Editor's note, this story was originally published June 6, 1991.
Fred Trump is clean enough to lend money to his son Donald and the younger Trump's struggling casino empire, state gaming regulators ruled Wednesday.
In a unanimous decision, the state Casino Control Commission ruled that the 85-year-old Fred Trump meets all the licensing requirements that are imposed on people or firms that lend money to casinos. The decision means that Donald Trump can now legally borrow money from his father to help resolve financial problems at his casinos.
(EDITOR'S NOTE: This story was originally published in 1991. The Press periodically republis…
Deputy Attorney General Thomas Auriemma said that an investigation by the state Division of Gaming Enforcement uncovered nothing that should prevent the elder Trump from getting licensed.
The gaming division's report was not made public, but Auriemma said it included information that was originally supplied to the casino commission in its 1981 report on Donald Trump's qualifications.
The only item of significance dealing with Fred Trump in that report was that the elder Trump was named in a 1973 suit filed by the federal government charging racial discrimination in the way Trump Management Inc. leased apartments in New York City.
Trump Management and the government entered into a consent order to settle the suit without admitting any wrongdoing.
Trump's father was required to get licensed here after a highly unusual loan to the Trump Castle Casino Resort that enabled the casino to narrowly avert a default and make a $16 million interest payment to bondholders.
Fred Trump, through his attorney, bought $3.5 million in chips at a high-stakes blackjack table and left without gambling with them.
The move resulted in an investigation and a complaint by the gaming division. Trump officials and the gaming division reached a settlement of the complaint and the gaming hall has agreed to pay a $30,000 fine. That settlement will be reviewed by the casino commission on June 19.
The approval comes in time for the elder Trump to again lend a hand to his son's gaming halls.
Trump Castle and Trump Plaza each face payments to bondholders of $41.1 million on June 17. While the Trump Plaza apparently will come very close to having enough funds to make the payment, it is becoming increasingly apparent that Trump Castle will fall significantly short.
Trump Castle bondholders have been negotiating with Trump officials to restructure the bonds, although the first offers submitted by Trump officials have been rejected, according to bondholder sources.
All three Trump casinos and the overall Trump Organization must appear before the casino commission on June 17 to prove their continuing financial stability. Trump Organization officials have reached tentative agreements with many of Trump's bankers to restructure hundreds of millions of dollars of loans.
There already is a plan for the Trump Taj Mahal Casino Resort to file a prepackaged bankruptcy. That plan, which gives bondholders half the equity in the city in exchange for a reduction of the interest rate on their bonds, will be filed after it is approved by the Securities and Exchange Commission and by the bondholders.
Don McGahn’s picture is conspicuously missing from the wall of former commissioners at the F…