Editor’s Note: In early 2004, NBC launched The Apprentice, a show in which eager young entrepreneurs competed to land a job with Donald Trump. Trump painted himself as the personification of the William Morris mailroom: get in the door and watch your career rocket. Clearly a lots of viewers believed it to be true; the shows ratings were extremely strong. But what were watchers learning from Trump? Did he actually know anything about business? Fortune set out to answer that question — a question that has gained added urgency with his potential run for president. Every Sunday, Fortune publishes a favorite story from our archive. Today’s is a 2004 cover story on Trump, “The Trophy Life.”
Donald Trump is not a great promoter. He has explained that to me a number of times already. “See, I don’t view myself as a good promoter,” he said during a five-hour flight from New York to Los Angeles on his private 727. “People say I’m a great promoter. People say I’m the greatest promoter that there is. Anywhere.”
So when we meet the next morning in the lobby of the Beverly Hills Hotel, it’s a relief to see that he’s working through his promotional problems: On his head is a red baseball cap bearing the coat of arms Trump created for himself (a hand clutching an arrow, resting on a knight’s helmet, which is perched over three leaping lions) and, emblazoned in gold, TRUMP INTERNATIONAL, the name of his Florida golf course. His yellow Tommy Hilfiger sweatshirt also sports the insignia, as does the white golf shirt underneath. Only his khakis are logo-free, along with his golf cleats–which he will wear all day without actually golfing.
What Donald Trump is great at, Donald Trump tells me, is building buildings, inside and out. And today he’s focusing on the minute details of the inside, climbing into a limo for a trip to the factory of J.P. Weaver Co., which makes, he says, “the most incredible moldings you’ll ever see.” Trump is adding a 17,000-square-foot ballroom to his Palm Beach private club, Mar-a-Lago, a 128-room mansion built in 1927 from Dorian stone imported from Italy and containing 36,000 Spanish tiles dating back to the 15th century. And as soon as he walks into the company’s showroom, designed to resemble a room at Versailles, he has seen enough.
“This is exactly what I’m looking for,” he says to owner Lenna Tyler-Kast, his plastic cleats clicking along the hand-laid cherry floor. The room is a riot of celadon moldings–flowers in urns, flowers on their own, curlicues, leaves, tasseled ropes, ribbons. “Not the ceiling, by the way,” Trump warns. “The ceiling no, the walls yes. I also think the mirrors should have this.” He fingers a delicate strip of molding that splits a mirror into a grid. “The moldings are very important in the mirror.” A few minutes later, as Tyler-Kast handles other business, Trump marvels at what he’s seen. “Unbelievable,” he says in a low whisper. “Can you imagine if I can pull that off in a huge room?” As soon as she comes back, though, the famously pursed lips return. “What’s your price? I hope that you’ll give me a discount. No. 1, because I’m Trump.”
This is business done the Donald Trump way. Don’t believe what you see on TV–watching him work is actually much more entertaining. In Trump’s reality show, The Apprentice, he and two lieutenants monitor contestants as they backstab their way to a $250,000-a-year job as president of one of his companies. In Trump’s real life he has managed–by force of personality, insane attention to certain details, charisma, bluntness, self-promotion, and connections–to build an empire of steel, marble, beauty pageants, casinos, and some of the most incredible moldings you’ll ever see. The total value? If you believe Trump, $6 billion.
But few people actually believe him. And there’s good reason. Trump is the Reality Tycoon. He lives his life straight out of the Survivor handbook: Start with the truth, then add enough drama, celebrity, sex, and what might very charitably be called creative editing to make something entirely outlandish. What The Bachelor is to dating and American Idol is to singing in the shower, Trump is to business. He dabbles in the world of management and money as we know it: working through deals, meeting with lawyers, phoning underlings to gauge how his enterprises are doing. But then he’s off into the Trumposphere, jumping into his 727–a plane with so much mirrored gold in the bathrooms that it may be the cause of his ever-present squint–for a run to the coast to be feted by Hollywood, or to Florida to visit his golf course for a round of speed golf. If he’s not flying, he’s engaging in acts that people who don’t even want to like business like hearing about: writing bestselling management books, toying with a run for President, showing up at parties with his stunning Slovenian girlfriend, Melania Knauss, filming commercials for McDonald’s or Verizon, or appearing on Saturday Night Live. All the while the casino company of which he is chairman and CEO is crumbling beneath him–something that might keep a different kind of executive awake at night–but Trump is breezily unfazed.
In a few minutes of talking, Trump sprinkles in enough superlatives to make the Guinness Book of World Records read like a list of deeds and transfers. “I build the best buildings in the best locations,” he says. His girlfriend is the “most efficient person I’ve ever met.” (Though Trump soon after notes that he himself is “very efficient.” In fact, he’s the “most efficient human being.”) The 18th hole of his golf course outside Los Angeles, rebuilt after it slid into the Pacific Ocean, is now the “safest place in California if there’s an earthquake. Literally.” When FORTUNE wrote an article recently about the booming stocks of housing companies, he called to remind me that he is the “ultimate homebuilder.” “I don’t think of myself that way,” he says. “But really, I guess I am.”
Sometimes Trump’s boasts even turn out to be loosely truth-based. Trump, for instance, called me in mid-March to announce that following negotiations with NBC, he was “officially the highest-paid person on television.” A top executive at NBC would only say, “Consider your source.” And Trump’s co-producer on The Apprentice, reality TV impresario Mark Burnett, denied Trump’s claim altogether. Trump called Burnett as we were talking, and ten minutes later Burnett called me back to explain that, well, if you look only at prime time, and after Friends goes off the air, and once the next season of The Apprentice starts, then, yes, Trump is probably correct. Trump later explained that that’s what he really meant.
Of course, it’s not just Trump who thinks he’s the hottest thing going. According to a stack of papers and personal letters he handed to me, Suburban Golf, an occasional insert in the suburban New York-based Journal News, thinks Trump National Golf Club is better than Winged Foot. “This is a Gannett paper,” he says. “That’s the whole deal. That’s the monopoly up in Westchester.” Real Estate Weekly heralds him as a “realty TV star.” And while he has nothing but disdain for the New York Times‘s coverage of him, he still keeps an inch-thick stack of color copies of the paper’s positive 2002 architectural review of Trump World Tower. Even gossip columnists, who regularly take Trump to task for his unusual hairdo, make a point of boosting him–whether they mean to do so publicly or not. In mid-March syndicated columnist Liz Smith wrote Trump a private letter in which she declared that she was fighting to get the New York Landmarks Conservancy to declare him one of its “Living Landmarks.” If anyone found out, she warned, she’d have to resign from the conservancy, noting in her P.S., “I hate to ask you not to circulate this, but I am asking. I think you understand.” Trump handed me the letter and told me to keep it.
What Trump definitely understands is that all of these boasts and declarations, whether coming from him directly or indirectly, serve more than just to get the world to catch up to his image of himself. There’s real business involved. Love him or hate him, Trump’s self-promotion works. He’s managed to create a nationally known luxury real estate brand. Neil Ostergren, former president of the Hospitality Sales and Marketing Association and now a consultant, has polled some 800 senior executives since 1997 to see what names they know in real estate. The only two that scored consistently high: Trump and Levitt. And what William Levitt’s Levittown did for middle-income housing, Trump seems to be pulling off for the rich. Condos in Trump-branded buildings so far this year sold for 39% above New York’s $853-per-square-foot average. In Chicago, Trump and the troubled newspaper company Hollinger International are planning a 90-story condo tower downtown, to be called, surprisingly, Trump International Hotel & Tower. Even though the building still on the site has yet to be razed, Trump has managed to sell so many units at such high prices–from $575,000 to $15 million–that he single-handedly raised the average condo price for the entire city by 25% at the end of last year. “He’s like P.T. Barnum on steroids,” says Richard LeFrak, a New York real estate developer and a friend of Trump’s. “What’s his greatest asset? It’s his name. He’s a skillful marketing person, and what he markets is his name.”
The name earns him more than just condo fees. The self-promotion and the larger-than-life persona earn him deals that other real estate developers never see, allow him to get financing where most would have long been cut off, and win him friends among people who are prepared to be his enemies. Now, with The Apprentice becoming, says Trump, the “hottest show on television” (er, No. 7, but definitely doing well enough to save NBC’s soon-to-be-Friend-less lineup), his brand is even bigger than it was during the last Donald peak, in the late 1980s. And while Trump likes doing the show, what he really likes doing is real estate. “I keep telling people, NBC pays me a lot of money, a lot of money, but American Express”–which rents space in 40 Wall Street, a building on which Trump holds a 250-year lease–“pays me more every week.” Not that the show and real estate don’t work well together. While in Los Angeles, Trump filmed a comedy spot for the Jay Leno show. Before shooting, NBC Entertainment president Jeff Zucker stopped by, and the two almost immediately started to talk about apartments in Manhattan, with Trump pressing on him a place in Trump International. “He’s going to buy,” Trump said later. (Zucker insists Trump’s kidding.)
The Trump show–the real-life one–has been playing for decades, and rivals and peers marvel at his ability to keep at it. “He can sell anything to anyone, he really can,” says Percy Pyne, CEO of Pyne Co. and a real estate investor who has dealt with Trump for 25 years. “He’s a magician.”
Of course, no magician worth his salt reveals his secrets, and Trump is no different. Is he worth the billions that he says he is? Or is it more like a few hundred million, as several ex-associates say? Outsiders have never gotten to the bottom of his finances, despite his near bankruptcy in the early 1990s, and weeks of digging by FORTUNE yielded only murk. All his deals are buried in layers of corporate names, partners, and either debt or no debt, depending on whether you’re talking to Trump. Not that it matters. The more interesting question is not what he owns but how he gets it. And what the heck is it like to work for a man who never turns off? The simple answer to that last question, says Greg Cuneo, chairman of New York construction heavyweight HRH and a man who got his start thanks to Trump, is this: “Bizarre. Totally fucking bizarre.” And he means it glowingly.
Donald Trump can seem at times like a caricature of himself, and yet he’s strangely appealing. He has a warm side–on the flight he cooed over Knauss’s sore throat–and a politician’s knack for making it seem as if he’s telling you something for the first time he’s said many times before. Even his constant, casual mentions of how much he makes, how much the things he owns cost, and how much he has in the bank are somehow refreshing. He’s not embarrassed about making money or spending it. And the best way to understand how Trump makes it is to see how he lost it.
In the 1980s, Trump, the son of an extremely successful outer-borough New York developer, funded a world of buildings, hotels, and casinos, a USFL football team (helmed by Doug Flutie), a 284-foot yacht (helmed on the comic pages by Doonesbury character Duke), and an airline, mainly by charming banks into huge mortgages–even persuading them to lend him money for his equity stake, backed only by personal guarantees. When the early 1990s recession hit, Trump began to default on his loans and found himself with nearly $1 billion in debt that he personally had guaranteed. He worked out a deal with the banks to sell his properties and get them some of their money back. In return, they spared him from having to declare personal bankruptcy. Reports at the time said the banks granted Trump a $450,000 monthly allowance. He denies it. “Honestly, wouldn’t that be terrible PR for the banks?” Trump says.
Over the next few years Trump clawed his way back, negotiating with contractors who had liens on his property, bringing in professional management, doing smaller deals, and releveraging the casinos. It was that last action that freed him from the banks. In 1995 he took public a couple of casinos then loaded with about $500 million in debt, calling the company Trump Hotels & Casino Resorts and giving it for a ticker symbol his monogram, DJT (the “J” stands for John). Then he added even more debt, using the public company to buy two of his other deeply leveraged casinos, Trump Taj Mahal and Trump’s Castle. By the end of 1996, DJT the company was carrying $1.7 billion in debt.
With the cash and refinancing, DJT the man mollified the banks. But he also infuriated shareholders. Today the casino company hands over 20% of its net revenue in interest payments. But Trump, a master at moving the chess pieces of his empire around to support the others, has no qualms. “Entrepreneurially speaking, not necessarily from the standpoint of running a company but from an entrepreneur’s standpoint, [the IPO] was one of the great deals,” he says. His days as CEO are likely numbered (see box).
After doing his casino deals, Trump turned back to real estate. To build Trump Place, a series of rental and condo properties along a nearly mile-long swath of land he owned on Manhattan’s West Side, he found six Chinese companies willing to foot the bill. To win them over, he flew to Hong Kong and met with Vincent Lo, chairman and CEO of Hong Kong’s mammoth Shui On Holdings, and other investors. During a game of golf, the two sides worked out a deal–the Chinese would put up all the money, and Trump would get management fees, plus a big bonus when major parcels were complete and after the investors got their money back plus a preferred return. Lo was stunned by his speed and oversized personality. “We don’t have anyone like him here, that’s for sure,” laughs Lo, who, when he comes to the U.S. to visit the property, makes a point of playing a round at Trump National Golf Course in Westchester, N.Y., where he’s an honorary member.
Back in the U.S., there are plenty of people who will do deals just to get close to Trump. In 1998 he called up Steve Hilbert, the flamboyant founder and CEO of insurance and financial services firm Conseco, and persuaded him to put up most of the money–$191 million to Trump’s $11 million–to be a fifty-fifty partner in purchasing New York’s GM Building, best known to tourists for housing the F.A.O. Schwarz flagship store. Conseco had little experience with real estate deals this big, and Hilbert had met Trump only once, yet the two quickly worked out a deal. “Trump is a very good negotiator. He basically says, ‘You don’t know anything about New York real estate, I’m the king of New York real estate, I want to run this thing,'” says a person with detailed knowledge of Conseco and the deal. And Trump knew who he was dealing with: Hilbert was based in Indianapolis, the same city as the GM Building’s owners, and he was always looking for big scores. “He was a Donald Trump wannabe,” says the source. “He was very enamored of Trump.” (Says Hilbert: “This was the right structure, the right operating partner in Donald, and we had all the controls we needed.”)
Later that same year Trump persuaded the massive Korean chaebol Daewoo–which later sank under the weight of its debt–to put up almost all of the money to build the $360 million Trump World Tower, a 72-story condo complex across the street from the United Nations building in New York. There were plenty of bidders for the site, but Trump knew that Daewoo, with its size and engineering focus, would be attractive to the landowner, the United Engineering Foundation. And again, Trump let Daewoo executives know they couldn’t pull off anything in New York without him.
In each case Trump used Trump to get ahead. Just ask him. “One of the advantages I have by being a superstar is that when I call people, no matter who they are, they’re honored to be my partner. And I’ve done a great job,” he says, of no particular deal. “If some other competitor of mine in New York, you know, Mr. Irving Schwartz of Schwartz Co.–nice builder, everything good–calls you, you’d say, ‘Give me a break.’ When Donald Trump calls, you say, ‘Oh, great!’ I get to the top guy immediately. And if he’s not in, they call me back in five minutes.”
But once the call gets picked up, self-promotion doesn’t always lead to riches. In the case of the GM Building, Conseco agreed to Trump’s insistent demand for 50% ownership, but only if it got in exchange a 15% preferred return on its money in a sale. When Hilbert’s dealmaking sent Conseco into a free fall, Trump had his chance at the whole building but had trouble putting together a package. Conseco rejected a $295 million debt-and-equity deal Trump constructed with Deutsche Bank, saying it was too wobbly. Then Sept. 11 hit, Trump missed his deadline for getting a deal approved by Conseco, and the two ended up in years of litigation. (Interestingly, Hilbert, after being pushed out of Conseco, testified on Trump’s side.) An arbitration panel last year ruled that Trump not only wouldn’t get the building but also had to sell his half to Conseco for $15.6 million. Before the case went to appeal, the two parties settled for an undisclosed amount that, according to sources unfriendly to Trump, is more than $20 million but not much more. (Trump would say only that the figure is “totally wrong, absolutely wrong.”) If true, that’s not a bad return, but not nearly what Trump could have gotten. Trump had spent two years, by all accounts, masterfully fixing up the building–installing a new marble lobby, redoing the front plaza, raising rents, tacking up four-foot brass letters reading TRUMP on the front and back. And thanks largely to his efforts, Conseco sold the GM Building for $1.4 billion–a number that Trump could, if he wanted, honestly brag is the highest price ever paid per square foot for an office building.
In Trump’s eyes, the problem was personal. The new management of Conseco didn’t care how much he had transformed the building. “They were at war with Steve Hilbert,” he says. “And with me, because Steve was the person who made the deal with me, even though I didn’t know him before this deal.” Still, he says he’s proud of what he pulled off: “Look, very simply, I got control of a very major building in New York for almost no investment. Not so bad.”
In the first episode of The Apprentice, Donald Trump climbs out of a limo on Manhattan’s West Side and announces to the camera what the contestants are battling for. “This is the chance to work for me at a huuuuge salary,” he says, his hair not whipping in the wind. “And more importantly to learn enough so that maybe they too can be a billionaire some day.”
On a recent day at work, he shows how it’s done:
“Vince, this is Donald Trump,” says Trump, leaning into a speakerphone in his office, which is decorated with gold-framed pictures of himself from magazine covers. He’s haggling with a contractor over the cost of fire doors for a new building at Trump Place. He’s dressed in a suit and a bright-pink tie, and his feet are kicked behind him as if he were riding a motorcycle. Sitting in front of Trump is a group of men from the general contracting firm in charge of the building–the people who usually pick their own subcontractors. Vince, who runs a small building-supply company (and whose last name and firm I agreed to keep anonymous), is the low bidder. Trump wants him lower.
“Vince, can you do the job for $500,000? You’re at $667,000. We’re going to give it out today.”
“Donald, you know what’s happened to steel. It’s doubled in price,” Vince starts.
“Not doubled, but it’s gone up,” says Trump. “But you bought your shit years ago. I hear business is good for you.”
“No, it’s not. I need a job, Donald. I need your job. Can you give me 660?”
“No, I can’t do it for that,” says Trump. “How ’bout 550?”
Vince says no and starts listing all the work he’s done for Trump. As he continues, Trump puts him on mute and starts talking to the guys in his office about Vince. Finally he hits the mute button again and interrupts him.
“Vince, you don’t have to talk me into it. Do the job for 600.”
“Donald, give me 640, and you’ll get the best.”
“Okay, 625. Sign him at $625,000,” Trump says to his contractors. “Good luck, Vince. Take care. Good luck. Do a good job. Bye-bye.”
Vince goes silent. Trump hangs up.
In earlier negotiations that same day, Trump had shaved off about $1 million in costs to what will eventually be a $100 million construction bill for the building. Vince’s part was pocket change. Trump haggled with him not just to show off–though he acknowledged that was part of it–but because he loves doing it.
And he loves to get his hands just as deep into the rest of the organization. He calls employees up to see how business is, or to find out whether a certain kind of sand has come in, or to tell them that they should be prepared for a delivery of nine chandeliers. In the casinos he walks the floor, asking everyone from doormen to table operators to executives how things are going and what’s going wrong. If a uniform is out of place or a table messy, he demands that it be taken care of. “He can be tough–he has no problem laying anyone out,” says Larry Mullin, the former president and COO of Atlantic City casino Trump Marina, and now an executive vice president at Trump-trumping casino Borgata. “But he can be supportive and encouraging, because he wants to win.” One thing employees don’t see: e-mail. The boss doesn’t use it. The only computer in his office sits unplugged on the windowsill.
There are plenty of executives, of course, who bypass the company hierarchy to find out what’s going on. Where Trump again gets unreal is in the loyalty he demands–and doles out–to employees. In 1989, Greg Cuneo was a 27-year-old project engineer on one of Trump’s construction sites. When the firm he worked for was sold, Cuneo decided to strike out on his own. He asked to see Trump and was ushered in. In a private meeting, Trump listened to Cuneo’s plan and told him that he’d back him in his new company–and within days Cuneo had a contract with Trump. “He said, ‘Greg, I’m going to make you a millionaire,'” Cuneo recalls. “I said, ‘Donald, I don’t think that’s a bad idea.'” Since then Cuneo, chairman of HRH Construction, has been involved with almost all of Trump’s biggest buildings, and he has grown used to Trump’s regular calls to tell him what kind of wood to use on lockers or complain that stone has been laid the wrong way. “The sickest thing about working for him is that he’s involved in every detail,” Cuneo says.
And though Trump came from a wealthy family and went to Pennsylvania’s Wharton School of Finance–“the best school, rated by Business Week as the best school,” he says, perhaps relying on figures from 2000, when Wharton was ranked No. 1–he doesn’t care about backgrounds or degrees when figuring out whom to keep or whom to move up. When he buys a building, he rarely fires en masse, and people on the site sometimes find themselves subsumed into Trump’s world.
That’s what happened to Vincent Stellio. In 1992, Stellio was working security at the Plaza hotel, which Trump then owned. When Trump and then-wife Marla Maples had a daughter, Trump hired Stellio as the girl’s bodyguard. One day Trump, who had just bought his golf course properties in New York, called Stellio into his office and told him that from then on Stellio would oversee the work. “He said, ‘You’re a smart guy, very dependable, loyal, and you know how to get things done. I have a lot of confidence in you.'”
Over the years Trump has stuck with Stellio, extending his responsibilities to overseeing construction at all the golf properties. And while Stellio says that the learning curve was steep at first, Trump is willing to give people breaks. “It’s when you repeat the mistake, though, that he gets fired up,” says Stellio.
For their loyalty, employees, contractors, and outside attorneys get trips to Mar-a-Lago or memberships in the golf clubs. Trump remembers birthdays and sends checks at deaths. But those who violate his loyalty find themselves frozen out quickly. When former Trump Marina COO Mullin announced he was quitting, he received a personal letter from Trump blasting him for “betrayal.” Trump says being cut off is the price people pay for moving on: “I’ve had many people leave who want to come back because they miss the Trump action. I would never have them back.”
If it sounds cultish, that’s because it is. Some people who work for Trump even end up sounding like him. The maintenance director of the Trump 727 dismissed other private planes with their “fiberboard and other types of paneling.” He explained, “This plane has only real wood, veneered wood. All done by Italian craftsmen.” Also, the pilots’ seats–all sheepskin. “The airlines, they have cloth,” he said. The former director of the Trump Spa at Mar-a-Lago, a chiropractor named Ginger Southall, said she learned to think big and motivate others by watching Trump in action: “He gets you excited about whatever you’re doing. Even if it’s a big pile of doody, he can get you excited.” A minute later, however, she was selling me on herself: Did I know that she had climbed Mount McKinley, which “obviously has to do with my inner strength”? Also, the person I should really be writing about is her current employer, who owns a nutritional supplements company–“He’s the Donald Trump of the natural health and wellness industry!”
So what matters to Trump? Certainly, being hailed as a great builder: Over the course of a few weeks, he told me a handful of times that the real story is his success in real estate. “If you’re honest, when this is through, you’ll say Trump is much bigger than people understood,” he said on the flight to L.A. But the truth is–well, with Trump, of course, it’s almost impossible to know. His property on the West Side of Manhattan is doing well, but how much does he own? He says 50%, but his partners won’t go into details or reveal documents. His holdings in the casino business are shrinking by the day. Even how well he did at J.P. Weaver, the molding company, is a mystery. He says he got a fantastic deal. The firm’s owner laughs, “Honey, we only have one price, and I tried to indicate that that day.”
One thing is undeniable: Trump’s TV show is huge. Yet it’s about the show that Trump seems a bit baffled, if proud. One morning in the limo in Los Angeles, he takes a call from NBC about the previous night’s Nielsen ratings for his show. The Apprentice came close to beating CBS’s CSI and actually tied it in the last half-hour. Trump can’t help but inflate the news. Hanging up, he ignores the first part and announces that The Apprentice tied CSI. Then he starts laughing–and briefly I get a peek behind the mask. “I’m just a fucking businessman,” he says. “It’s crazy, right? It’s a crazy world.”
Associates: Jenny Mero and Helen Kim