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Trump personally pockets club membership fees, breaking with industry norms

Donald Trump drives himself around the golf course to watch the final round of the Cadillac Championship golf tournament in Doral, Fla. on March 6, 2016.
Donald Trump drives himself around the golf course to watch the final round of the Cadillac Championship golf tournament in Doral, Fla. on March 6, 2016. AP

Even as he serves as president, Donald Trump earns a tidy sum — tens to hundreds of thousands of dollars — every time a new member joins one of his tony clubs.

Whether it’s the Trump National Golf Club in Bedminster, New Jersey, where the U.S. Women’s Open Golf Championship rounds start Thursday; the club outside the nation’s capital, where the president often spends time over the weekend; the historic Mar-a-Lago Club, where he hosted the president of China and the prime minister of Japan; or one of his other exclusive addresses, each collects a hefty initiation fee from new members — up to $450,000 per person, with annual dues on top of that.

Trump has benefited greatly from these initiation fees for years. Even back when it was typical for membership fees to take the form of refundable deposits, he broke with the norm for such clubs by taking the money for himself, according to documents and interviews.

In 2004, Trump had access to nearly $100 million from refundable fees from members at just four clubs, including Mar-a-Lago, the resort in Palm Beach, Fla. that Trump has dubbed the Winter White House, according to a personal financial statement written by his accountant that year and obtained by McClatchy.

Reporting by McClatchy, including nearly 20 interviews and hundreds of pages of documents — some from litigation involving Trump and his businesses — shows that the president put in place unusual policies that allowed him to keep the high one-time fees charged to new members and put language in his club rules that allowed him to spend the money on anything he wanted.

“It’s definitely unusual,” said Jay Karen, CEO of the National Golf Course Owners Association, who has been in the golf club business for two decades. “It certainly reflects a clever and shrewd way to raise capital.”


Trump’s decision to retain ownership of his businesses while president, including his nearly 20 clubs across the globe, has been sharply criticized by ethics experts who cite a litany of potential problems: Will the president’s proposals on taxes, environmental rules and labor regulations benefit his bottom line? Are members and their guests gaining unfair access to the president? Is the president violating the Constitution by accepting money from foreign officials? Do local and state leaders feel pressure to make decisions that could favor Trump’s businesses?

“I don’t think we have anything to compare this to in presidential history,” said John Wonderlich, executive director for the Sunlight Foundation, a government watchdog group. “He is refusing to acknowledge that the office is bigger than his business.”

In the more than five months he has been in office, Trump has visited Mar-a-Lago on 25 days and his golf clubs on 36 days, sometimes more than once a day, according to a compilation of information released by the White House.

The visits have led to a flurry of publicity that could boost the clubs’ popularity and revenue, fueling questions among experts as to whether he is using the presidency to make more money.

Mar-a-Lago saw profits climb nearly 25 percent in 2016 while Trump was a presidential candidate, though overall income at his golf clubs declined 6 percent, according to his personal financial disclosure statement released last month. Immediately following his election, Mar-a-Lago doubled its initiation fee to $200,000.

“Just about all publicity is good,” said Laurence Hirsh, president of Golf Property Analysts and a former president of the Society of Golf Appraisers. “As he continues to visit his clubs, he raises their profile and potentially enhances their business.”

The White House referred questions to the Trump Organization, the business now run by Trump’s sons, which did not respond to questions. But in an interview after a Mar-a-Lago member quietly arranged for a pair of former Colombian presidents to meet Trump, White House Chief of Staff Reince Priebus told NBC News that Americans didn’t need to know about the clubs, including the identity of its members.

“I mean this is a private business,” he said. “It’s a private organization. It’s a private club.”

There’s no doubt that Trump’s clubs are among the biggest moneymakers in his vast empire. He listed more than $325 million in income from golf clubs and resorts, according to his recent disclosure statement. Trump National Doral, a golf resort in Miami, was his largest source of revenue with $116 million in income.

Before he was sworn into office, Trump eschewed calls to fully separate from his business interests and instead placed his holdings in a trust.

An attorney who specializes in financial matters, including taxes, for affluent families who examined Trump’s available trust documents at the request of McClatchy noted that Trump amended an existing trust this year to name as trustees his son, Donald Jr., and Allen Weisselberg, the Trump Organization’s chief financial officer.

The attorney said Trump retains the legal power to revoke the trust. The trust, which was to include all Trump’s businesses, is designed to hold assets for his “exclusive benefit,” which he can receive at any time without the public’s knowledge, the attorney said.

White House Press Secretary Sean Spicer acknowledged in April that Trump could receive the money while president.

“The whole entire point of setting it up is so that somebody can draw money,” Spicer said. “The idea that the president is withdrawing money at some point is exactly the purpose of why a trust is set up, regardless of an individual.”

Trump pledged to donate profits from spending by foreign governments at his hotels to the U.S. Treasury (though the Trump Organization has recently said that it won’t ask guests if they are representing other governments because it would “diminish the guest experience”). But that policy does not apply to Trump’s clubs.

Trump’s name adorns 18 exclusive clubs around the globe, including facilities in Scotland and Ireland; three of them are in Florida. Ten of them are private clubs – including the one 30 minutes outside Charlotte in Mooresville, N.C. – where only those who are hand-chosen can be become members and use the top-tier features, which can include golf, pools, tennis, basketball, fitness centers, dining and overnight accommodations. The Trump memberships provide “a lifestyle of uncompromising personalized service, luxurious amenities and attention to detail that create a lifetime of memories,” the Trump Organization boasts on the club websites.

Other Trump clubs are open to the public but also allow membership. Another three are open to the public, but do not offer memberships. In February, Trump’s adult sons, who are charged with running the family business while Trump is president, attended a ceremony to open a golf club in Dubai. A second course is set to open in Dubai in 2018. Officials at the clubs declined to comment for this story.

Members of Trump clubs are required to pay initiation fees — a one-time charge for joining, as is common at clubs — as well as thousands of dollars in annual dues; dues vary, but amounted to $25,000 at one club and $14,000 at another. None of the fees are returned.

“No portion of an Initiation Fee will be refundable in connection with a member’s resignation,” according to a 2014 membership plan for Trump National Golf Course Colts Neck, N.J., obtained by McClatchy.

In the past, Trump’s initiation fees were refunded when a club member left — as long as he or she had been there at least 30 years. But the money wasn’t sent back until a new member joined, essentially ensuring that the same amount of money was always available to Trump. No interest was given to the members, who also had to pay additional fees to receive the refund fees that the Bedminster rules put at 15 percent in 2010.

The practice of requiring a new member to replace an existing member had been the norm for high-end clubs. But Trump’s threshhold of a 30-year membership was less common. Most clubs allowed a deposit to be returned in just a couple years if four to five new members signed up, Karen said.

Henry DeLozier, a principal in Global Golf Advisors, which works with investment bankers, real estate developers and golf owners, said refundable deposits became popular in the late 1980s and early 1990s. “It was a means…to gain access to capital with a 30-year payback,” he said. “It was a 30-year interest free loan.”

After the recession — when more members wanted to resign from clubs than wanted to join them — owners began to forgo refundable deposits for initiation fees that were never to be returned.

On at least one occasion, Trump apparently tried to convert refundable deposits into the nonrefundable kind: In February, a federal judge ordered the Trump National Golf Club in Jupiter, Fla., to give back nearly $6 million to members who accused Trump of keeping their refundable deposits, promised under a prior owner, and refusing to allow them to have access to the club after they said they planned to resign.

In 2004, Trump’s accountant at the firm of Weiser LLP wrote a personal financial statement used in a lawsuit that outlined the refundable deposits he had control of from four clubs: $26.2 million from Mar-a-Lago; $20.1 million from Trump National Westchester in Briarcliff Manor, N.Y.; $31.6 million from Trump International in West Palm Beach, and $22.2 million from Trump National in Bedminster. (Trump didn’t acquire some of his clubs until several years later.)

“One condition of membership is the contribution of non-interest bearing deposits that do not require repayments until 30 years after receipt and then only upon a member’s resignation,” the statement said. “The fact that Mr. Trump will have the use of these funds for that period without cost and that the source of repayment will most likely be a replacement membership has led him to value this liability at zero.”

Scott Univer, general counsel at Mazars USA LLP, which acquired Weiser, declined to comment, saying it was against both company policy and professional rules.

The majority of clubs in the United States are non-profits, where members have equity in the facility and any fees are spent on improvements. Those clubs and others run like businesses generally earmark fees for capital costs, such as improvements to the club house or restaurant, or say they will be spent on the club, according to leaders at four professional associations of clubs in the United States, including the National Club Association and Club Managers Association of America, which have thousands of members.

Philip Newman, a CPA who has spent more than two decades working with private clubs, said initiation fees are typically used for a club’s facilities but “certainly there are developers who put the money in their pocket.”

Two Trump club membership contracts obtained by McClatchy show the refundable deposits could be spent however the owner wants.


“Membership deposits and all other Club revenues are the property of the Club Owner and may be used for any purpose, in its sole discretion,” according to rules in place in 1999 at the Trump International Golf Club in Palm Beach and modified in 2000, obtained by McClatchy. Rules at Trump’s Bedminster club in 2010 used the same language, word for word.


Thomas Hutchison, a businessman who, with his wife, Deanne, joined both Mar-a-Lago and Trump National Golf Club in Jupiter in 2015, said he is sure that Trump spent their initiation fee however he wanted. “That’s how he makes his money,” he said. “If you don’t like the way he’s maintaining it, you quit.”

The Hutchisons are members of five other clubs around the country; including three in Florida and Maryland that are owned by the members. The other two, both in Idaho, allow the owners to use fees as they wish.

Hutchison described the situation this way: If you rented your house, you wouldn’t expect all the money to be spent on the house’s upkeep. “If I owned a golf club, I’d do the same thing,” he said.

Two other Mar-a-Lago members who did not want to speak for attribution about the president’s businesses said they were aware that Trump could spend the money as he pleased; one said he signed the club’s contract a decade ago — after his attorney reviewed the document — knowing he would never get his money back.

“I don’t know what they do with the money. I don’t care,” said Michael Kovner, a Manhattan residential real estate broker and new Mar-a-Lago member. “It’s theirs.”

The amounts of current initiation fees are not publicly disclosed, though some have been reported in the media: The Briarcliff Manor club charges $200,000. The Bedminster facility charges $350,000. And the West Palm Beach club charges $450,000.

Multiply that by the thousands of members of Trump’s clubs and it adds up to a fat purse: In 1999, Palm Beach capped membership at 375. In 2010, Bedminster’s ceiling was 700. In 2014, Trump’s Colts Neck, N.J., club limited membership to 375. All figures are taken from club documents.

Each club’s full financial paperwork, including loan or tax documents, could pose some limit on how the money could be spent, but Trump has not released it.

Trump is the first president in decades to refuse to release his taxes, which would show what he is making from his clubs. “We need to see the president’s tax returns to see what he is profiting from,” said Aaron Scherb, director of legislative affairs of the government watchdog group Common Cause.

Ben Wieder and Katishi Maake contributed.


Private clubs that require membership

The Mar-a-Lago Club, Palm Beach, FL

Trump National Golf Club, Bedminster NJ

Trump National Golf Club Charlotte, Mooresville NC

Trump National Golf Club Colts Neck, Colts Neck NJ

Trump National Golf Club Hudson Valley, Hopewell Junction NY

Trump National Golf Club Jupiter Golf Club, Jupiter FL

Trump International Golf Club Golf, West Palm Beach FL

Trump National Philadelphia Golf Club, Pine Hill NJ

Trump National Golf Club, Washington, Potomac Falls VA

Trump National Golf Club, Westchester, Briarcliff Manor, NY

Clubs that are open to the public but also offer memberships

Trump National Doral Golf Club, Miami FL

Trump International Golf Links, Doonbeg Ireland

Trump International Golf Links, Aberdeen Scotland

Trump International Golf Club Dubai, UAE

No membership required

Trump Golf Links, Ferry Point, Bronx NY

Trump National Golf Club Los Angeles, Rancho Palos Verde CA

Trump Turnberry, Turnberry Scotland

Not opened

Trump World Golf Club, Dubai UAE

Source: Trump Organization

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