[David Cay Johnston (left) after his 8/23/16 talk at Union Place. Photo: David Kramer from The electoral year in review. Getting Trumped ]
In November, we interviewed David Cay Johnston on his latest book,The Big Cheat. Today, Allison Bondi, former content manager for Brighton Connections, takes us from Johnston’s early days as a cub reporter in high school to his winning of the Pulitzer Prize to his trilogy on Donald Trump.
Growing up as David Cay Johnston
David Cay Johnston got his byline on the front page of the San Jose Mercury by age 19 and solved his first murder case at 21. As remarkable as these achievements are, once you learn about David’s work ethic, it’s hardly surprising. “I had gone to work at ten and worked 40 hours a week or more since I was 13. I was working all the time in junior high and high school.” On weekends he did jobs like washing dishes and bussing tables and during the weekdays he had seven newspaper runs, four in the morning and three in the afternoon. Surrounded by newspapers and growing up in a house filled with books, David seemed destined to write.
An accomplished Pulitzer prize-winning investigative journalist and a four-time New York Times bestselling author, David’s writing career had humble beginnings. His first writing job came from a local coupon clipper paper. “It was a little throw-away shopper newspaper, and a guy was shooting my picture almost every week for winning a speech contest or something at school, and he asked me to write a column for the newspaper for a very modest fee. So I did that.” His high school teacher Thad DeHart helped him get going with the columns, and in no time David was asked to start covering the Santa Cruz County Board of Supervisors, City Council and school board meetings. “My coverage of the meetings was unlike the local daily, which upset their reporter.” At one point the reporter from that paper confronted David saying, ‘I don’t know how you do what you’re doing, but you gotta stop it because you’re getting me in trouble.’”
“It wasn’t that I knew anything, because I didn’t know anything.” But David not knowing anything worked to his advantage. He was still in high school, and unlike his peers, had no journalism degree or conventions to restrain him. “I didn’t have the blinders of formal training. The people I was competing against were basically regurgitating official versions of events in the way they were instructed.” David wasn’t indoctrinated in this, and it allowed him to do things differently. “I always wanted to go my own way.”
David definitely did things his own way. Before graduating high school, he was married with a kid on the way. In today’s norm of adult children living out of their parents’ basements, it’s hard to imagine that any kid would eagerly bounce out of bed seeking adulthood, but David didn’t waste time.
There is an undeniable dotted line connecting David’s determination to his parents. His father grew up in New Orleans and in the summer of 1928, rode to California in the rumble seat of a relative’s car. He came back the next summer, and at 18 went west again, but this time, he didn’t come back. “He was also great with numbers and became a timekeeper working on Boulder Dam. Then he learned to become a chef.” His father found uses for his skills and talents despite having only a 3rd grade education. He did not let other people and their standards of measurement determine his placement in life. He was a self-educated, voracious reader. David grew up in a house brimming with his books. Unfortunately, the draft came. “When they were really scraping the bottom of the barrel my father got drafted for WWII. He was 33.”
David’s father returned as a disabled veteran, later becoming completely disabled, dying when David was just 20.
David’s mother was also a strong character in her own right. She was born a Minnesota lumber and hardware heiress, the sole child of a vast fortune which in today’s numbers would be north of $100 million dollars. When called to testify against her father in court regarding an affair with a mistress, she decided to tell the truth. Her father made it clear he would disown her if she testified against him, “but my bull-headed mother did it anyway.” Her father kept his word, and completely cut her out of his fortune.
This is all to give you an idea of the DNA coursing through David while he waited for an interview with the San Jose Mercury’s managing editor, Oscar Liden, for what would be his first real journalism job. Two other editors could not hold back their laughter as David waited. “They thought it was hilarious that an 18-year-old kid was here to interview for a reporting job. There was a copy messenger about 5 years older than me getting his masters in journalism who hoped to be hired as a reporter one day.” But the next opening on the reporting staff went to David, by then 19 years old.
David’s Finds His Way
“It changed my life. I went from working four jobs almost 90 hours a week, being totally exhausted all the time on a Friday, to on a Monday having a base salary that in today’s money is $57,000 a year. With overtime plus money from The War Orphans Act (which children of fully disabled veterans qualified for), I was making $77,000 in today’s money while still a teenager,” he recalled.
Within three years he bought a house in what is now Silicon Valley. “Even though we were making a lot of money we had a kid and another kid and another kid… so most of the money went into building a home, pots, pans, beds, linens and so on.” But even with that we were able to save.
With a letter of recommendation from the famous New York Times reporter Wallace Turner, David was awarded a fellowship to the University of Chicago. He was 23 and had 5 kids at this point. “I almost lost the fellowship because my editors told me to write a little piece about myself to put in the paper and it mentioned I had 5 kids. The fellowship guy called me up and said, ‘How can you afford to do this? I think you should withdraw.’ I said, ‘I can afford to do it. I have savings.’”
Oscar Liden, the editor who hired David at the San Jose Mercury also was concerned. “He asked me to come and see him. He said, ‘How can you afford to do this?’ I said, ‘Well, I’ll get paid.’ He said, ‘Well, how much are you going to get paid?’ I said, ‘Basically four-days-a-week
salary.’ He said, ‘What are you going to do about health care for your kids?’ And I said, ‘I guess I hadn’t thought about that.” He said, ‘Okay. I’m going to keep you on the payroll one day a week, and that will keep your health benefits.’ This meant I would get full pay. Then I said, ‘Oscar, I gotta tell you something. I’m being recruited by some bigger papers and I probably won’t come back.’ And he said, ‘That’s okay. We got way more than what we expected out of you.’”
David is grateful for that moment. “Nobody in Corporate America would do that today.”
He appreciated his time at the San Jose Mercury but felt like he had outgrown it. David took his fellowship and studied economics for 2 quarters in Chicago and then joined the Detroit Free Press state capitol bureau in Lansing as the first investigative reporter to ever work there. “Lansing was full of untold stories.”
David exposed a local television monopoly that was using their news department to manipulate politicians and business owners for profit. And profit they did. The TV station counted over 50 cents of every dollar of revenue as profit which was absurd. Most companies make 10 cents, 5 cents, maybe 12 cents per dollar. The business was forced to shut down because of David’s reporting. “There were all sorts of other scandals that just were sitting there waiting for me.”
David’s approach to investigative reporting was through fact finding. He dug out hidden facts that would ultimately reveal corruption or fraud. “The three major sources of corruption are through the wallet, the ego and the zipper. The wallet is always the easiest to prove.” David documents people and situations that seemed suspicious or important and over time, the facts come together to tell the stories he publishes.
David took this approach years later to predicting major changes within the casino industry and also to documenting specific people, the hotelier Barron Hilton, president Donald Trump, General Electric CEO Jack Welch, and LA police chief Daryl Gates. This tracking has led to huge exposés on each of these people and subjects. “That’s what I do for a living. I track stories. I have stories that I have tracked and written about for ten, 20, 30 years because I saw them early on as things that would be important for the future.”
David Hits Some Bumps
After Michigan, David was hired by the LA Times in San Francisco. He spent two and half years there but because of a blow up among high level managers he was told he could go to the Washington Bureau or LA. “Since I grew up in California and my wife was from California, I went to LA.”
His success as an investigative journalist was not always met with adulation. In fact many people in his own newsrooms were not happy to have David looking under the rocks for the bodies. This was definitely the case in LA.
David investigated many powerful local people, and it made the paper’s owners, the Chandler Family, and the top editor sweat bullets. The paper was tough on investigative reporting in distant places, but locally saw the paper more as a tool for economic expansion and less as a vessel for journalistic integrity and after 12 years, they made David’s job so untenable, he finally quit. “They were just livid about it and they were making my life impossible. They did not want me to investigate the local leadership,” he recalled.
Despite this, David exposed several police spies and the problematic behavior in the LA Police Department. He received threats and warnings that were serious enough for him to write and give a 31-page memo to a few people in sealed envelopes in case he turned up dead.
This wasn’t the only place where the “truth” was a little too much for his employers to handle. The New York Times had a delicate way of calling out the powerful. David discovered that several powerful executives were legally not paying taxes on their earnings, and The Times tried to bubble wrap the story with a milder headline and lead.
“My lead was, 5 years ago this newspaper reported that the head of the Coca-Cola company had been paid the then astounding sum of $98 million for a single year’s work. What has never been reported until now is that he only paid taxes on $2 million of that money, and years and perhaps decades will pass before he pays taxes on the other $96 million. Roberto Goizeuta, the CEO of the Coca Cola company is far from alone. John F. Welch of General Electric, Lawrence Bossidy at AlliedSignal, John Akers at IBM and thousands of other American executives have similar deals in which they earn now and pay their taxes by and by.
“The editor said, ‘That is the worst lead I’ve ever read in my life. No one will read that story.” I looked at him and said, ‘Are you out of your mind? Of course, people will read that story.’ ‘No, they won’t and furthermore we can’t say we failed to report something 5 years ago.’ ‘Why not? We didn’t. It was a great story we did but we didn’t know back then we couldn’t have known he didn’t pay taxes.’”
“I had figured out that Goizueta had been paid vastly more than anybody understood because while it was actually in the public record, it was deftly hidden in the proxy in the executive compensation section. There was a half-page long paragraph with one wordy sentence that disclosed the compensation, not in dollar signs but in words requiring calculations. Once I realized they actually had to disclose this stuff, I began finding it everywhere. This was the biggest enterprise journalism project The New York Times had ever done, but because of a fraidy cat editor, it didn’t get a Pulitzer Prize.
“The lead that actually ran was Even as congress is discussing cutting taxes for the super-rich, American executives are finding ways to cut their taxes. David snores in his chair showing me how boring the lead is. “When I asked the editor why he changed my lead he said, ‘They hired you to go after this stuff, and they gave you a pistol. They didn’t give you a goddamn shotgun to put to the head of Wall Street.’ The Times has a tradition of not writing things in a hammering fashion, and I was hammering.”
Despite the piece not getting the play that it deserved, David went on to win a Pulitzer in 2001 and was among the three finalists three other times. The Pulitzer board cited his “exquisite command of tax law.”
David and Donald
David was working on what he considers to be his most important book, proposing a new federal tax system, when Donald Trump announced his run for president on June 16th 2015.
David dropped everything he was doing and changed gear. Because Trump had been a subject David had been following for decades since his coverage of the Atlantic City Casinos, he had amassed the largest private collection of documents about Donald Trump in the world and felt obligated to inform the public on what a reckless, dangerous and morally ambivalent person Donald is.
Johnston was uniquely positioned to connect the dots for the American public and considered it his duty to. He began work on a trilogy of books. His latest book released in December of 2021, is called “The Big Cheat: How Donald Trump Fleeced America and Enriched Himself and His Family.” He takes the facts and the myopic individual accounts, and testimonies to paint the bigger picture of how Donald Trump tried to turn the government into a kleptocratic institution for personal financial benefit.
“The institutions of our government were not prepared to have a president who did not put the country first. We have run our country, from the beginning, with presidents who (whether you do or don’t like their policies), were well intentioned. No reasonable informed person would ever say that a past president has ever set out to cheat everybody. Even Chester Arthur who came out of the political machine of Tammany Hall, turned out to act in the public interest as he saw. When the Tammany Hall guys showed up at the White House thinking ‘Oh boy, are we going to make money now,’ he said, ‘Gentlemen, I am now the president of the United States. I don’t do those things anymore. Leave and don’t ever darken the White House door again.’ Donald Trump has no concept of what is best for the country. He can only see what is best for himself.”
Donald, like most people David exposes, is not a fan. He has called David at his home many times threatening to sue to which David responds “Well Donald, if you have a case then you should bring it.” But Donald never has. “He knows my facts are bolted down solid.”
With Donald out of office for now, David is relieved to get back to his book on taxes and hopes to finish and publish it in early 2023. He is also shifting focus to a pilot TV series on the $50 trillion dollars of illicit money floating around the world. “To give you an idea of how much money that is, all of the economic activity generated by everybody in America who works for the next two and a half years, it would just barely equal that amount.”
David views himself as a translator, taking the language of the high priests of tax and accounting and putting it into the vernacular to empower the average Joe to act on what is happening in their government and in their world.
“One of my fundamental principles in life is that most of us just learn the mechanics of things. If we learn instead at the level of principle and theory, we can always figure out the mechanics.”
“If I understand the economics of something and the rules, I can’t tell you exactly what will happen, but I can tell you the direction it’s going to flow. It’s like water going downhill. If you let me study the hillside where the low spots are, I’ll tell you where the water is going to flow. “
At 73, the beat reporter with a penchant for tax and economics hasn’t slowed down. “One of things I tell my students and children is: whatever age you are, you should run your life on the theory that it will continue forever, but you should always have your affairs in order. Even if you’re in your 20s you should have a written will and instructions on things to do, because you may not get to the end of this sent-,” he pauses and feigns death from his chair.