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Australia

Donald Trump’s bid for Sydney casino in 1980s was rejected because of ‘mafia connections’, secret documents show

Cabinet documents reveal police warned NSW government about approving a plan to build city’s first casino in Darling Harbour

PUBLISHED : Wednesday, 16 August, 2017, 11:47am
UPDATED : Wednesday, 16 August, 2017, 5:30pm

A bid by Donald Trump to build Sydney’s first casino was rejected 30 years ago after police expressed concerns about his links to the mafia.

News Corp revealed on Wednesday morning minutes of the New South Wales cabinet that show police had warned the state government against approving a 1986-87 bid by a Trump consortium to build and operate a casino in Darling Harbour.

Trump, in partnership with the Queensland construction company Kern, was one of four groups vying for the lucrative project. The NSW government dumped it from the process on May 5, 1987, along with two other bidders.

At the time, the state treasurer, Ken Booth, said he had received reports on the bids from the police board, the state’s Treasury, the Darling Harbour Authority, and an independent financial consultant.

“I wish to inform honourable members that in light of these reports the government has decided to eliminate three tenderers from further consideration,” Booth told the state parliament.

“These are the HKMS consortium, the Federal-Sabemo consortium and the Kern-Trump consortium.”

The public was not told the substance of the NSW government’s concerns. Booth said the reports “contain confidential and commercially sensitive material” and refused to make them public.

Now, under rules that declassify NSW cabinet papers after 30 years, summaries of the various reports on the Kern/Trump bid have come to light.

The documents, obtained by News Corp, show the Kern/Trump group was one of three deemed “dangerous” by the police board.

“Briefly stated, the Police Board considers that HKMS, Federal/Resorts/Sabemo, Kern/Trump, are unacceptable,” the summary of the police report said.

“Atlantic City would be a dubious model for Sydney and in our judgement, the Trump mafia connections should exclude the Kern/Trump consortium,” a summary of the police board’s report said.

The cabinet papers also show there were doubts about the viability of the Kern/Trump bid. A report prepared by the independent contractor, the Canadian Imperial Bank of Commerce, found the Kern/Trump bid was one of two that were “not financially viable”.

The report found that revenues for the casino were overstated.

“The proposal is financially viable on the basis that the projected financial structure is reasonably based,” a summary said.

We certainly wouldn’t have wanted any connection with organised crime
Reverend Fred Nile

“However, projected casino revenue estimates are not soundly based and the quantum of the potential overstatement is so material that the tender is not financially viable. Also, the tender is not financially viable on the basis of expected returns to equity investors.”

The Darling Harbour Authority, which assessed the design of Trump’s proposed casino, was largely supportive. It described Kern/Trump casino design as “rich, attractive and well-integrated” and said it would have “strong public appeal”.

The casino control division also gave Kern/Trump “unqualified certification” for the running of a casino in NSW.

One of the chief critics of the proposed casino at the time was the Reverend Fred Nile, who is still a sitting member of the NSW upper house.

When the government announced its rejection of the Kern/Trump bid, Nile described the process as a “disaster” and pushed for the NSW government to scrap the casino entirely.

Nile said he had raised concerns about possible organised crime links with the planned casino.

“We certainly wouldn’t have wanted any connection with organised crime,” he said.

“We talked about that and there was always problems – casinos attract prostitution and other things.”

He was also strongly opposed to it having poker machines.

“Which upset [James] Packer, because you make a lot of money from the poker machines,” he said.

“We were able to get the government to pass the law that there would be no poker machines in the Crown casino.”

The revelations come as representatives for Trump consider a bid for the Macau casino market.

DTTM Operations LLC, a Delaware-based company responsible for handling the ownership of dozens of trademarks for the president, filed four applications in the world’s largest gaming hub under the brand name “Trump” in June.

Trump was once a commanding figure in Atlantic City, the casino hub in America’s northeast, where his casinos accounted for nearly a third of gambling revenues in the early 1990s, according to The New York Times.

At the peak of his casino investment, Trump had four properties. But the real estate mogul ended up losing control of the casinos after a series of bankruptcies, the latest in 2009.

Additional reporting by Raquel Carvalho