And the question remains: Will his penchant for hyperbole and playing by his own rules ultimately catch up with him?
The Washington Post’s David A. Fahrenthold and Jonathan O’Connell are out with a must-read story on the unorthodox financial statements Trump has provided lenders and business partners in recent years. We already knew that these “Statements of Financial Condition” appeared to contain the kind of Trumpian wealth-inflation we’ve come to expect. But the big takeaway here is that some of the claims are flat-out wrong or leave out key information. And perhaps not coincidentally, they appear to err in one direction: toward Trump being wealthier and more financially stable than he actually was.
A few examples of the false claims:
- Trump listed 55 home lots for sale at his golf course in Southern California, even though only 31 were zoned and ready for sale. The 24 nonexistent lots were valued at $3 million a piece, or $72 million.
- He claimed his Virginia vineyard has 2,000 acres, when it in fact has about 1,200.
- He omitted his hotels in Chicago and Las Vegas, which just happen to carry mortgages that would have added significantly to his debts.
- He said an estate he owned in Westchester County, N.Y., was “zoned for nine luxurious homes” and estimated the value of the property, once the homes were built, would be $261 million. The lots were valued at just about $20 million by local assessors, however. Trump never built homes on them.
The first thing we can say is that it quickly becomes clear how Trump has inflated his wealth. On just two items, Trump appears to have exaggerated his actual assets by more than $300 million. Even if you accept that Trump is worth in the $8 billion-to-$10 billion range, that’s a good 3 percent to 4 percent he’s plucked out of thin air and layered on top, using just a couple of developments. The $4 billion value he has unilaterally placed on his personal brand is one thing, but at least that’s obviously rank speculation. These are actual assets.
The real question, as it has been for months on collusion and obstruction of justice, is when this kind of thing departs an ethical gray area and bleeds over into actual illegal activity. It’s not illegal to inflate your wealth in your public statements, but it can be illegal to do so to obtain something from a financial institution.
Former Trump lawyer Michael Cohen testified to Congress last month that Trump had indeed inflated his wealth to these institutions, and he submitted the documents described here. At least two investigative entities ― the Democratic-controlled House Oversight Committee and the New York State Department of Financial Services — are now probing just that. House Financial Services Committee Chairwoman Maxine Waters (D-Calif.) also said this week that Trump’s main lender in recent years, Deutsche Bank, has turned over documents concerning Trump to her.
As with Mueller on collusion and obstruction, though, proving Trump’s guilt could be difficult. And that appears especially so given that the “Statements of Financial Condition” carried extensive disclaimers. The accountants who wrote them noted that these weren’t traditional financial statements, acknowledged the exclusions of the hotels and wrote, “We have not audited or reviewed the accompanying financial statement.” They freely admitted that Trump was the source of some of the valuations and added, “Users of this financial statement should recognize that they might reach different conclusions about the financial condition of Donald J. Trump.”
That seems pretty ironclad. But as Fahrenthold and O’Connell write, such disclaimers are not provided in at least one case: a 2013 document laying out Trump’s finances. That document is missing the debts related to the hotels, but it doesn’t disclose that those properties are omitted. Thus, even someone reading the entire document could easily have gotten a mistaken impression about Trump’s actual financial status.
This document is briefer than the others and carries a different title: “Summary of Net Worth.” Trump submitted it to Deutsche Bank when he applied for a loan to buy the NFL’s Buffalo Bills. And while the New York Times has reported that Deutsche Bank vouched for Trump’s failed $1 billion bid to buy the Bills, it also reported that the bank didn’t buy Trump’s own claims of his net worth. One source told the Times that the bank would generally take Trump’s estimates and reduce them by 70 percent.
And that’s a key element here: Proving a crime on this kind of thing depends upon evidence that Trump intended to mislead and evidence that his distortions actually helped him obtain a financial benefit he wouldn’t have otherwise received. In other words, if Deutsche Bank didn’t actually believe it, it may not qualify.
But even if the pieces of a crime don’t fit on these documents, the fact that Trump was submitting misleading estimates with not just exaggerations but outright falsehoods to lenders is conspicuous. Why even venture into that kind of dicey territory?
Trump’s similar ventures into the gray areas of collusion and obstruction don’t appear to have cost him. We’ll apparently find out whether a similar approach to his finances may. And judging by the way he transferred his father’s wealth to himself, which the Times has deemed to be in some cases “outright fraud,” it’s hardly out of the question.