We often hear that good business is built on "win-win" scenarios, where all parties involved in a transaction feel they have gained what they sought without being taken advantage of. However, this principle has its limitations. There exists a grey area between a “good deal” and outright corruption—a line that is often vague and elusive.
This topic was prompted by the well-publicized case of New York vs. the Trump Organization, which involves allegations of unlawful practices in property evaluations to secure favorable outcomes from institutions like banks, insurance companies, and tax officials.
Interestingly, I haven't encountered much discussion about why the affected institutions haven't faced scrutiny in these cases. Perhaps they have been implicated; I admit I don’t follow Trump-related news closely, as there’s only so much I can absorb in a day.
In my research, I explored whether banks or their officers receive incentives for approving loans. Banks do profit significantly from interest on loans, so it's in their interest to issue them. But what about the loan officers? Several sources suggest that they, too, are rewarded for closing loans.
Hypothetically speaking, could we suggest that a commission structure might incentivize loan officers or insurance agents? If property evaluations are inflated, it leads to larger loans and, consequently, bigger commissions or coverage.
Consider this scenario: A property measuring 4,000 square feet has a market value of $1 million, and the owner seeks a $1.1 million loan. If the property is re-evaluated as 4,500 square feet, its value jumps to $1.5 million, allowing the loan to be based on this inflated figure. The loan is approved, the owner receives funding, the bank profits—no harm, no foul, right?
Wrong!
Corruption operates on a quid pro quo basis. If I inflate my property’s value by $500,000 in exchange for a larger loan, both the bank and I benefit—along with any commission paid to loan and insurance officers. This creates a landscape ripe for kickbacks, incentivizing unethical behavior.
Even if all parties fulfill their financial obligations, this scenario remains illegal and criminal, which is the essence of corruption. When government involvement is added, the situation becomes even more dire.
In examining Trump's business history, we see two types of deals: one where the other party is exploited due to a lack of options, and another where Trump seeks favors by circumventing laws or regulations. For example, a proposition like, "I’ll build a hotel here if you waive the necessary environmental assessments," may not be illegal, but it is ethically and morally questionable. Not everyone possesses the means or mind to navigate such loopholes.
In honest business transactions, a dollar equals a dollar. However, when multiple parties collude to manipulate facts and inflate numbers for mutual gain, that constitutes corruption. It is both immoral and illegal. Given Trump's business dealings over the years, it wouldn’t surprise me if many operated in this manner. Yet, I cannot definitively state that as a fact.
Ultimately, we must ask ourselves: "Who truly benefitted from these dealings if no one appears to have lost?" I would venture to guess, several people did.