New York looks at inflated Trump valuation

New documents ask New York court to order the Trump organisation and Eric Trump to comply with subpoenas.

Eric Trump greets supporters outside the Milwaukee Police Association hall last week. Picture: AFP

The New York Attorney-General is investigating whether the Trump Organisation and the Pres­ident improperly inflated the value of his assets in financial filings, according to court papers that seek to compel company exec­utives to comply with subpoenas.

The state’s top prosecutor opened the civil investigation in March last year after Michael Cohen, Donald Trump’s former personal lawyer and senior executive of the Trump Organisation, provided congress with copies of the President’s financial statements and testified his assets were inflated to secure favourable loans and tax benefits, according to the filings in Manhattan state court made public on Monday (Tuesday AEST).

The Attorney-General’s office, in the filings, asked the court to order the Trump Organisation and others to comply with civil subpoenas, including one issued for testimony from Eric Trump, who has led the Trump Organisation since his father took office.

The office submitted the request on Friday, and the court filings were made available on the first day of the Republican National Convention.

Allen Weisselberg, the Trump Organisation’s chief financial officer and a long-time confidant of Donald Trump, gave sworn testimony to the state investigators over two days last month, according to the filings. Other Trump Organ­isation executives have declined to meet the Attorney-General’s office or have withheld documents, citing privileged communications or claiming an overly broad inquiry, the filings say.

State prosecutors said they subpoenaed Eric Trump for testimony in May, but less than two days before his scheduled July 22 examination lawyers for the Trump Organisation cancelled, saying the Attorney-General’s office’s questions to Mr Weisselberg were “beyond the scope” of the civil inquiry.

As of last week, Eric Trump “has now refused entirely”, the Attorney-General’s office said in its filing, prompting it to ask the New York court to act.

“For months, the Trump Organisation has made baseless claims in an effort to shield evidence from a lawful investigation into its financial dealings,” New York Attorney-General Letitia James said on Monday. “They have stalled, withheld documents and instructed witnesses, including Eric Trump, to refuse to answer questions under oath.”

A spokeswoman for the Trump Organisation called it “a discovery dispute” and said the company had done nothing wrong.

“While we have tried to co-operate in good faith with the investigation at every turn, the NYAG’s continued harassment of the company as we approach the election (and filing of this motion on the first day of the Republican National Convention) once again confirms that this investigation is all about politics,” she said.

Ms James, a Democrat, has filed several lawsuits against the Trump administration. During her 2018 election campaign, she pledged to defend vulnerable New Yorkers and stand up to Mr Trump’s policies, which she says have harmed the state.

At issue are seven subpoenas for testimony and thousands of documents primarily involving several Trump Organisation properties, including a Westchester County, New York, estate called Seven Springs and Trump National Golf Club in California. Mr Trump donated conservation easements at both properties by placing permanent development restrictions on the property and taking tax deductions equal to the diminished value.

The New York donation generated a $US21.1m income-tax deduction, and the California donation yielded a $US25m deduction, according to the filings.

Those deductions hinge on appraisals of the value of the land before and after the easement, and the filing suggests that investigators are examining how those appraisals were done. The filing also mentions 40 Wall Street, a Lower Manhattan building with a $US160m loan, of which $US20m was personally guaranteed by Mr Trump; and Trump International Hotel and Tower Chicago.

The Wall Street Journal