By Elizabeth C. Tippett, Assistant Professor, School of Law, University of Oregon. World leaders listen to President Trump speak at the General Assembly. AP Photo/Seth Wenig President Trump on Sept. 19 gave his inaugural speech to the United Nations General Assembly, where he characterized North Korean dictator Kim Jong-un as a “rocket man on a suicide…
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A new legal filing by New York’s attorney general this week accused former President Donald Trump’s company of misleading lenders about the financial health of its landmark downtown Manhattan skyscraper, 40 Wall Street, while seeking to renew the building’s mortgage.
Though the Trump Organization called 40 Wall Street “one of the great success stories post 2008,” lender Capital One found the company’s estimates of the building’s worth so unbelievable that the bank declined to refinance the tower’s loan in 2015, the filing alleges.
“Capital One harbored great skepticism regarding the Trump Organization’s valuations,” says the filing, which was submitted by Attorney General Letitia James in response to Trump’s efforts to block her from questioning him and his children as part of an ongoing investigation by her office.
The new accusations offer startling details about possible financial fraud involving 40 Wall Street — one of the subjects of a 2019 ProPublica story that highlighted conflicting financial documents the Trump Organization had filed for the building.
ProPublica’s story documented how income, expense and occupancy numbers cited in the eventual refinance for 40 Wall Street and another Manhattan building sometimes didn’t match those the company had filed with city tax authorities. A lower valuation for the city would produce a lower tax bill, while a higher valuation for lenders would make it easier to get a new mortgage.
One expert said it appeared like the Trump Organization was keeping “two sets of books.”
“It feels like a set of books for the tax guy and a set for the lender,” said Kevin Riordan, a financing expert and real estate professor at Montclair State University, at the time.
In her filing, James asserts that Trump Organization employees, including Trump’s children, took part in a pattern of deception in which they misled lenders, insurers and the Internal Revenue Service by vastly overstating values for 40 Wall Street and a host of other Trump properties, including golf courses in Scotland, Los Angeles and Westchester and his buildings on Fifth and Park avenues.
The Trump Organization on Thursday lashed out at James, a Democrat, via a statement emailed by a spokesperson, saying, “The only one misleading the public is Letitia James.
“She defrauded New Yorkers by basing her entire candidacy on a promise to get Trump at all costs without having seen a shred of evidence and in violation of every conceivable ethical rule,” the organization’s statement said. It asserted that James “has no case” and that the “allegations are baseless and will be vigorously defended.”
Alan Futerfas, a lawyer for Trump’s children Donald Jr. and Ivanka Trump, also criticized James, accusing her of making “repeated threats to target the Trump family” and ignoring legal protections for “the very people she is investigating.”
James is seeking to compel testimony and obtain documents from Trump, Donald Jr. and Ivanka, who she said have not cooperated with her investigation.
The filing says that property valuations formed the heart of statements of financial condition that the Trump Organization used to demonstrate its net worth. The statements, which James said contained inaccuracies, were compiled by an outside accounting agency from a data spreadsheet and backup material provided by the Trump Organization.
Trump’s personal guarantees to some banks and insurers required him to certify that his financial statements were correct, according to James’ filing. The documents say her office has evidence Trump was “personally involved in reviewing and approving” the statements.
If the company or its employees are found to have deliberately provided misleading valuations, they could face civil or criminal penalties. The company is under investigation by both James and Manhattan District Attorney Alvin Bragg.
With its classic Gothic Revival style and signature green spire, 40 Wall Street gave Trump a presence in the most famous financial district in the world. His company doesn’t own it, but rather purchased in 1995 the right to act as the landlord for its office and retail space. Finding tenants for that space, however, particularly in the building’s narrow tower, proved a challenge, especially after 9/11, when occupancy sagged and the entire financial district struggled, the ProPublica investigation found.
James’ filing says that as early as 2009, Capital One, which held the mortgage on the property, “raised substantial concerns about cash flow” at 40 Wall Street, prompting in-person meetings with Trump, longtime Trump Organization Chief Financial Officer Allen Weisselberg and others. Donald Trump Jr. was also involved in the discussions, the filing says.
The conversations led to a loan modification in 2010, with bank personnel harboring doubts about the Trump Organization’s representations of the building’s financial standing. During those discussions, the Trump Organization provided the bank with profit numbers for 2010 of $12.3 million, which bank personnel described as “very optimistic.”
More startling were the differences between valuations that appeared on Trump’s statements of financial condition and those prepared by appraisers for Capital One. The Trump Organization set the value of the building at $601.8 million in 2010, while the appraisals for Capital One done by Cushman & Wakefield set it at just less than one-third of that, $200 million.
Weisselberg shared one of the company’s higher valuations for the building with the bank in early 2015, boasting of “considerable capital investment” and “a much improved cash flow.” He wanted Capital One to restructure its loan and waive a principal payment of $5 million due in November.
But Capital One declined to refinance the mortgage, referencing its own internal estimate that the building was only worth $257 million in the fall of 2014.
That year, 40 Wall Street’s $160 million mortgage was a thorn in Trump’s side, representing his then-largest single debt as he launched his campaign for the presidency.
After Capital One’s rejection, the Trump Organization turned to Ladder Capital Finance, where Weisselberg’s son Jack was a director. Ladder commissioned its own appraisal. Though Ladder used the same Cushman & Wakefield team that had estimated the building was worth $220 million in 2012, the team this time more than doubled the value to $540 million, legal filings said. Ladder approved the refinance.
James’ filing said that evidence her office obtained suggests the 2015 Cushman valuation “appears to have used demonstrably incorrect facts and aggressive assumptions” to arrive at the higher estimate, which the document said “did not reflect a good faith assessment of value.”
On Thursday, Cushman & Wakefield defended its practices, saying it took “great issue with mischaracterizations concerning the work performed and believe they are not supported by the evidence.
“The referenced Cushman & Wakefield appraisals were undertaken and completed in good faith based upon the material information made available,” the company said in a statement emailed by a spokesperson. “We stand behind the appraisers and the referenced appraisals which reflect fair valuations based upon the underlying facts and market dynamics.”
In 2015, the Trump Organization’s statement of financial condition listed the value of the building as $735.4 million.
Ladder Capital and Capital One did not immediately respond to requests for comment Thursday. Allen Weisselberg and Jack Weisselberg could not immediately be reached.
ProPublica’s 2019 story found several instances of the Trump Organization reporting much lower expenses to its lender, Ladder Capital, than to city tax authorities — including 40 Wall Street’s insurance costs and ground lease. Jack Weisselberg declined to comment at the time on Ladder’s loans or his relationship with the Trump Organization. Executives with Ladder also declined to be quoted for the story then.
In 2019, former Trump lawyer Michael Cohen testified before Congress that the Trump Organization inflated valuations at times to appear more profitable and deflated them to achieve a lower real estate tax bill.
Patriot Front, a fascist hate group that held a march in Washington D.C. late last year, is now disrupting the annual anti-abortion March for Life.
As reported by The Daily Beast's Zachary Petrizzo, dozens of Patriot Front members barged into the March for Life on Friday and began chanting while other anti-abortion marchers did their best to keep their distance from them.
As the Patriot Front members chanted slogans, some counter-demonstrators could be heard yelling back, "F*ck you, Nazis!"
As the march started, Patriot Front walked along with other marchers while carrying a banner that read, "Strong Families Make Strong Nations."
"The ‘March for Life’ has been derailed by the white nationalist and neo-Nazi hate group Patriot Front," commented Petrizzo as he documented the event.
According to the Washington Post's Ellie Silverman, Patriot Front members at some point split off from the larger March for Life and were escorted by D.C. police through the city before arriving at the Gallery Place Metro near the Smithsonian American Art Museum on H Street.
Silverman notes that counter-protesters yelled at police for giving them an escort instead of arresting them after they broke off from the permitted path of the March for Life.
Watch some videos of Patriot Front below.
The white nationalist organization now appears stuck in the middle of the march route.pic.twitter.com/rNsmFSeJMy— Zachary Petrizzo (@Zachary Petrizzo) 1642789851
DC Police appear to be escorting them away from the March for Life. They\u2019re now on 6th St NW, passing Indiana Ave NW\n\nCounterprotesters continue to follow them, yell at them to to home and criticize police. \n\n\u201cJust like J6, they walk right in,\u201d one counterprotester yelledpic.twitter.com/3EPgtLGj9T— Ellie Silverman (@Ellie Silverman) 1642793331
The white nationalist group \u2018Patriot Front\u2019 has arrived in DC and is now at the head of the \u2018March for Life\u2019 as it is about to begin.pic.twitter.com/yfKsqnTCS9— Ron Filipkowski (@Ron Filipkowski) 1642790381
GOP's Louie Gohmert said he’d run for Texas attorney general if he could raise $1 million in 10 days. He didn’t get close.
U.S. Rep. Louie Gohmert, R-Tyler, promised in November that he would run for attorney general if he could raise $1 million in 10 days. And while he eventually entered the race, claiming he met his goal, a new campaign finance report shows he did not come close.
In fact, he did not even top $1 million in contributions until the final day of the reporting period, at least based on the dates of the contributions reported.
"I'm Louie Gohmert, and it's my honor to let you know that we have reached our initial goal of raising $1 million in order to start a run for Texas attorney general," Gohmert said in a Nov. 23 video.
Gohmert insisted Thursday that he did reach his goal, saying he spent those 10 days securing "both contributions and commitments."
"Getting all of the money in house took more time, but we got it just as we were promised and just as we promised," Gohmert said in a statement.
Gohmert's fundraising haul became public this week, when state candidates filed their campaign finance reports covering the last six months of 2021. In the hotly contested Republican primary race for attorney general, the incumbent, Ken Paxton, and his three challengers, raised over $9 million combined as Paxton was outraised by one of his opponents, Eva Guzman. He still has $7.5 million cash on hand, more than double his closest opponent in that category.
Guzman, a former justice on the Texas Supreme Court, raked in $3.7 million during the latest period, covering July 1 through Dec. 31, and Paxton received $2.8 million, according to reports that were due Tuesday to the Texas Ethics Commission. Another Paxton challenger, Land Commissioner George P. Bush, collected $1.9 million, while Gohmert — who entered the race later than his opponents — reported raising just over $1 million.
Guzman was helped tremendously by support from Texans for Lawsuit Reform, the powerful tort reform group; its allied donors; and other top Texas GOP contributors that have backed her from the beginning. About 70%, at or least $2.6 million, of her haul came from TLR, which gave $600,000, plus five individual givers.
The primary is the most closely watched one on the statewide level as Paxton looks to fend off the three challengers who are assailing his integrity and ability to do the job amid a raft of legal problems. Paxton has been indicted on securities fraud charges since months after he took office in 2015, and he has come under FBI investigation over allegations from former top deputies that he abused his office to help a wealthy contributor. He has denied wrongdoing in both instances.
Former President Donald Trump has endorsed Paxton for reelection — and headlined a December fundraiser for him that brought in over $750,000, according to Paxton's team. The campaign filed his most recent report late, citing technical issues, and said it was still working to disclose all contributions from the period. The campaign said that the totals on the report were correct.
Despite the competitive fundraising among the primary candidates, Paxton still enjoys the largest campaign account balance in the primary. While he has $7.5 million saved up, the next closest opponent is Bush, with $3.2 million.
Gohmert announced on Nov. 9 he would enter the primary if he could raise $1 million in the next 10 days. His report shows he only got roughly $27,000 by Nov. 19. Plus, a $100,000 donation that pushed him over $1 million — from a political action committee called Save Texas Now — did not come in until Dec. 31.
Gohmert didn't immediately respond to a request for comment.
Gohmert's top donors were state Rep. Mayes Middleton, the Wallisville Republican who chairs the Texas Freedom Caucus, and another House Republican, state Rep. Matt Krause of Fort Worth. Middleton gave Gohmert $300,000 personally, and Krause gave $250,000 out of his campaign account. Krause had been running for attorney general as well but dropped out around the time Gohmert got in. Both Krause and Middleton, who had been Krause's top donor, expressed support for Gohmert at the time.
As for Guzman's donors, the top individuals each gave $500,000. They included Richard Weekley, TLR's senior chair; Harlan Crow, a Dallas real estate developer; and Robert Rowling, a Dallas hotelier.
Paxton's largest contributor over the six-month period that was disclosed was Michael Porter, a leading Texas GOP donor from the Hill Country, who gave $100,000.
Disclosure: Texans for Lawsuit Reform has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.
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