Why Did Trump’s Accounting Firm Fire Him?
The recent decision by Mazars USA to abandon their high-profile client spells trouble in terms of the civil and criminal investigations and upcoming lawsuits involving the former president, the Trump Organization, and some of his family members, as well as in their collective abilities to pay back some $500 million in loans, half of it in Donald’s name.
Landwebs
In a letter sent to the Trump Organization last week and revealed to the public this week, Mazars USA LLP, Donald Trump’s accountants, announced that after a decade’s worth of helping the organization prepare its financial statements they can no longer vouch for the statements’ reliability.
In effect, two months before the 2021 taxes were due for the Trump Organization and for Donald and Melania, the accounting firm called it quits, withdrawing its working relationship with Trump and company.
Their stated reasons included recent revelations from New York court documents, their own due diligence, and the Trump Organization’s “apparent unwillingness to share information” in what they described as a ‘non-waivable conflict of interest,’” Bloomberg reported.
Did Mazars only now “discover” the tax problems associated with the Trump Organization’s pattern of inflating the property values of their assets to secure loans, or more generous write-offs, while simultaneously low-balling the values of these properties to reduce their tax bills?
Or was the firm simply getting nervous about its exposures in the civil and criminal probes being carried out, respectively, by the New York State Attorney General and the Manhattan District Attorney?
A charitable interpretation related to the former case would imply that the Mazars were either incompetent or the victims of fraud perpetrated by their clients. But an historical lawsuit involving Trump’s previous accountants, M.R. Weiser & Co, the predecessor firm to Mazars, with many of the same bookkeepers and accountants employed by each firm, suggests that the Mazars may have been accomplices of the Trump Organization and not their hoodwinked victims.
Looking backward, in 2006 Trump sued Timothy L. O’Brien, the author of TrumpNation. In trying to assess the financial worth of Trump, O’Brien’s attorneys raised several questions about the valuations of his properties during the depositions of Trump’s accountants,.
Specifically, O’Brien’s “attorneys asked the bookkeepers how they arrived at valuations contained in documents similar to those that they’re now disavowing.”
Donald Bender, one veteran accountant, had a difficult time trying to explain a memo that he had written describing Trump’s valuations as “subjective.”
Another veteran accountant during his deposition stated that he lacked “the professional expertise to discuss valuations.”
The depositions also revealed that the accounting firm had not made any attempt to independently corroborate the information coming from the Trump Organization. It was also revealed that the Trump documents did not comport with standard accounting practices.
Sound familiar?
Flash forward to 2022. Bender is now the lead Mazars partner. He has been Trump’s accountant for as long as Allen Weisselberg has been Trump’s CFO.
Bender has already appeared before the New York grand jury and has been cooperating with the district attorney’s criminal investigation. Ergo, the non-waivable conflict of interest.
In other words, Trump’s former partner in financial fraud has “flipped” on Boss Donald and has turned state’s evidence. Just one of numerous ex-partners of Donald’s that over the years became another legal adversary.
The Mazars’ abandonment of Trump and company spells trouble not only in terms of the civil and criminal investigations and upcoming lawsuits involving Trump, the Trump Organization, and some of his family members, but also in their collective abilities to pay back some $500 million in loans, half of it in Donald’s name.
Gregg Barak
Similarly, without their old accountants and with no immediate new accountants coming forward, these latest legal assaults on the Trump Organization will no doubt impede the Trumps’ abilities to raise new capital outside of the Trump PACs and the monetizing of the Trump brand—the two most viable short-term revenue streams looking forward that stand between more corruption, more racketeering and more money laundering.
Additional Reading: NY Attorney General Can Question Trump, Two Children, Judge Rules
Gregg Barak is an Emeritus Professor of Criminology and Criminal Justice at Eastern Michigan University, co-founder and North American Editor of the Journal of White Collar and Corporate Crime, and the author of the forthcoming Criminology on Trump (May 2022).
