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State Investigative Report On Trump Shows Complexity Of Alleged Mob Ties

New Jersey regulators investigated allegations and decided not to take further action. And Trump may have even helped mob fighters in NYC.

Donald Trump in 1992

[Photo: Ron Galella, Ltd., WireImage, Getty Images]

Even amid a particularly vicious Republican primary season, one of the most incendiary allegations about Donald Trump has not received much attention—until last week.

On NBC’s Meet the Press on February 28, rival Republican presidential candidate Ted Cruz speculated that Trump may be reluctant to release his tax returns due to his "business dealings with the mob, with the mafia." He added that multiple news reports have described Trump’s dealings with S&A Construction, "which was owned by ’Fat Tony’ Salerno, who is a mobster who is in jail. Maybe his taxes show those business dealings are a lot more extensive than has been reported." When host Chuck Todd interrupted Cruz and called such claims "speculative," Cruz asserted that there have been multiple news reports describing such allegations about Trump.

Indeed, Trump and his businesses have been linked to the mob in multiple news reports and biographies—and such allegations have been probed by government investigators. In 1992, the New Jersey Division of Gaming Enforcement looked into multiple allegations about Trump’s links to organized crime and other unsavory activities that may have disqualified him from holding a casino license in the state. In the end, the agency and the state’s Casino Control Commission chose not to take any action against Trump, who retained his license. The agency’s internal investigative report was obtained by Fast Company.
(Scroll down for embedded PDF.)

Trump Actually Helped The Government Investigate The Mob

It turns out that Trump’s relationship with organized crime is a lot more complicated than Cruz's allegations suggest. The developer actually helped government agents investigate the mob during the 1980s, according to the former head of New York State’s organized crime task force. After a press conference at which the task force issued a report on the mob’s grip on legitimate businesses in New York, Trump approached the team and offered his assistance. "After we issued our interim report and we were considering various way of reforming and restructuring the industry, Trump offered to be of whatever help he could and we did take him up on his offer and we talked from time to time and he provided insights into the industry and construction process," Ronald Goldstock told Fast Company.

Donald Trump at the opening of his Trump Taj Mahal Casino in Atlantic City, New Jersey, 2nd April 1990.Photo: Yann Gamblin, Paris Match via Getty Images

The Backstory

American history is littered with prominent politicians, including former presidents John F. Kennedy, Richard Nixon, and Ronald Reagan, with links to organized crime figures. There were widespread allegations that Chicago crime boss Sam Giancana was a donor to JFK's campaign and helped him win the 1960 West Virginia primary. Nixon was friendly with James Crosby, a businessman whose company was associated with mobsters, and Charles "Bebe" Rebozo, who ran a bank that reportedly handled mob money. And Reagan was friendly with legendary mob-connected Hollywood lawyer Sidney Korshak. None of these associations have ever been proven to be unlawful.

Trump was first linked to organized crime in the 1980s, when a $7.8 million subcontract for Trump Plaza was awarded to S&A Concrete, which was partially owned by Salerno, the boss of the Genovese crime family, and Paul Castellano, the boss of the Gambino crime family who was later gunned down outside midtown Manhattan’s Sparks Steak House in 1985. In the 1986 federal indictment of Salerno, government prosecutors noted the company’s work on Trump Plaza.

Trump himself discussed the company’s notorious backers when he acknowledged that S&A Concrete was "supposedly associated with the mob" in a December 2015 interview with the Wall Street Journal. He emphasized that many other developers hired the company and he praised the quality of their work: "Virtually every building that was built was built with these companies. These guys were excellent contractors. They were phenomenal. They could do three floors a week in concrete. Nobody else in the world could do three floors a week. I mean they were unbelievable. Trump Tower, other buildings."

Did Trump Do Enough To Avoid Supporting Organized Crime?

In the wake of Cruz’s comments, the fact-checking site Politifact examined the issue and concluded: "It’s important to note that Trump hasn’t been charged with any illegal activity, and it’s reasonable to argue that he was unaware or even a victim in some cases. But Cruz has a point that the mogul has been linked to the mob for decades."

Almost a dozen former FBI agents and DGE investigators interviewed by Fast Company did not know about Trump ever meeting personally with members of organized crime. And they stressed that most developers in New York in the 1970s and 1980s couldn’t avoid dealing with contractors linked to organized crime since the mob had a stranglehold on the industry.

"Maybe not personally, but through his companies he had to have contacts with the mob," says one former member of the bureau’s Organized Crime Task Force. "He couldn’t have built his buildings without them. The question is whether he could have done more to avoid them."

According to the task force's 1990 report on the influence of organized crime: "[T]he construction industry in New York City has learned to live comfortably with pervasive corruption and racketeering. Perhaps those with strong moral qualms were long ago driven from the industry; it would have been difficult for them to have survived. 'One has to go along to get along.' "

Donald Trump at the opening of his Trump Taj Mahal Casino in Atlantic City, New Jersey, 2nd April 1990.Photo: Tom Gates, Archive Photos, Getty Images

In Atlantic City, Trump reportedly had other links to organized crime figures. The developer’s initial partners on his first deal in the gambling mecca on the Jersey shore were Kenneth Shapiro, who was identified by state and federal prosecutors as an investment banker to former Philadelphia mob boss Nicky Scarfo, and Danny Sullivan, a former Teamsters Union official, who is described in an FBI file as having mob acquaintances. Both men controlled a company that leased parcels of land to Trump for the 39-story hotel-casino, as I reported for the Huffington Post in 2011.

Trump teamed up with the duo in 1980 soon after arriving in Atlantic City, according to numerous news reports and his real estate broker on the deal, Paul Longo. The developer grabbed a prime piece of property and partnered with Shapiro and Sullivan, but the state’s gambling regulators were concerned enough about Shapiro's and Sullivan’s mob links that they required Trump to end the partnership and buy out their shares, according to several Trump biographies. Both Sullivan and Shapiro died in the early 1990s.

Trump later confided to a biographer that the duo were "tough guys," relaying a rumor that Sullivan, a 6-foot, 5-inch bear of a man, killed Jimmy Hoffa, the legendary Teamsters boss whose disappearance in July 1975 remains unsolved.

"Because I heard that rumor, I kept my guard up. I said, ‘Hey, I don’t want to be friends with this guy.’ I’ll bet you that if I didn’t hear that rumor, maybe I wouldn’t be here right now," Trump told Timothy L. O’Brien, the author of TrumpNation.

Donald Trump, Mayor Ed Koch, and Roy Cohn attend the Trump Tower opening in October 1983 at The Trump Tower in New York City. Photo: Sonia Moskowitz, Getty Images

But Trump told a different story to casino regulators who were deciding whether to grant him the lucrative gambling license.

"I don’t think there’s anything wrong with these people," he said about Shapiro and Sullivan during licensing hearings in 1982, according to "TrumpNation." "Many of them have been in Atlantic City for many, many years and I think they are well thought of."

Sullivan's unsavory reputation did not stop Trump from later arranging for him to be hired as a labor negotiator for the Grand Hyatt, a hotel project on Manhattan’s East Side, according to People magazine and the Los Angeles Times. Trump also introduced Sullivan to his own banker at Chase, though he declined to guarantee a loan to Sullivan, reported the L.A. Times.

Longo, the real estate broker Trump used in Atlantic City on the Trump Plaza deal, told me in 2011 that he wasn’t aware of Shapiro or Sullivan having any mob ties, and insisted Trump didn’t have any problems at all obtaining his gaming license. "In AC, you always had to be careful who you were dealing with, but Donald did things on the level," Longo told me in 2011.

In his investigative biography, Trump: The Deals and the Downfall, reporter Wayne Barrett wrote that Trump’s life "intertwines with the underworld," and he outlined the real-estate developer’s numerous alleged ties to organized crime, including that Trump:

  • Once met Salerno at the Manhattan townhouse of Roy Cohn, the infamous sidekick to Joe McCarthy who represented both men, according to an eyewitness source who talked to Barrett.
  • Was very close to Cohn, whom Barrett describes as Trump's "bridge to the mob."
  • Had ties to mob associates Shapiro and Sullivan.
  • Paid almost double the market price for property in Atlantic City owned by Salvatore Testa, a capo in the Scarfo crime family.
  • Evaded New Jersey state laws banning casino owners from making political contributions by channeling donations to Mike Mathews, then-candidate for mayor of Atlantic City, through Shapiro and another mob-tied associate.
  • Failed to disclose to state casino regulators that Trump was the target of a bribery probe in 1979 and was questioned in a 1981 racketeering investigation. Neither federal probe led to criminal charges, noted the Philadelphia Inquirer’s David Johnston in a review of the book.

Preferential Treatment For The Donald?

In the book, Barrett also claimed that New Jersey state regulators demonstrated a double standard by granting Trump a casino license while denying licenses to other developers and gambling executives whose conduct was far less troubling than Trump's. In 1985, Hilton Hotels was turned down for a license partly due to the chain’s ties to Sidney Korshak, a lawyer with reputed mob connections. But with Trump, the New Jersey Division of Gaming Enforcement (DGE) never bothered to write a report that raised "the possibility that Cohn's mob liaisons . . . might have been used to facilitate Trump construction projects," wrote Barrett.

Executives at competing gambling companies have often complained that Trump "gets preferential treatment from gambling regulators," wrote Johnston. And in 1991, two members of the state Casino Control Commission accused the DGE of favoritism and a double standard when it comes to Trump. At the time, the CCC was investigating whether Trump’s father, Fred Trump, had made an illegal loan by buying $3 million worth of chips at the Trump Castle in Atlantic City. The elder Trump was trying to give his son an advance on his inheritance and help him make a crucial mortgage payment on the casino—but under the law, it’s illegal for anyone unlicensed to put money into a casino. When the casino admitted the illegal loan and settled for just $30,000, commissioners David Waters and Valerie Armstrong objected that the settlement was too weak. "It’s greater than a disappointment to me, it’s an outrage that the Division of Gaming Enforcement would take this position and fail to carry out what I understand to be its responsibility to enforce the provisions of the Casino Control Act," said Waters, according to Johnston’s book, "Temples of Chance." The division has denied claims of bias.

Earlier, Trump had been accused of lying under oath by commissioner Armstrong when the developer backed out of a commitment to help finance a $40 million road improvement project in 1986. Such a charge, indicating a lack of integrity, could cost Trump his license, notes Johnston in his book. An outraged Armstrong complained that Trump’s testimony on the subject lacked "candor and honesty." But Trump had the backing of other commissioners and his license was renewed on a 4 to 1 vote.

Revealed: The Investigative Report Into Allegations of Mob Ties

In the wake of the Barrett book’s bombshell allegations, the DGE conducted an investigation into the claims that consisted of interviews with Trump lawyers and FBI agents, compiling them into a June 24, 1992 internal report that included the following conclusions:

  • As to the Salerno ties, the investigators cited the 1984 federal indictment, which found that S&A Concrete was involved in a bid-rigging scheme involving real-estate projects in Manhattan exceeding $2 million, but that it was done without the knowledge of the developers. "The Division’s investigation revealed no evidence which tend to suggest that Trump, or any entities related thereto, had any knowledge of the scheme." But the report recommended that Trump be questioned about Salerno and S&A Concrete.

  • As to the federal bribery probe, Trump told investigators that he was questioned by a government official but "was not aware that it was a criminal investigation" and "could not recall all of the details because so much time had passed."

  • As to the Salerno meeting claim, DGE investigators questioned Barrett, who said that he was told about the 1983 meeting at Cohn’s townhouse by a former female employee of Cohn's. "Barrett found the source to be credible because she told him she specifically remembered the meeting because she liked Donald Trump and Tony Salerno and thought that it would be good if two of her favorite people became friends." Barrett also said it was possible that a Salerno associate named Cafora, who was now in the federal witness protection program, was at the meeting. Cafora did not return a request for comment relayed to the U.S. Marshal’s Service from Fast Company. In its final report, the DGE noted that it interviewed Trump (identified as DJT) on the matter: "DJT, under oath, denies that any such meeting took place and has indicated that he never met Salerno nor communicated orally with him or in writing with him. DJT has also stated under oath that Roy Cohn never mentioned Salerno to him. DJT said he is also unaware of Cohn representing Salerno."

  • As to the Testa property purchase, the DGE found that Trump had called up NJ’s then deputy attorney general Anthony Parrillo, to express his concerns about the Testa connection, saying he "did not want to deal with those people directly." In the end, Testa received $36,832 to transfer the property to the secretary for Trump’s lawyer, who then transferred it to Trump’s company, according to the report.

  • As to the alleged illegal campaign contributions to former Atlantic City mayor Matthews, investigators recommended interviewing Sullivan and Shapiro and getting a sworn statement from Trump. (Sullivan confirmed that claim in discussions with reporters, saying that he was present when Trump proposed funneling contributions to the 1982 Mike Mathews campaign for Atlantic City mayor through Kenny Shapiro.)

In the agency's final report dated December 1, 1992, the DGE investigators didn't recommend any further action, stating that: "Most of the significant matters in the book have been previously investigated by the division and reported to the Casino Control Commission... Having reviewed its files and re-examined certain matters, as well as having conducted additional inquiries where appropriate, the Division does not presently believe that the integrity or character of DJT is affected negatively by items set forth in Trump: The Deals and the Downfall."

The agency's findings didn't surprise Barrett, who says that the regulators couldn't be expected to rule against a developer as powerful as Trump: "The book and the public record is replete with evidence that DGE and the CCC caved to Donald again and again. I am not questioning the integrity of the agents that conducted the review of some of the book's allegations, but Donald controlled 40 percent of the rooms in Atlantic City when the report was done. No way that two state agencies could allow a book to dethrone the king."

Asked to respond to several different questions, including the claim that Trump assisted the organized crime task force, a spokeswoman for Trump simply told Fast Company: "There is no truth to this."

Upon the publication of Barrett’s book, Trump issued a statement saying that Barrett was "a second-rate writer who has had numerous literary failures, who has been writing negative stories about me for the past 15 years. The book is another example of Mr. Barrett's personal prejudice and animosity towards me. The book is boring, non-factual and highly inaccurate."

UPDATE: This story has been updated to include an embedded version of the final report sent by the New Jersey Division of Gaming Enforcement to the Casino Control Commission, as well as a summary of some of its conclusions.