New Jersey has one of the largest and most ruthless student loan programs in the country, described by one bankruptcy lawyer as “state-sanctioned loan-sharking.” The state is less strict about collecting on debts, however, when it comes to bankrupt casinos owned by celebrity real estate developers.
According to the New York Times, by 2010, when Chris Christie became governor of New Jersey, Donald Trump’s casinos owed the state almost $30 million, with interest, in back taxes. The company that owned the casinos failed to pay its taxes from 2002 through 2006—a period during which Trump was the company’s chairman and chief executive. (The company lost money every year during this time.) The state spent years trying to collect the taxes, through bankruptcies and other litigation, even accusing Trump’s holding company of lying to state casino regulators about how much it had already paid. And yet, in December 2011, after six years in court, and a year after Governor Christie took office, the state agreed to a settlement in which it would accept just $5 million of the $30 million owed.
A spokesman for Christie told the Times that the governor was not aware of the tax dispute and could not comment on the terms of the settlement. Christie, a former prosecutor, and Trump had been friends for many years before the governor assumed office—Trump’s sister, Maryanne Trump Barry, a federal judge, introduced the pair in 2002. Christie was invited to Trump’s third wedding, in 2005, and Trump attended the governor’s 2010 inauguration; he’s also made several large donations to a nonprofit that maintains the governor’s residence and to the Republican Governors Association when Christie was chairman.
Such settlements are not completely out of the ordinary, but the size of the reduction certainly, especially considering the decrepit state of the casino industry in general and Trump’s casinos in particular. From the Times:
A spokesman for the attorney general’s office, Leland Moore, said the settlement was approved largely because of the risks of continuing to fight in bankruptcy court and the “concerns about the future ability of the casinos to pay their tax debts.”
The Trump casinos may not have been able to afford their long overdue taxes, but they did not turn suddenly spartan, either. They continued to rent a helicopter from Mr. Trump for $390,000 a year, until they filed for bankruptcy again in 2014.
Mr. Moore declined to release the titles of officials who approved the settlement, except to say it was agreed to by officials from both the attorney general’s office and the State Division of Taxation.
Mr. Christie was close to the attorney general at the time, Paula T. Dow, whom he had appointed and who worked for him as a prosecutor at the United States attorney’s office. A week after the settlement was signed, Mr. Christie announced that he was appointing Ms. Dow to the counsel’s office of the Port Authority of New York and New Jersey until he could find her the judgeship that she desired.
“I think you all know that Paula Dow has been one of my most trusted advisers for the last 10 years,” Mr. Christie said at the time.