In the movie Billy Madison, Adam Sandler's character is competing in an "academic decathlon" against his rival, an, ahem, ethically challenged executive, for control of his father's company (please don't ask me to explain any more). Way ahead on points, the sleazeball--played by Josh Lyman of The West Wing no less--just has to answer one more question to win. He has to: "explain business ethics, and how they are applied today." Unable to offer a single coherent thought, he screams and pulls out a gun. Then things really go downhill.
As is the wont of many men my age, I relate real world events to things I've seen in stupid movies. The aforementioned scene popped into my head this week when Donald Trump responded to an attack from Hillary Clinton that cited his 2006 comment regarding the possibility of a housing market crash. When she slammed him for saying--in an audiobook created by Trump University of all things: "I sort of hope that happens because then, people like me would go in and buy," he threw up his hands and said, "I'm a businessman, that's what I'm supposed to do." Then, trying it out in reverse order, he added: "That's what I'm supposed to do. I mean, I'm a businessman." Trump might rather have screamed and pulled out a gun--he has stated that he "always carries" one on him--but even he probably understands that would be unpresidential.
"I'm a businessman." Maybe that's what the thieving Domino's executives and franchise owners were saying to themselves to justify stealing the earnings of low-wage employees, many of whom likely struggle just to make their monthly rent payment. The corporation-wide system shorted workers' hours across the board. Domino's knew the system didn't work, yet still required the franchise owners to use it. That's why New York State's Attorney General Eric Schneiderman sued the corporation--the entity responsible for the fraudulent system.
Of course, Domino's isn't the only one committing wage theft, as the Department of Labor has won judgments totaling more than $1 billion in such cases over the past six years. From the New York Times:
Across the country, lawsuits involving wage theft have been on the rise. Broadly defined, wage theft involves employers' violating minimum-wage and overtime laws and not counting work hours, and management wrongfully taking employees' tips.
The surge in lawsuits, according to labor advocates, is a reflection of the changing nature of the American workplace
Increasingly, corporations are using franchises, subcontractors and temp companies to fill jobs. One result is fierce competition to fill jobs with people who will work for the lowest possible wages. And, in turn, corporate franchisers can insulate themselves from charges of wage violations by creating a degree of separation between the corporation and the employees.
Corporations are all too happy to have these--to paraphrase another movie with a bit more artistic value (sorry, Mr. Sandler)--"buffers." And that brings us back to Mr. Trump. Deborah Garcia was a catering employee at Trump SoHo, a Manhattan hotel. The hotel slapped a 22 percent service charge on the bill for catered affairs. According to New York law, a service charge applied to the bill is considered a tip unless it explicitly says otherwise--which Ms. Garcia claims did not happen. The law also requires that any tip must go to employees, not the establishment. Ms. Garcia never got any of those tips, and so she's suing for wage theft. She isn't suing Trump directly because--remember the buffers--Trump SoHo uses a subcontractor to hire its catering staff. Of course, the more profitable the subcontractor's business, the better for the hotel.
What's that you say? How about Trump himself stealing? Yeah, we've got that too. Just this week the UK's Telegraph broke this story:
Exclusive: US presidential hopeful Donald Trump signed off on a controversial business deal that was designed to deprive the American government of tens of millions of dollars in tax, the Telegraph can disclose.
The billionaire approved a $50 million investment in a company - only for the deal to be rewritten several weeks later as a 'loan'.
Experts say that the effect of this move was to skirt vast tax liabilities, and court papers seen by the Telegraph allege that the deal amounted to fraud.
That's right. Donald Trump stole from American taxpayers. That's not only a bad move politically, it's a crime. This story is pretty convoluted, and Trump isn't the one behind the scenes doing the actual dirty work. Nevertheless, he's got an equity stake in the deal, and he put his name on the dotted line approving the fraudulent re-characterization of an investment of capital--something that would have triggered a significant tax bill and potentially an even bigger one down the road if it proved a profitable investment--as a loan, a transaction that would mean a zero tax liability.
The article from the Telegraph makes clear that Trump's minions knew exactly what they were doing. The money quote--literally and figuratively--comes from Julius Schwarz, executive vice president of the company that Trump partially owned and which was at the center of this fraud. When asked how to characterize the deal, Julius Schwarz, executive vice president and general counsel at Bayrock Group, the company that was building a number of Trump buildings, said:
Call it equity, but for tax purposes it's debt. Otherwise we write a huge check to the IRS. As a 49 per cent equity partner they are still equity. There is no other way around it.
Separate from any criminal investigation, Donald Trump is vulnerable politically. He's vulnerable on tax evasion, and on his refusal to release his tax returns. The two are connected. Hillary Clinton and Elizabeth Warren have both hit him on his returns in recent days, after he claimed that the tax rate he pays is "none of your business." Greg Sargent thinks Trump's defense that he "fight[s] very hard to pay as little tax as possible" could work, as Trump will essentially be saying to the American people: "You're damn right I've been a scummy businessman. Now I want to be a scummy businessman on your behalf and on America's behalf."
However, Warren has crafted a powerful counter-argument, highlighting Trump's statement that paying taxes is like "throwing money down the drain," and then hammering him for having torn up the social contract that binds us as a society--which obviously includes paying taxes. Sen. Warren condemned Trump as someone who "inherit[ed] a fortune from his father," but has been "keeping it going by scamming people." Warren then connected this attack to Trump having said he hoped for home prices to crash, noting that that hope reflects Trump's basic character as someone who "roots for people to get thrown out of their house," and "doesn't care who gets hurt, as long as he makes a profit."
Trump thus personifies the "I got mine, go screw yourself" philosophy of the Republican Party. Secretary Clinton alluded to that point in her criticism of Trump's "hope" for a housing crash, saying: "And now he says he wants to roll back the financial regulations that we have imposed on Wall Street to let them run wild again. Well I will tell you what--you and I together, we're not going to let him." Additionally, Hillary connected Trump's comments on taxes, his refusal to release his returns, and his rejection of the social contract: "He goes around saying, 'Well we have got to have a stronger military.'...Well he certainly doesn't want to pay a penny to protect our men and women in uniform."
Yes, Donald Trump is a businessman. But that word doesn't mean the same thing to everyone. He uses it as an excuse for things he's done and said, the details of which continue to emerge--as this week's revelation on his company's tax evasion makes clear. The goal of Democrats must be to convince the American people that Trump is not a savvy businessman who'll work on their behalf, but a schemer and a thief who's only in it for himself.