Remember When Trump Promised to Save Ed McMahon’s House?
Donald Trump boasts that he elevated real-estate dealmaking to an art form. But in 2008, there was one transaction that he just couldn't seem to close.
That was when Trump swooped in, promising to rescue Ed McMahon, the longtime announcer for NBC's The Tonight Show who was in failing health and facing foreclosure on his six-bedroom mansion in Beverly Hills, California.
Like some of Trump's other charitable pledges, this one generated an avalanche of publicity, only to mire in confusion and delay once the TV cameras moved on. Trump negotiated for months over the property without striking a deal, with McMahon and his family in limbo. Then another deep-pocketed investor stepped in and resolved McMahon's predicament with no fanfare.
Trump still chalks up the McMahon deal as a win, according to Michael Cohen, his special counsel.
“The sole purpose of this transaction was to ensure that Ed McMahon, who Mr. Trump admired greatly, would remain in his home while dealing with his significant health issues,” Cohen said in an e-mail. “Mr. Trump accomplished the task and was thanked by both Ed and his family for his assistance.” (Attempts to reach McMahon's widow, Pam McMahon, were unsuccessful.)
As Trump prepares to formally accept the Republican nomination for president next month, some of his philanthropic claims are facing scrutiny. He said at a rally in January that he gave $1 million to support veterans. But he did not cut a check until four months later, after reporters from the Washington Post and other news outlets started asking where the money was. This week, the Post reported that after contacting 188 charities, it couldn't confirm millions of dollars' worth of other donations that Trump has pledged since 2008.
Trump has said that the veterans' donation was delayed because he needed to vet the nonprofit group that was getting the money. As for the Post report on his other contributions, Cohen, his lawyer, called it “patently false,” without elaborating.
McMahon was Johnny Carson's longtime sidekick, famous for his opening line, “Heeeere's Johnny!” By 2008, he was suffering from a neck injury and deep in debt. The house was burdened with between $6 million and $7 million in loans, according to Alex Davis, his agent at the time, but it wasn't selling at an asking price of $4.6 million, amid a nationwide collapse in the housing market.
One reason McMahon had so much debt, Davis said: The TV star was one of an elite group of politicians and other notables that Countrywide Financial's CEO, Angelo Mozilo, had showered with loans during sunnier times. They were known as “Friends of Angelo.” By August 2008, Mozilo was out, Countrywide had collapsed and Bank of America Corp. owned its assets.
As the bank moved to foreclose, Trump revealed his role to the Los Angeles Times in an “exclusive” interview in August 2008. Trump had an agreement to buy the house from the bank and allow McMahon to stay in it, the Times reported, although the details were still being hashed out. The news, which the Times called “an act of benevolence,” was picked up by dozens of outlets, including Fox News, National Public Radio, and People.
The limits of benevolence soon became clear.
Davis, who once flew to New York to pitch the deal at Trump Tower, said he can't recall the specifics of Trump's offer for the Countrywide loan, but called it a “lowball” offer that the bank never took particularly seriously.
A week later, the Associated Press reported that a foreign buyer offered to purchase the home, and that Trump was apparently going to stand down. “If another buyer should emerge who will create the benefit Mr. Trump sought for Ed McMahon, then he is clearly pleased,” Cohen told the AP. But according to the AP, the foreign buyer was planning to kick McMahon out.
It didn't matter. The foreign bidder soon disappeared and Davis was back to looking for help from Trump, or anyone else. By October, when McMahon was asked about the status of the Trump rescue plan on Fox Business News, he couldn't explain what was going on. “That's kind of murky. That is not really finalized,” he said. “Everything that seems like it's wonderful becomes unclear.”
Cohen placed the blame on the U.S. economy, and on the lender. “This is a process that does not lend itself to moving quickly, especially in light of the economic climate,” he told the gossip site Page Six that month. “Whether or not it gets resolved is not up to Donald Trump as it is up to Countrywide.”
Not long after—with no notice in the press—McMahon's situation was swiftly resolved. A wealthy investor in San Francisco, Daniel Schryer, heard about McMahon's predicament and got in touch with Davis. Schryer ran a company that owned data centers, and given the housing downturn, he was already looking for ways to invest in distressed real estate.
In less than a month, Davis said, Schryer bought the loan from Countrywide for an amount significantly more than what Trump had offered. Schryer recalls that he paid around $3.5 million.
Unlike Trump, Schryer acknowledges that he was interested in the deal partly to turn a profit. “I did it as an investment, and trying to help out someone who was an icon as far as I am concerned,” he said in an interview this week. “I watched him on The Tonight Show forever.”
Only the following June, after McMahon died at age 86, did the Wall Street Journal report this final turn of events. Trump again put the blame on the lender. “We contacted the institution that had the mortgage on this house and it was unfortunately wrapped with many other mortgages and they were unable to get out of their own way,” he told the Journal. “I really wanted to help him out.” (Schryer said he experienced no such problem with Countrywide.)
Cohen didn't answer questions about the value of Trump's offer, or why Trump was unable to complete a deal that another buyer closed so quickly. “How Mr. Trump brilliantly strategizes potential opportunities is proprietary and will not be discussed,” he said in the e-mail.
As far as publicity goes, Schryer took a different approach than Trump. He sought to keep the deal itself quiet—mostly to avoid further embarrassment to the McMahon family, he said—and didn't put his name on any of the public paperwork. Only years later did the Journal identify him as the buyer. Schryer says he became friendly with the McMahon family and attended the celebrity's funeral. He later sold the place for what he called a “small profit.”
Even though Trump didn't end up closing a deal, Davis said he's nevertheless grateful for Trump's efforts. His offer helped McMahon put off foreclosure for a few months, and helped publicize the situation to other potential rescuers.
“Trump at the very least had good intentions with doing something, with his desire to make a bid. He didn’t really want to do it—I never thought he really wanted to do it—but it's not like he didn’t try to do it,” Davis said. Trump “said he was going to bail him out, and in a sort of long, twisted way, he kind of did.”