Abraham Wallach Was Sued, Then Hired, By Donald Trump - 27 East

Real Estate News

Real Estate News / 1395751

Abraham Wallach Was Sued, Then Hired, By Donald Trump

icon 3 Photos
Abraham Wallach

Abraham Wallach

author on Aug 29, 2018

Among the mementos that Southampton resident Abraham Wallach has kept from his time working for the Trump Organization is a New York Times cartoon, autographed by Donald Trump.

The illustration by R.O. Blechman depicts the White House with a tower rising from the top of the south portico and “TRUMP” spelled out on the columns, as if it were Trump Tower or another of his branded properties.

Above Mr. Trump’s autograph—which, because of all the executive orders he’s publicly signed, is now easily recognizable—are the words: “To Abe, Great job!”

But this cartoon wasn’t published during, or after, Mr. Trump’s successful 2016 presidential campaign—Mr. Wallach had left the Trump Organization long before then. The cartoon was published by The Times in 1999, when Mr. Trump was weighing a third-party run with the Reform Party.

Mr. Wallach, now 77 years old, worked for Mr. Trump through the 1990s until 2002. As the senior executive vice president for acquisitions and finance, he had a hand in the Trump Organization’s biggest real estate deals during that era, from Trump World Tower and The Plaza Hotel to the West Side Yards and the Empire State Building.

Around Southampton, Mr. Wallach is known for a much smaller deal—not one that he was trying to make, but one that he was trying to kill. It was Fresh Market, a grocery store pitched in 2011 at the site of a former car dealership on the eastern edge of the Village of Southampton.

The existing village zoning code did not allow for a supermarket at the site, so the Southampton Village Board weighed a proposal that would create a special exception in the code to allow supermarkets in the highway business zone on lots larger than 60,000 square feet. Only four or five lots would have been affected—including the proposed site of the Fresh Market.

Learning that the board was weighing legislation to apparently benefit just a specific property owner, Mr. Wallach was disturbed. It was a case of illegal “spot zoning,” he insisted, and he made it his personal mission to convince the board to strike down the proposed code change.

He spent thousands of dollars out of his own pocket to help hire an attorney, despite not actually being a Southampton Village resident himself. He splits his time between the hamlet of North Sea, just north of the village, and Manhattan, where he lives at 845 United Nations Plaza—better known as Trump World Tower.

His fight against the supermarket law was well documented in local media at the time. His years of working for the future president—he was hired after Mr. Trump sued him for $250 million—are detailed in an unpublished memoir that he began drafting not long after he quit.

Over the course of several interviews over several months, Mr. Wallach detailed his experience working for Mr. Trump, and his motivations to take up a fight in a village that he didn’t even live in.

‘How To Get Hired 
By Donald Trump’
Mr. Wallach was a senior vice president of First Capital Advisers, a Manhattan real estate developer, in 1989, when he was invited on PBS’s “The MacNeil/Lehrer NewsHour” to discuss Mr. Trump’s financial woes.

“I didn’t say anything negative about Donald,” Mr. Wallach insisted. “I simply said, ‘If you buy too many properties all at the same time and you put very little equity into each deal, a day of reckoning is going to come when all the lenders are going to call in their loans, and you’re going to be bankrupt.’ That was basically it.”

Back at work, everyone told him what a “wonderful, marvelous job” he had done on television, he said.

But within a week, at his loft on 20th Street, he was served with a stack of papers: Donald Trump was suing him for $250 million.

“I read through them quickly, and it says, basically, ‘defamation of character’ and such things one would say if you’re trying to sue someone. Went to the office—they had gotten the same stack of papers.”

It turned out that his firm’s real estate lawyer, Gerald Schrager, also worked for Mr. Trump, so Mr. Schrager was tasked with resolving the issue.

Mr. Wallach said that Mr. Schrager came back and told him, “It’s finished with Trump—but he doesn’t want you talking to the newspapers or anybody about him.”

This was not a problem, Mr. Wallach said, because he hadn’t wanted to talk about Mr. Trump in the first place.

Mr. Trump had one more request: He wanted to meet Mr. Wallach.

Mr. Wallach wasn’t sure what Mr. Trump could want, but he agreed.

He went to the 22nd floor of Trump Tower for their appointment—which had been postponed a number of times—and waited, and waited, getting tired.

“I’m sitting there almost falling asleep, and out comes Donald. Donald is 6-2, and at that time he was a very good-looking man. And I’m sitting there half asleep. He put out his hand, I shake it. And his handshake was so strong it hurt my hand.”

He was in Mr. Trump’s office for about an hour but probably had only 10 minutes of his attention, because Mr. Trump was constantly on the phone, he said.

“I was very blunt in my conversation, which he loved. He loved that I was straightforward, said what I felt,” Mr. Wallach recalled.

They then had a second meeting, where Mr. Trump asked what Mr. Wallach’s plans were. He shared his intention to leave his current employer and go to work for Sentinel, which buys up apartment houses nationally. He said Mr. Trump replied, “Nah, you don’t want to go work for them. Come work for me.”

Mr. Wallach didn’t see what capacity Mr. Trump wanted him in. “You’ve got, from what I understand, a lot of problem loans. How can I help you? I can’t write a check,” he recalled telling him.

However, he suggested that perhaps his next job—whether it be for Mr. Trump or for someone else—should be to help people in the terrible real estate market deal with their problem loans.

Mr. Wallach ultimately took the job at Sentinel. But on his first day, he received a call from Mr. Trump, telling him to get over to Trump Tower—where Mr. Trump offered to match his new salary.

He left Sentinel and went to work for the Trump Organization. He was excited, he said. But when he arrived on his first day, the scene was not very promising.

“I thought I had just signed up to the Titanic as the women and children were leaving for the lifeboats, because it was utter chaos,” he said.

Working For Trump
The first chapter of Mr. Wallach’s manuscript is about the unusual circumstances of how he got hired. From there, he spends each chapter giving the history of the biggest Trump deals that he personally had a hand in.

Some deals were acquisitions, others were sales. In the case of Niketown, it was a corporate bond and a very long lease of unused space adjacent to Trump Tower.

Nike vacated Niketown, at 6 East 57th Street, just this year. The original deal, struck in 1995, was for a 20-year lease. Without the deal, according to Mr. Wallach, Mr. Trump would not own Trump Tower today.

“There was a $70 million mortgage on Trump Tower with Chase Manhattan Bank, and Donald said, ‘Abe, you got to find refinancing, because I could lose Trump Tower,’” Mr. Wallach recalled.

It was the mid-1990s, and by that point of working for Mr. Trump, Mr. Wallach had built many connections for finding financing. “I had gotten to know all the big-money people in Asia and New York,” he said.

He leaned on those connections. “I brought them in and I said, ‘How would you like to be Donald Trump’s partner on Trump Tower? Seventy million dollars in equity, and you’re his 50-50 partner.’ And it went over like a lead balloon. Everybody said, ‘We don’t want to be Trump’s partner.’”

Mr. Wallach said that Mr. Trump suggested going to Chase and hiring the bank’s management company, which figured out strategies for businesses to use their real estate. But he explained to Mr. Trump that Chase had already said it was not going to refinance the mortgage and was getting out of real estate management.

“He said, ‘Abe, you’re missing the point. The management company of Chase will not find me the money, and then I will sue. I’ll sue the management company. I’ll sue Chase Manhattan Bank. And I’ll drag it out till Chase agrees to continue the mortgage.’

“This is Donald—typical.”

But then an opportunity arose. Nike was interested in leasing 55,000 square feet of empty space—and “Nike has a double A credit rating.”

Rather than the Trump Organization collecting rent on a monthly basis, Mr. Wallach had another idea: securitization. Nike could issue a corporate bond, so Mr. Trump would receive tens of millions of dollars upfront, and then the lease payments would be used to pay interest on the bonds and, ultimately, repay bondholders.

He said that Mr. Trump told him the idea would not work and ordered him not to pursue it—threatening to fire him if he did. Mr. Wallach worked on it anyway.

Because Mr. Trump would catch wind of his activities if he went to a New York bank, Mr. Wallach went to out-of-state firms. In Baltimore, he found Legg Mason, an investment management firm. Legg Mason agreed to Mr. Wallach’s proposal, but instead of a typical lease of 10 years or so, the bond market would require a 20-year term, guaranteed by Nike. To Mr. Wallach’s surprise, Nike agreed.

Having done the legwork behind his boss’s back, Mr. Wallach went to him with the proposal and talked him into it. However, he added, Mr. Trump insisted that the deal be given to his friend Ace Greenberg at New York’s Bear Stearns—so Legg Mason did not receive a dime for the work it did.

“The bonds were sold,” Mr. Wallach said. “The interest rate and the credit rating of Nike was such that they sold $92 million worth of bonds; $70 million went to pay off the mortgage to Chase, which was the first time Donald didn’t have debt on a property he owned. And the remaining $22 million, Donald put in his pocket.”

After the deal was made, Mr. Wallach said, Mr. Trump apologized for doubting him and said, “I didn’t think this could be done.”

For his efforts, Mr. Trump presented Mr. Wallach with a $30,000 bonus. Considering the size of the deal, Mr. Wallach was not happy.

That weekend, he went to Tanglewood in the Berkshires for classical music—but he could not enjoy the concerts. “I was fuming. I couldn’t listen to the music,” he said. “I was just, like, ‘He gives me 30,000 bucks after I went through hell and he didn’t want me to work on it, and he put 22 million bucks in his pocket?’”

So when he returned to New York on Monday, he went into Mr. Trump’s office and shut his door, “which, you never do that. You never shut Donald Trump’s door.”

He expressed his dissatisfaction to Mr. Trump. “He looked at me and he said, ‘What do you want?’ I said, ‘I want $2 million. I want 10 percent of what you got.” And if he didn’t get $2 million, he would leave, he told Mr. Trump.

He got the $2 million.

“That was the nature of our relationship,” Mr. Wallach said. “Push and pull.”

In another example of their struggle, he said that when he sold his Manhattan loft and bought a house in Pound Ridge in Westchester County, Mr. Trump offered to renovate the master bathroom with marble, as a gift—and wouldn’t take no for an answer.

Mr. Wallach said he was hesitant to accept the gift, because he knew that he would pay for it later. But he finally said yes, and Mr. Trump built him “the most gorgeous bathroom” in Pound Ridge and well beyond.

“Come the end of the year, it’s bonus time. So I said, I’m going to have a problem with Donald and my bonus this year. So I made out a check to Donald for $50,000, put it in my shirt pocket, went into his office and said, ‘Donald, can we talk bonus?’ … He said, ‘Yes—hey, wait a minute, I gave you that gorgeous bathroom. Isn’t that your bonus for the year?’

“I said, ‘Well, Donald, you told me it was gift. And if it wasn’t a gift, here’s a check for $50,000. Tell me how much more I owe you if it cost more than the $50,000.’

“This is what he liked about me.

“He looked at the check, he looked at me, he looked at the check, he took the check, ripped it up, and said, ‘Okay, let’s talk bonus.’”

These stories are just the tip of a narrative iceberg.

“There’s so many anecdotes like that, that occurred,” Mr. Wallach said. “But it shows he respected me and had wanted to please me. But I knew he’s the kind of guy that doesn’t give away anything for nothing.”

Though Mr. Wallach has countless stories about working with Mr. Trump, he said his book is less about Mr. Trump and more about how deals are made. Some chapters read more like a textbook, he said, and may be better suited for university business students than most readers.

“In writing this book, the publishers, or the people under the publishers, said, ‘You’ve got to make the book sexier. It’s just a string of facts. People don’t necessarily like to read about real estate, but if it’s funny, if it’s sexy, then they may read it. So try and make it more interesting,’” Mr. Wallach said.

So when he was still actively trying to get the book published, he added embellishments to satisfy publishers—a decision he now regrets.

One of the embellishments, he said, was a story he made up about putting sleeping pills in the drink of a marketing executive during a flight to Singapore, so he could look at the documents inside the man’s briefcase. The fake story got out—it was featured on Page Six of the New York Post, among other places—and caused embarrassment for Mr. Wallach.

“I did it initially with the idea publishing it,” he said of his memoir, “but it has caused me so much trouble, that book, that right now, except for these purposes, I want to keep it locked away somewhere.”

Early Life And Early Career
Mr. Wallach grew up in a “relatively religious” Jewish family. He was born in the Bronx but the family moved to Long Island when he was 2 years old, to Laurelton, and later to Lawrence. He began visiting the Hamptons as a young man, taking the Mustang he shared with his sister, Claire, and driving to East Hampton.

He studied accounting at Queens College for two years at the urging of his father, Anchel Wallach. He then transferred to Columbia, where he majored in finance with a minor in art history—a “pretty strange combination,” he said.

Because of his performance as an undergrad, he was automatically admitted to the Columbia School of Business for graduate school and sat in classes alongside the sons of billionaires, he said.

He immediately got a job for Touche Ross, one of the big three accounting firms at the time, he said. But one day, while counting securities, he realized how much he hated it. “I just took the securities, threw them up in the air and said, ‘I quit!’”

Claire told him that the decision would not go over well with their father, he recalled. He told her that he wanted to do public service.

He applied to Cornell University for city planning and architecture. “I had the most wonderful time studying something that I loved, city planning and architecture, and was really looking forward to doing public service,” Mr. Wallach said.

During his first summer break, he worked for the New York City Landmarks Preservation Commission. “I was doing so well they allowed me to write the report for the first historic district they were designating, Gramercy Park. I wrote the entire narrative for the designation.”

After completing his master’s at Cornell, he worked for Vollmer Associates, an engineering firm, and his first assignment was to study the impact of billboards on highways.

But he wanted to get out of the private sector, he said. He ended up in Jersey City, where he worked as the director of city planning under Mayor Paul Jordan, who was the same age as him and the youngest mayor in the city’s history—only 30 years old when he was elected in 1971.

When Mr. Wallach discovered the Jersey City waterfront on the Hudson River, served by mass transit and with views of Lower Manhattan, he saw potential. He got the City Council on board to develop the area. “Typically, a city planner prepares a report then waits for someone to come along and build it or do it, which evidently wasn’t in my nature,” he said.

Instead, he and the mayor pitched the potential to developers—including Mr. Trump’s father, Fred Trump, he said. Ultimately, it was Samuel J. LeFrak, considered “an outspoken champion of middle-income housing,” according to his obituary in The New York Times, who became the first to build several thousand apartments and a shopping center on the waterfront.

When Mr. Jordan made a gubernatorial bid, Mr. Wallach moved on to run a nonprofit in New Brunswick sponsored by Johnson & Johnson and Rutgers University and tasked with revitalizing the downtown. Later, he worked from New York for American Diversified, a Costa Mesa, California-based real estate firm, and Guardian Real Estate Advisers, based in Houston, Texas. During his time with American Diversified and Guardian, he was responsible for the acquisition or development of 15,000 apartment units, which were put into portfolios for investors, he said.

Aside from the Sentinel job, which he quickly walked away from at Mr. Trump’s behest, First Capital Advisers was his last stop before joining the Trump Organization.

As Mr. Wallach found success in his professional life, he was battling depression in his personal life. His troubles manifested themselves in what doctors diagnosed as impulse control disorder.

“I hated people. I had no respect for people. I thought people were trying to use me, and in many cases they were. Not in any particular job, but generally,” he said.

One contributing factor was that he is gay, and during times that being homosexual was not as accepted as it is today, people threatened to out him publicly on several occasions, he said. But he wasn’t really closeted, either; he said he belonged to a “gay synagogue” in the West Village and was arrested in 1993 for marching without permission in the Salute to Israel Parade with a sign reading “Proud of Israel, Proud to Be Gay.”

As a child, he had anxiety. He said that he wouldn’t want to go away to summer camp, for fear that no one would be there when he came home. As an adult, he had great anger, which would turn to numbness, he said.

“One day, I’m taking a cab in New York, and I see a credit card on the taxi floor. My juices jumped. I picked the card up—I used it. And I bought something that I have no use for. I don’t remember what it was, but I gave it away. But suddenly I realized that I was getting this incredible good feeling whenever I would steal a credit card. And so the practice continued—because that would keep me alive and jumping.”

The habit started in the mid-1980s, and continued when he worked for the Trump Organization. It even occurred during the years that he was regularly earning a seven-figure income, he noted—pointing out that he clearly was not stealing because he needed the money.

Whatever he would buy with the credit cards, he would either throw away or give away to friends and co-workers, including Mr. Trump’s then personal assistant, the late Norma Infante Foerderer, and even to Mr. Trump, himself. For one of Mr. Trump’s birthdays, Mr. Wallach said he used a stolen credit card to buy six or seven Charvet ties from Bergdorf Goodman.

He said that the feeling he got from using the credit cards gave him an incredible high, and it became an addiction. “They were easy to use. And if you walked in dressed in a nice suit, nobody would question you.”

But his behavior did catch up with him.

“I got caught twice. Regrettably, they didn’t do anything to me. They basically slapped my hand and said, ‘Don’t do it again,’ and I’d leave the precinct house. And I thought I was invincible. I had these rushes of grandiosity. But as time passed I realized this can’t go on forever. I needed to seek help.”

He saw psychiatrists and was prescribed medication, which he said clouded his mind and made him sleepy while not changing his compulsions. “So, the end result was, I decided to try and kill myself. I don’t know if I was serious or not. Probably not. I was seeking help. And I started walking in traffic on Sixth Avenue.”

Cars were honking and people were screaming at him, he said. “Suddenly, a guy pulls me by my jacket and pulls me out of traffic.”

He said the stranger asked what was wrong. “He said to me, ‘You need to go to a 12-step program.’”

While the most recognizable 12-step program is Alcoholics Anonymous, there are also programs for people who thieve, Mr. Wallach noted. He went to a meeting that same night in the West Village. He said two things that were said left him hysterically crying, but he knew he had found the place that would help him.

Those were the first steps of the program—“We admitted we were powerless over our addiction, that our lives had become unmanageable”—and the serenity prayer—“God grant me the serenity to accept 
the things I cannot change, courage to change the things I can, and wisdom to know the difference.”

“I thought, I don’t have to be Donald’s savior. I don’t have to be guarded in my sexual inclinations. And I don’t need to steal credit cards to feel good.”

He said he became very active in the program, frequently attending meetings. At AA and Narcotics Anonymous meetings, he would simply substitute “credit cards” for “alcohol” or “drugs.”

“Well, you can’t exactly give proper attention to a 12-step program and be working for Donald Trump,” Mr. Wallach said. “It’s like a dichotomy beyond belief.”

Mr. Wallach said it was 2002 when he realized that he needed to spend more time on his sobriety than on doing deals for Donald Trump.

He explained to Mr. Trump what had been going on in his personal life, and that he could not continue working there, he said.

Mr. Wallach recounted telling Mr. Trump: “Here’s what we’re going to do, with your approval. You’re going to give me a year’s salary, you’re not going to say anything about what happened, and I am never going to talk about you, or your deals, or about anything I know about you personally.”

He got a check for more than a year’s salary and Mr. Trump assured him that he would not say anything to anyone, Mr. Wallach said.

“Well, Donald is the biggest blabbermouth in the world. He went and told everyone in the real estate industry. They would say, ‘Where’s Abe?’ and he went and told them.”

Mr. Wallach said he knows that Mr. Trump blabbed because those people would say to him, “Donald told me this.”

He said that years ago when he ran into Mr. Trump, he confronted him, saying, “You betrayed me,” but Mr. Trump denied it.

“I’ve been ostracized by everyone I know who knows about this, who knows about my background,” Mr. Wallach said. “Absolutely ostracized. I used to be a person with a lot of friends. I don’t have a lot of those friends anymore. They don’t want to associate with me.”

But he has come to terms with that.

“I don’t need a lot of friends, I realize. I need people who really care about me. I don’t need acquaintances.”

Desire To Do Good
Mr. Wallach said he got involved in the Southampton Village zoning situation because he was determined to do good deeds and when he saw a wrong being done, he felt compelled to stop it.

His efforts, and the efforts of others in the community also opposed to the code change, were successful. The law never passed.

Ultimately, the village’s need for a second grocery store was fulfilled when Citarella Gourmet Market opened in the heart of the village on Hampton Road in 2014. And the former car dealership at the corner of Hampton and Flying Point roads was sold this year for $4.5 million and has been leased by the Spur, a private club and shared workspace for entrepreneurs.

Mr. Wallach said it worked out best for the village and all the parties involved—there were no losers.

He has also volunteered at Southampton Hospital, assisting patients just before surgery, and at the Rogers Memorial Library used bookstore.

“I’m a very emotional person,” he said. “I care about people, which may sound strange to you—but I really do care about people.”

The President
“Donald has a big ego and it was clear that real estate deals weren’t going to fill his needs and that he would have to come up with something bigger and newer,” Mr. Wallach said. “And how much higher can you go than president of the United States?”

He did not think Mr. Trump would actually win the 2016 race.

“No, I, like everybody else, thought he would lose. I was watching it on TV, but when Florida went for Trump, I said, ‘The election’s over,’ I turned my TV off. My phone starting ringing incessantly, and I just didn’t want to talk to anyone.

“I wish him luck. I really do wish him luck,” Mr. Wallach continued. “He has the power to help a lot of people, and to deal with a lot of important issues, and I only wish him luck.”

You May Also Like:

Newly Built Little Plains Road Residence Sells For $11.35M

A newly built Southampton Village residence by Northport’s Schuttinger Building has sold for $11.35 million. ... 22 Jan 2020 by Staff Writer

AIA Peconic Names 2020 Executive Committee

AIA Peconic, the East End chapter of The American Institute of Architects, has announced its executive committee for 2020. Debbie Kropf AIA of DSK Architect will serve as president and Nilay Oza of Oza/Sabbeth Architecture will be vice president. Viola Rouhani AIA of Stelle Lomont Rouhani Architects returns to the board as secretary, and Anne Sherry of Anne Sherry Architect returns as treasurer. Gregory Thorpe, who was the 2019 AIA Peconic president, will serve as an AIA of New York State board member, Emmanuela Martini of Blaze Makoid Architecture will be an associate liaison and B. Kay Jones is the ... 21 Jan 2020 by Staff Writer

Wyandanch Lane Residence Sells For $8.95 Million

A classic Southampton Village home on a Wyandanch Lane flag lot has sold for $8.95 ... 20 Jan 2020 by Staff Writer

Historic Sagaponack Home Halseycot Sells For $7 Million

Halseycot, an iconic Sagaponack Village home, recently sold for $7 million, and the buyer, according ... by Staff Writer

CPF Revenue For First 11 Months Of 2019 Down 23 Percent

Revenues for the Peconic Bay Region Community Preservation Fund during the first 11 months of ... 10 Jan 2020 by Staff Writer

Normandy House On Southampton’s Lake Agawam Sells For $22 Million

The historic Normandy estate fronting Southampton Village’s Lake Agawam has changed hands for $22 million, ... 8 Jan 2020 by Staff Writer

Ellen Pompeo Sells Sag Harbor Home

Actress Ellen Pompeo’s modern farmhouse retreat on 8 acres in Noyac has sold, about six ... by Staff Writer

Water Mill Home That Previously Belonged To Mel Brooks, Anne Bancroft Sells For $11 Million

An oceanfront Water Mill beach house that once belonged to filmmakers Mel Brooks and Anne ... 7 Jan 2020 by Staff Writer

Hampton Bays Home Fronting Peconic Bay Sells For $3.9 Million

In Hampton Bays, 18 Cedar Point Road, located east of the Shinnecock Canal and fronting ... 6 Jan 2020 by Staff Writer

State Issues New Regulations In Response To Newsday’s Housing Discrimination Investigation

The New York State Board of Real Estate has approved new regulations to combat housing discrimination in response to a three-year Newsday investigation. The investigation and subsequent report, titled “Long Island Divided,” found widespread illegal discrimination against minority homebuyers. Newsday also found that the fair housing and anti-discrimination training classes that real estate agents are required to attend were, more often than not, inaccurate, confusing or incomplete. Governor Andrew Cuomo directed the Department of State to issue new regulations in light of Newsday’s report, which was published in November. On December 16, the State Board of Real Estate — which ... by Staff Writer

Welcome to our new website!

To see what’s new, click “Start the Tour” to take a tour.

We welcome your feedback. Please click the
“contact/advertise” link in the menu bar to email us.

Start the Tour
Landscape view not supported