President Trump exaggerated his personal wealth repeatedly in financial documents he provided to banks and insurers, his former personal lawyer Michael Cohen told Congress Wednesday, citing documents that Cohen said support his contention that Trump is “a con man.”
Before a dramatic hearing on Capitol Hill, Cohen submitted to the House Oversight Committee portions of these documents, called “statements of financial condition,” for the years 2011, 2012, and 2013. The Washington Post independently obtained a complete copy of the 2012 statement, as well as those for several previous years.
The documents contain detailed dollar figures for Trump’s cash holdings, the value of his real estate assets and the amount of his outstanding debts. In his testimony, Cohen said these figures were adjusted to make Trump seem like a better credit risk, seeking to lower his insurance premiums and obtain a Deutsche Bank loan to buy the NFL’s Buffalo Bills — a purchase that never materialized.
Cohen said that Trump also used them to attempt to improve his ranking among lists of wealthy Americans. One statement showed his net worth rising by $4 billion.
“It was my experience that Mr. Trump inflated his total assets when it served his purposes, such as trying to be listed amongst the wealthiest people in Forbes, and deflated his assets to reduce his real estate taxes,” Cohen said.
The Trump Organization and Trump’s longtime accounting firm, Mazars USA, declined to comment about the statements Wednesday. Deutsche Bank also declined to comment.
The “statements of financial condition” are not rigorously audited financial documents. According to a cover letter on one of the documents obtained by The Post, they represented Trump’s own estimates about what he was worth and what he owed.
Still, the documents provided a new glimpse into how Trump presented his finances, not just to journalists and the public but also to lenders and insurers, who were being asked to stake their money on Trump’s future.
And it revealed a new potential target for Democrats, who have pledged to investigate myriad aspects of Trump’s business holdings.
“Did the president ever provide inflated assets to an insurance company?” asked Rep. Alexandria Ocasio-Cortez (D-N.Y.) during the hearing.
“Yes,” Cohen said. At Ocasio-Cortez’s prompting, Cohen said that Congress might learn more about the truth of these statements by examining Trump’s still-undisclosed tax returns.
Legal experts said Wednesday that the documents alone did not indicate fraud.
For one thing: Unlike the partial documents produced by Cohen, the full statements of financial condition obtained by The Post begin with a long disclaimer, written by Trump’s accountants, warning any reader that the numbers were not complete, audited or compliant with normal accounting standards.
The one from 2012 warned, “users of this financial statement should recognize that they might reach different conclusions about the financial condition of Donald J. Trump” if they could see the full picture.
“Michael Cohen’s testimony opens another line of inquiry — into bank fraud,” said Stanford University law professor Joseph A. Grundfest, a former commissioner of the Securities and Exchange Commission. “But to determine whether fraud occurred requires a careful look at the text of the statute and at the documents submitted to the bank.”
“The question,” Grundfest said, “ is whether there was a knowing attempt” to defraud the bank.
While Cohen’s testimony brought new attention to these unusual statements, Trump has used them since at least the 1980s, according to a deposition from one of Trump’s accountants in a 2007 lawsuit.
That accountant, Gerald J. Rosenblum, described a process where his accountants didn’t audit the figures Trump gave them for the values of his buildings. They simply wrote them down.
“The role is to accept those values and move them forward,” not to assess whether the values were accurate, Rosenblum said at the time. “It’s a process of acceptance.”
The figures they accepted painted a very rosy picture of Trump’s net worth. In 2012, for instance, the statement said Trump had $5 billion in assets, and only $450 million in liabilities, for a net worth of $4.5 billion.
But that statement was rosy, in part, because it left out some less-flattering parts of Trump’s portfolio. The disclaimer said that Trump had omitted any mention of his huge hotel projects in Chicago and Las Vegas, both of which carried outstanding loans. The statement said that Trump had also declined to say anything about his expected income tax liabilities.
Trump also assigned very generous values to his own assets. One example involves an estate he owns in Westchester County, N.Y., called Seven Springs.
In 2012, Trump said it was worth $291 million. In the full report obtained by The Post, Trump’s accountants explained why: Trump planned to build nine “luxurious homes” on the site. That dollar figure, they said, was “based on an assessment made by Mr. Trump in conjunction with his associates of the projected net cash flow” of developing and selling those home lots.
But the local authorities valued the property at a far lower number, according to local town officials. In 2013, their assessment of the entire property’s value was $18.9 million — about 6 percent of the value Trump claimed in his statements to bankers.
In 2013, Trump’s self-described financial picture got even brighter.
Trump said his net worth had nearly doubled that year, to $8.6 billion.
Trump had added a new asset, his “brand value,” which he estimated was worth exactly $4 billion.
In his testimony, Cohen said Trump had sent the statements to both insurance companies and to Deutsche Bank, one of Trump’s most important lenders.
“These documents and others were provided to Deutsche Bank on one occasion where I was with him,” Cohen said, “in our attempt to obtain money so that we can put a bid on the Buffalo Bills.”
But, between 2011 and 2016, Deutsche Bank provided Trump with $295 million in loans for other properties: Trump National Doral Miami golf resort and the Trump International Hotel in downtown Washington.
Tom Hamburger and Philip Bump contributed to this report.