We have chronicled all of the days President Donald Trump has spent at his golf clubs since becoming Commander-in-Chief, and we’ve done that as a relative means of accountability since Trump so frequently criticized President Barack Obama for how often he played golf (333 times, by estimate) in office.
However, we also want to stand up for truth as much as accountability and transparency. There’s been some information floating around social media that Trump drove the former Trump International Golf Club in Puerto Rico into bankruptcy. And there’s been an effort to link that course’s bankruptcy to his administration’s Puerto Rico response in the wake of Hurricane Maria.
Let’s set the record straight.
The Puerto Rico golf club in question was — and now is again — called Coco Beach Golf & Country Club. The owner, Empress Diaz, used $25 million as proceeds from bonds sold by Puerto Rico’s Tourism Development Fund to construct the 36-hole facility. That fund is backed by taxpayers, and the fiduciary responsibility falls on the fund to pay the bonds if the borrower defaults.
The original owners of the property went millions in debt in the first years of operating the club, and they sought Trump and the Trump Organization for help in righting the ship. In 2008, Trump came along in two ways, signing a licensing deal to put his name on the club for marketing purposes and signing a management deal to help the club run more efficiently and effectively. As most of these deals go in the golf industry, the management deal compelled the owners to pay Trump a fee to run the property and an incentive based on the profits of running the club.
In 2008, the PGA Tour created the Puerto Rico Open and brought it to the golf club. It was played opposite the WGC-Cadillac Championship, which was played until 2016 at Trump National Doral in Florida. However, the notoriety of being a PGA Tour stop and having Trump’s name on the club couldn’t help the owners overcome the initial debt problem, so they sought private bonds in 2011 to pay off the original debt from the Tourism Development Fund, touting Trump’s involvement and turnaround plan in offering documents. The turnaround plan didn’t work, and the club quickly began defaulting on the new bonds as the Trump miracle the owners apparently expected (unreasonably so) never manifested itself.
Four years later, the well had run dry, and the owners filed for bankruptcy protection as Coco Beach Golf & Country Club, claiming $78 million in debts against $9 million in assets.
The management and licensing deals with Trump were ended as part of the bankruptcy. The Trump Organization LLC for the deal filed for a payment claim of $927,000 in unpaid fees as part of the bankruptcy. The Tourism Development Fund filed a claim for $32.67 million for the real estate mortgage in 2015. The resort was sold for $2 million to a private equity firm, which manages the property now.
In other words, Trump really had little to do with taxpayers being left with $30-plus million in unpaid debts that they then had to payout to bond owners.