Trump Made Puerto Rico's Debt Worse After His Golf Course Filed For Bankruptcy — REPORT
Last week, Hurricane Maria pummeled the U.S. territory of Puerto Rico, wreaking havoc on the island and leaving many of its residents without access to basic necessities, such as food, water, power, and medicine. While President Trump has authorized the minimum FEMA response in Puerto Rico, his reaction to the devastation has largely been seen as insufficient and insensitive; part of it due to his tweet about Puerto Rico's "massive debt" instead of offering comfort and support to the territory. The president's tweets are especially ironic considering that Trump himself reportedly contributed to Puerto Rico's debt, as one of his golf courses on the island defaulted in payments and caused a tax debt of millions of dollars.
Puerto Rico has been enduring a financial crisis for many years. As Slate reported, the island has essentially been in a recession since 2007 and it owes creditors billions of dollars. Moreover, in May of this year, the island filed for bankruptcy, which resulted in the government cutting spending and increasing tax revenue.
Trump's comments about Puerto Rico's debt as the island's residents are suffering and desperately trying to recover from Maria are wildly inappropriate — especially considering that one of his businesses reportedly further contributed to this debt.
As Death and Taxes reported, prior to Trump's presidency, there was a golf resort in Puerto Rico that bore his name, the Trump International Golf Club Puerto Rico. Previously known as Coco Beach Golf & Country Club, it was re-named in 2008 when Trump entered the picture. The club had reportedly already been struggling financially when Trump took over.
Trump's company initially borrowed $26.4 million in government-backed bonds to pay for improvements to the property, but eventually defaulted on many of these bonds (and others). Moreover, the club filed for bankruptcy in 2015. The club's bond defaults and bankruptcy reportedly left the island of Puerto Rico with a nearly $33 million tax debt.
Polifact concurs that the club's bankruptcy filing left the island with substantial tax debt, noting:
The Puerto Rico Tourism Development Fund, which provided project financing in 2000 and 2004, filed a claim in bankruptcy court for $32.7 million. The fund is paid for with tax dollars. The resort later sold for about $2 million to OHorizons Global, a private investment firm. This left the Government Development Bank — the tourism fund is a subsidiary of the bank — to make payments on the outstanding bonds.
Death and Taxes reported that the Trump family has tried to distance itself from the bankrupt Puerto Rican resort. Eric Trump, one of the president's sons, told Bloomberg in 2015 that the Trumps have no financial investment in the course and that the family company only managed the golf course. According to BuzzFeed News, Eric described the family's involvement with the property as a licensing agreement, though Trump collected hundreds of thousands of dollars in fees as a result of this licensing agreement.
Trump's criticism of Puerto Rico's debt, especially in light of the bankruptcy and subsequent multimillion dollar tax debt of the Trump International Golf Club Puerto Rico, has sparked the ire of many. On social media, many users expressed their outrage at the president's comments, questioning how he "has the nerve" to criticize Puerto Rico's debt when the bankruptcy of one of his company's resorts reportedly contributed to it. Other users demanded that Trump pay back the reported millions of dollars in tax debt.
Polifact did note that Trump is not completely to blame for the club's bankruptcy, considering the context of the ongoing recession in Puerto Rico as well as the club's existing financial struggles when Trump took over. However, many members of the public, as suggested by their aforementioned Twitter posts, do believe that the fact that the president is commenting on Puerto Rico's debt as it struggles to recover from being battered by two ferocious hurricanes (especially considering his former business' reported tax debts on the island), is insensitive and a disservice to the people of Puerto Rico — American citizens who, as president, he is supposed to protect and uplift.