silence at the moment,” said Per­cy Pyne, a Flori­da ship­ping exec­u­tive who has rep­re­sent­ed the family’s busi­ness inter­ests at 40 Wall in the past.)

    Typ­i­cal­ly, in ground-lease dis­putes, “who winds up win­ning is a ques­tion of who can wheel and deal the best,” Kwatinetz says. “I’m not a fan, but I am not per­son­al­ly putting mon­ey against Trump at that game.” Trump could rework the lease again. Or he — or some­one inter­est­ed in back­ing him — could buy the Ger­mans out. Amer­i­cans might not even learn if there was a change of own­er­ship. The ground is tech­ni­cal­ly held by a pair of LLCs, and those enti­ties could change hands with­out pub­lic dis­clo­sure.

    ...

    ————

    “The Weird Worth of 40 Wall Street” By Andrew Rice; Curbed; 10/31/2024

    No Trump prop­er­ty, how­ev­er, has expe­ri­enced a fall like 40 Wall, which was once con­sid­ered to be the sin­gle most valu­able prop­er­ty in his port­fo­lio. “What a fuc king mess that build­ing is,” says one real-estate pro­fes­sion­al who is famil­iar with its state. “You could charge a nick­el a foot and no one wants to pay the Trump Orga­ni­za­tion rent.” Of the 75 ten­ants list­ed on 40 Wall’s rental rolls in 2015, the last time it refi­nanced its mort­gage, more than 40 have left. Around two dozen oth­ers have long-term leas­es that appear to be set to expire in the next two years. Although the Trump Orga­ni­za­tion claims 40 Wall is still 75 per­cent leased, a few floors are entire­ly vacant and sit­ting on the sub­let mar­ket. Its ground-lev­el retail space is almost total­ly emp­ty. In today’s world, the 1930s-vin­tage sky­scraper is like­ly best suit­ed for con­ver­sion to res­i­den­tial use; to sur­vive as an office build­ing, it needs expen­sive upgrades. Either way, it will require a land­lord and lenders will­ing to invest hun­dreds of mil­lions in cap­i­tal, a poten­tial­ly tall order for a con­vict­ed felon whose largest source of per­son­al wealth is his founder’s stake in the prof­it­less com­pa­ny that owns Truth Social, a meme stock that fluc­tu­ates with his poll num­bers. And that’s before you even get to the deal­break­er: the fact that Trump doesn’t own the land beneath his own build­ing and must pay rent to a secre­tive group of for­eign investors who have a con­trac­tu­al option to jack it up in a few years.

    40 Wall Street isn’t just anoth­er build­ing in Don­ald Trump’s real estate port­fo­lio. It was his crown jew­el. The kind of crown jew­el that Trump rou­tine­ly over­val­ued to defraud banks, accord­ing to a New York State civ­il law­suit. A law­suit Trump lost in 2024, result­ing in the kind of poten­tial penal­ties that could have wiped out Trump’s cash reserves. And that’s with a $114 mil­lion mort­gage on the prop­er­ty com­ing due in 2025.

    But even at the height of its val­ue, the build­ing was an invest­ment odd­i­ty: Trump did­n’t actu­al­ly own the ground beneath it. Instead, a secre­tive group of for­eign investors owns that ground. And thanks to this bizarre own­er­ship struc­ture and the fact that the com­mer­cial real estate mar­ket has been ham­mered so sig­nif­i­cant­ly in recent years, this secre­tive group of investors were poten­tial­ly in a posi­tion of enor­mous lever­age over Don­ald Trump. The kind of lever­age that could have poten­tial­ly allowed them to take con­trol of the entire build­ing. At least, they would have had that lever­age had Trump lost the elec­tion. It’s a dif­fer­ent ball­game now:

    ...
    In April of last year, dur­ing his sea­son of indict­ments, Don­ald Trump sat for a depo­si­tion and defend­ed his worth. The ses­sion was held at the New York State attor­ney general’s office in low­er Man­hat­tan, in a large con­fer­ence room with a south­ern expo­sure that looked out on 40 Wall Street, Trump’s near­by cop­per-crowned Art Deco office tow­er. The build­ing also hap­pened to be at the cen­ter of that day’s lit­i­ga­tion: a civ­il law­suit accus­ing Trump of defraud­ing banks by over­stat­ing the val­ue of his prop­er­ties. Trump gri­maced as Attor­ney Gen­er­al Tish James opened the depo­si­tion with a promise of a “fair and impar­tial” process. Over sev­en con­tentious hours, he brushed aside her team’s ques­tions about val­u­a­tion. With Trump, it has always seemed the strength of assets proves the qual­i­ty of the man.

    ...

    In real­i­ty, the build­ing behind the cur­tain is once again worth next to noth­ing. Like many Man­hat­tan sky­scrap­ers, 40 Wall has been dev­as­tat­ed by the post-pan­dem­ic office-mar­ket crash. Its cur­rent oper­at­ing income, as reflect­ed in dis­clo­sures to its mort­gage ser­vicer, appears not to even cov­er its loan pay­ments, and the building’s mar­ket val­ue today is almost cer­tain­ly less than the $114 mil­lion bal­ance Trump will owe when the mort­gage comes due next year. One real-estate investor said Trump’s most ratio­nal move would be to “throw in the keys to the lender,” like oth­er New York office land­lords who have seen their tro­phies turn into emblems of dis­as­ter.

    Trump has built his iden­ti­ty around punch­ing back and win­ning, what­ev­er the odds. But while that approach has brought him a stun­ning come­back in pol­i­tics, putting him on the cusp of a sec­ond term as pres­i­dent, his orig­i­nal busi­ness — New York real estate — is on the ropes. Ear­li­er this year, James won her fraud law­suit, and the penal­ties the judge assessed, $489 mil­lion (and count­ing, with inter­est), could be more than enough to wipe out Trump’s cash reserves if they stand up on appeal. His fam­i­ly com­pa­ny, the Trump Orga­ni­za­tion, has been hol­lowed out by crim­i­nal pros­e­cu­tions and is now oper­at­ing under the super­vi­sion of a court-appoint­ed mon­i­tor. The com­pa­ny has been busy over­seas, cut­ting deals to license Trump’s per­son­al brand to devel­op­ments in places like Oman and Dubai, and host­ing tour­na­ments affil­i­at­ed with the Sau­di-gov­ern­ment-backed LIV golf tour. But at home in New York, Trump’s name has become a repel­lent. Con­do boards have vot­ed to rip it off their build­ings. The city of New York was glad to see him final­ly out of his deal to oper­ate a pub­lic golf course in the Bronx so it could remove the “Trump Links” sig­nage that was so con­spic­u­ous from the White­stone Bridge. Guc­ci, the anchor ten­ant in the aging mall at Trump Tow­er, man­aged to get Trump to slash its rent in 2020, but the retail­er is once again rumored to be plot­ting a move, since its par­ent com­pa­ny recent­ly spent near­ly $1 bil­lion to pur­chase anoth­er build­ing across the street. Trump’s most lucra­tive real-estate invest­ments, his pas­sive stakes in a pair of New York and San Fran­cis­co office build­ings run by Vor­na­do Real­ty Trust, are also worth less than they were before the pan­dem­ic.

    ...

    Between 2019 and last year, 40 Wall’s annu­al net oper­at­ing income — the fig­ure the real-estate indus­try uses to deter­mine a building’s mar­ket val­ue — fell by about a third to $12 mil­lion, accord­ing to dis­clo­sures made to bond­hold­ers. Through the first six months of 2024, the build­ing was on pace to gen­er­ate less than $8 mil­lion in net income this year, not enough to even pay all the $9.8 mil­lion Trump owes in debt ser­vice. Like many office land­lords who bor­rowed before the pan­dem­ic, Trump now has a build­ing that is worth less than its mort­gage bal­ance on paper. “40 Wall is not alone,” says Kent Swig, a real-estate exec­u­tive who has rede­vel­oped many build­ings in low­er Man­hat­tan. “Two-thirds of the $2 tril­lion in debt that is com­ing due over the next two years is under­wa­ter.”

    ...

    Cur­rent­ly, Trump pays the ground own­ers just $2.5 mil­lion a year. But 40 Wall’s lease con­tains a clause that says the rent will peri­od­i­cal­ly reset to reflect the land’s fair mar­ket val­ue, as defined by a for­mu­la that is very favor­able to the ground own­ers, giv­en the extra­or­di­nary increase in Man­hat­tan land prices over the past few decades. The first reset was sup­posed to hap­pen years ago, but dur­ing the 2008 finan­cial cri­sis, Trump was able to push off the day of reck­on­ing. In his civ­il-fraud-case depo­si­tion, Trump tes­ti­fied that he had rene­go­ti­at­ed “very favor­able terms” and said he fore­saw that he would one day con­vert 40 Wall into a lux­u­ry res­i­den­tial build­ing. “If the city ever comes back,” he said, “you can con­vert the entire tow­er of 40 Wall Street into con­dos and make an absolute for­tune, far more than the five-or-six-hun­dred mil­lion prob­a­bly that the build­ing is worth now.” Maybe he’d for­got­ten that dur­ing the last lease nego­ti­a­tion, he gave up his option to uni­lat­er­al­ly do a con­do con­ver­sion. The long-post­poned reset is now sched­uled to hap­pen in eight years, with­in the term of his next mort­gage.

    For the pur­pos­es of reval­u­a­tion, the reset for­mu­la pre­tends there is no land­marked office build­ing on the prop­er­ty and sets its val­ue as if it were emp­ty for devel­op­ment. An appraisal pre­pared the last time Trump refi­nanced esti­mat­ed that in those cir­cum­stances, the 40 Wall land would be worth around $160 mil­lion, yield­ing a reset annu­al rent of around $10 mil­lion — more than the building’s cur­rent net oper­at­ing income. The land might be even more valu­able today. Woody Heller, a real-estate exec­u­tive who han­dled a pre­vi­ous sale of 40 Wall back in the 1990s, said that in some cir­cum­stances, a rent reset can “destroy the eco­nom­ics” of a build­ing, and for that rea­son, “a lease­hold with a fair mar­ket val­ue reset is very hard to refi­nance.”
    ...

    And as the arti­cle notes, the own­er­ship struc­ture of the tow­er and the ground beneath it is so opaque that it’s pos­si­ble for the own­er­ship of LLCs that tech­ni­cal­ly own the land to change hands with­out a pub­lic dis­clo­sure. So while we know this group of secre­tive wealthy Ger­man investors def­i­nite­ly owned the land when Trump first bought the tow­er back in the 90s, we don’t actu­al­ly know who exact­ly owns those LLCs today:

    ...
    Typ­i­cal­ly, in ground-lease dis­putes, “who winds up win­ning is a ques­tion of who can wheel and deal the best,” Kwatinetz says. “I’m not a fan, but I am not per­son­al­ly putting mon­ey against Trump at that game.” Trump could rework the lease again. Or he — or some­one inter­est­ed in back­ing him — could buy the Ger­mans out. Amer­i­cans might not even learn if there was a change of own­er­ship. The ground is tech­ni­cal­ly held by a pair of LLCs, and those enti­ties could change hands with­out pub­lic dis­clo­sure.
    ...

    And as we can see in the fol­low­ing Real Deal arti­cle from Jan­u­ary 6, 2017, while we may not know exact­ly who owns these LLCs that owns the land beneath the tow­er, it’s pret­ty clear the own­ers are very pro-Trump. The Hin­neberg broth­ers even appear to have a his­to­ry of MAGA-adja­cent ‘anti-elite’ polit­i­cal orga­niz­ing.

    But we also learn a very inter­est­ing fun fact about that his­to­ry of the shady own­er­ship of this build­ing: Fer­di­nand Mar­cos acquired the lease to the tow­er just three weeks after the Ger­man investors took own­er­ship of the land in 1982. Which rais­es the fas­ci­nat­ing ques­tion as to whether or not the leas­ing of the tow­er to Mar­cos was the intend­ed plan all along. Because if that’s the case, there could be a whole Gold­en Lily-laun­der­ing angle to this sto­ry that has yet to be revealed:

    The Real Deal

    Meet the obscure Ger­man mag­nates who actu­al­ly own Trump’s most valu­able build­ing

    Pres­i­dent-elect pays Deutsch­land-based aris­to­crats and titans of indus­try $1.6M a year in rent for 40 Wall Street

    Jan 6, 2017, 1:00 PM
    By Kon­rad Putzi­er

    The sky­scraper at 40 Wall Street occu­pies a spe­cial place in Don­ald Trump’s tale of busi­ness suc­cess. It is, in all like­li­hood, the most valu­able sin­gle real estate asset he con­trols, worth hun­dreds of mil­lions. And he nev­er gets tired of say­ing that he bought it for a mere $1 mil­lion in 1995. “On occa­sion, I am asked what my favorite deals have been,” he wrote in his book “Nev­er Give Up.” “I have a lot to choose from, but there is some­thing about the acqui­si­tion of 40 Wall Street that will always stand apart.”

    What’s often left unsaid is that Trump doesn’t actu­al­ly own the build­ing. He mere­ly leased it for a term of up to 200 years. The building’s actu­al own­ers are a group of obscure, wealthy Ger­mans.

    That sud­den­ly mat­ters a great deal. Trump will be sworn in as Pres­i­dent of the Unit­ed States on Jan. 20. The com­man­der-in-chief owing reg­u­lar lease pay­ments to a bunch of for­eign busi­ness­men might not be con­cern­ing if it weren’t for the fact that no one seems to know exact­ly who they are.

    ...

    The own­er­ship web of 40 Wall

    On Decem­ber 7, 1982, five Ger­mans bought the land under the tow­er from its long-term own­er, the Met­ro­pol­i­tan Life Insur­ance Com­pa­ny. The buy­ers: Stephanie von Bis­mar­ck, Joachim Fer­di­nand von Grumme-Dou­glas and sib­lings Ani­ta, Chris­t­ian, and Wal­ter Hin­neberg (more on these peo­ple below).

    Ani­ta and Wal­ter Hin­neberg each owned 25 per­cent of the prop­er­ty and Chris­t­ian Hin­neberg owned 30 per­cent. Bis­mar­ck and Grumme-Dou­glas each owned 10 per­cent.

    In 1992, the three Hin­neberg sib­lings trans­ferred their com­bined 80 per­cent inter­est to an enti­ty called 40 Wall Lim­it­ed Part­ner­ship. In Decem­ber 2014, that enti­ty in turn trans­ferred its inter­est in the prop­er­ty to anoth­er enti­ty, 40 Wall Street Hold­ings Corp. The ben­e­fi­cial own­ers of that lat­est enti­ty aren’t pub­lic, but Chris­t­ian Hin­neberg signed the deed as the buy­er on behalf of 40 Wall Street Hold­ings Corp.

    Mean­while, in 1992, Bis­mar­ck and Grumme-Dou­glas trans­ferred their com­bined 20 per­cent inter­est to an enti­ty called Scan­dic Wall Lim­it­ed Part­ner­ship. In 2004, that enti­ty in turn trans­ferred it to anoth­er enti­ty, called New Scan­dic Wall Lim­it­ed Part­ner­ship, which still owns a 20-per­cent stake in the build­ing. The ben­e­fi­cial own­ers of that enti­ty aren’t pub­lic, but the 2004 deed doc­u­ment lists Joachim Fer­di­nand von Grumme-Dou­glas as its pres­i­dent. Reached by phone, Stephanie von Bis­mar­ck con­firmed that she invest­ed in the prop­er­ty but declined to say whether she still holds a stake. Grumme-Dou­glas could not be reached.

    To sum up: the Hin­nebergs still appear to con­trol the enti­ty that owns 80 per­cent of 40 Wall Street. Joachim von Grumme-Dou­glas is the pres­i­dent of the enti­ty that owns the remain­ing 20 per­cent, and Stephanie von Bis­mar­ck may or may not still be a part of it.

    Here’s where it gets com­pli­cat­ed: While the Ger­mans tech­ni­cal­ly bought the prop­er­ty in 1982, they didn’t have full con­trol. Since 1966, the build­ing had been leased to investors George Com­fort, Hen­ry Loeb and Clif­ford Michel.

    While the land stayed under Ger­man own­er­ship the fol­low­ing decades, the lease­hold changed hands sev­er­al times. Three weeks after the prop­er­ty sold to the Ger­mans, Com­fort and his part­ners trans­ferred the lease­hold to an enti­ty that was lat­er found to hide the wealth of Philip­pine dic­ta­tor Fer­di­nand Mar­cos. Fol­low­ing Mar­cos’ exile in 1986, the tow­er became embroiled in sev­er­al law­suits. In 1989, New York-based Resnick fam­i­ly took over, but amid a mar­ket down­turn, they couldn’t make the build­ing lucra­tive. In 1993, Hong Kong-based Kin­son Prop­er­ties took con­trol of the lease­hold in a fore­clo­sure sale, but it too strug­gled to make the build­ing a cash cow. In 1995, Trump took over the lease­hold and restruc­tured it.

    Under the new terms, the lease runs through April 30, 2059, with two tenant’s options to extend it by 67.5 years each. Bloomberg val­ued the lease­hold at about $550 mil­lion in 2015. Though it’s unclear how much the Trump Orga­ni­za­tion receives in annu­al rent, Don­ald Trump Jr. last year said the build­ing was 97 per­cent leased. With an esti­mat­ed aver­age $36 per square foot, Trump could receive more than $30 mil­lion a year from ten­ants at 40 Wall Street.

    ...

    Trump, who took out a $160 mil­lion loan against his lease­hold in 2015 from Lad­der Cap­i­tal, pays the own­ers $1.6 mil­lion a year under the terms of the ground lease, accord­ing to SEC doc­u­ments cit­ed by the New York Times.

    ...

    The Hin­nebergs

    Elec­tions to the Ham­burg cham­ber of commerce’s plenum don’t typ­i­cal­ly make head­lines, but this year marks the excep­tion. A group called “We are the cham­ber” is run­ning on a plat­form to shake up what they describe as a crusty elite, get rid of manda­to­ry dues and increase trans­paren­cy. Sound famil­iar? It seems that the glob­al anti-estab­lish­ment move­ment that swept Trump into the Oval Office and put the Unit­ed King­dom on a path to leave the E.U. has made it into the hal­lowed halls of one of the mer­chant city’s most pres­ti­gious insti­tu­tions.

    But that’s not the only con­nec­tion between the so-called cham­ber rebels and Trump: one of its lead­ers is Wal­ter Jr. Hin­neberg. “How Don­ald Trump’s friend is shak­ing up Ham­burg,” read a Ger­man-lan­guage head­line in local paper Ham­burg­er Abend­blatt on Nov. 11.

    Twin broth­ers Chris­t­ian and Wal­ter Jr. Hin­neberg, 64 years old, are among the wealth­i­est and best-con­nect­ed ship bro­kers in the world. They run their busi­ness, named Wal­ter J. Hin­neberg GmbH after their late father, from a small office in Hamburg’s Ballindamm street. Like Trump, the Hin­nebergs inher­it­ed a sub­stan­tial busi­ness from their father and made it big­ger. But in anoth­er sense they are the exact oppo­site of Trump: they are reserved, shy away from media cov­er­age and live a rel­a­tive­ly mod­est lifestyle con­sid­er­ing their wealth, one fam­i­ly friend told TRD. “Their mot­to is ‘dis­cre­tion is our busi­ness,’” the friend said.

    While many ship bro­kers field flashy, cor­po­rate offices, the Hin­nebergs run their busi­ness from a cou­ple of con­ser­v­a­tive­ly dec­o­rat­ed rooms with a staff of less than a dozen, one ship­ping indus­try source who per­son­al­ly knows the Hin­nebergs said.

    The source sug­gest­ed that the broth­ers like­ly had some sort of involve­ment with the major­i­ty of con­tain­er ships that roam the oceans, and have par­tic­u­lar­ly strong rela­tion­ships with Kore­an ship­yards.

    ...

    In a rare inter­view, Chris­t­ian told the mar­itime news com­pa­ny Lloyd’s List in 2004 that with his father’s trau­mat­ic expe­ri­ence of los­ing his sav­ings dur­ing World War II in mind, the fam­i­ly eschewed stocks or cur­ren­cy invest­ments in favor of prop­er­ty, “some­thing sol­id,” he said.

    The Hin­nebergs appear to have a good rela­tion­ship with their ground ten­ant at 40 Wall. In a recent chat with the Ham­burg­er Abend­blatt, Wal­ter Jr. described Trump as a “friend­ly and not at all arro­gant per­son.”

    Trump, in turn, has heaped praise on the fam­i­ly. “I got along very well with the Hin­nebergs, and they real­ized that after a string of losers who had owned the build­ing, I had the integri­ty of their spec­tac­u­lar prop­er­ty first and fore­most in my mind,” he wrote in “Nev­er Give Up.” “They are a tru­ly great fam­i­ly, and they knew I loved the build­ing, that I would be doing every­thing pos­si­ble to restore it to its inher­ent grandeur.”

    The friend­ship between the devel­op­er and the ship bro­kers appears to have last­ed: two sources close to the fam­i­ly told TRD that the Hin­nebergs spent the hol­i­days with Trump at his Flori­da estate Mar-a-Lago this year.

    And on Jan. 4, Wal­ter Hin­neberg had a 25-minute meet­ing with Trump at Trump Tow­er. Accord­ing to news reports, he also had lunch with Trump’s son Eric.

    Joachim von Grumme-Dou­glas and Stephanie von Bis­mar­ck

    Stephanie Andrea Vive­ca Mar­ti­ta von Bis­mar­ck, nee Sedl­mayr, mar­ried into the aris­to­crat­ic dynasty most famous for pro­duc­ing Germany’s first chan­cel­lor, Otto von Bis­mar­ck. Her hus­band, Got­tfried von Bis­mar­ck, holds a mas­ter of sci­ence in elec­tri­cal engi­neer­ing degree from MIT and spent some time work­ing in the U.S. Accord­ing to his Linkedin page, he now works as an inde­pen­dent busi­ness con­sul­tant. (He is not to be con­fused with anoth­er Got­tfried von Bis­mar­ck famous for host­ing drug-fueled orgies in Lon­don who died of a cocaine over­dose in 2007. ) The cou­ple, both in their 70s, lives in Ham­burg.

    Lit­tle is known about Joachim Fer­di­nand von Grumme-Dou­glas, oth­er than that he was born in 1933 and lived or still lives in Brus­sels. Accord­ing to an online geneal­o­gy track­er of the sprawl­ing Dou­glas fam­i­ly, he is a descen­dant of Scot­tish and Ger­man aris­to­crats and the grand­son of an admi­ral in the impe­r­i­al Ger­man navy.

    Joachim von Grumme-Dou­glas and Stephanie von Bis­mar­ck appear to be close­ly relat­ed. When Grumme-Dou­glas’ moth­er Annabel Sedl­mayr (nee von Arn­im, wid­owed von Grumme-Dou­glas) died in 2001, the death announce­ment list­ed Stephanie von Bis­mar­ck (nee Sedl­mayr) at a spot typ­i­cal­ly reserved for imme­di­ate rel­a­tives of the deceased.

    As the son of a born von Arn­im, Grumme-Dou­glas is the scion of one of Germany’s more famous aris­to­crat­ic dynas­ties. Arguably the best-known von Arn­im was Hans-Jur­gen, a World War II gen­er­al who led Nazi Germany’s army in North Africa from 1942 until its capit­u­la­tion in 1943.

    ———-

    “Meet the obscure Ger­man mag­nates who actu­al­ly own Trump’s most valu­able build­ing” By Kon­rad Putzi­er; The Real Deal; 01/06/2017

    “That sud­den­ly mat­ters a great deal. Trump will be sworn in as Pres­i­dent of the Unit­ed States on Jan. 20. The com­man­der-in-chief owing reg­u­lar lease pay­ments to a bunch of for­eign busi­ness­men might not be con­cern­ing if it weren’t for the fact that no one seems to know exact­ly who they are.

    As we can see, the own­er­ship struc­ture of the land beneath the tow­er isn’t just a mys­tery at the start of Trump’s sec­ond term. It was was a mys­tery 8 years ago dur­ing his first term. For all the pub­lic atten­tion direct­ed at Trump and his many bla­tant con­flicts of inter­est, we still nev­er real­ly learned who ulti­mate­ly owned the land beneath Trump’s ‘crown jew­el’. But we do at least have an idea of some of the ini­tial peo­ple behind this invest­ment: Stephanie von Bis­mar­ck, Joachim Fer­di­nand von Grumme-Dou­glas and sib­lings Ani­ta, Chris­t­ian, and Wal­ter Hin­neberg. With Chris­t­ian Hin­neberg sign­ing the deed as the buy­er on behalf of 40 Wall Street Hold­ings Corp. And over­all, it looks like the Hin­nebergs con­trol the hold­ing com­pa­ny today while Stephanie von Bis­mar­ck may or may not have divest­ed:

    ...
    On Decem­ber 7, 1982, five Ger­mans bought the land under the tow­er from its long-term own­er, the Met­ro­pol­i­tan Life Insur­ance Com­pa­ny. The buy­ers: Stephanie von Bis­mar­ck, Joachim Fer­di­nand von Grumme-Dou­glas and sib­lings Ani­ta, Chris­t­ian, and Wal­ter Hin­neberg (more on these peo­ple below).

    Ani­ta and Wal­ter Hin­neberg each owned 25 per­cent of the prop­er­ty and Chris­t­ian Hin­neberg owned 30 per­cent. Bis­mar­ck and Grumme-Dou­glas each owned 10 per­cent.

    In 1992, the three Hin­neberg sib­lings trans­ferred their com­bined 80 per­cent inter­est to an enti­ty called 40 Wall Lim­it­ed Part­ner­ship. In Decem­ber 2014, that enti­ty in turn trans­ferred its inter­est in the prop­er­ty to anoth­er enti­ty, 40 Wall Street Hold­ings Corp. The ben­e­fi­cial own­ers of that lat­est enti­ty aren’t pub­lic, but Chris­t­ian Hin­neberg signed the deed as the buy­er on behalf of 40 Wall Street Hold­ings Corp.

    Mean­while, in 1992, Bis­mar­ck and Grumme-Dou­glas trans­ferred their com­bined 20 per­cent inter­est to an enti­ty called Scan­dic Wall Lim­it­ed Part­ner­ship. In 2004, that enti­ty in turn trans­ferred it to anoth­er enti­ty, called New Scan­dic Wall Lim­it­ed Part­ner­ship, which still owns a 20-per­cent stake in the build­ing. The ben­e­fi­cial own­ers of that enti­ty aren’t pub­lic, but the 2004 deed doc­u­ment lists Joachim Fer­di­nand von Grumme-Dou­glas as its pres­i­dent. Reached by phone, Stephanie von Bis­mar­ck con­firmed that she invest­ed in the prop­er­ty but declined to say whether she still holds a stake. Grumme-Dou­glas could not be reached.

    To sum up: the Hin­nebergs still appear to con­trol the enti­ty that owns 80 per­cent of 40 Wall Street. Joachim von Grumme-Dou­glas is the pres­i­dent of the enti­ty that owns the remain­ing 20 per­cent, and Stephanie von Bis­mar­ck may or may not still be a part of it.
    ...

    Also note this inter­est­ing detail about Fer­di­nand Mar­cos acquir­ing the lease to the tow­er back in the 1980s: it was just three weeks after the Ger­man investors took own­er­ship of the land in 1982 when the lease for the tow­er was trans­ferred to Mar­cos. Which, again, rais­es intrigu­ing ques­tions about the mon­ey-laun­der­ing poten­tial of this prop­er­ty. The 1980s over­lapped with Mar­co’s vast for­tune derived from his recov­ery of the Gold­en Lily plun­der, after all. Was the pur­chase of the land beneath the tow­er by this Ger­man invest­ment group part of a larg­er plan in coor­di­na­tion with Mar­cos to find an over­seas place to invest his bast illic­it for­tune? If so, that would add a whole new wild dimen­sion to this sto­ry:

    ...
    Here’s where it gets com­pli­cat­ed: While the Ger­mans tech­ni­cal­ly bought the prop­er­ty in 1982, they didn’t have full con­trol. Since 1966, the build­ing had been leased to investors George Com­fort, Hen­ry Loeb and Clif­ford Michel.

    While the land stayed under Ger­man own­er­ship the fol­low­ing decades, the lease­hold changed hands sev­er­al times. Three weeks after the prop­er­ty sold to the Ger­mans, Com­fort and his part­ners trans­ferred the lease­hold to an enti­ty that was lat­er found to hide the wealth of Philip­pine dic­ta­tor Fer­di­nand Mar­cos. Fol­low­ing Mar­cos’ exile in 1986, the tow­er became embroiled in sev­er­al law­suits. In 1989, New York-based Resnick fam­i­ly took over, but amid a mar­ket down­turn, they couldn’t make the build­ing lucra­tive. In 1993, Hong Kong-based Kin­son Prop­er­ties took con­trol of the lease­hold in a fore­clo­sure sale, but it too strug­gled to make the build­ing a cash cow. In 1995, Trump took over the lease­hold and restruc­tured it.
    ...

    So what’s Trump’s rela­tion­ship with this mys­te­ri­ous invest­ment group? Well, as we can see, the Hin­neberg broth­ers — two of the biggest ship bro­kers in the world — are note only quite chum­my with Trump but also appear to be ide­o­log­i­cal­ly aligned with the MAGA ‘anti-elite’ agen­da. Again, these are two of the wealth­i­est ship­ping bro­kers on the planet...pushing ‘anti-elite’ right-wing pol­i­tics. And as we saw, the Hin­nebergs appear to con­trol the major­i­ty stake in the invest­ment group. Although that’s still spec­u­la­tion since we don’t real­ly know the own­er­ship struc­ture:

    ...
    Elec­tions to the Ham­burg cham­ber of commerce’s plenum don’t typ­i­cal­ly make head­lines, but this year marks the excep­tion. A group called “We are the cham­ber” is run­ning on a plat­form to shake up what they describe as a crusty elite, get rid of manda­to­ry dues and increase trans­paren­cy. Sound famil­iar? It seems that the glob­al anti-estab­lish­ment move­ment that swept Trump into the Oval Office and put the Unit­ed King­dom on a path to leave the E.U. has made it into the hal­lowed halls of one of the mer­chant city’s most pres­ti­gious insti­tu­tions.

    But that’s not the only con­nec­tion between the so-called cham­ber rebels and Trump: one of its lead­ers is Wal­ter Jr. Hin­neberg. “How Don­ald Trump’s friend is shak­ing up Ham­burg,” read a Ger­man-lan­guage head­line in local paper Ham­burg­er Abend­blatt on Nov. 11.

    Twin broth­ers Chris­t­ian and Wal­ter Jr. Hin­neberg, 64 years old, are among the wealth­i­est and best-con­nect­ed ship bro­kers in the world. They run their busi­ness, named Wal­ter J. Hin­neberg GmbH after their late father, from a small office in Hamburg’s Ballindamm street. Like Trump, the Hin­nebergs inher­it­ed a sub­stan­tial busi­ness from their father and made it big­ger. But in anoth­er sense they are the exact oppo­site of Trump: they are reserved, shy away from media cov­er­age and live a rel­a­tive­ly mod­est lifestyle con­sid­er­ing their wealth, one fam­i­ly friend told TRD. “Their mot­to is ‘dis­cre­tion is our busi­ness,’” the friend said.

    ...

    The Hin­nebergs appear to have a good rela­tion­ship with their ground ten­ant at 40 Wall. In a recent chat with the Ham­burg­er Abend­blatt, Wal­ter Jr. described Trump as a “friend­ly and not at all arro­gant per­son.”

    ...

    The friend­ship between the devel­op­er and the ship bro­kers appears to have last­ed: two sources close to the fam­i­ly told TRD that the Hin­nebergs spent the hol­i­days with Trump at his Flori­da estate Mar-a-Lago this year.

    And on Jan. 4, Wal­ter Hin­neberg had a 25-minute meet­ing with Trump at Trump Tow­er. Accord­ing to news reports, he also had lunch with Trump’s son Eric.
    ...

    And then we to the oth­er known investors like Joachim von Grumme-Dou­glas and Stephanie von Bis­mar­ck, who both appear to be close­ly relat­ed to Ger­man aris­to­crats and each oth­er:

    ...
    Stephanie Andrea Vive­ca Mar­ti­ta von Bis­mar­ck, nee Sedl­mayr, mar­ried into the aris­to­crat­ic dynasty most famous for pro­duc­ing Germany’s first chan­cel­lor, Otto von Bis­mar­ck. Her hus­band, Got­tfried von Bis­mar­ck, holds a mas­ter of sci­ence in elec­tri­cal engi­neer­ing degree from MIT and spent some time work­ing in the U.S. Accord­ing to his Linkedin page, he now works as an inde­pen­dent busi­ness con­sul­tant. (He is not to be con­fused with anoth­er Got­tfried von Bis­mar­ck famous for host­ing drug-fueled orgies in Lon­don who died of a cocaine over­dose in 2007. ) The cou­ple, both in their 70s, lives in Ham­burg.

    Lit­tle is known about Joachim Fer­di­nand von Grumme-Dou­glas, oth­er than that he was born in 1933 and lived or still lives in Brus­sels. Accord­ing to an online geneal­o­gy track­er of the sprawl­ing Dou­glas fam­i­ly, he is a descen­dant of Scot­tish and Ger­man aris­to­crats and the grand­son of an admi­ral in the impe­r­i­al Ger­man navy.

    Joachim von Grumme-Dou­glas and Stephanie von Bis­mar­ck appear to be close­ly relat­ed. When Grumme-Dou­glas’ moth­er Annabel Sedl­mayr (nee von Arn­im, wid­owed von Grumme-Dou­glas) died in 2001, the death announce­ment list­ed Stephanie von Bis­mar­ck (nee Sedl­mayr) at a spot typ­i­cal­ly reserved for imme­di­ate rel­a­tives of the deceased.

    As the son of a born von Arn­im, Grumme-Dou­glas is the scion of one of Germany’s more famous aris­to­crat­ic dynas­ties. Arguably the best-known von Arn­im was Hans-Jur­gen, a World War II gen­er­al who led Nazi Germany’s army in North Africa from 1942 until its capit­u­la­tion in 1943.
    ...

    And, again, that’s just who we know about. There could be oth­er mys­tery investors involved with this invest­ment. The kind of invest­ment that, in the con­text of today’s dis­tressed com­mer­cial real estate envi­ron­ment, makes these investors some of Don­ald Trump’s best friends once that mort­gage comes due. The kind of best friends the pres­i­dent will be incred­i­bly eager to please through what­ev­er means nec­es­sary.

    Posted by Pterrafractyl | January 29, 2025, 1:06 am

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