Donald Trump and Mar-a-Lago
A look at the club which has been indispensable to Brand Trump
The Mar-a-Lago Club, seen from the air. (Picture credit: Fortune.)
With the return of Donald Trump to office, I am presenting below the original, in-depth feature I wrote four years ago, about Donald Trump’s club at Mar-a-Lago, which was published in January 2021 in an edited form on openDemocracy.
As Trump leaves office, he is set to move back to his 20-acre, 128-room Mar-a-Lago Club – but legal troubles have always abounded there.
While most of Trump’s businesses, including Mar-a-Lago, have taken a hit to revenue during his presidency, the Palm Beach club has also become more profitable, and is central to his lifestyle.
The Trump Organization’s accounting is shrouded in secrecy, but recent revelations have started to shed light on how Mar-a-Lago subsideses Brand Trump. While Trump has been in office, his federal disclosure forms have pointed to diminishing turnover, and this may well be true – while also being the product of creative accounting. (See diagram below.)
Yet this is not the whole story. The New York Times analysis of his leaked tax returns noted:
“Profits there rose sharply after Mr. Trump declared his candidacy, as courtiers eagerly joining up brought a tenfold rise in cash from initiation fees — from $664,000 in 2014 to just under $6 million in 2016, even before Mr. Trump doubled the cost of initiation in January 2017. The membership rush allowed the president to take $26 million out of the business from 2015 through 2018, nearly triple the rate at which he had paid himself in the prior two years.”
All this is subsidised by the U.S. taxpayer, who according to the Government Accountability Office pays $1 million a day for each of the days Trump has spent at Mar-a-Lago. It is unclear how many more millions have been spent on enhanced security and renovation during the President’s tenure.
There are now clear signs Trump intends to move full-time to the mansion, renovating his apartments, and with Melania Trump seeking out local schools for his youngest son Barron. However, he faces opposition from local residents, as when he turned the building into a club, he signed a binding legal agreement that said he would not live in it for more than 21 days a year – something which he is plainly already doing. A Washington Post tally counts his having spent at least 130 days of his presidency there. Other outlets quote materially higher figures.
Trump’s former lawyer and “fixer” Michael Cohen first suggested in November that Trump “will stay there through the inauguration.” Trump has since confirmed he will not attend the inauguration.
Mar-a-Lago: Trump’s Golden Egg
It is often said that the Trump Organization isn’t really an organization – it’s a hotch-potch of different boutique interests which have little in common. And as the leaked Trump tax returns showed, most of those businesses are in the red. Even Trump’s luxury Washington D.C. hotel, used by Nigel Farage to launch his new UK political party, and favoured by diplomats seeking to lobby the President, has lost at least $32 million in four years, according to a recent study from Forbes. The same study showed Trump had lost a further $70 million on his Miami Doral golf course.
Against this stands Mar-a-Lago. Since it opened as a private members’ club in 1994, the building has been a rare “golden egg” for Trump. The New York Times notes in its analysis of his taxes:
“everything that feeds the image [of Trump], including the cost of his businesses, can be written off on his taxes. Mr. Trump may be reporting business losses to the government, but he can still live a life of wealth and write it off. Take, for example, Mar-a-Lago, now the president’s permanent residence as well as a private club and stage set on which Trump luxury plays out. As a business, it is also the source of millions of dollars in expenses deducted from taxable income, among them $109,433 for linens and silver and $197,829 for landscaping in 2017. Also deducted as a business expense was the $210,000 paid to a Florida photographer over the years for shooting numerous events at the club, including a 2016 New Year’s Eve party hosted by Mr. Trump...
“One Trump enterprise that has been regularly profitable, and is a persistent source of concern about ethical conflicts and national security lapses, is the Mar-a-Lago club…Some of the largest payments from business groups for events or conferences at Mar-a-Lago and other Trump properties have come since Mr. Trump became president, the tax records show.”
The opulent mansion is not only invaluable in writing off tax obligations, it is also a reliable source of income – especially at a time when his other income sources are drying up. Since 2015, he is understood to have taken an additional $5 million a year from the club.
The membership of the club remains a closely-guarded secret, although an attempted aggregation of news reports from major media outlets lists 133 current or former members. All are millionaires, and many are billionaires. Wealth seems to be the primary requirement for membership: According to the Miami Herald, former members include the disgraced paedophile financier Jeffrey Epstein, although Epstein’s membership may have benefitted from his friendship with Trump – as Trump told New York Magazine in 2002, “I’ve known Jeff for 15 years, he’s a lot of fun to be with. It is even said that he likes beautiful women as much as I do, and many of them on the younger side. No doubt about it – Jeffrey enjoys his social life.” After Epstein’s conviction, a source close to Trump claimed the the two had never been close.
Members are not asked to produce any proof of the source of their $200,000 joining fee – a loophole which leaves the club wide open to the scope for agents of foreign governments joining with state-sponsored funds.
Members can also book private functions at the club – like last month’s conference for conservative student organisation Turning Point USA, where the 2,000 guests were photographed at tables of 10 without masks or social distancing.
While Presidents have long given Ambassadorships to campaign donors, the Trump presidency has seen a new twist on this, with at least five current or former members of his clubs having been appointed Ambassadors:
Robin Bernstein – Dominican Republic
David Cornstein – Hungary
Callista Gingrich – The Vatican
Lana Marks – South Africa
Adrian Zuckerman – Romania
Some of these have proved to be highly controversial appointments, with Cornstein expressing close support for far-right Hungarian premier Viktor Orban.
‘The Visionary’ by Ralph Wolfe Cowan (1989) - a portrait commissioned by Donald Trump, with numerous copies hanging throughout Mar-a-Lago, and other Trump properties.
What we know
At a $200,000 entry fee + $14,000 a year subscription, plus a minimum annual spend of $2,000 on food, it should be possible to “guesstimate” how many new members have signed up. This is interesting in itself, because Trump only holds a licence to have a maximum of 500 members, and for years it's been the worst-kept secret on Palm Beach that he's long been well over that limit.
Prior to Trump’s inauguration, Mar-a-Lago’s joining fees had sagged to $100,000 – so the 2014-6 ‘boom’ in joining fee income from $664,000 to £6 million suggests that at least 100 new members were elected in that time, almost certainly further breaching the 500-member limit.
Yet Mar-a-Lago’s overall revenue having fallen $4 million in 2017-9 may not actually show a drop in core revenue, but simply mean that large numbers of new members stopped joining after 2017 – the doubling of the entry fee in 2017 may well have deterred new members, along with the President’s increasingly divisive words and actions once he took office. The fact that revenue has still settled $1 million above where it used to be would consistent with a big growth in 2014-6, and then a stabilisation.
Of course, Mar-a-Lago could have many, many more members. Trump has long reduced the joining fee, or waived it entirely, as a favour for friends, opening the possibility that the above calculations seriously underestimate the true figures.
There is a strict custom for approaching the President at Mar-a-Lago – he enjoys impromptu walkabouts, meeting and greeting members. Buying membership will not buy a private meeting with Trump – but it will buy a ringside seat with his entourage, something that was dramatically highlighted in the first month of Trump’s presidency, when he dealt with a North Korean missile crisis while dining al fresco at his favourite table in the club, within earshot of members milling around.
The Winter White House
The presidency has been good to Mar-a-Lago. Money has flowed into the club in the last four years, and at times, government websites have even openly promoted the club.
Trump has also refined the art of profiting from summit meetings held at the club. When leaders like Xi Jinping and Shinzo Abe have flown in, government records show that Trump has booked out all the guestrooms at Mar-a-Lago for U.S. secret service, billing the government. Pulitzer Prize-winning journalist David Fahrenthold comments, “They figured out what is the maximum you can charge the U.S. government for a hotel room, and charged that.”
Trump has long fought a rearguard action against local Florida airports, to try and get them to reroute flights away from Mar-a-Lago. The nearby Trump International Golf Course West Palm Beach, Trump’s first ever golf course, has been leased from Florida’s Department of Airports since the 1990s. Trump converted the land to a golf course, in no small part to prevent its use as an airport and minimise the number of flights past his estate.
Nevertheless, Trump’s estate had long been blighted by flyovers from the private planes of Palm Beach’s billionaires jetting in. Upon becoming President, Trump had the long-festering grievance resolved in his favour: due to national security, all flights around Mar-a-Lago are grounded when the President is in residence. When he loses office, he will once again have to put up with one of his biggest bugbears.
Trump has also benefitted from an unspecified number of taxpayer-funded renovations and improvements to his property. Whilst this raises ethical concerns, Trump is most certainly not the first President to do this. Most notoriously, Richard Nixon maintained both a “Winter White House” in Key Biscayne, Florida, and a “Western White House” at La Casa Pacifica, San Clemente, California. In addition to the usual enhancements around security and communications, Nixon made considerable additions to the property, including the addition of a helipad to his Florida house, the cost of which was not disclosed until well after he had left office.
Even with secret service protection, security at Mar-a-Lago has long been considered a joke, with gatecrashers common on the estate. Recent incursions included two Chinese citizens found carrying cell phones and USB sticks with infecting malware, various student pranksters, and an opera singer who bluffed her way in and pleaded insanity after a car chase.
The Making of Mar-a-Lago
Trump bought Mar-a-Lago for a song, in 1985. The sprawling mansion, currently the 18th-largest house in the USA (not the largest, as Trump likes to boast), was built by cereal heiress Marjorie Merriweather Post in the 1920s, but has always been unfeasibly expensive to maintain. She tried donating it to the U.S. government in her will, for use as a “Winter White House”, but the parsimonious Jimmy Carter administration had no use for it, with its million-dollars-a-year upkeep.
Enter “short-fingered vulgarian” Donald Trump in the 1980s, keen to break out of his father’s shadow, at the time building unglamorous but profitable tower blocks in Brooklyn and Staten Island. Already stung by a 1973 federal prosecution for breaching discrimination laws against his tenants, Trump was keen to strut onto the national stage. The 1980s saw him make a series of flamboyant acquisitions – a string of casinos, a yacht, an airline, New York’s landmark Plaza Hotel, and completion of the first of his series of increasingly outlandish Trump Towers. Mar-a-Lago was the icing on the cake – for decades, New York’s “old money” had been wintering on mansions along Palm Beach island off the Florida coast. After several years of haggling, the Mar-a-Lago estate, which had been advertised for $90 million, was sold to Trump for under $9 million. Only $300,000 of that was his own money – the rest was from a secret $8.5 million loan from the Chase Manhattan Bank; although in public, he invariably boasted he paid cash up-front, of course.
Unfortunately for the hopelessly overleveraged Trump, his wave of 1980s acquisitions was wholly unsustainable, and as he sank deep into debt in the early 1990s, several of his companies went bankrupt. The casinos, the yacht, the airline, the Plaza Hotel – all were sold off. Mar-a-Lago, a cripplingly expensive vanity purchase, looked set to go the same way.
What saved Mar-a-Lag for Trump was the decision to turn it into a private members’ club. As Trump’s neighbour Laurence Leamer shows in his book on Mar-a-Lago, this was not Trump’s own idea (although he often bragged that it was). It was that of his trusts & estates attorney, Paul Rampell.
Trump initially needed much persuading about the plan: “Like 21 or Studio 54? A nightclub?”, was his first reaction. Trump instinctively hated the world of Palm Beach’s snooty clubs – some of the most elitist private clubs in the world, which had long looked down on the real estate developer as an arriviste. Mar-a-Lago’s founder, Marjorie Merriweather Post, had so loved the world of private member’s clubs, that she had built her own next door to her, the Bath and Tennis Club, even digging a private underground tunnel linking it to Mar-a-Lago. But when Trump had tried to join the Bath and Tennis Club as Mar-a-Lago’s new owner, he had been “blackballed” by Palm Beach’s WASP high society.
The idea of owning his own club grew on Trump, though – it would be his own world, where he could stride in as the centre of attention, and decide who to admit, and who to keep out. In 1994, the Mar-a-Lago Club opened its doors for the first time.
Trump was in the right place at the right time. The major Palm Beach clubs of the time, including the Beach Club, the Everglades, the Sailfish, and the Bath & Tennis, were notorious for their exclusionary policies – “No blacks and no Jews” – although they were careful enough to never invite a prosecution by enshrining these conventions in any written rules. Instead, it just happened to be that amongst their thousands of members, not a single black or Jewish candidate had ever been elected to membership. Apart from the Palm Beach Country Club set up for Jewish members who had been excluded from other clubs, the ethnic and religious minority billionaires of Palm Beach had nowhere else to go – and in the 1990s, Palm Beach was becoming less WASPy, while Trump heralded a wave of “new money”, keen to flash their cash while being shunned by local society.
Trump was therefore, somewhat improbably, the inclusive face of Palm Beach. He made much of this when the Mar-a-Lago Club opened, boasting to the Town Council that if he “Could leave one legacy to Palm Beach, it would be the creation of a non-sectarian club.” Of course, Trump is scarcely a paragon of inclusivity – there are reportedly tapes of his using the “N-word” in private – but it suited his purpose in getting planning permission to turn the mansion into a club. No-one wanted to be publicly seen opposing Palm Beach’s first non-sectarian club.
Mar-a-Lago has become a key part of the Trump image.
Palm Beach is not Trump country
Among the quagmire of legal issues Trump faces on leaving office, his decision to move to Mar-a-Lago may cause him further problems.
Palm Beach’s town council only granted permission for a change of use, from a private home to a club, in exchange for a series of legally-binding promises Trump set out in a 1993 Declaration of Use Agreement. In it, Trump agrees to turn over ownership of the building to a company, The Mar-a-Lago Club LLC (formerly the Mar-a-Lago Club Inc), a business currently registered at the White House.
Since becoming President, Trump has transferred control of this company from himself to his oldest son, Donald Trump Jr. Potentially in violation of the 1993 agreement, Trump maintains private quarters in a wing of the mansion – something which is openly admitted on Mar-a-Lago’s own website.
Trump is in a legal minefield with his Mar-a-Lago residency. In September 2019, he transferred his residency from New York to Florida, designating Mar-a-Lago as his main home for the first time. Yet Trump’s own use of Mar-a-Lago is still – theoretically – constrained by the original Declaration of Use Agreement, which sets out that no member, including Trump, shall reside at the Club for more than three non-consecutive weeks of the year.
Since becoming President, Trump has been able to walk all over this agreement, thanks in part to the reluctance of prosecutors to act against a sitting President. For instance, already by December 2017, NBC News found that Trump had spent 133 days (over 4 months) of his first 10 months of his presidency at Mar-a-Lago. When Trump leaves office on 20 January, prosecutors may take a renewed interest – even if he grants himself a federal pardon (itself highly unlikely to be binding), it will not excuse him from proceedings by states such as Florida.
There are also problems with the very rich and influential neighbours. When Trump became President, Palm Beach largely made its peace with him. Yet years of simmering discontent remain. In last November’s election, Palm Beach County voted for Biden over Trump, by 56% to 43%. Four years earlier, Hillary Clinton had won the county by 57% to 41%. Last month, lawyers for Trump’s next-door neighbours delivered a formal letter, stating that they would hold him to the 1993 agreement, and making it clear they did not wish him to reside there.
And despite the pandemic, this year’s annual black-tie gala New Year’s Eve party went ahead, drawing complaints for hundreds of maskless members and guests milling around. In its wake, Omari Hardy, a member of Florida’s House of Representatives and former Palm Beach City Council member, has called for Mar-a-Lago to be shut down. Trump can expect this to be only the first of many attempts to remove his club licence.
The Trump Organization and representatives of Mr Trump did not respond to a request for comment.