For most businesses, a freak thunderstorm flooding your golf course would constitute something between an inconvenience and a crisis — especially after you faced accusations of illegally modifying your course in a way that caused water damage to your neighbor’s buildings. But most businesses aren’t run by Donald Trump.
When a deluge flooded the Trump Organization’s Westchester County golf course and a nearby town in 2011, the organization used a wildly inflated claim to score an insurance payout of nearly $1.3 million, pulling in far more than what it spent to repair the course, two people tell Rolling Stone. The previously unreported insurance claim at Trump National Golf Club in the Village of Briarcliff Manor far outstripped the cost to repair the damages, which were about $130,000 to $150,000, one of the sources says.
The Only U.S. President to Be Impeached Twice Calls Biden 'Worst President in History'
Police 'Laughed' When Biden Staffers Pleaded for Help as Trump Train Harassed Campaign Bus, Lawsuit Says
50 Greatest Movie Superheroes
25 Best 'Friends' Episodes
One of the sources, a former Briarcliff employee, says superficial repairs were made to the damaged parts of the course. “The work was never completed,” the former employee says. “They basically band-aided it.” The Trump Organization had sought even more than the nearly $1.3 million that was paid out, but the insurer withheld a portion because the Trump Organization failed to produce the required receipts, the other source says.
Both sources have direct knowledge of the Trump Organization’s operations and spoke on the condition of anonymity because they did not want to compromise ongoing investigations. Neither source who spoke to Rolling Stone knew the name of the underlying insurer of the Briarcliff course because all claims were handled through a brokerage service, Aon. Aon and the Trump Organization both declined to name the underlying insurer.
Questions around the claim could spell more legal trouble for a Trump Organization already eyeball-deep in lawsuits and investigations. The Westchester County District Attorney’s office has opened a criminal investigation into financial dealings at Trump’s Briarcliff club. The New York Times, which first reported the investigation, said it appears focused at least in part on whether the Trump Organization misled local officials about the value of the property to reduce its taxes. The newspaper noted that the full scope of the inquiry could not be determined. (Jess Vecchiarelli, a spokeswoman for the district attorney’s office, declined to comment.) In the course of legal wranglings over an attempt to obtain Trump’s tax returns, a federal judge in 2019 noted that the New York District Attorney’s office and other law enforcement authorities in the state are investigating “alleged insurance and bank fraud by the Trump Organization and its officers.”
A Trump organization representative, in an emailed statement, says the organization was “not aware” of any investigation into the Briarcliff claim or any other. “Nor should there be an investigation,” the representative wrote. “The insurance claim at issue was amicably resolved more than a decade ago following a series of well-chronicled storms across Westchester County that dumped more than five inches of rain on the Village of Briarcliff Manor causing extensive damage and flooding at the golf course and surrounding areas.”
The organization’s alleged insurance shenanigans at Briarcliff may help explain how the Trump Organization, year over year, took in more from insurance than it paid out in premiums. One of the sources said the company would routinely gather overinflated repair estimates, often from members of Trump’s clubs, that could be used to justify insurance claims. In a conversation with top company officials, the source learned that the Trump Organization calculated that it got more than $2 back from insurers for every dollar it paid in — a return of more than 100 percent. Broadly, the source says, the company viewed insurance not as an expense, but rather as an ongoing source of profit.
Even within the Trump Organization’s broader legal morass, the Briarcliff payout stands out. The organization not only made a hefty profit off the flood, per the two sources, it did so after a series of moves that increased the damage both to the golf resort and to its neighbors, according to a lawsuit. The Village of Briarcliff Manor alleged that the Trump Organization improperly modified a series of course features that were aimed at controlling flooding, breaking the rules for aesthetic reasons, an accusation the Trump Organization denied.
After the storm, the village cited the course over modifications to grassy basins that had been designed to catch excess rainwater but were turned into ponds. Those ponds were unhelpful when the June 23, 2011 storm dropped five inches of water on the course, and the rain spilled over into a massive flood, according to a lawsuit the village filed in 2014. In the lawsuit, the Village of Briarcliff blamed these “illegal and intentional modifications,” along with the club’s failure to maintain the stormwater system, for flooding that caused nearly a quarter-million dollars in damage. The village, which lies at the foot of a hill below the course, saw its recreation center and historical society, both located in the local library, damaged by flooding, and the local swimming pool and athletic fields were submerged below several inches of water. A geyser of water shot from a manhole cover that popped off when the drainage system was clogged with rocks and debris. The village demanded the Trump Organization pay for damage estimated at more than $238,000. “The failure of the Trump storm water facilities to perform as designed was the sole direct cause of the village damage,” the village claimed in its suit.
The Trump Organization disagreed and disavowed any responsibility for the flooding. Before the suit, Specialty Risk Services LLC, a third-party administrator, had denied the Village of Briarcliff’s insurance claim against Trump’s golf club, finding that the flooding was due to an extreme “300-year event,” according to a letter obtained under New York’s Freedom of Information Law. (In its subsequent lawsuit, the village maintained that the rainfall did not exceed the amount the course’s stormwater system was designed to handle.) Scott Blough, a former superintendent at Trump’s golf course, told Rolling Stone that the club was not to blame for the flooding, saying the erosion had all occurred in a ravine off the golf course and he was unaware of any problems with the drainage basins. “From what I understood, everything was working properly,” Blough says.
The Trump Organization ultimately paid the town $50,000 to settle the lawsuit but, under the terms of the settlement, did not admit any wrongdoing, according to a copy of the settlement obtained in a request made under New York’s Freedom of Information Law. The settlement came on July 12, 2016, a few days before Trump accepted the Republican nomination for president.
The Trump National Golf Club Westchester in Briarcliff Manor, New York.
The allegations about the insurance claim could add to the former president’s mounting legal problems. The Trump Organization and its chief financial officer Allen Weisselberg have pleaded not guilty in what one prosecutor called a “sweeping and audacious” scheme to evade taxes on perks that should have been declared as income. Authorities in Georgia have opened a separate criminal investigation into Trump’s efforts to overturn the state’s election results, and the Attorney General for the District of Columbia announced a criminal investigation into the former president’s activities on January 6th. Trump also faces a host of civil complaints. And then there’s the Westchester County DA’s investigation.
As is often the case with Trumpworld, the allegations about the insurance claim pull in a rotating cast of characters with long-standing ties to Trump and legal woes of their own, including former Trump caddy Dan Scavino and onetime bodyguard Matthew Calamari.
In a 2007 deposition, Donald Trump testified that, when it comes to dealing with insurance claims, he relies “mostly” on Calamari, the Trump Organization’s fiercely loyal chief operating officer. The Wall Street Journal reported that the New York District Attorney’s office is investigating whether Calamari received tax-free benefits as part of its investigation into former President Trump’s company.
Calamari’s attorney, Nicholas Gravante Jr., says his client has neither been contacted nor subpoenaed by any New York authorities regarding anything related to insurance claims, adding that all of Calamari’s “duties at the Trump Organization have always been performed lawfully and ethically.” Responding to allegations that his client acted improperly with insurance claims, Gravante says: “Tell whoever the coward is who is anonymously feeding you this false information to come out of the woodwork and attach their name to it. I’ll look forward to suing them for defamation on Mr. Calamari’s behalf.”
A spokesperson for the Trump Organization declined to respond on the record about whether Calamari and Dan Scavino were involved with the Briarcliff insurance claim.
According to two sources, Scavino, the general manager of the golf course at the time, would have been well aware of the modifications to the course’s stormwater system, as well as the claim for damage from the 2011 storm. Scavino, another diehard Trump loyalist, was a 16-year-old caddy at the Briarcliff club in 1990 when he got to carry Trump’s golf bag. In 2015, he joined the Trump campaign and served as White House director of social media and a deputy chief of staff. Scavino did not respond to a message left on his phone and one of his social media accounts.
One of the sources provided a specific example of the Trump Organization wringing money out of an insurer. As part of the 2011 claim at the Briarcliff club, the company asked its insurer to cover the cost of replacing a torn lining in a manmade pond at the Briarcliff club. The Trump Organization insisted that replacing the torn lining would be an expensive process. It would involve draining a large pond and then removing and replacing the damaged liner. But all along, the source says, Trump’s company had a far cheaper repair in mind: Instead of draining the water, a worker was sent into the pond with scuba gear to patch the lining, a fix that had an estimated cost of less than $1,000.
The nearly $1.3 million payout at the Briarcliff club was not the first time that the Trump Organization may have profited from an excessive insurance payout in the wake of a weather-related disaster. Six years earlier, in 2005, Trump received a $17 million payout for hurricane damage to Mar-a-Lago, the former president’s members-only club and current home in Palm Beach, Florida. The Associated Press reviewed property records, interviewed the adjuster who handled the claim, and spoke with Trump’s butler at Mar-a-Lago. The AP ultimately concluded that there was “little evidence” of large-scale damage to the property.
Trump’s insurance policies also came up in 2007 when he was deposed in a $5 billion defamation lawsuit he filed against author and journalist Tim O’Brien. In that deposition, Trump said that under the terms of his “very good insurance policy” he was not required to repair damage to his properties. “We didn’t have to spend anything under the policy, as I understand it,” Trump said.
Pamela Newman, Trump’s longtime insurance broker at Aon Risk Services, handled the claim at Trump’s Westchester course and personally surveyed the damage, according to two sources. Newman also handled the 2005 claim for hurricane-related damage at Mar-a-Lago. In his 2007 deposition, Trump said Newman and her associate, Regina Degnan, “did the entire settlement with the insurance companies” for the Mar-a-Lago claim. Newman did not respond to an email or a text message left seeking comment.
Trump was one of Newman’s “largest clients,” according to a glowing 2011 profile of the insurance broker broadcast on PBS’ Nightly Business Report. Newman holds the distinction of being the first person to contribute to Trump’s presidential run. She retired from Aon in 2017 and was appointed a civilian aide to Army Secretary Ryan McCarthy, representing southern New York.
The former president’s relationship with Newman may raise red flags, according to an analysis of Trump’s legal troubles produced in June by the Brookings Institution. The report noted the close relationship “may raise questions for investigators as to how closely the broker scrutinized any false statements Trump may have made, or whether she was duped by him,” the report stated, adding that it may turn out nothing was amiss.
In 2019, New York regulators subpoenaed Aon for documents relating to the company’s dealings with Trump and the Trump Organization, according to The New York Times. (Aon was reportedly not a target of the investigation.) Aon, which declined to comment for this story, has said it intends to cooperate with investigations into the former president and his company. In addition to serving at the Trump Organization’s insurance broker, Aon Risk Services was paid more than $2 million for providing insurance services to the Trump campaign, Federal Election Commission records show. The city of Cleveland paid Aon $9.5 million for consulting services and a policy covering the 2016 GOP convention.
Trump said that Aon’s Newman was there for him whenever there was a flood, a fire, or any other problem at one of his properties. “There’s something about Pam where she just gets in there and kicks ass,” Trump told Nightly Business Report, not long after the Briarcliff storm that yielded his company a seven-figure payout. “She’s all right.”
Source: Read Full Article