How Donald Trump lied his way onto the Forbes 400 richest people list

Written by Brent Bambury

Jonathan Greenberg knew Donald Trump was lying to him when he placed him on the Forbes list of America's richest people, but he didn't know the magnitude of Trump's lies until this week.

As a journalist for Forbes, it was Greenberg's job to talk to Trump and try to uncover the truth about his wealth.

"I'll never forget coming back from Fifth Avenue in his office in 1982 thinking, 'I cannot believe someone would lie so much and so transparently'," author and journalist Greenberg told Day 6.

The New York Times, on Wednesday, published details of Trump's tax losses, and it clarified some of the obscurity around Trump's wealth by revealing a crushing burden of debt.

The Times report shows Trump suffered massive losses, a total of $1.17 billion US from 1985 to 1994.

Through five of those years, Forbes continued to list Trump among America's wealthiest, and Greenberg put him on the list in 1982, as well. But he says it was a mistake.

"He was worth under $5 million that year when I put him in at $100 million. He should never have been on that list and neither should his father," Greenberg said.

"I mean, he totally snowed me."

Scaled back but still a lie

It wasn't a total snow job because Greenberg knew Trump was wildly exaggerating his wealth when he claimed to be a billionaire.

"He was like, 'Are you kidding me? We're worth more than anyone on this list. We're worth a billion dollars. What are you talking about?'"

According to Greenberg, Trump took elaborate and transparent measures to make the case he was richer than he was.

"He pretended to take a phone call from his father advising his father how to place tens of millions of dollars in bond holdings," Greenberg said. "And when I got close I could hear that there was no one on the other end."

When the list came out and valued Trump at a fraction of the wealth he claimed, Trump struck back.

"Then it was Trump management writing letters to Malcolm Forbes," Greenberg remembered. "Calling my editor saying 'How dare he say that we're only worth $200 million or $100 million? I'm worth so much more.'"

Greenberg recalls being satisfied that Trump failed to convince him to inflate his worth, but admits that's exactly what happened.

"I went through my life thinking, 'We did a good job. We kept Donald Trump in check. He said he was worth a billion. We got him down to a couple of hundred million.' And in fact, the couple of hundred million was a fiction," he said.

"I was the one who had been snowed."

A call from John Barron

After two years of meeting with Greenberg in his Trump Tower office, Trump tried a new tactic to pump up his valuation on Forbes' 1984 list.

"That year his secretary had set up a call with the VP of finance. '[The secretary said] Mr. Trump can't talk to you this year, but John Barron will and he'll tell you whatever you need to know,'" Greenberg said.

Greenberg recorded the calls and preserved the tapes and there are two key takeaways: nearly everything Barron told Greenberg about Trump's wealth was false, and John Barron didn't really exist.

"John Barron was Donald Trump pretending to be his vice-president of finance," Greenberg said.

We were hearing from Trump about this positive cash flow — that he knew we wanted to hear, because we were evaluating wealth on the basis of a multiple of cash flow.- Jonathan Greenberg

"For 45 minutes in May, and then for 40 minutes again in July, I had a conversation with a fictional character who was really Donald Trump. He was feeding me lies that were very carefully fabricated ... He said that all of my father's assets have been consolidated and transferred to me."

In fact none of Fred Trump's properties had been transferred to his son.

"He did own some of his own properties," Greenberg said. "But as we see in the Times report, they were very heavily leveraged."

How Forbes calculated Trump's worth

Greenberg says Forbes made its estimates of Trump's wealth based on the real estate Trump held at the time.

"We knew what the buildings were. We knew when they had it built. We had a sense from others how heavily leveraged they were," Greenberg said. 

But there was little indication of the massive debt Greenberg read about in the Times this week.

"I was fascinated by ... how large the losses were and how far back they went, because we were hearing from Trump about this positive cash flow — that he knew we wanted to hear, because we were evaluating wealth on the basis of a multiple of cash flow," he said.

Greenberg admits he overestimated Trump's wealth and underestimated his mendacity. But he's not buying Trump's explanation that losses of $1.17 billion were advantageous to borrowing money.

"Real estate people need to leverage. They need to borrow money and they need to convince lenders that they are able to pay the debt service on those loans," Greenberg said.

"And if you show $50 million in losses, what it says is that all of your available cash flow from your rentals are not sufficient to pay the debt service. They're not going to loan you a dime."

Donald Trump was removed from the Forbes 400 in 1990, but re-entered in 1996.

He's remained on the list ever since.

To hear the full interview with Jonathan Greenberg, download our podcast or click 'Listen' at the top of this page.