Last week, Politico breathlessly announced that “Trump Owes Tens of Millions to the Bank of China.”
The story was totally wrong. It was a fabricated story. It was fake news.
The story revolved around a financing secured by an office building located at 1290 Avenue of the Americas. It was a nice office building and the Trump Organization — the President’s real estate operating company, now run by a son — owned a minority interest of 30%.
As a minority partner, the Trump Organization — not President Trump personally — did not call the shots, was not the managing partner, and did not solicit the loan.
In fact the loan was a “bridge loan” meaning it was money used to hold the property while a “securitization” was underway. In a securitization, the mortgage is converted to a series of securities — rather than a mortgage.
These securities — bonds — are sold to institutional investors. The mortgage lender gets paid off.
In this instance, the Bank of China was a member of a broad syndicate of lenders that provided the bridge funding prior to the securitization. The proceeds of the securitization were used to pay off the lending syndicate.
So, Bank of China advanced funds with a myriad of others in 2012 and was repaid with the proceeds from the securitization shortly thereafter. This happened immediately.
After the securitization, which also closed in 2012, the Bank of China had no money in the deal and was no longer involved with the building.
President Trump never — at any time — owed the Bank of China millions. He never made any decisions about this property as he was a minority partner in the deal.
So how did this happen, Big Red Car?
Politico received an “anonymous” tip about a mortgage provided by Bank of China. The tip was wrong.
Politico never followed up with the Bank of China.
Politico allowed its TDS Stage IV lens to obscure the truth of the matter.
Politico never checked with the Bank of China after they wrote the article, but before they printed it.
This is called FAKE NEWS and Politico is not even remotely apologetic.
But, hey, what the Hell do I really know anyway? I’m just a Big Red Car.