Like Trump's business skill? Look at Taj Mahal case

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The Trump Taj Mahal Casino is illuminated at dusk in Atlantic City, New Jersey October 24, 2014. REUTERS/Mark Makela

By Peter Binzen

and Peter Lindsay

During recent debates among Republican candidates, a charge has been leveled against Donald Trump that deserves closer attention.

The charge is that Trump had gone bankrupt, presumably for overspending in Atlantic City's casino district. Trump has flatly denied the allegations. "I never went bankrupt," he shouted at one debate in Greenville, S.C.

It's true that he has never filed for personal bankruptcy, but he has filed for corporate bankruptcy four times - in 1991, 1992, 2004, and 2009 - all related to over-leveraged casino and hotel properties in Atlantic City, and all intended to keep the businesses going.

Consider the first filing, over Trump's Taj Mahal Casino, Atlantic City's largest. Its funding had been questioned just before the Taj opened in April 1990. Marvin Roffman, a casino analyst for Janney Montgomery Scott in Philadelphia, forecasted that the Taj Mahal would do well in the summer months after its opening. "But after the cold winds from October to February," the analyst said, "it won't make it. The market just isn't fair."

Trump ordered Roffman's employer to force an apology from the analyst or fire him. Roffman wound up being dismissed after 30 years in the securities business. Alan Abelson, editor of Barron's Magazine, which covered the case, labeled the firing "an act of unsurpassed spinelessness."

Roffman's prediction about the Taj Mahal was on target. In the fall of 1990, the Taj defaulted on its first interest payment. The following summer it filed for Chapter 11 bankruptcy reorganization. Under this form of bankruptcy, the troubled company is allowed to keep operating.

Roffman filed suit against both Janney and Trump. He received about $750,000 from Janney for wrongful discharge. Roffman charged Trump with defamation and interference with Roffman's relationship with his employer. The case was settled out of court for an undisclosed sum.

In addition, PolitiFact reports that Trump was required to give up half his stake in the Taj Mahal Casino, about $450 million, as well as his yacht and his airline.

So why does all of this deserve closer scrutiny?

Well, Trump has no political experience - no executive or legislative record - for voters to assess. He is running under the assumption that such a record is unimportant because business experience qualifies someone for political office. That claim is dubious enough, but if, for the sake of argument, we accept it, then surely the quality of this business experience matters.

So voters must ask, Does Trump's record in business suggest that he would make a good president?

If voters listen to Trump ("I used the law four times and made a tremendous thing. I'm in business. I did a very good job."), they will have a reason to cast their vote his way.

If, instead, they listen to the facts, then someone else - anyone else - is probably a safer bet.

Peter Binzen is a retired Inquirer staff writer. Contact him via www.peterbinzen.com.

Peter Lindsay is a professor of political science and philosophy at Georgia State University. plindsay2@gsu.edu