A business owned or operated by Donald Trump was entitled to $150,000 in federal aid to businesses affected by the 9/11 attacks.
The grant money wasn't specifically earmarked for small businesses, nor was it improperly accessed by Trump. Trump's businesses did not lie or mislead federal agencies to in order to qualify under the terms of the programs, which didn't require businesses to have sustained physical damage to be entitled to the funds. Trump's business also wasn't the only large firm to qualify under criteria used by the agency tasked with distributing the grant money.
In late May 2016 a number of web sites published articles reporting that presumptive Republican presidential nominee Donald Trump had improperly received $150,000 in federal aid earmarked for small businesses affected by the September 11 attacks for a property he owned or maintained at 40 Wall Street in New York. Many social media shares misleadingly described the reports as “just in” or “breaking,” suggesting that rumors of Trump’s purported fiscal impropriety with respect to 9/11 funds had only recently come to light, and their underlying articles mischaracterized the details of the controversy.
The web site Bipartisan Report published an article inaccurately stating the funds in question were allocated expressly for buildings that had sustained physical damage in the 9/11 attacks and incorrectly implied that the funds were intended only for use in repairing structural damage to buildings:
Donald Trump’s building at 40 Wall Street is located a mile from ground zero, yet Donald Trump joined in with fellow bigwigs to take that money from the mouths of business owners, some of whom had to close shop completely after the attack. Trump granted the money after he was able to prove that the business located at 40 Wall Street only had $26 in its bank account.
How exactly Trump’s financially failing business qualified for a $150,000 grant from Empire State Development Corporation, money meant for buildings that were structurally damaged during the attack, is beyond most people with functioning brains, but that is exactly what he did. The federal government is responsible for allowing the large corporations to take advantage of the funds set up for Americans who actually needed it.
The real clincher, is the fact that the business located at 40 Wall Street brings in an annual revenue of $8 million, which clearly disqualifies if from being considered a small business. Also, even if there were structural damages to the building, Donald Trump could have easily afforded to fix it himself. Trump, however, decided to take advantage of the federal government’s generosity.
ReverbPress‘s reporting dated the controversy (not Trump’s purported acceptance of funds) to a 2006 New York Daily News “exposé,” framing the distribution of funds to larger businesses as some sort of corporate shell game:
Presumptive Republican Presidential nominee Donald Trump, who claims to be worth $10 Billion (though recent reports suggest that could be as “little” as $150 Million), put money well ahead of the country he plans to make great again during her darkest hour when he took $150,000 earmarked by Congress for small businesses devastated by the 9/11 attacks. Trump, along with other financial giants exploited a loophole created by a state agency that ignored the federal definition of what qualified as a “small business”, according to a New York Daily News report:
Trump got $150,000 for his swanky property at 40 Wall Street because the Empire State Development Corporation, run by the state, didn’t enforce federal guidelines on what defines a small business. Instead, the state used much looser rules that let The Donald and others including Morgan Stanley and Bank of China take money that was earmarked by Congress to help small business owners in the neighborhood recover after the tragic attacks.
In a 2006 expose, the Daily News uncovered the loophole that the Empire State Development Corporation used to funnel money away from small businesses and into the hands of people like Trump and corporations like Morgan Stanley, Dell, The AXA Group and others[.]
Both articles linked to an 18 May 2016 Daily News article about the controversy, in which the Daily News cited their own January 2006 coverage of the allegations. Back then, the New York newspaper quoted lawmakers and community leaders who opined that money purportedly funneled to Trump could have assisted truly small businesses decimated by the collapse of the World Trade Center:
Donald Trump made a pretty penny off a program to help small businesses hurt by 9/11, one of many times where The Donald took advantage of government programs to save or make money off the taxpayer.
The self-proclaimed billionaire, who has so far refused to release his tax returns, was one of many wealthy individuals and businesses who used a loophole in a program intended to help smaller companies in lower Manhattan recover after the Sept. 11 tragedy.
Trump got $150,000 for his swanky property at 40 Wall Street because the Empire State Development Corporation, run by the state, didn’t enforce federal guidelines on what defines a small business. Instead, the state used much looser rules that let The Donald and others including Morgan Stanley and Bank of China take money that was earmarked by Congress to help small business owners in the neighborhood recover after the tragic attacks, a 2006 Daily News expose found.
Locals say Trump, who used the bravery of 9/11 responders to counter-punch when Ted Cruz maligned his “New York values” during the Republican primary, didn’t live up to the term … Many small businesses were destroyed in the towers themselves, and others in the neighborhood went under because of the exodus of locals, loss of patrons who used to work in other shuttered shops and a decrease in foot traffic in the area. The funds were aimed at helping the mom and pop shops make it through an incredibly difficult stretch.
“It’s really indefensible that this money went to big guys like Trump,” said Rep. Jerry Nadler (D-Manhattan), who helped secure the funds from Congress for the program and earlier in his career fought Trump over funding for a pair of construction projects on the Upper West Side.
“It’s unfortunate because it meant a lot of the small businesses didn’t get that money,” Nadler continued.
The paper’s 2016 rehash of the claims added little in the way of updated information, dubbing Trump a “welfare king” and briefly delving into the candidate’s contemporaneous response to those allegations before listing off a number of other controversial arrangements with the City of New York unrelated to 9/11:
[Trump] told Time Magazine earlier this year that the 9/11 money was “probably a reimbursement for the fact that I allowed people, for many months, to stay in the building, use the building and store things in the building,” arguing “The value of what I did was far greater than the money talked about, much of which was sent automatically to building owners in the area.”
The Daily News article didn’t reference a specific Time magazine piece, but on 12 April 2016 that publication had reported on claims made by a Political Action Committee (PAC) against Trump that referenced the 2006 Daily News report. According to Time, the 9/11 allegations had resurfaced in ads geotargeted to New York City residents ahead of the state’s primary elections:
A super PAC opposing Donald Trump is releasing a new web ad criticizing the GOP front runner for allegedly accepting funds earmarked for small-business recovery after the attacks of Sept. 11, 2001.
The video released by the #NeverTrump PAC cites a 2006 investigation by the New York Daily News into the small-business funding program that revealed a Trump-owned property at 40 Wall Street received $150,000 in a federal grant for losses incurred after the attacks.
“Donald Trump owes New Yorkers an explanation for taking funds meant for small-business owners recovering from 9/11,” said Rory Cooper, a senior adviser to #NeverTrump PAC. “In his own words, Trump has said his businesses were unharmed and surely we are not to believe he is a small-business man. Over the years, Trump has flirted with 9/11 trutherism and has lied about events surrounding the terror attack. Trump should own up to what he did with this money.”
Targeted at New York City, the ad is the latest in the GOP establishment’s last-ditch effort to try to slow Trump’s momentum. Coming one week before the New York primary, the group hopes the spot will help keep Trump from winning more than 50% of the Empire State’s GOP vote and with it, nearly all of the state’s delegates.
The ad in question was titled Stolen Recovery and included footage of Trump presumably recorded in 2001. In the clip Trump stated that he owned property in the vicinity of the World Trade Center, but that it had not been damaged in the attack:
As the Daily News‘s 2016 article noted, Trump provided a statement to Time about the attack ad’s claims, but the statement was vague, and Trump asserted any funds he received were compensation for his hospitality in the aftermath of 9/11. It wasn’t clear whether Trump was admitting to receiving the small business aid funds in question, or whether he was maintaining he did receive funds but the money was intended for a purpose other than small business recovery. Trump said “it” was “probably a reimbursement” for his actions during the period of immediate post-9/11 recovery, but he appeared not to be aware of the specifics of the media’s charge against him:
It was probably a reimbursement for the fact that I allowed people, for many months, to stay in the building, use the building and store things in the building. I was happy to do it and to this day I am still being thanked for the many people I helped. The value of what I did was far greater than the money talked about, much of which was sent automatically to building owners in the area.
Another version of the claim was published by the web site Addicting Info, holding that Trump’s property at 40 Wall Street didn’t meet federal criteria for what constituted a small business entitled to financial relief doled out to affected businesses. The outlet asserted Trump had “swindled” the Empire State Development Corporation out of funds to which he was not entitled. That web site also misrepresented the financial aid as funds designated solely for the repair of damaged buildings:
Donald Trump’s building at 40 Wall Street is one mile away from the World Trade Center, yet Trump was able to claim that the building only had $26 in the bank and that it was a small business in order to receive $150,000 that should have gone to revitalize the real small businesses around the World Trade Center.
But 40 Wall Street brings in $8 million in revenues every year, which goes beyond the federal definition of a small business.
Even if there had been any damage to 40 Wall Street because of 9/11, Trump could have definitely paid to fix it himself. But he didn’t. Instead, he swindled the Empire State Development Corporation out of $150,000 of taxpayer money so that he wouldn’t have to reach into his own deep pockets.
However, back in 2006 the Daily News not only suggested Trump was technically entitled to federal aid under the established guidelines, but they also reported that many other subsidiaries of large businesses had similarly qualified for and received federal aid from the same program by meeting the Empire State Development Corp.’s definition of what constituted a “small business”:
Donald Trump, the Rockefeller Group and Ford Models were among the tycoons and huge corporations that received federal 9/11 recovery grants earmarked by Congress for small businesses, a Daily News investigation has found. Other unlikely recipients include subsidiaries of corporate giants Dell Inc., Morgan Stanley, The AXA Group and the Bank of China, records show. Even World Trade Center leaseholder Larry Silverstein’s company qualified for some small-business recovery aid. The firms were allowed to collect small-business grants because the state agency that dished out the free money, the Empire State Development Corp., ignored the federal definition of a small business and adopted a much looser standard. The ESDC used employee counts — setting the maximum for its $556 million Business Recovery Grant (BRG) program at 500 workers — to determine whether applicants were small businesses.
Federal law requires that the size category of the types of businesses most common in lower Manhattan — finance, insurance, real estate and law firms — be determined based on annual revenue. Only the wholesale, manufacturing and mining sectors — obviously uncommon downtown — are measured by number of employees. Also, in totaling the number of employees, the ESDC didn’t require applicants to include employees of subsidiaries and other affiliated businesses. Federal regulations require that linked companies are included in determining whether a business is small.
The News found dozens of examples of large firms slipping through as small ones. One couldn’t tell from ESDC records, for example, that “40 Wall Street LLC” is owned by Trump … But the ESDC’s rules transformed Trump into a small-business man. His company collected a $150,000 grant for losses at 40 Wall St. The grant application describes the corporation through which Trump owns that building as having 28 employees and $26.
8 million in annual revenues. That passed the ESDC’s small business test of less than 500 employees. But the revenue amount would put the single Trump property over the federal definition of a small business — which is $6 million annually for lessors of nonresidential buildings.
At the time of the controversy, Trump was not the sole business entity named by the paper. The Daily News explained in detail that the ESDC used number of employees as a qualifying benchmark with respect to the disbursed funds, not annual revenues or additional ownership of businesses. In the chaotic wake of 9/11, it was not uncommon for relief agencies and the government to adopt a simpler standard of categorization in order to allocate money with alacrity to victims in need, or to stave off damage to the economy in the weeks, months, and years to come.
That original report named several large businesses entitled to relief funds under the standard applied by the ESDC, Trump among them. The paper noted that those entities often reported yearly profits far exceeding the relatively minor funds received under the 9/11 small business aid initiative and decried what was painted as a loophole under which a significant portion of the funds allocated were distributed to larger companies with relatively small presences in the downtown Manhattan area affected by the tragedy:
The ESDC’s use of the number-of-employees standard allowed Ford Models to be seen as small and collect a $100,000 grant because it reported just 65 employees on its application. But Ford’s annual revenues of $19.9 million at its New York office put it far above the federal mark of $6 million for talent agencies to be considered small. Nine months after receiving the grant, Ford’s annual Supermodel of the World contest awarded a $250,000 contract to Dari Maximova, an 18-year-old from Germany. The third-place contestant was given a $100,000 contract — the same amount the ESDC awarded the Ford agency under the 9/11 program.
A grant application filed by the owner of an office building at 140 Broadway listed 16 employees and $29 million in annual revenues, way over the federal revenue cap of $6 million for that sector. Plus, the entity that received the grant — MSDW 140 Broadway Property, LLC — belongs to Morgan Stanley, the investment powerhouse that owns the Discover Card and has annual revenues of $7 billion and 53,218 employees. The ESDC awarded this Morgan Stanley subsidiary a $300,000 BRG. Larry Silverstein’s company, which held a 99-year lease on the twin towers and stands to collect as much as $4.65 billion in insurance, was awarded two BRGs totaling $82,031 on 120 Wall St. and 120 Broadway. Two subsidiaries of The Rockefeller Group, the original developer of Rockefeller Center, also looked like small businesses under the ESDC’s rules. They reported three employees each and received grants totaling $234,397. The Rockefeller Group, which acknowledged receipt of the grants but declined comment, is even bigger than its name suggests. It is wholly owned by the Japan-based Mitsubishi Estate Group, one of the largest real estate companies in the world …
A News analysis of a complete set of grant data recently obtained under the state Freedom of Information Law found that vast portions of the money went to businesses that few would consider small: At least $114 million – 20% of the total awarded under the BRG program — went to companies that reported too much revenue to meet the federal definition of a small business. And that figure likely represents only a fraction of the grant recipients whose revenue would surpass federal limits, because the ESDC asked applicants only to report the revenue attributable to their lower Manhattan office. Some $468 million — 84% of the money the ESDC handed out through the BRG program — went to businesses in sectors that federal law says should be evaluated based on revenue, not on the number of employees, the standard the ESDC used.
An ESDC spokeswoman said the state agency chose a 500-employee threshold for its biggest program because the SBA uses that standard in its research. “We preferred a simple definition that could be administered consistently,” ESDC spokeswoman Deborah Wetzel wrote the Daily News in an e-mail … Congress explicitly mandated that at least $500 million of the $21.4 billion 9/11 aid package go to “individuals, nonprofits, and small businesses for economic losses from the Sept. 11, 2001, terrorist attacks.
The Daily News was neither the sole source of information on the grants provided to businesses after the attacks, nor the most neutral. A September 2005 report [PDF] on the economic recovery initiatives undertaken after the event clearly and concisely explained the scope business loans and grants available to affected businesses under the Business Recovery Grant Program, which was not specifically described as being for small businesses only (save for the 500-employee threshold). Moreover, the qualifying zone included any business operating on or below 14th Street, an area so large that the majority of eligible businesses would not have been “damaged” in the attack in a structural sense:
Eligibility: Businesses and nonprofit organizations qualified for the BRG program if they met three eligibility requirements: occupied an establishment on or below 14th Street prior to September 11th and were either continuing or intended to resume operations within New York City; employed fewer than 500 people; derived revenues or expenses from operations conducted in, and maintained at least one full-time permanent employee (or were self-employed) at a location within, the Eligible Area. The BRG2 program was established for businesses that employed more than 500 people nationwide and operated on or south of 14th Street one or more establishments, each of which employed fewer than 200 people.
Status: At the conclusion of the programs, 14,311 businesses employing 161,252 persons had received $556 million. Seventy percent of small businesses located south of 14th Street were grant recipients, and BRG grants compensated 17 percent of total net losses claimed
The attack ad from which allegations resurfaced placed focus on Trump’s 2001 statement that none of his properties were damaged in the event, suggesting that his access to grants was improper. That implication was misleading, as recovery programs focused on the broader effects of the attacks on businesses, since even businesses that didn’t sustain physical damage did not escape financial damage due to the months-long excavation of the site, ongoing disruption of widely relied upon public transportation services, and other factors that gravely affected all businesses located in the surrounding area:
ESD’s emphasis on grants reflected an understanding that loans alone were not a sufficient response given the scale of losses suffered by affected businesses and uncertainty about the return of normal economic conditions to Lower Manhattan.
The BRG’s documentation [PDF] expressly contradicted the Daily News‘ assertion that the funds were somehow only intended for small businesses, and that large ones nonetheless managed to get their hands on chump change they neither needed nor were entitled to under the law. Another concise explanation of the recovery program explicitly stated that the funds were for small and large firms alike, with a clear goal of preventing their exodus from a then-recovering lower Manhattan:
LMDC’s Business Recovery Grant (BRG) program provided grants to businesses (including not-for-profit organizations) with fewer than 500 employees, located in Manhattan south of 14th Street, to compensate them for economic losses resulting from the disaster. The goal of the program was to keep businesses and jobs from deserting the city and moving to other States or overseas.
The program was designed to retain and create jobs and attract and retain large and small firms and non-profit organizations. Eligible businesses had to show a business lease, deed, or permit that was in effect on September 11, as well as a new business lease, deed, or permit, if relocated, that confirmed the ongoing viability of the enterprise.