Trump's finances

When Donald Trump wanted to make a good impression — on a lender, a business partner, or a journalist — he sometimes sent them official-looking documents called “Statements of Financial Condition.”

These documents sometimes ran up to 20 pages. They were full of numbers, laying out Trump’s properties, debts and multibillion-dollar net worth.

But, for someone trying to get a true picture of Trump’s net worth, the documents were deeply flawed. Some simply omitted properties that carried big debts. Some assets were overvalued. And some key numbers were wrong.

  WaPo

Don't try this at home.

For instance, Trump’s financial statement for 2011 said he had 55 home lots to sell at his golf course in Southern California. Those lots would sell for $3 million or more, the statement said.

But Trump had only 31 lots zoned and ready for sale at the course, according to city records. He claimed credit for 24 lots — and at least $72 million in future revenue — he didn’t have.

He also claimed his Virginia vineyard had 2,000 acres, when it really has about 1,200. He said Trump Tower has 68 stories. It has 58.

[...]

Now, investigators on Capitol Hill and in New York are homing in on these unusual documents in an apparent attempt to determine whether Trump’s familiar habit of bragging about his wealth ever crossed a line into fraud.

If he's using those documents to get loans or to pay taxes, then how can it not be fraud?

On Wednesday, the House Committee on Oversight and Reform said it had requested 10 years of these statements from Trump’s accounting firm, Mazars USA.

And earlier this month, the New York state Department of Financial Services subpoenaed records from Trump’s longtime insurer, Aon. A person familiar with that subpoena, who spoke on the condition of anonymity to describe an ongoing investigation, said “a key component” was questions about whether Trump had given Aon these documents in an effort to lower his insurance premiums.

[...]

[Michael] Cohen told Congress that statements were given to Deutsche Bank, as Trump sought a loan to buy the NFL’s Buffalo Bills. Since then, Deutsche Bank and another Trump lender have also received subpoenas, from the New York State attorney general.

The statements may additionally draw the interest of the House Financial Services Committee, which is scrutinizing Deutsche.

[...]

Donald Trump Jr. and Eric Trump, the president’s sons who are running his business, noted on social media that Cohen has provided false testimony about other topics.

So we're to infer that what he said about those financial statements is a lie? Funny, you'd think they'd just come out and say that if it were true. (I'd think they'd say it even if it weren't true, but I'll let you give them the benefit of the doubt.)

Mazars USA, the accounting firm, issued a brief statement Wednesday after the House Oversight letter became public, saying that it “believes strongly in the ethical and professional rules and regulations that govern our industry, our work and our client interactions.” It declined to comment further about Trump.

About as telling as the Trump boys' weasel words.

Trump is far from the first real estate developer to inflate his projects or wealth. But there are laws against defrauding insurers and lenders with false information. Financial and legal experts said it’s unclear at this point whether Trump will face any legal consequences. They said it depends on whether Trump intended to mislead or whether the misstatements caused anyone to give him a financial benefit.

“How much would [the errors] impact an investor?” said Kyle Welch, an assistant professor of accountancy at George Washington University. “If it’s systematic and it’s across the board, and it’s all in one direction, that’s where you have a problem.”

Welch said Trump could be protected by disclaimers that his own accountants added to the statements, warning readers that they weren’t seeing the full picture.

That pennypincher signed off on everything. He knew what the score was.

And in an odd way, Welch said, Trump could be helped by the sheer scale of the exaggerations. They were so far off from reality, Welch wondered whether any real bank or insurer could have been fooled.

Really? Because the banker goes out and investigates it?

Welch said he’d never seen a document stretch so far past the normal conventions of accounting.

“It’s humorous,” Welch said. “It’s a humorous financial statement.”

So he gets a pass?

The story of Trump’s “statements of financial condition” — in essence, sales brochures for Trump the man, given out by Trump the company — goes back to the early 1980s, according to past testimony from Trump’s accountants and staffers.

In 2007, a Trump lawyer named Michelle Lokey said she had sent these statements out to Trump’s lenders, for projects in Chicago and Las Vegas, because Trump had personally guaranteed those loans.

And which lenders investigated whether he actually had all those assets? I'm guessing none.

The statements were prepared by Trump’s longtime accountants, a firm now called Mazars. In other contexts — such as when one of Trump’s companies was seeking to secure a federal contract — this firm prepared rigorously audited financial statements.

This was a different sort of job.

When compiling these statements of financial condition, those accountants have said they did not verify or audit the figures in the statements. Instead, when Trump provided them data, they wrote it down without checking to see whether it was accurate.

And he'll be happy to let them pay any legal consequences.

“In the compilation process, it is not the role of the accountant to assess the values,” said Gerald J. Rosenblum, one of the accountants. “The role is to accept those values and move them forward.”

An attorney asked: Do the values have to be logical?

“The value per se does not have to be logical,” Rosenblum said.

He and Lokey were deposed as part of a lawsuit in which Trump sued a New York Times reporter for allegedly lowballing his net worth. Trump’s suit against the reporter was later dismissed.

I hope he had to pay the reporter's legal bills plus a penalty.

The documents begin with two-page disclaimers, warning of various ways in which the statements don’t follow normal accounting rules. The accountants note that Trump is the source of many buildings’ valuations — and that, contrary to normal accounting rules, he had inflated them by counting future income that wasn’t guaranteed.

[...]

“Users of this financial statement should recognize that they might reach different conclusions about the financial condition of Donald J. Trump” if they had more information, the statement concludes.

FFS, were people not expected to even read the documents?

Trump calls this a "statement of financial condition." But right away, his accounting firm is warning readers that it hasn't checked anything in this document to be sure it's accurate.

[...]

The accountants also note that Trump had told them to simply omit two of his major hotels, in Chicago and Las Vegas. Both buildings were carrying mortgages. That omission means that some of Trump’s actual debt load was hidden from anyone reading the statement.

I'm guessing no one was reading it. After that introductory caveat, why bother?

Legal experts interviewed by The Post said that sort of broad disclaimer might shield Trump from allegations that he misled his lenders and insurers. After all, his own accountants told readers they weren’t getting the full story.

“The transparent disclaimers — even if frustrating — typically wipe out a basis” for bringing charges of fraud, said Jacob Frenkel, a former federal prosecutor who is now a private attorney at Dickinson Wright.

[...]

The 2013 statement that Cohen provided — and which he said was also given to Deutsche Bank, in pursuit of a loan to buy the Bills — is different from the other two.

It is just two pages long, with a slightly different title: “Summary of Net Worth.” It does not include the usual disclaimer from Trump’s accountants, so readers aren’t told that the debts from Trump’s Chicago and Las Vegas hotels are missing.

[...]

This document also includes a new “asset” that wasn’t there before.

It says that Trump’s brand value — his name, essentially — was worth $4 billion, and that it ought to be counted among his assets as if it were a building or a resort. With his brand included, Trump’s net worth jumped from $4.6 billion to $8.6 billion.

We've seen all that before - Trump claims his own feeling about his properties counts toward their value.

...but hey, do what you want...you will anyway.

UPDATE: