Inside Trump's Dealings with People Who Had Mob Ties: 5 Things We Learned from the 'Wall Street Journal' Investigation

Donald Trump has acknowledged that he sometimes worked with people who may have had ties to the mob

Photo: AP Photo/Gerald Herbert

As a young real estate developer in Atlantic City, Donald Trump dealt with people who had ties to organized crime, according to a new Wall Street Journal examination of his career.

The Journal reports that although Trump knew a business partner in Atlantic City had connections to “unsavory” people and although an FBI agent advised him in a sit-down that there were easier ways to invest, Trump nevertheless went ahead with plans to break ground in Atlantic City. He would ultimately go on to own four casinos there.

People Trump dealt with as a real estate developer in New York also had ties to the mob, according to the Journal.

Among these people were Kenneth Shapiro, who was identified by law enforcement as an agent of Philadelphia mob boss Nicodemo “Little Nicky” Scarfo; Robert LiButti, a gambler convicted of tax fraud who was banned from New York racetracks; and John A. Cody, a union leader found guilty of racketeering, the Journal reports.

The newspaper said it reviewed thousands of pages of legal and corporate documents and interviewed dozens of Trump’s business associates in its examination. Here are five key takeaways:

1. Trump has acknowledged that he sometimes worked with people who may have had ties to the mob.
But the now Republican presidential nominee told the Journal that he either wasn’t aware of the ties at the time or that he had only casual relationships with the unsavory figures.

“If people were like me, there would be no mob, because I don’t play that game,” Trump said, adding that he’s “the cleanest guy there is.”

2. In the 1970s and 1980s, people with ties to the mob were reportedly so embedded in the real estate world that it was all but impossible for developers to avoid them.
People in the industry told the Journal that dealing with people who had ties to organized crime was unavoidable in the construction, real estate and gambling worlds 30 or 40 years ago, especially in New York and Atlantic City.

Trump “wasn’t going to build Trump Tower without having those connections. Every builder in New York had to do that at that time,” said Michael Cody, the son of a mob-linked union leader Trump dealt with.

Asked about a concrete contracting firm he dealt with that law enforcement said had ties to New York Mafiosi, Trump said, “That was a major contractor. You hear stories that they may have been [mob-controlled].”

“In the meantime, I was a builder. I was never going to run for office,” Trump said. “I’d go by the lowest bid and I’d go by their track record, but I didn’t do a personal history of who they are.”

3. Trump was accused of making illegal campaign contributions to former Atlantic City mayor Michael Matthews.
Trump, as a casino owner, couldn’t donate money to local politicians who controlled zoning and signs in Atlantic City. One man who Trump leased property from, alleged Philadelphia mob agent Kenneth Shapiro, told a federal grand jury that he secretly gave thousands of dollars to the mayor on Trump’s behalf.

“Donald was always trying to maneuver politically to get things done,” Shapiro’s brother Barry told the Journal.

For his part, Trump denied making secret contributions to the mayor, saying, “I’m not interested in giving cash, okay? … The last thing I’m doing is now handing cash.”

Of Shapiro, who the government has described as a conduit the Scarfo crime family used to buy influence with the mayor, Trump added, “I never remember him asking me for money. He was always straight with me … I didn’t know Shapiro well other than to know that we did a pretty small little land transaction down in Atlantic City, which was fine.”

4. Trump Plaza was fined for illegally funneling $1.65 million in gifts to a racehorse trader named Robert LiButti.
The Journal described the late LiButti as a “major profit source” at one Trump casino, whose gambling losses earned Trump Plaza $11 million between 1986 and 1989. A Trump employee said LiButti, who had been convicted of tax fraud involving horse sales in 1977, repeatedly called New York gangster John Gotti “my boss,” according to a 1991 state investigative report.

Trump, in an interview, described LiButti as a “high-roller in Atlantic City” and a “nice guy” but said he “had nothing to do with him.” But according to Jack O’Donnell, who ran Trump Plaza in the late 1980s, Trump “spent time” with LaButti and even attended his daughter’s birthday party. LaButti’s daughter confirmed to the Journal that Trump attended her party.

Later, the Journal reports, “regulators, in a ruling that didn’t cite Mr. Trump personally, fined Trump Plaza for funneling Mr. LiButti $1.65 million via gifts of expensive cars quickly converted into cash.”

5. Despite all this, Trump says dealing with gangsters is "not my thing".
“When you have those relationships, in the end, you lose,” Trump told the Journal. “You can solve some problems short term, but long term, you’ve got a disaster.”