How good a businessman is Donald Trump? Maybe the answer doesn’t matter, since barring death or impeachment he’ll be the most powerful man in the world until January 2021, or even 2025, come what may. Or maybe it does matter, in the sense that the only positive spin to be put on his otherwise ridiculous presidency is that the irrepressible cunning of the real-estate tycoon will eventually win through for the good of America — and thereby, we must hope, the good of the free world — against opponents who have smaller cojones and less dealmaking prowess than the Donald does.
‘He’s the closer,’ declared White House spokesman Sean Spicer, shortly before his boss failed to close his biggest political deal so far, the American Health Care Act. So what, say supporters. He has also just fallen from 366th to 544th in the Forbes list of billionaires but he’s still worth $3.5 billion, which is a hell of a lot more than you or me. And yes, he has clocked up six bankruptcies — but they were ‘Chapter 11’ reorganisations, which are smart devices to keep companies alive and creditors at bay — not liquidations — and five of them were in the gaming biz, which is a great big can of worms anyway, and you probably wouldn’t have noticed them at all but for the Trump name upfront. The point of Trump is that he always fights back and finds ways to win, just like he did in the presidential campaign.
But is he really a man we can do business with? I asked an old friend who did several property deals with him. ‘He can be very charming, but what you and I see as this…’ — my chum makes a right angle with his hands, then runs a finger slowly round the curve of the circular table between
us — ‘…Trump sees as this. He has vision, he takes big risks, he’s a brilliant marketer, he’s clever at putting his brand on things he only owns pieces of.’ And his Achilles heel?
‘Well, look at the casino complex he built in Atlantic City [opened in 1984, repeatedly redeveloped and refinanced, the Trump Plaza closed in 2014]. You and I wouldn’t be comfortable doing business with the people he was doing business with there, I can tell you. I won’t be surprised if some big scandal comes out of his past.’
That’s the other reason to scrutinise Trump’s business record: it could still bring him down before the end of his first term. Meanwhile, we’re repeatedly reminded of one of his campaign tweets: ‘Deals are my art form… preferably big deals. That’s how I get my kicks.’ Most people don’t realise the quote originates from page one of his million-selling 1987 book The Art of The Deal, which he didn’t actually write: a journalist called Tony Schwartz ghost-wrote it for him, and its Random House publisher Howard Kaminsky told the New Yorker, ‘Trump didn’t write a postcard for us.’
Too big to punish
Given the modern propensity for corporate sin, the ‘Deferred Prosecution Agreement’ (DPA) seems likely to become as common as the parking ticket as a means of paying for past misdemeanours. DPAs are a recent innovation by the Serious Fraud Office: an American-style form of justice for companies, designed to avoid long, costly trials. The first one of note was the £497 million settlement with Rolls-Royce for bribery in January this year. The latest involves Tesco Stores Ltd, which (if the agreement is approved in court next month) will pay a £129 million fine for the supermarket chain’s ‘black hole’ accounting scandal three years ago.
The DPA does not address whether liability of any sort attaches to the parent Tesco PLC or any of its executives — three of whom have been charged with fraud but must wait until September for trial. No prosecutions have yet been brought against Rolls-Royce managers though several, including former chief executive Sir John Rose, are understood to have been questioned. The long-running investigation of the Qatari financing that rescued Barclays from a state bailout in 2008, on which an SFO decision is imminent, could be the next case for a combination of DPA and bosses in the dock.
The SFO says an agreement of this sort ‘enables a corporate body to make full reparation for criminal behaviour without the collateral damage of a conviction (for example, sanctions or reputational damage that could put the company out of business and destroy the jobs and investments of innocent people)’. In Rolls’s case a conviction could have disbarred the company from bidding for government contract work, crippling its defence business. So it all seems to make pragmatic sense — or will until executives start coming to trial. If they end up in jail, lives ruined, while others who were part of the same collegiate decision-making processes continue their careers and the companies themselves shrug off financial penalties as though nothing had happened, stand by for an outcry. DPA may become synonymous with ‘too big to punish’.
South West China Express
‘Any state but the British state’ is rail union leader Mick Cash’s summation of the government’s policy on awarding passenger rail franchises to foreign state-owned firms, rather than renationalising as he and Jeremy Corbyn ardently wish. The winner of the South West Trains contract — now ‘set to make a killing at the British taxpayers’ expense’, says Cash — is Chinese, which may sound worrying until I add that it is Hong Kong metro operator MTR, in partnership with FirstGroup. And that’s surely good news, because anyone who has ever visited Hong Kong knows the MTR is one of the world’s most reliable high-frequency mass transit systems, which is why the company also won the contract to run Crossrail trains.
Meanwhile, in my experience most of the best train services in the UK are ultimately owned by Germany’s Deutsche Bahn. So I’m with Cash and Corbyn, up to a point: the best place for our railways is under state ownership, but only by states that know how to run decent trains.