PANAMA CITY — The directors of the Trump Ocean Club met July 28 on urgent business. They needed to fire Donald Trump.
The building’s residents and condo owners had invested in the namesake, a 70-story waterfront tower along Panama Bay, on the strength of Trump’s reputation. But during the four years that Trump Panama Condominium Management LLC had managed the property, Central America’s largest building, a team installed by the Trump family was accused of running up more than $2 million in unauthorized debts, paying its executives undisclosed bonuses and withholding basic financial information from owners, according to an Associated Press examination.
The Trumps had done all of this through fine-print chicanery, the board said. A clause in many residents’ purchase agreements prevented them from voting against the Trump company’s wishes. That allowed the Trumps to install their top employee as chairman and the residents’ representative on the board — even though the Trumps’ actual stake in the building’s residential area was merely a storage closet on the 15th floor.
The Trump Organization sent its response days later. “Your letter is a complete sham,” wrote the Trumps’ top lawyer, Alan Garten. He accused the board of ingratitude and criminal trespassing. After refusing to accept being fired, Garten declared that Trump’s company was quitting — and demanded a $5 million termination fee.
Whether wheeling and dealing with Wall Street bankers, debating political rivals or running a condo association, Republican presidential candidate Donald Trump has advanced his interests by leveraging his outsized reputation, canniness and aggression. The Trump Organization’s adventures in Panama provide a window into how these traits have filtered into his business empire — and the style of management that could be expected in a Trump White House. Transparency and close attention to expenses are not strengths. Squeezing the most from contractual language is.
Though Donald Trump lists himself as managing member in the Panama business in campaign financial disclosure documents, the company in practice is part of the Trumps’ family business. In an interview, Trump’s son Eric called the squabbling at Trump Ocean Club a minor aside in the story of how the family’s affiliation with the building created “an amazing icon and, frankly, a great testament to America.”
The power struggle at the tower shows the powerful allure of Trump’s name — and the disenchantment and separation that sometimes follow. Even that is indicative of Trump’s style: As the Ocean Club’s board was trying to settle into the administrative offices, Trump’s people cut off the office’s Internet and phone service and repossessed the office copy machine. The Trump Organization acknowledged this to the AP, saying that disconnecting services was necessary for security and privacy concerns.
Without Donald Trump, the development would not exist. But the grand ambition behind it belongs to Roger Khafif, a businessman with a prime waterfront parcel in Panama City and an aspiration to build a condominium, hotel, marina, casino and commercial center in the arcing shape of a wind-filled sail.
What Khafif lacked was the long track record as a developer needed to lure international banks and construction firms for such an expensive project.
“A lot of people were saying it was never going to be built,” said Duncan McGowan, a real estate agent and property manager who has sold units in the Trump Ocean Club since before construction began.
Bringing Trump aboard bolstered the project’s credibility with potential buyers, too.
“I am proud to develop this extraordinary high rise,” Trump said in a brochure, promising that the building would be a “landmark in Latin America and the Caribbean.”
