Trump Probably Didn't Do Fraud With His $$$ Lies Since Nobody Believed Him Anyway
It's not news that Donald Trump lies about everything, but it's still useful to keep track of how he lies about what, because one of these days some historians are going to wonder if we were all complete idiots who never noticed the "president" was lying all the time. It's just a matter of good record keeping, so people in the future can accurately point out that some of us were paying attention. That brings us to David Fahrenthold's latest piece in the Washington Post, which details some of the ways Donald Trump puffed up his supposed wealth for anyone he wanted to impress with what a rich genius he was. Trump was fond of sending out impressive-sounding "Statements of Financial Condition" that routinely over-valued Trump's assets and conveniently excluded some of his liabilities, because isn't that about what you'd expect?
The exaggerations were routine, and petty. Trump Tower, for instance, has only 58 floors, but the documents list it as having 68. Trump inflated the number of acres in his winery to 2,000 even though the winery has an almost-correct 1,300-acre figure right on its website. (Fahrenthold also notes that "only about 227 acres are planted with grapes.") Mercifully, the documents appear not to have included any estimates of the length of Trump's vulgar little fingers.
This could, of course, be trouble for Trump, since it's actually illegal -- yes, even for celebrities with reality TV shows -- to defraud investors or insurers with false information. Congressional and law enforcement investigations are looking into whether Trump may have committed fraud, as suggested by Michael Cohen in his congressional testimony last month. Fahrenthold points out that whether any laws were broken by the exaggerated numbers would depend on "whether Trump intended to mislead or whether the misstatements caused anyone to give him a financial benefit."
George Washington University accounting prof Kyle Welch said it's possible the statements' heavy disclaimers might provide some protection to Trump (more about which in a moment), and that it's also possible the statements are protected by the same factor that protects satire: The things are simply so freaking unbelievable that no one would take them seriously.
They were so far off from reality, Welch wondered whether any real bank or insurer could have been fooled.
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."
If you are looking for accountancy humor -- this is where Rebecca pops in to shriek "ACCRUAL METHOD!" and then DIES OF LAUGHS -- Kyle Welch is your guy!
In depositions for a 2009 lawsuit against former New York Times reporter Timothy O'Brien, over his book in which he said Trump was no billionaire, accountants testified that Trump's "statements of financial condition" were based on what he said he was worth, not on any actual valuations of Trump's properties:
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.
"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.
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.
The disclaimers also point out that the statements don't include Trump's Chicago or Las Vegas hotels, which had mortgages, and therefore presented a rosier picture of his overall financial strength. But hey, at least the accountants were open about hiding that. Experts told Fahrenthold the disclaimers might actually be just enough sort-of transparency to avoid a fraud case, maybe.
Oh, and then there's that two-page statement Cohen said Trump gave Deutsche Bank in 2013 when he sought financing to buy the Buffalo Bills sportsball franchise. That has much of the same financial information as the other, longer statements, but lacks the disclaimer -- so there's not a word about the Chicago and Las Vegas mortgages. And it includes another neat accounting fiction, too, says Fahrenthold:
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.
Of course, we all know how that turned out: Deutsche Bank, for reasons only Deutsche Bank pretends to understand, offered to finance that bid on the football team, but lucky for the bank, Trump lost a bidding war and so he never got a chance to weasel out on that deal, HOORAY!
In other news, Donald Trump would like you to all be very upset with some Democrats who he insists are big fat liars. Have a nice day.
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Doktor Zoom's real name is Marty Kelley, and he lives in the wilds of Boise, Idaho. He is not a medical doctor, but does have a real PhD in Rhetoric. You should definitely donate some money to this little mommyblog where he has finally found acceptance and cat pictures. He is on maternity leave until 2033. Here is his Twitter, also. His quest to avoid prolixity is not going so great.