Bankruptcy & The Presidency: Is Trump the First Presidential Candidate Personally Familiar with Bankruptcy?
by John G. Merna
Over the past few decades, Donald Trump has filed four (4) Chapter 11 bankruptcies for several of his corporations. Business bankruptcies, especially those
filed by Fortune 500 companies and municipalities, are more common and get more positive publicity. Few presidential candidates in recent history have been
as personally familiar with the bankruptcy laws as candidate Trump.
The truth is financial difficulties for presidential candidates are part of our history, going back to the Founding Fathers.
Thomas Jefferson was a great thinker and Renaissance man. His ideas and perspectives were embodied in the documents that we all believe have created this free and unique democracy. In his financial life Jefferson was less successful. Plagued by debt for most of his life, Jefferson died insolvent 50 years to the day after the signing of the Declaration of Independence.
President Ulysses S. Grant rose to public and historic awareness during the Civil War. His battlefield and post-war leadership catapulted him into the presidency. But after the presidency his financial success was shortcut by his poor decision in a business partner. He invested in a Wall Street investment firm, Grant and Ward, co-owned by his son Buck Grant. Theft by partner Ward put both the firm and the former president in bankruptcy. Grant penned his memoirs while battling throat cancer. While the memoir earned him $450,000, he died soon after completing his book.
tried his hand at business as he did with law before going into politics. Partnering up to open a general store in New Salem, Illinois in 1832, he bought
out the inventory of other stores on credit. Despite a booming economy at the time, Lincoln’s business strategy failed. While Lincoln attempted to sell his
shares to exit the venture, the death of his partner left him owing $1,000. Without the protection of modern bankruptcy laws he was force to sell his two
most value pieces of property: his horse and his survey equipment. It wasn’t enough to pay the full debt and he spent the next 18 years paying off the
governor of Ohio, lent money to a friend for his business. Unfortunately, the friend’s business failed and McKinley was liable for the approximate $130,000
of debt to the bank. He considered leaving politics to return to the practice of law to pay off the debt. However with the assistance of some friends he
was able to satisfy the debt. Three years later, McKinley was elected the 25th president of the United States.
I think the lesson is that political success and business success do not go hand-in-hand. In the examples given the presidents were good politicians but
poor businessmen. Does it follow that a successful businessmen like Trump, despite his familiarity with bankruptcy, may be a poor politician? That you will
decide at election time. Thanks for reading.