Page 25 - ARUBA TODAY

BUSINESS A25
Monday 12 October 2015

Fed official still favors hike AP Exclusive:

but notes dimmer outlook Panama condo owners toss Trump

M. CRUTSINGER JEFF HORWITZ estimated his cumulative that,” Monstavicius said.
M. CRAFT Associated Press licensing payout would
AP Business Writers PANAMA CITY (AP) — The total $75.4 million, rough- “But there was nothing
NEW YORK (AP) — A voting member of the Federal Re- directors of a massive ly two-thirds the amount
serve’s policy committee said this weekend that he still Trump-branded luxury con- raised. I could do because my
thinks an interest-rate increase will be appropriate by dominium development Burdened by cost over-
year’s end. But he acknowledged that the outlook for in Panama fired Donald runs and the global reces- money was committed.”
the economy appears cloudier than it did a few weeks Trump’s company in the
ago. summer over allegations This photo shows the main Some owners feared that
Dennis Lockhart, president of the Fed’s Atlanta re- of mismanagement, over- entrance to the Trump Ocean
gional bank, noted that the most recent economic spending and undisclosed Club International Hotel and Trump’s management
figures have sent mixed signals, with higher risks than bonuses executives paid Tower in Panama City, Pan-
he had earlier forecast. Notably, the government said themselves, according to ama. The tale of the 70-story might be disproportionate-
last week that employers cut back sharply on hiring in an Associated Press exami- waterfront tower along Pan-
September and added fewer jobs in July and August nation. ama Bay that was managed ly spending the building’s
than previously thought. The coup at Central Amer- by the Trump empire offers
“While I have not changed my basic outlook, very ica’s largest building, Pan- insight into the Republican budget in ways that ben-
recent data have not provided much confirmation ama City Trump Ocean presidential candidate’s busi-
that my narrative still holds,” Lockhart said. “I perceive Club, offers a glimpse into ness traits, and hints about efited the hotel instead of
a touch more downside risk today than I saw some the workings of the Repub- the management style that
weeks ago.” lican presidential front- might be expected from a the building’s other com-
In particular, Lockhart said he will closely review con- runner’s business empire Trump White House.
sumer activity before deciding how to vote on wheth- — and the style of man- ponents. But despite re-
er to raise rates at one of the Fed’s two final meetings agement that might be (AP Photo/Arnulfo Franco)
of 2015. expected from a Trump peated requests, Trump’s
For now, he said, he thinks the economy’s progress re- White House. Transparency sion, the actual developer
mains “satisfactory.” and close attention to ex- stopped making debt pay- managers never provided
“I continue to feel that cumulative progress is consis- penses are not strengths. ments within a few months
tent with liftoff relatively soon,” Lockhart said in his re- Squeezing the most from of the ribbon cutting in a detailed breakdown of
marks to the annual meeting of the Society of Ameri- contractual language is. 2011. Trump earned an es-
can Business Editors and Writers. Whether wheeling and timated $20 million of con- the costs generated by
The Fed has kept its key rate at a record low near zero dealing with Wall Street cessions in a subsequent
since December 2008. Many had expected the first bankers, debating Repub- bankruptcy deal, and he each of part of the build-
rate hike to occur in September. But minutes of that lican presidential rivals or is probably the only partici-
meeting released Thursday revealed concern that a running a condo associa- pant in the original deal to ing, and never established
sharp slowdown in China, which roiled markets this tion, Trump has forwarded come out ahead.
summer, could weaken the U.S. economy, and that in- his interests by leveraging Along with his branding the separate bank ac-
flation could remain excessively low. his outsized reputation, and hotel management
The Fed voted 9-1 at that meeting to keep rates un- canniness and aggression. deals, Trump held a third counts stipulated in their
changed. Lockhart voted with the majority. In an interview, Trump’s son contract to manage the
Lockhart is one of five regional bank presidents with a Eric dismissed the allega- overall building. A patch- management contract. A
vote this year on the Federal Open Market Committee, tions of mismanagement work of contractual lan-
the panel of Fed bank presidents and board members as an orchestrated at- guage gave Trump’s com- senior Trump executive in
that meets eight times a year to set interest rate policy. tempt to sully the Trumps’ pany the right to vote at
The Atlanta Fed president is a moderate, outside both reputation. He called the owners meetings on behalf New York told one owner
the “dovish” camp that includes Yellen and others project “an amazing icon of hundreds of hotel and
who focus more on unemployment and the “hawkish” and, frankly, a great testa- condo units. Buyers learned in 2012 that maintaining
camp of policymakers who worry mainly about infla- ment to America.” they were abdicating their
tion risks. Built in the shape of an arc- voting rights only if they five bank accounts would
During a question-and-answer period, Lockhart ing, wind-filled sail, the de- read the fine print of their
stressed that the Fed’s policymakers will be studying velopment is recognized as sales agreements, said Al be too expensive.
the economic data before the next two meetings. The among the finest building Monstavicius, a retired Ne-
final meetings this year will be Oct. 27-28 and Dec. 15- in Panama. Visitors can sip vada doctor who bought Trump’s top employees
16. drinks next to a 65th-floor, a penthouse condo.
Before the December meeting. the Fed will have data edgeless pool that seems “I shouldn’t have signed in Panama also awarded
on job growth in October and November, inflation to float above the ocean.
data for September and October and the first two esti- “I am proud to develop themselves hundreds of
mates for overall economic growth in the third quarter. this extraordinary high rise,”
The data on consumer spending, Lockhart said, may Trump said in one 2007 pro- thousands of dollars in bo-
be the most telling. motional brochure, promis-
Speaking of his own views, he said, “I am slightly less ing to build a “landmark in nuses without seeking the
confident today than I was six weeks ago.” Latin America and the Ca-
He added: “The argument for October or December ribbean.” authorization of unit own-
(to raise rates) is a committee decision, and I can’t an- It turns out Trump wasn’t
ticipate where the committee will be in a few weeks.” a developer on the proj- ers, according to members
Many economists say the weak jobs report for Septem- ect. He merely licensed
ber released last week makes an October rate hike his brand, though even of the board.
unlikely. Some still foresee an increase in December, that imprimatur came at
others not until next year.q a high price. A 2007 bond Eric Trump said such pay-
prospectus for the project
ments were appropriately

disclosed — though board

members say they still

don’t know the amounts of

the bonuses.

Transparency concerns

took on a heightened ur-

gency given the Trumps’

failure to stay within its

owner-approved budget.

“We made the budget,

other than extraordinary

things we can’t control,”

said Eric Trump. He cited

rising local costs and a bro-

ken water main as culprits

for $1 million deficits in 2013

and 2014. “We had an un-

believable team, and we

managed to an interna-

tionally renowned set of

standards.”

At a December meeting,

restive unit owners dis-

agreed.

“Civility was lost,” said Dun-

can McGowan, a real es-

tate agent and property

manager on the building’s

board.

After the meeting, Mc-

Gowan and other dissi-

dents lobbied fellow own-

ers to revoke proxy voting

rights granted to Trump. q