Amid casino closings and mass layoffs in Atlantic City, one guy is coming out on top: billionaire Carl Icahn. Icahn and his funds are the sole debt holders on the Trump Taj Mahal—a casino that is to be shut down Dec. 12, forcing 3000 layoffs, unless New Jersey taxpayers give Icahn $175 million in tax breaks. Already, Icahn has driven the casino into bankruptcy, costing casino workers their health insurance and retirement plans.
But the people of Atlantic City say Icahn has profited enough, and he has the power to make this right. Icahn has already pulled $350 million out of Trump, using the bankruptcy process to gain control of casinos at steep discounts and lending at 12% interest rates. For decades, Icahn has built his fortune using the bankruptcy process to hurt workers and destroy companies. Workers say the current crisis in Atlantic City is the latest one that Icahn has created and profited from.
Carl Icahn’s Profits in Atlantic City
To understand why Trump Taj Mahal is in financial trouble, look no further than billionaire Carl Icahn:
- Since 2010, Icahn has extracted $350.5 million out of the Trump casinos in Atlantic City and sent that money back to Icahn Enterprises in New York.
- In 2010, while Icahn was the sole lender at Trump Entertainment, the interest rate climbed to 12%, compared to a pre-bankruptcy interest rate of 6.2%. If Trump had been paying 6.2% interest instead of 12%, the company would have saved about $70 million over the past four years or about $17.7 million per year-significantly more than the $5 million a year that health benefits for Local 54 members cost the Taj Mahal.
For more on Icahn’s profits from Atlantic City ventures, read our report.
What billionaires Icahn and Trump have done to 1,100 workers at Taj Mahal:
- Eliminated the health insurance plan that all of the rest of the casinos use. For the last decade, workers have sacrificed wage increases to maintain benefits.
- Eliminated Pension.
- Less pay: company eliminated paid lunch break (loss of about $1,600 annually)
- Job insecurity. Company is permitted unlimited subcontracting in Food and Beverage
- More work: Housekeepers clean 16 rooms a day, up from 14.
- Overall 35% reduction in compensation for workers who average less than $12.50 per hour in wages.
Icahn has a history of stripping workers of their benefits and stripping assets.
About UNITE HERE Local 54
UNITE HERE Local 54 is the largest casino workers union in Atlantic City. With a 100-year history, Local 54 represents about 10,000 workers in 8 different city casinos. We are a union of housekeepers, bartenders, servers, cooks, and dishwashers. Local 54’s parent union, UNITE HERE, represents approximately 270,000 hotel, food service, and gaming workers throughout the United States and Canada.
- Sweeney Offers Plan to Save AC, 11/11/2014, NJTVNews
- EDITORIAL: Hurting workers no way to save Taj Mahal, 11/5/2014, Courier Post
- Trump Taj Mahal casino workers with health problems dreading impending loss of insurance, 11/23/2014, Fox Business
- Atlantic City Workers Protest Casino Closing and Carl Icahn, 11/19/14, Fortune
- Casino Workers Rally to Save Jobs, 11/19/14, NBC40
- Casino Workers to March Against Icahn, 11/19/14, AP
- Taj Mahal to Stay Open if Union Drops Contract Appeal, 11/19/14, Bloomberg News