Analysis: Why Would a Billionaire Charge the Secret Service $650 a Night?
Six theories for why Donald Trump insists on billing taxpayers
Last year, Eric Trump was asked about Secret Service protection at Trump Organization properties.
“If my father travels, they stay at our properties for free,” he said. “So everywhere that he goes, if he stays at one of his places, the government actually spends, meaning it saves a fortune because if they were to go to a hotel across the street, they’d be charging them $500 a night, whereas, you know we charge them, like $50.”
You will be stunned to learn that this is not remotely true.
Instead, as the indefatigable David Fahrenthold and three colleagues at The Washington Post chronicle in his latest scoop on the president’s business, the Trump Organization charged the Secret Service (in other words, the taxpayer) from $400 to $650 a night to stay at Mar-a-Lago while guarding the president. At another Trump property, his golf course in Bedminster, New Jersey, the Secret Service was billed $17,000 a month for a small cottage, even when the president wasn’t present. These are just snapshots. Despite heroic public-records work by the Post, there’s still no complete picture of just what the Trump Organization is charging the Secret Service.
It’s no longer news per se that the Trump Organization is profiteering from the presidency. Since Donald Trump refused to divest from his business at the start of his term, that’s been inevitable. There’s the massive emoluments scandal of the Trump International Hotel in D.C. There are Trump’s Scottish properties, at which he “invited” the vice president to stay, then charged the taxpayer tens of thousands of dollars. There was his shameless choice to hold the G7 summit at Trump Doral—a decision so universally reviled that the White House quickly reversed it. One of the arguments the administration offered for picking Doral was that it would allow savings on security. “He’s not making any money off of this, just like he’s not making any money from working here,” insisted Acting White House Chief of Staff Mick Mulvaney. The new Post story shows that was almost certainly false.
New or not, the question remains: Why does a billionaire charge the Secret Service $650 to stay at his property?
The issue is not whether taxpayers should pay for presidential protection. They should, unequivocally. The question is about the cost. As the Post notes, other presidents who allowed the Secret Service to use their properties, including both George Bushes and Bill Clinton, didn’t charge them. None of those presidents owned a for-profit business while serving as president either.
Perhaps only Trump knows the answer to why he’s charging so much. But here are a few theories as to why so rich a man would gouge his bodyguards and constituents.
The president is simply a penny-pinching cheapo. In 1990, Spy started mailing progressively more minuscule checks to rich people to see who would go through the trouble of cashing them. Only two people cashed the smallest checks, for 13 cents: an arms dealer, and Donald Trump. Trump is the kind of guy who, while running a huge real-estate business, routinely stiffed contractors out of four-figure checks. Why wouldn’t he squeeze every cent out of this too?
The profiteering is the point (with apologies to my colleague Adam Serwer). Trump’s presidential run was conceived of more as a publicity stunt than a serious policy initiative. He set out to make money, and if winning the election wasn’t really part of the plan, that didn’t mean it didn’t contribute to the ultimate goal.
It’s about defiance. So many of Trump’s actions can easily be explained as trolling, or at least as a kiss-off. If you tell him he can’t do something, he’ll do it. What other explanation is there for announcing, in the midst of an impeachment investigation over abuse of power, that you’ll direct a major international summit to your own resort? Some people will be appalled by the charges, but there’s nothing they can do. When you’re a president, they let you do it. You can do anything.
He feels he’s entitled. The extravagant charges are hypocritical because Trump has made great show of donating his presidential salary. He has insisted that the presidency is a money loser for him, depriving him of a chance to make money elsewhere. It’s impossible to assess this claim—Trump hasn’t released documents to back it up, and his reputation for honesty speaks for itself. It does appear that political backlash against the president has hurt business at some of his properties, though. Trump may view the money he makes from the Secret Service as the least taxpayers can do to mitigate his selfless sacrifices in making America great again, and a meager return for him.
He’s not really a billionaire. Democratic presidential candidate Mike Bloomberg was recently asked whether Americans really wanted to watch two billionaires fight on Twitter. “Two billionaires? Who’s the second one?” Bloomberg quipped. Questions about Trump’s real net worth have circulated for years. When journalist Tim O’Brien (now a Bloomberg adviser) reported in 2005 that Trump was worth more like $250 million, Trump sued him for $5 billion. (The suit was dismissed.) Whenever any investigation has gotten near Trump’s business, he’s gone ballistic. Or perhaps the better explanation is that …
He’s a paper billionaire with a cash-flow problem. Trump may well be worth billions on paper, but his empire is built on borrowing; he once called himself the king of debt. That means he has to service his loans, for which he needs cash. But several of his businesses seem to be struggling to bring in money, which could mean he struggles to move cash out the door too. As the Post previously reported, Doral is one of several properties that has seen its income tank. Revenue has also fallen at some of his hotels.
One of the few hotels that seems to be thriving is the Trump International Hotel in D.C. (though even it has its own struggles). Yet the Trump Organization is looking to sell the lease on the hotel, for a record sum. On paper that seems illogical: Why would the Trump Organization sell a property that’s thriving? And if it’s thriving because of its connection to the president, why would another operator pay a huge price for value that will dry up once it’s sold? One answer would be that the Trump Organization is seeking a large cash infusion, so that it can continue to service its debts.
Charging $650 a night for Secret Service agents doesn’t add up to the reported $500 million asking price for the D.C. hotel. But Trump has spent roughly a third of his presidency staying at his own properties, and all the nights there start to add up to a steady stream of cash coming in, from captive buyers. Just how much is unclear, though, because neither the Trump Organization nor the government will tell.