ANDREA BERNSTEIN: It’s Tuesday, September 11, 2001, 7:36 AM. 

[CROWD NOISES PLAY]

BERNSTEIN: A young man walks through the World Trade Center concourse, buys a pack of Marlboros. A muzak version of a Rod Stewart song plays in the background. The man works with his dad. Their business is “tax consulting,” getting property tax bills lowered.

In the concourse the consultant meets another guy, a New York City tax assessor. They walk to a restaurant in a nearby hotel, sit down. Glasses clink and people laugh. 

[FANCY MEAL AMBIENCE AND MUSIC PLAY]

“I love this place,” the consultant says. “Isn’t it great?” the assessor replies. The assessor had been on the take, accepting cash to lower property tax assessments.

[MUSIC WINDS DOWN, BECOMES OMINOUS]

At 8:46 AM, there’s a far off, muffled boom. Then a louder and closer explosion. It lasts for 28 seconds. The hotel’s alarm blares. 

We know all this because one of the guys was wearing a wire.

The FBI was recording the breakfast. The tape is the only uninterrupted audio recording of the 9/11 attacks. 

The whole thing was later revealed by the New York Daily News.

[MUSIC BECOMES DRAMATIC]

“Let’s get out of here,”the consultant shouts. The two men split up. The consultant runs to West Street, at the edge of Lower Manhattan. “Oh my god,” he says, as he looks up at the North Tower of the World Trade Center. 

There’s another explosion. It’s now 9:03 AM. The tape is still rolling.

The consultant and the assessor both survive.

[A BEAT OF MUSIC, THEN A RIFF ON TRUMP INC. THEME MUSIC BEGINS]

Just under six months later, the U.S. Attorney for the Southern District of New York, James Comey, announces 18 arrests.

Comey says, quote, ”For decades, New York City tax assessors, as well as some representatives of owners of commercial and residential properties throughout New York City, have been unjustly enriching themselves at the expense of the people of this magnificent city." 

The tape made on 9/11 was evidence in the case. 

[TRUMP INC. THEME MUSIC PLAYS]

BERNSTEIN: Hello, and welcome to Trump Inc., a podcast from WNYC and ProPublica that digs deep into the business of Trump. I’m Andrea Bernstein.  

When the arrests were announced, you could still smell the smoke from the World Trade Center. Michael Bloomberg had only been mayor for two months.

BLOOMBERG: Recently, in February 2002, 18 current or former New York City tax assessors employed by the Finance Department's Real Property Assessment unit were arrested on federal racketeering, bribery, and mail fraud charges.

BERNSTEIN: Bloomberg estimated the city had lost $160 million in tax revenues over just the previous four years.

BLOOMBERG: A joint city and federal investigation revealed that the assessors took more than $10 million in bribes over a 35-year period. 

BERNSTEIN: All the assessors pleaded guilty, except for one, who died. Most served prison time and are still paying restitution.

Though the scheme was widespread, encompassing more than five hundred properties, no owners were charged. The statute of limitations for prosecution has passed. Only a few of the companies who were allegedly involved were ever publicly named. 

We have one more. Here’s what Trump Inc. reporter Katherine Sullivan and ProPublica’s Heather Vogell have found:

[MUSIC WRAPS UP]

BERNSTEIN: According to five former tax assessors and city employees who were convicted in the scheme, as well as a former Trump Organization employee, the Trump Organization paid bribes, through middlemen, to New York City tax assessors to lower its property tax bills for several Manhattan buildings in the 1980s and 1990s. 

In turn, the former city employees say, Trump’s company received tax reductions at several marquee properties.

[JAZZY, BASS-DRIVEN INTRIGUE MUSIC PLAYS]

The alleged payoffs involved bagmen, envelopes of cash, meetings in restaurants, and big savings for the Trump organization. 

No evidence has emerged that Donald Trump personally participated in the alleged bribery. We don’t know exactly what, if anything, Donald Trump knew about the scheme. 

The Trump Organization said in a statement, “To be clear, at no time did the Trump Organization or any of its employees or principals ever pay anyone for the purpose of unlawfully obtaining a lower tax valuation.”

The White House did not respond to requests for comment. 

[BEAT]

The events we’re talking about happened a long time ago.

Some of the people involved have died. Almost no one wanted to be named, because they’re afraid of retribution. So we’re relying on multiple unnamed sources, which we’ve gone to lengths to corroborate.  

We’ll explain. 

Katherine Sullivan takes it from here. 

[MUSIC CHANGES, BECOMES THE SOUND OF THE JFK AIRPORT AND A PLANE TAKES OFF, THEN BACK TO THE MUSIC]

KATHERINE SULLIVAN: I’m in Howard Beach, a largely Italian neighborhood in Queens, just next to JFK Airport. 

SULLIVAN: I’ve come here to meet Frank Valvo. Valvo used to be a city tax assessor. He pleaded guilty to five counts of bribery, racketeering, and conspiracy. Served a year and a half in prison, and is still paying restitution.

Valvo lives alone in a low-ceiling first-floor apartment. You can hear planes taking off from his living room.

VALVO: There’s loads of information here. [PAPERS SHUFFLE] But I want to — I don’t even know where to start myself.

SULLIVAN: Valvo is 88 years old. The hair he still has is nicely brushed. He walks with a little stoop. His mouth cocks a bit to the side, which affects his speech. He has a lot to say. 

VALVO: I, uh — was the, uh — retired as the first deputy tax assessor in the borough of Manhattan, alright? I was a supervisor for many — many, uh, properties. Uh, matter of fact, at times, the whole borough was under my jurisdiction. 

SULLIVAN: Valvo grew up in the Bay Ridge neighborhood of Brooklyn, finished high school, joined the Navy and served in the Korean War. He got a job as an ironworker before he started to work for the city. He wanted to be a tax assessor. 

VALVO: Everybody was a college graduate, except me. Guy would laugh, you know? “You didn't go to college, how you gonna pass the assessors exam?”

SULLIVAN: Valvo sent his wife and kids to stay with his in-laws so he could study in the evenings. He passed. People asked how that happened.

VALVO: I says, “You know why I passed the test?” I says, “‘Cause a guy like you put me down, I should have knocked the crap out of you.” I says, “But I chose to do it this way. And I came out the right way and I did it the right way, you know?” 

SULLIVAN: Yeah.

VALVO: And — and I — too bad I went that way, that route, but …

SULLIVAN: When Valvo went to work in the Municipal Building in 1971, everything was done by hand, in paper and multi-colored pencils. The Assessor's Office was long and narrow. Desks were arranged like a map of Manhattan: if you were assigned a district in Lower Manhattan, you sat on the southern end of the room. Those assigned to districts in Upper Manhattan sat on the opposite end of the floor. In the middle of the room was Midtown, where many of the high-value buildings were located. 

That’s where you’d find an assessor named Joe Marino.

VALVO: Describe Joe Marino? Joe Marino was a little taller than me. Joe Marino was built. Joe Marino was from East New York. Joe Marino had a bent nose, and a big nose. They used to call him “Joe the Nose.”

[MUSIC BECOMES JAZZIER FOR A MOMENT]

SULLIVAN: Before we go on, we should talk about how assessments work. It’s complicated.

Assessors are assigned a district. They have to decide how much each piece of property in that district is worth. There is an equation that’s used. The value of a property — and some of the numbers that go into that equation — are determined by the assessor.

They glean information about a property from many different sources. They have to visit every site and see what the building looks like: were there renovations recently? Are there a lot of vacancies? Did the building burn down last week? How will these things impact the building’s income? 

They look at past values for a property: what is the local real estate market in the neighborhood doing? Are rents going up or down? They also get some income and expense filings from the commercial owners. 

And of course, until just a few decades ago, assessors had to find all this information without the internet. They looked at real estate news, maps, historical rental data. They talked to building managers and supers. 

And then [PAUSE] they made judgement calls.  

[MUSIC BECOMES MORE SLICK]

VALVO: I — I get on the elevator with him and Tom McArdle —

SULLIVAN: Valvo hadn’t been at this job very long before he had an encounter with two other assessors.  One was Tom McArdle — we’ll get back to him. The other was Joe Marino. “Joe the Nose.” He’d dropped $200 on the floor.

VALVO: — He says, “Hey, Frank.” I said, “What, Joe?” This I don’t forget — he says, “You dropped your money.” I says, “What the hell is he talking about? I didn't drop no money.” I said, “What’s he, crazy?” I looked down. He says, “Just pick it up.” I pick it up. I says — I'm looking in my pocket. I’m — I'm looking in my pocket. $200! I'd never carried in my life!

SULLIVAN: Frank said $200 was basically his monthly rent.

VALVO: I — so now I said to myself, “Holy shit,” I says, “I took the $200. I put it in my pocket. Now,” I says, “This is the beginning.”

[MUSIC BECOMES MORE INTENSELY SPY-MOVIE-LIKE]

SULLIVAN: With that $200, Valvo became part of a decades-long bribery scheme. It went like this: Developers would hire so-called “tax consultants” to lower their bills. These middlemen would pay off guys like Joe Marino and Tom McArdle. Valvo got a portion of their take. 

A Marino sidekick would ask: “Frankie, can you see what you can do with these buildings?”

VALVO: This is a way in, right? So I did it and I — I, uh — I think it was four or five buildings involved, and I gave them cuts. 

SULLIVAN: Eventually, Valvo got promoted to handle wealthier, more prestigious districts. Whenever Marino or McArdle asked him to change an assessment, he did it. 

VALVO: I — I — I — I always got paid. I always got paid. 

SULLIVAN: How much a year?

VALVO:  Well, it would depend. It would depend on the assessment: how much they took off, how much they saved in taxes, a regular routine kind of thing. A formula, you know?

SULLIVAN: Most of the guys in on the scheme made a few thousand dollars a year.

They had a system and a lingo. Guys who took bribes were “doing business.” Properties they changed were “contract buildings.”

VALVO: A contract is a dealing between the owner and the assessor. You know, could be different people.

SULLIVAN: It's called the contract, but was that ever actually a written thing, or was it just a kind of — verbal?

VALVO: Verbal. That was all verbal.

SULLIVAN: It was more than the money, though. Valvo’s job came with status. He started meeting with people: tax consultants, building reps, lawyers.

VALVO:  You know, nobody ever called me “Mr. Valvo.” Lawyers, they're coming up to me — I wanted to be a lawyer when I was a young kid — lawyers are coming up to me, saying, “Mr. Valvo,” and I would sit — I would think I was Jesus Christ, coming from the streets of Brooklyn, to be an assessor, and a lawyer calling me “Mr. Valvo.” Holy smokes. I mean, big lawyers, all-the-name lawyers. Everybody knew me.

[1930s MUSIC PLAYS]

SULLIVAN: The origins of the scheme trace to a man named Albert Schussler. Schussler began working as an assessor in the 1930s. He retired from the city in 1967. Then, he started a “tax consulting” business. He promised building owners that he could get them lower tax bills. He allegedly paid bribes to make it happen. 

[MUSIC BECOMES MORE MODERN AND CONTEMPLATIVE]

After Frank Valvo had worked in the office about a decade, Tom McArdle left city government.  He set up a “tax consulting business” of his own. Sometimes he worked with Schussler, sometimes he worked independently.

This scheme grew to engulf over a third of the assessors in the Manhattan office.  

We talked to one of the assessors who was not involved. David Moog is now the Nassau County assessor on Long Island. He got his start in Manhattan. 

MOOG: I was hired on January 12th, 1987, as an assistant city assessor and assigned to the Manhattan Real Property Assessment, uh, Division, in Manhattan.

SULLIVAN: Moog got the job right out of college. He was younger than most of the men in the office. While most assessors went out to lunch, he brought his in a brown paper bag. He says Marino’s crew had a name for guys like him — the “Mickey Mouse Club.”

MOOG: I think it was 1990, I first heard the word, “All of those guys belonged to the ‘Mickey Mouse Club.’” And “Mickey Mouse Club” was guys who were not on the inside. 

SULLIVAN: Moog could tell that some of the guys in the office were close, and that they kept a lot to themselves. While he didn’t know exactly what was going on, he kept his distance. 

MOOG: There's certain people you didn't — it almost — like cliques, and certain cliques you wouldn't want to be in because you just didn't have any familiarity with them. You didn't want to — you had a bad feeling about it. You got a sense. And also you just didn't like the lifestyle. There's some of these guys were kind of loud, crude, or boisterous.

SULLIVAN: Moog eventually got transferred out of the Manhattan office to Staten Island. In part, he says, because he was not in the right “clique.” 

[MUSIC OUT]

BERNSTEIN: In 1980, there was a young developer on the rise.

BROKAW: This is Donald Trump, 33 years old, and some people think that he wants to buy the World Trade Center.

BERNSTEIN: NBC Nightly News anchor Tom Brokaw interviewed Trump. They were talking about the price of real estate in Manhattan.

BROKAW: … apartments in NYC alone — one-bedroom, not very large at all, $650 a month. That’s tough for the working class, isn’t it? 

TRUMP: And that’s actually now a very low price, in fact, if you have any of them available, I’d like to —

BROKAW: I know where I can sell a thousand of them at that price. 

TRUMP: That’s really a very low price. I know of a couple of buildings — for instance, the Olympic Tower on 51st Street and 5th Ave. Apartments … [TRUMP CONTINUES UNDER NARRATION]

[SILENCE]

BERNSTEIN: By this time, Donald Trump had built the Grand Hyatt Hotel and was making a name at Trump Tower and in Atlantic City.

He wasn’t the biggest developer in New York City. But by the mid-1980s, he was famous and becoming more so.

KATHERINE: Around this time, as Frank Valvo described it, several assessors gathered in the open floor-plan office, behind one big metal desk.

[JAZZY, OLD TIMEY GANGSTER MUSIC PLAYS]

VALVO: Joe Marino, you know, and Tom McArdle walked in.

They were the group that were working on getting Trump's business, right? Finally, they walk in one day, Joe behind the desk, and said — he says, “We got Trump! Everybody. All the — all the — the big district got Trump.” 

Wow. Holy smokes. You know?

KATHERINE: That day, in the municipal building, the excitement [PAUSE] was palpable.  

VALVO: And then it started. Then boom, badda-boom, badda-boom. Just, you know, punches left and right.

BERNSTEIN: We’ll be right back. 

[MIDROLL]

[BASS-DRIVEN MUSIC PLAYS AGAIN]

BERNSTEIN: I'm back with Katherine Sullivan and ProPublica's Heather Vogell. So here's what we know — 18 tax assessors were indicted in a scheme to take bribes to lower taxes. Frank Valvo, who spoke with us on tape, was one of them. Three men senior to Valvo in the scheme — Al Schussler, Joe Marino and Tom McArdle — have since died. No property owners were charged, and the name “Trump” did not surface in public legal documents.

[MUSIC OUT]

BERNSTEIN: So Valvo describes this vivid scene at the Municipal Building in New York City where his colleagues come in and say, “We got Trump.” But this was not something that Frank Valvo was directly involved with. So let's walk through it. Katherine and Heather, what do we know about what actually happened?

SULLIVAN: We talked to six people, including Valvo, who told us that the Trump Organization benefited from this bribery scheme. Four of those people were other city employees who worked with Frank Valvo. And two of those four employees had direct knowledge of Trump Org buildings being involved. They said they actually changed assessments for the company’s properties.

BERNSTEIN: You attempted to contact every living assessor who’d been convicted of the scheme. Some of them declined to comment but others ones, what? Just didn’t respond to your requests?

SULLIVAN: Right. To multiple requests.

BERNSTEIN: So, let's start with the first individual you spoke with. And this is somebody actually that you spoke to very early on in your investigation.

What did this person tell you, and how was he in a position to know it?

[JAZZY MUSIC BACK, QUIETER]

SULLIVAN: So, this is a former city employee, and I spoke to him many times on the phone, met with him a few times. And he had very specific details about working on some Trump Organization properties, including the 40 Wall Street building.

BERNSTEIN: So what — what would he say — what happened?

SULLIVAN: He would meet with a number of middlemen, who he called “bagmen.” One of those middlemen was Tom McArdle, who we've heard about from Frank Valvo. And he would meet with these middlemen at diners or restaurants, often for breakfast, and they would give him an envelope of cash — either under the table, sometimes leaving it on his chair — never passing it to him over the table.

BERNSTEIN: Under the table, which is, like — it’s, like, a metaphor, right? [BOTH LAUGH] There’s actual money under the table.

SULLIVAN: Right? Literally underneath the table. Um, so it's not to draw attention.

And he said at one of these meetings, with one of these middlemen, he opened the envelope and he asked for more money. And the middleman responded, “Um, you know, Donald thinks you should be doing this for free.”

BERNSTEIN: And what did he understand that he was supposed to be doing with these envelopes of cash? Like, what was his understanding of what these envelopes of cash were for?

SULLIVAN: He understood that he was taking the money to change assessments for 40 Wall Street in a favorable way for the Trump Organization.

[MUSIC OUT]

BERNSTEIN: So that's number one. Heather, you spoke to another city employee whose job it was also was to set assessments for properties, including Trump Org properties, and he described similar scenes.

HEATHER VOGELL: He was someone who was also in charge of setting the assessment for 40 Wall Street, though at a different time. And he recalled meeting with Tom McArdle at restaurants or diners and that, during those meetings, that he would be passed cash in an envelope, discreetly. And he also remembers being given a list of properties that were the ones he was supposed to fix.

And he specifically remembers 40 Wall Street being on that list, at a time when the Trump Organization controlled it.

[MUSIC FLOURISH]

BERNSTEIN: So, there's two people with direct, firsthand knowledge. What other corroboration do we have? 

SULLIVAN: So, we spoke to two other employees at the Assessor's Office who said they also knew that Trump Organization properties were involved. One of them says he remembers hearing talk about the assessment on a Trump Org property being lowered in exchange for bribes.

VOGELL: And I spoke with someone who said that yes, he remembered that at least one Trump Organization property was involved, but he declined to provide any more specific information. And he was somebody who other people had mentioned as being in a position to know one way or the other.

[MUSIC MOMENT]

BERNSTEIN: So, we have Frank Valvo. We have two people who said that they personally took bribes — as they understood it — to lower, among others, Trump Organization property tax assessments. Then we have two more people who worked in the office at the time who said they had also heard of Trump Organization properties being involved in this scheme.

And then, Heather, you spoke to someone who used to work at the Trump Organization.

VOGELL: Right, exactly. So this would be somebody who would be aware of this from the other side. And what he told me was that he remembers Donald Trump setting up a meeting between McArdle — who we discussed as one of these middlemen — and an employee of the Trump Organization. And in that meeting, my source said, Tom McArdle received a check from the Trump Organization, and he also received some financial information on the Plaza Hotel —

BERNSTEIN: — which the Trump Organization owned at the time. 

VOGELL: And that that information — my source called it, quote, “Bogus,” as in the numbers had been somehow tampered with — and that that was information that was given to McArdle to be passed on to the assessors to help them lower the assessments.

BERNSTEIN: So, you were told Donald Trump personally set up the meeting, and therefore allegedly [BEAT] knew about it. 

VOGELL: Right. We don’t know exactly what Donald Trump knew about the meeting that the ex-Trump Org employee described to me.

BERNSTEIN: One other piece of information that your source — this former Trump organization employee said — was something that happened afterwards, regarding Trump and Tom McArdle.

VOGELL: Right. After one of the early stories was written about the assessor's scheme, my source said that Donald Trump became very concerned that he had signed one of the checks to McArdle and was asking staff about it, and his staff told him, “Oh, don't worry. It was executives at the Plaza that signed that check.”

SULLIVAN: We did speak to one former assessor who was convicted in the scheme, Joe Iovino. Said he “did not know of any Trump properties” paying bribes. 

[DRIVING ROCK MUSIC PLAYS]

BERNSTEIN: One other thing was that Heather, you looked at the numbers. What is it, the historical, what … ?

VOGELL: So I — I pulled the historical tax assessment data for both the Plaza and for 40 Wall Street, since those were specific buildings that came up in these other interviews.

BERNSTEIN: So let's start with the Plaza. What did you find?

VOGELL: Basically what we saw with the Plaza was that a few years after Trump purchased it, that the valuations dropped steeply. We saw a 40% drop in the valuation in two years. And then, when it went on the market, the valuation started to rise again slowly. But what's complicated about that is that there were different things going on in the New York City real estate market at the time, and Trump Org attributes any changes in value to those bigger market changes that were happening.

BERNSTEIN: And what about 40 Wall?

VOGELL: 40 Wall Street's a little bit more complicated. The property’s assessment began to drop before Trump officially took control of the building. But what we've also heard from several sources is that he retroactively challenged some of the tax assessments. You know, the building stayed low for several years and then starts rising again right around when the investigation was beginning to get traction.

BERNSTEIN: Now, the Trump Organization said it had appealed its tax bill for legitimate reasons. The building had been in distress.

VOGELL: Right. But what we also know is that, indeed, Trump Organization did finish some renovations and that, around 1998, they began landing some really lucrative tenants who had free rent periods and didn't begin paying rent until ’99, say. So, you're gonna see that assessment going up anyway because of that.

BERNSTEIN: So, just to be clear, the data could support that these assessments were artificially lowered. But because of the complexity of New York City tax data, it's impossible to say. However, we know that the data doesn't contradict it. The data doesn't show the tax rates going up, for example.

VOGELL: Exactly. Exactly. Right.

[MUSIC BECOMES SLOWER, MORE MARIMBA-FOCUSED]

VOGELL: Remember, the Trump Organization’s chief legal officer, Alan Garten, denied that Trump Organization's principals or employees paid bribes. 

He wrote in his statement, “This was corroborated by multiple investigations which found no evidence of any wrongdoing by the company or any of its principals. ... If anything, the Trump Organization was a victim of the scandal.” 

Asked to provide evidence or name the agencies that allegedly cleared his company, Garten did not provide additional details, saying, “I was referring to the different investigations conducted by the state and federal authorities at the time.”

As we were finalizing this episode, Garten sent an email that stated, “We reviewed our accounting records and we have no record of any payment ever being made to Tom McArdle.” We asked whether the records search included those from the Plaza Hotel, as well as whether the records indicated if the company had paid McArdle’s firm rather than McArdle personally. Garten replied, “Regarding Trump Plaza, as I said, we have no records of any payment to Mr. McArdle.”

[MUSIC SLOWS MORE]

Five years after the indictments, Trump was giving a deposition in an unrelated matter. He was suing the journalist Timothy O’Brien. Buried in the transcript of Trump’s deposition, there’s an exchange.  

Here it is, in full.

[ANDREA BERNSTEIN READS THE FOLLOWING]

QUESTION: Ever heard the name McArdle?

ANSWER: No. who is McArdle?

QUESTION: Thomas McArdle.

ANSWER: It sounds vaguely familiar, but I don’t remember.

QUESTION: Former New York City tax Assessor's Office, then tax consultant. 

ANSWER: I don’t know the name. 

QUESTION: Was caught up in a scandal in the early 2000s regarding tax assessors. 

ANSWER: I think he is a man that represented many, many real estate people in New York. He represented some of the biggest real estate companies in New York. I don’t know if he represented us or not, but I don’t remember that. 

QUESTION: Did you ever make any payments to Mr. McArdle? 

ANSWER: I don’t even remember ever — I don’t know that name. I think I read the name because there was some kind of tax scandal going on, and he was involved with various real estate people. I don’t know the name. I don’t know that we ever used him. 

[QUESTION] Do you recall — 

[ANSWER] He was a consultant of some kind? 

[QUESTION] Yeah.

[ANSWER] No, I don’t remember ever having used him. But he was used by many major real estate companies in New York.

[BERNSTEIN FINISHES, MUSICAL MOMENT]

BERNSTEIN: Tom McArdle died in 2013. He was not charged with wrongdoing [PAUSE] in this case.

[MUSICAL MOMENT ENDS, THEN GOES BACK TO BASS-DRIVEN MUSIC]

BERNSTEIN: Katherine is going to pick up again.

SULLIVAN: Frank Valvo retired in 1998. But what he didn’t know was that an investigation had started a year earlier. The FBI teamed up with the city’s Department of Investigation. 

Within the Assessor's Office, there were rumors of an investigation, and in 2000, Joe Marino was quietly arrested. Eventually, word made its way to a reporter at the New York Times, who got an anonymous phone call. 

BAGLI: That said that this guy, uh, Joe Marino, had been arrested or indicted or something. Some legal thing.

I’m Charlie Bagli. I’ve been covering the intersection of politics and real estate in New York City for the past 30 years. 

And eventually I went down to the federal courthouse and pulled his case file. And there was a single sheet of paper in there and it said that he had accepted — taken $4 million in bribes. And that's about all it said. And I was thunderstruck because if he took $4 million, how many millions of dollars had he lowered the tax bill for various, uh, landlords in New York City?

[MUSIC STOPS UNTIL BAGLI SPEAKS AGAIN]

SULLIVAN: Marino’s arrest spooked the other assessors and the scheme. Most of them took far less money then Marino, one of the ringleaders. For awhile, the assessors went quiet, and stopped taking money.

One person told us that several of the assessors got together in a restaurant in Chelsea to decide what to do next. Ultimately, they guessed that the investigation had stopped with Marino. 

BAGLI: So they picked up again. And the investigators — the FBI was sort of flabbergasted that they would start going up again.

SULLIVAN: Unbeknownst to the assessors, the FBI’s investigation was very much ongoing, now with several cooperating witnesses, including Tom McArdle and his adult son. McArdle’s son was the one wearing the wire on 9/11 that recorded the attacks. (He was not charged with any wrongdoing and he declined to comment for this story.)   

The last recorded meeting took place on January 10th, 2002. Four days later, Bagli broke the news of the investigation. 

BAGLI: And it blew the whole thing up.

SULLIVAN: A month later, the FBI made 18 arrests. Frank Valvo was at home —

VALVO: In my apartment on Ocean Parkway in Brooklyn. And then they called me up — at six o’clock in the morning, is when they called everybody. They called me at six o'clock in the morning, and they says to me, “Valvo. It’s the FBI. We're outside your door.”

SULLIVAN: They told him to open it. He thought it was his friends pranking him.

VALVO: I said, “What are you effing around! It’s — it's six o'clock in the morning! What?” I say, “You’re effing around,” I said, and I hung up the phone. The phone rings again. I says, “Jesus Chri —“ I’ll never forget, I pick it up. I says, “What’d I just say?” He says, “Frank. Look out the peep hole.” He says, “We’re the FBI.”

SULLIVAN: He looks out the peephole —

VALVO: There’s four FBI guys out there. Black uniforms. I opened the door with the chain on it. He says, “Open the door.” They got guns in their hand.

SULLIVAN: All of the assessors ended up pleading guilty — all, that is, except for Albert Schussler, who was 85 at the time. 

BAGLI: There was a court date set. Schussler was supposed to go in to talk to the U.S. Attorney early in 2003, when he ended up dead. He had a stroke the night before he was to go into the office, and then he died in the hospital. And, uh, that pretty much ended the pursuit of the owners that benefited from this scheme. 

[MUSIC SLOWLY COMES UP]

SULLIVAN: The city seized $17.5 million from Schussler’s estate.

Remember — the city calculated that the scheme had cost $160 million in tax revenue just in the four years before the indictment. 

BAGLI: Well, my — my concern from the very beginning was about who was benefiting, and so I'm looking for the names of property owners that were involved in this scheme. I wasn't really that interested in the tax assessors — the individual tax assessors. They're getting basically Christmas money, maybe a little bit more than that, but it wasn't big numbers. And often, when these big scandals break out, they're looking at the peons down at the lowest levels of the conspiracy, rather than the serious beneficiaries. 

SULLIVAN: The lead federal prosecutor on the case, Sharon McCarthy, spoke to researchers from Columbia University in 2014. She said, quote, “You’d love to follow the rainbow to the very end and get every person along the way who has been committing crimes, but unfortunately, it’s not possible. The person who dealt directly with the property owners is Albert Schussler, and he passed away, and so we lost the ability to go after anyone else.”

I reached out to McCarthy. She said she couldn’t comment on anything that wasn’t already in the public record.

Her boss at the time, James Comey, declined to comment.

[SAXOPHONE COMES BACK INTO THE MUSIC]

BERNSTEIN: After 9/11, federal law enforcement agencies focused on fighting terrorism. In City Hall, there was real fear that businesses would abandon the city. Property owners got tax breaks, not scrutiny.  

BAGLI: And then, of course, Trump sees the moment to piss off both the city and the real estate industry by filing a lawsuit that said, “Well, uhh, you know, I had to pay higher taxes, uh, because all these other guys had cut some kind of crooked deal to get lower taxes.”

BERNSTEIN: In an interview with the New York Times’ Charlie Bagli, Trump called the scandal “perhaps the greatest bank robbery in the history of America.”

Trump said, “It is impossible for any one of those property owners who used Schussler not to have known what was going on.”

He also said, “I’m getting ready to bring a major lawsuit against all the property owners whose taxes I was funding, because I was honest and used legal channels. The other people used illegal channels and got better results.”

Trump's companies did file a lawsuit against the city. It said, quote, “the corrupt practices of these Department of Finance employees” meant other property owners unfairly got better rates than him. 

Shortly after, Trump filed a second lawsuit. This one argued that Trump’s Tower near the United Nations should be eligible for affordable housing tax breaks. 

The city resolved both suits into one settlement worth over $100 million.

The city’s settlement runs thirteen pages and goes into detail about the affordable housing tax breaks. 

Not mentioned at all? Trump’s claims that he had been hurt by the bribery scheme.

[JAZZY MUSIC OUT, CREDITS MUSIC IN]

Do you know more of this story, or have something else you want to share with us? Head to our website, TrumpIncPodcast.org, for details on how to securely send us tips and story leads.

This episode was reported by Katherine Sullivan and Heather Vogell. It was edited by Nick Varchaver and Eric Umansky. Fact checking and additional production by Alice Wilder. Jared Paul does our sound design and original scoring, with extra help this week from Isaac Jones and Spencer Hattendorf. Hannis Brown wrote our theme and additional music.

Very special thanks to Charles Bagli for his help with this story.

Thanks also to Doris Burke for her research, and to Meg Cramer, David Lewis, Jake Pearson, Peter Elkind, and Lydia Depillis.  

Matt Collette is the executive producer of Trump Inc. Emily Botein is the Vice President for Original Programming at WNYC and Stephen Engelberg is the Editor-in-Chief of ProPublica.

I’m Andrea Bernstein, thanks for listening.

[MUSIC OUT]

 

Copyright © 2020 ProPublica and New York Public Radio. All rights reserved. Visit our website terms of use at www.wnyc.org for further information.

New York Public Radio transcripts are created on a rush deadline, often by contractors. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of New York Public Radio’s programming is the audio record.