Donald Trump once said he calculated his net worth, to a degree, on his “feelings,” and that he put the “best spin” on some of the assets.
“I think everybody” exaggerates about the value of their properties. “Who wouldn’t?”
Did he inflate values? “Not beyond reason,” Trump said, insisting he gave his “opinion” to a key associate and “ultimately” let that person make the decision, according to an exchange in a 2007 deposition.
The exchange takes on fresh meaning this spring as Manhattan prosecutors investigate whether Trump’s “best spin” was common practice in local real estate circles — or if he crossed the line into illegal activity.
The answer could determine whether Trump ends up facing criminal charges.
The public record already sheds lots of light on how Trump has run the Trump Organization. A CNN examination of sworn depositions, interviews with former employees, and published accounts shows that Trump has tried repeatedly to push responsibility for his valuation decisions onto his chief financial officer.
At the same time, the documents and depositions appear to show that, even as Trump claimed that he left those valuation decisions to someone else, he was also deeply involved in running his business.
In his pursuit, Manhattan District Attorney Cyrus Vance Jr. is scouring millions of pages of Trump’s personal and company tax returns and related records, interviewing lenders, and recruiting forensic accountants. The accuracy of Trump’s financial statements is one of several areas that prosecutors are scrutinizing in a wide-ranging investigation. Former prosecutors say bringing a case isn’t easy because authorities would need to prove beyond a reasonable doubt that officials intended to defraud someone through misstatements.
Vance’s office has declined to comment. The Trump Organization did not respond to requests for comment.
Representatives for the Trump Organization have previously said they did nothing wrong and paid appropriate taxes.
A spokesman for Trump did not respond to requests for comment. Trump has called the investigation a “political witch hunt” and said Michael Cohen’s allegations about inflating assets are lies.
Trump’s own statements draw attention to a longtime Trump family associate, Allen Weisselberg, the chief financial officer of the Trump Organization.
Prosecutors are hoping to pressure Weisselberg into cooperating against his long-time boss, people familiar with the investigation say. They are already gaining assistance from a former insider: Cohen, Trump’s former fixer, who has met with prosecutors eight times, according to a person familiar with the matter. Cohen has alleged that he and Weisselberg would “juice” the values of Trump’s assets until they arrived at a figure that satisfied Trump’s ego.
An attorney for Weisselberg declined to comment for this story.
The 2007 deposition provides a snapshot of the relationship between Trump and Weisselberg, a 40-plus year veteran of the company, and the inner workings of the Trump Organization, a company amplified by the persona of its founder but one that at its heart is a family-run business.
Unlike some other companies employees rarely leave the Trump Organization. Weisselberg joined in the 1970s after working for Trump’s father Fred Trump. Others in the finance and legal departments have also been there for decades, and some of those who have left declined to speak with CNN about the company.
Barbara Res, an executive vice president at the Trump Organization from 1980 until 1991, said when she worked there, Weisselberg “paid the bills, collected the rents. He was not in the inner circle.”
“He was extremely deferential” to Trump, she recalled. “I think he adored Trump in his own way and worshipped him so to speak.”
Over time, Weisselberg, whose office was down the hall from Trump’s on the 26th floor of Trump Tower, flourished within the company. He moved from a modest home on Long Island into an apartment in a Trump-branded building in Manhattan. His son joined the company. He bought a home in Florida not far from Trump’s Mar-a-Lago resort. He often flew down on winter weekends with Trump on his private plane, according to two people familiar with their relationship.
Weisselberg was there as Trump was a tabloid fixture, when Trump’s casinos in Atlantic City went bankrupt, and through Trump’s financial rebound with the Apprentice television series.
“Allen got him through that to breathe again and function again,” said Jennifer Weisselberg, a former daughter-in-law of Allen Weisselberg. “Allen would never do anything behind his back. Everything is a conversation. They don’t hide things from each other,” she said. Jennifer Weisselberg was married to Barry Weisselberg, an employee of the Trump Organization. She has met with prosecutors multiple times and told CNN they have asked her about “compensation and gifts” including rent-free on apartments.
In a sign of how much Trump trusted Allen Weisselberg, when Trump was sworn in as president he turned the day-to-day operations of the company over to Weisselberg and his sons Donald Jr. and Eric Trump.
“Everything that went on at the Trump Organization went through Trump, and if there was anything to do with a dollar with anything financial it went across Allen Weisselberg’s desk,” one former employee said.
The attorney general in Washington, DC, asked a judge overseeing a lawsuit alleging the Trump Organization misused money raised for Trumps’ inauguration to depose Weisselberg after one witness testified that Weisselberg asked to review the inaugural committees’ financials despite having no known affiliation with the inauguration, according to a court filing.
The DC lawyers allege that the nonprofit President’s Inaugural Committee paid nearly $50,000 for block of rooms reserved by the Trump Organization. Last month the lawyers said they needed more time to investigate inconsistencies in testimony relating to the invoice for the Loews Madison hotel room block.
“Upon reviewing the PIC’s budget reports, Mr. Weisselberg would have seen that the PIC had funds leftover. The decision for the Trump Organization to punt its debts to the Loews Madison over to the PIC occurred in July 2017, after Mr Weisselberg had reviewed the PIC’s financials. As a de facto representative of Donald Trump’s business interests during the relevant period, Mr Weisselberg may have information relevant to why the PIC’s funds were used to pay a debt of the Trump family business,” the DC lawyers wrote.
“It’s very tightly controlled at the top,” said another former employee who worked for the Trump Organization in the mid 2000s but didn’t want to be quoted because it is “not a positive” for the resume. “The brand is big,” this person said, but it’s run “pretty close to the vest.”
‘I think Mr. Weisselberg did that one.’
Trump said in the 2007 deposition that the only person he dealt with in preparing the statements of financial condition was Weisselberg. The deposition was taken in 2007 as part of a defamation lawsuit Trump unsuccessfully brought against author Tim O’Brien, author of Trump Nation, a book that explored Trump’s wealth.
“I would give my opinion,” Trump said in the deposition. “We’ll talk about it,” he said, adding that “ultimately” and “predominately” it was Weisselberg who came up with the final values, which Trump said he viewed as “conservative.”
“He shows me what he ultimately comes up with and I — I’m not sure I ever said change this number or change that number. He shows me. We’ll talk about it. He’ll do it,” Trump said.
“He’ll show me before we go to the final drafts and put down everything and give it to Weiser [the outside accounting firm, which is now known as Mazars] and let them certify cash or whatever they — whatever they have to do, he’d show me numbers. And I’m not sure that I ever really said, gee, this one should be higher or this one would be lower. “
Trump said it was “possible that I would say, well, I think Mar-a-Lago is very low because of this, but I just don’t remember that. But generally he tends — I find he tends to be conservative.”
When asked about values assigned to Trump Tower, Trump said, “I think Mr. Weisselberg did that one.” When asked if he valued his golf courses based on the value of the land to be sold, Trump said, “I think that Mr. Weisselberg — again, he did that; I didn’t.”
Financial statements – $788 million or $3.5 billion?
But when questioned specifically about dramatic changes in values from one year to the next Trump had ready explanations.
During the deposition, Trump was questioned over Seven Springs where its value nearly doubled in one year from $80 million in 2005 to $150 million in 2006.
“The property was valued very low, in my opinion, then and it became very — it just has gone up,” Trump said.
He was asked if he had any basis for that view, other than his own opinion.
“I don’t believe so, no,” he said.
Asked if he consulted with any experts, Trump said, “I didn’t need to, because I’m not — I have no intention of selling the property.” He also said he did not believe an appraisal was completed.
Trump was also asked about the leap in value given to the golf course he owns in Rancho Palos Verdes, California. According to the deposition, Trump’s financial statements indicated in 2003 that he valued the golf course at $30 million and in 2005 said it was worth $360 million.
“A lot of things changed,” Trump said. He noted that he obtained approvals to build residential homes on the property and develop the golf course, which he said increased the value.
“Did you sell a single house,” the attorney asked.
“I didn’t want to,” Trump said.
Trump said the increased value reflected environmental and zoning approvals he obtained.
“So you went from 2003 where you had a piece of land that was so-called very difficult to get approvals to 2005 where you have all your approvals and the golf course is I guess ready to open or opened,” Trump said. “So that’s a big difference in terms of value.”
Trump was also told during the deposition that two lenders concluded vastly different estimates of his wealth. North Fork Bank valued his net worth at $1.2 billion compared with the $3.5 billion Trump claimed on his 2004 statement of financial condition. For the same year, Deutsche Bank, which provided a loan for Trump’s construction of a hotel and condo tower in Chicago, estimated Trump’s net worth at $788 million.
Trump said the banks were “incorrect,” they didn’t have appraisals on the properties, and were likely “discounting the hell out of them.”
In the case of North Fork Bank, Trump was informed that they had his tax returns.
“The tax return is different because you take deductions in a tax return, you take depreciations, you take other things,” Trump said.
Trump was also asked to explain discrepancies in his value of a commercial office building known as 40 Wall Street with a value determined by New York City assessors.
The city assessors valued it at $90 million. Trump valued it at $400 million, according to the deposition.
“Anybody would understand that a city assessment is 15 and 20 percent the value of a building,” Trump said.
Difficulty of financial investigations
Former prosecutors say bringing a tax or financial fraud case is challenging, especially when someone can say they relied upon the advice of lawyers and accountants. Adding to that is the complexity of real estate, where there is more leeway in deriving valuations.
In those financial statements Mazars included a two-page introduction that stated Trump came up with the valuations and that the financial statements did not comply in all respects with generally accepted accounting practices in the US.
Multiple times, when asked about accounting standards, Trump said, “I’m not an accountant” or “ask my accountants.”
The introduction had some of the same disclosures, verbatim, from the earlier financial statements that were read into the deposition, which may suggest that the practices did not change in the ensuing years.
As suggested by the deposition testimony, Trump is likely to argue there were different reasons for valuing a real estate asset one way when seeking a loan to reflect its potential growth, but he would have a legal basis to value it differently in a tax return when reflecting its current value, people familiar with the matter say.
In some instances, former prosecutors say, certain tax write-offs or valuations may on the surface appear suspicious but could turn out to be proper under the law.
Prosecutors are often reluctant to bring a fraud case if there isn’t a victim, former prosecutors say. Sophisticated lenders, like North Fork and Deutsche Bank in 2004, also conduct their own internal reviews before extending millions of dollars.
“I think the deposition is a mixed bag,” said Paul Pelletier, a former federal prosecutor. He said while Trump does acknowledge valuations were often based on his opinion, his statements that he relied on Weisselberg could give his attorneys something to work with.
“He says enough in that deposition to give attorneys something to latch onto to create reasonable doubt,” Pelletier said.
Prosecutors, he said, would need evidence of wrongdoing, such as internal documents and insiders to tell the story.
The fixer who flipped
Cohen, Trump’s former fixer-turned-state witness, said Trump was directly involved in efforts to boost the valuations.
“He doesn’t give you questions, he doesn’t give you orders. He speaks in a code and I understand the code, because I’ve been around him for a decade,” Cohen told lawmakers in 2019 of his interactions with Trump. He said Trump inflated the value of assets when seeking loans or insurance and deflated the values when paying taxes.
At the time Trump said Cohen “lied about so many different things.”
Cohen described in his book, “Disloyal: A Memoir,” how he helped boost the value on Trump’s properties for Forbes and Fortunes billionaires ranking.
“Trump would go into a frenzy. He would have CFO Allen Weisselberg and me concoct the highest possible number, inflating the valuation of his buildings and golf courses by using the absolute most optimistic comparable properties, and then we’d juice that number and juice it again and again until the Boss had a number that satisfied the requirements of his ego.”
Cohen wrote that he added “ridiculously high estimates” to Trump’s holdings. He said he valued retail space where luxury retailer Gucci was located at $1 billion based on comparing it with the St. Regis hotel nearby which had recently sold. He said Gucci had more square footage, but the St. Regis was more valuable because it was at street level, not a four-story property.
“The real value of Trump’s Gucci space was maybe, just maybe, $300 million, but who cared?” Cohen wrote.
Cohen is not an easy witness for prosecutors to present to the jury. He has pleaded guilty to nine crimes including lying to Congress, tax fraud, and facilitating hush-money payments to silence two women who alleged affairs with Trump.
The investigation goes far beyond the accuracy of the financial statements and includes certain tax deductions and expenses the Trump Organization has taken, according to people familiar with the matter. It also includes hush money payments made to Stormy Daniels, who alleged an affair with Trump. Trump has denied the affair. The Trump Organization has said it has paid all appropriate taxes.
And one man at the center of it is Donald Bender, an accountant with Mazars, who has worked on the Trump Organization account for decades. Prosecutors singled him out — by name — in their subpoena for Trump’s tax records.
In a financial investigation the role of the accountants is always of interest to prosecutors. The Trump Organization could potentially say it relied on the advice of accountants to defend any allegations, which would put that relationship in the spotlight.
He also served as the accountant for Allen Weisselberg and his son Barry, according to Barry’s ex-wife Jennifer Weisselberg.
Bender was in the Trump Organization offices frequently and was a quick resource for executives, according to the two former employees.
“Anytime anybody had any questions as it related to tax issues or structuring of the LLCs and the corporation, you went to Donald Bender,” said one former employee. In preparing the tax returns, this person said, “Only three people ever involved were Donald, Allen and Donald Bender.”
Bender, who is still employed with Mazars, did not respond to a request for comment. Mazars did not respond to requests for comment.
Allen Weisselberg has historically kept a low public profile and whether he would cooperate with authorities and testify against his long-time boss is a question openly debated.
He previously provided testimony in 2015 in a lawsuit brought by students who alleged they were defrauded by Trump University and in 2017 to the New York attorney general’s office during investigations into the Trump Foundation and an ongoing investigation into the Trump Organization’s finances. Weisselberg was also given partial immunity by federal prosecutors to testify in their investigation into Cohen’s role in the hush money payments.
Portions of his depositions in two cases were made public in court filings, but not the entire testimony.
The New York attorney general’s office said in court filings that it subpoenaed Weisselberg for his testimony last year and he sat for a deposition over three days in July and August where he was questioned, in part, about taxes.
Investigators with both the attorney general’s office and Manhattan district attorney are examining whether taxes were paid on a forgiven loan.
According to the filing, when Weisselberg was interviewed by the New York attorney general, he said he had no first-hand knowledge that the Trump Organization recognized as income a $100 million loan that was forgiven on the Chicago hotel tower. .Rather, he said, he was relying solely upon his recollection of conversations he had years earlier with the Trump Organization’s accountants.
He also was unable to provide investigators with information about how the Trump Organization treated a conservation easement donated on the Seven Springs property in its tax returns, according to the filing by the New York attorney general.
Investigators are whether the value of the conservation easement was improperly inflated, according to people familiar with the investigation and court papers. If the conservation easement were improperly inflated, tax experts say, the donor could take a larger tax deduction than is allowed.
The former employees who worked at the Trump Organization say they’re doubtful that Weisselberg would cooperate in the criminal investigation against Trump.
“It’s almost like they’re family,” said the former employee who worked there in the mid-2000s. “I still don’t see him breaking. I feel like it’d be more likely for Don [Jr] to walk away from his dad than Allen. They’re like brothers.”
The criminal investigation may test the relationship between the men and who was the ultimate decision-maker.
When deposed as part of the Trump University lawsuit in 2015, Weisselberg was asked if, as with all of Trump’s investments, he was acting on Trump’s behalf.
“Yes, of course,” Weisselberg said, according to the deposition.
“And you were ultimately — you’re subject to his ultimate control, correct?”
“Yes,” Weisselberg said.