[OPINION: The views expressed by columnists are those of the author and do not necessarily reflect the views of Investopedia.]

 

Donald Trump is loud and boastful on camera, but sometimes he operates more quietly off screen, like when he needed to solve a sewage problem beneath the streets of Manhattan – a problem that mysteriously evaporated one day in 1994, allowing a flood of cash that saved Trump from drowning in debt.

This is a little-known aspect of how Trump bungled the chance to make billions of dollars building on the largest developable tract of land in America’s largest city, a story the late actor Christopher Reeve called “the American dream gone berserk.”

Way back in 1974, when Trump was not yet 30 years old, he acquired control of the old Penn Central rail yards on Manhattan’s Upper West Side. For a song, he had 57 acres of land along the Hudson River that ran 13 blocks from 59th Street to 72nd Street.

Years later, after enough machinations to fill a Tolstoy novel, Trump proposed high-density residential apartment buildings mixed with other uses, notably new television studios for NBC, a project he called Television City. He also proposed the world’s tallest building, a 154-story skyscraper that would have cast long shadows over Central Park and much of the Upper West Side every sunny afternoon. That giant erection was what drew Superman’s ire.

That was a little problem for Trump. His big one was sewage.

As recently as 1986 most of the sewage generated in Manhattan flowed raw into the Hudson River, almost as if the city were the New Amsterdam of the 17th century with a few million more people emptying their chamber pots in the streets each morning. The city partially solved this problem by building a new sewage treatment plant. It was originally intended for the boat basin at 79th Street, but politically savvy and affluent Upper West Siders got their effluent pumped north to the Harlem waterfront, where the smell was godawful.

About 200 million gallons of sewage came in each day to the sewage treatment plan, well above its design capacity of around 170 million gallons per day. So on dry days, about 30 million gallons of raw sewage continued flowing into the Hudson River. Rainy days swelled the volume.

Ruth Messinger, the Manhattan borough president at the time, was adamant that no development would take place on the Trump property without proper sewage treatment for the estimated five million gallons per day his project was expected to generate.

Messinger wrote a 1992 letter to the city environmental commissioner saying a “host of experts” agreed with her that Trump’s project should not get approved “unless there is sustainable, reliable, and certain commitment to mitigate the anticipated sewage flows (PDF).”  Days later, Messinger testified that “there is no justification” for any claims that the existing sewage plant could handle the flushed toilets and other wastewater from 5,700 new apartments.

Messinger, the Coalition for a Livable Upper West Side and others stood firm. No Trump project would proceed until sewage inflows matched treatment capacity.

Then something strange happened, something that would have gone unnoticed but for one Princeton-trained civil engineer checking the weekly city sewage-flow reports.

The document showed 24 million gallons less sewage on the Upper West Side. Rich Herschlag, Messinger’s chief borough engineer, thought it an inside-the-bureaucracy joke. It was, after all, April Fool’s Day 1994.

When the next weekly report came Herschlag realized this was no joke.

Day after day, rain or shine, the official sewage-flow meter readings stayed about the same. Holidays, big events that drew people into the city, weekends when people left town – none of that influenced the effluent flow.

“It was as if 150,000 Manhattanites just vanished,” Herschlag told me last week.

Either that or Upper West Siders all stopped flushing, showering and washing the dishes. Just to be sure, I checked the news clips. There were no stories about incredibly stinky New Yorkers riding the West Side subway lines as summer heat enveloped Manhattan in 1994.

Eventually the United States Attorney for Manhattan, Mary Jo White, launched an investigation into the missing sewage. Herschlag meanwhile got busy trying to figure out how the system was being manipulated, complaining that something foul must be going on and asking how much it would take to bribe someone to play games with the sewer meters and computer software that continuously tracked sewage flows.

About this time Messinger, hailed by many as a great liberal reformer and voice of integrity, decided to run for mayor. Herschlag got muzzled. He was told to stop carping about an insignificant issue that no one else cared about. Eventually Herschlag was forced out of his job, his final paycheck held up until he could be told that were he to consult with the Coalition for a Livable Upper West Side, which opposed the Trump project, he could be prosecuted for violating a city charter ethics rule.

That’s when the best reporter in New York City, Wayne Barrett of the Village Voice, and one of his acolytes, Denise Kiernan, got on the story. On April 11, 1995, they published an article about “Ruth and Donald’s Artful Deal (PDF).”

They exposed connections between Trump and various elected and appointed city officials that were as complex, and hidden, as the sewer lines running beneath city streets.

For example, a former city councilman from the West Side named Ed Wallace registered as a lobbyist for Trump Management. New York’s Parks Council, which would have to approve a park for Trump’s project to proceed, was packed with officials and spouses on the Trump payroll.

Messinger did a complete reversal, becoming an advocate for the Trump project that she had once so firmly opposed since there was no longer, or so it seemed, a problem of overloading the already overloaded sewage treatment plant with more wastewater. Indeed, she said in February 1995 that she had not called for preventing sewer hookups at the proposed Trump project.

Mary Jo White, the federal prosecutor who is now chair of the federal Securities & Exchange Commission, dropped her inquiry. She has never been willing to answer questions about what motivated her reversal, including whether any instruction flowed down to her from the Bill Clinton White House, which at the time Trump courted and publicly supported.

Herschlag went on to a fine career on his own. He eventually figured out how the sewer-flow reports were manipulated to make 24 million gallons of filthy water a day seem to evaporate.

It may be the raw sewage was simply diverted into the Hudson River, but Herschlag believes another answer is highly likely. He learned that there are two independent sets of sewage-flow data. One is from the collector pipes, the other is at the entry to the treatment plant. Herschlag believes someone tampered with the plant intake meter, but neglected to fudge the collector-pipe meters so their numbers would match, either out of hubris – what are the odds someone would compare the two? – or laziness.

Herschlag later wrote a novel, "The Interceptor," about “a sly real estate mogul with a $4 billion deal at stake, a ruthless candidate for mayor in a heated election year and a lone civil engineer who uncovers a secret that could rock the lives of seven million New Yorkers.” It sold about 45,000 copies, an amazing number for a thriller about sewers. You can still buy a copy, for a penny plus shipping.

The end of the story came in 1997 when Trump sold most of his interest in the land to Hong Kong investors. No one would have paid a penny if the land could not be developed because there was no place for it in a sewer system that was already full – showing once again how Trump speaks the truth when he talks about how a businessman who delivers campaign cash and favors gets politicians to do what he wants.

 

Pulitzer Prize winner and recipient of an IRE medal and the George Polk Award, David Cay Johnston is author of five books. His next book, The Making of Donald Trump, will be out on August 2, 2016, to be followed by The Prosperity Tax: A New Federal Tax Code for the 21st Century Economy. He is a Distinguished Visiting Lecturer at Syracuse University College of Law and Whitman School of Management, and also writes for The Daily Beast and Tax Notes.

This essay first ran in The Daily Beast.

 

Want to learn how to invest?

Get a free 10 week email series that will teach you how to start investing.

Delivered twice a week, straight to your inbox.