For years, rumors of money laundering have surrounded Donald Trump’s golf business, but Forbes has uncovered the true source of the funds. In 2017, questions arose about the funding behind Trump’s golf empire, with speculation about Russian involvement. Journalists from various publications attempted to uncover the source of the hundreds of millions that Trump had spent on golf properties, with some suggesting possible money laundering. Politicians in Scotland even called for an investigation. However, after conducting their own investigation, Forbes believes they have solved the mystery.
The majority of the financing for Trump’s golf properties, totaling roughly $250 million, came from members of his private clubs who paid initiation deposits. These deposits did not come with interest payments or mortgage filings, making them a cheap and hidden source of funds. Additionally, over $450 million came from various windfalls, such as loan repayments, tax refunds, and property refinancings. Trump, unable to secure additional financing from Deutsche Bank, used almost all of his own cash to fund his golf empire, including remaking European golf resorts and bankrolling his presidential campaign.
Trump’s early forays into the golf industry involved collecting membership deposits, ultimately accumulating over $40 million at Mar-a-Lago and more than $80 million at properties in New York. Despite concerns in the industry about membership financing, Trump continued to build his empire by purchasing more properties and accumulating more membership liabilities through various acquisitions. Trump’s successful real estate deals, such as selling residential lots around a golf course in southern California, provided additional cash flow for his golf business.
In 2012, Trump bought into the golf industry in Florida and North Carolina, assuming millions of dollars in membership liabilities. Despite some legal challenges, Trump continued his aggressive expansion, purchasing Turnberry in Scotland and a property in Ireland in 2014. This period also saw increased cash flow from debt refinancing, allowing Trump to continue investing heavily in his golf properties. By the time Trump entered the White House in 2017, rumors about his financing sources were swirling, with many outlets attempting to unravel the mystery without success.
After becoming president, Trump’s sons took over the business, cutting development expenses and selling off real estate to improve the Trump Organization’s financial health. Today, Trump’s club and golf business is the fastest-growing part of his real estate empire, with his latest financial disclosure indicating minimal bank debt. Trump’s financing techniques have ultimately reduced his risk in the golf business, with earnings from the clubs now enough to pay back membership liabilities. Despite ongoing scrutiny of his funding sources, Trump’s golf business appears to be on solid financial footing, making it the least likely segment of his portfolio to require outside cash injections.
