Predictably, Donald Trump wants you to think that his longtime accounting firm’s decision to quit the Trump Organization last week was no big deal. In fact, he wants you to not think about it at all.
But that hasn’t stopped members of his inner sanctuary from wondering if the investigations made public in New York could actually what ended up burning down the former president’s family business.
That’s why after accounting firm Mazars USA quit the Trump Organization, three people close to former President Trump told The Daily Beast that they had urged Trump — or others in his family and his convictions — take this potentially destructive development seriously.
“I’ll be honest with you: I’ve been saying for years that this whole thing was a big fishing expedition,” one of the sources said. “I was expecting it to just flare up at a certain point, or pop up stuff that would make a big headline for prosecutors. The Mazars The news was that I first started thinking, ‘Hey, this could be serious.’ Donald Trump can [and his business] wry? I don’t know, but I’m not as confident as I used to be when I say, “No.”
The question currently facing the Trump Organization — the organization that has come to a boil after indicted in Manhattan for tax fraud last summer — whether the pillars that underpin his business empire had collapsed.
The massive bank loans that financed his real estate development projects were the foundation of his empire. Banks that approved Trump’s loans to build his golf courses and skyscrapers were based on personal guarantees and his “financial statement” — guarantees that are now shaky lay.
None of these sources who have spoken to Trump believe that he is taking this as seriously as what he should be. Two of them said the former president had told them his business empire had done “wonderfully,” regardless of what prosecutors were trying to do.
But notably, all three predict that this latest Mazars development will likely strengthen Trump’s resolve to run for president again in 2024.
John McLaughlin, who was one of Trump’s top pollsters in 2016 and 2020, declared: “Right now, all voters care about is preventing a US recession. and President Trump is the only one they know who can do it.” “Voters may care less about their accountants. As long as Joe Biden fails, President Trump grows stronger.”
After a day of silence on the subject, the former president rescue A lengthy statement Tuesday night emphasized that, among many other things, “We have an amazing company with amazing assets that are unique, incredibly valuable and, in many cases, valuable.” far more valuable than what is listed in our Financial Statements.”
However, Mazar’s decision on February 9 Trump’s denial of every statement of financial condition that Trump made between 2011 and 2020 is not merely a shadow of doubt about his wealth and future.
That’s because loan agreements often include clauses to cancel the transaction immediately — rendering the loan default — if the underlying documents prove false. According to an analysis widely cited by journalists at BloombergThe Trump Organization already has at least $590 million in debt coming due between 2021 and 2025. It’s unclear whether Trump’s loan agreements include a “material change in conditions” provision. but if they do, as most debt can lead to financial ruin.
Steven J. Solomon, a Miami-based attorney who heads bankruptcy operations at the national law firm GrayRobinson, warned of the severity of the situation for the Trump Organization.
“It is extremely important. And honestly, I’ve never heard of a situation where an accounting firm would go back 10 years,” he told The Daily Beast. “This will be a trigger point. If your lender doesn’t trust you because they can’t rely on the information, you can’t be friends anymore.”
In theory, Solomon said, lenders could proceed to seize any collateral Trump puts on the table. That could include any assets Trump is risking to borrow Bloomberg counted as $100 million for Trump Tower in Manhattan or another $125 million for the Trump Doral golf resort.
But the banks that have loaned Trump millions will be hesitant to suddenly call back their loans for fear that it could start a financial crisis that will eventually destroy the precious borrower. and reduce their chances of getting their money back, some bankruptcy attorneys tell The Daily Beast.
The political collapse of banks demanding repayment of their loans may also influence their decisions. While libertarians and good government groups may urge Trump’s lenders to do so, the backlash is likely to fall more heavily on banks than on Trump. Supporters of the former president would think nothing of Trump if his successful businessman personality suddenly evaporated. Instead, Trump will likely just incorporate the episode into his already mature politics of suffering.
However, that does not mean that banks calling back loans will not be affected.
Based on government disclosure form Trump signed in his last week in office a year ago, Trump is hooking more than $130 million for Deutsche Bank, scheduled to start in 2023. His life seems to have vanished as the banker. His longtime partner, Rosemary Vrablic, abruptly resigned amid allegations of shady dealings with Trump’s son-in-law, Jared Kushner.
Meanwhile, the disclosure form shows Trump owes $110 million to real estate investment trust Ladder Capital Finance that will begin this year — though Trump continues to have a family friend at the company many consider a loyal ally. his foundation in the form of director Jack Weisselberg, son of the Trump Organization CFO indicted.
But even if these big lenders don’t want to call back their loans, government-regulated banks will still be under pressure for an independent investigation into Trump’s true financial situation, as fear that they will violate responsible banking laws.
“This is also going to be extremely troublesome. You would have banking regulators look at… these loans and determine that there are questions raised about the borrower’s solvency,” said Solomon.
It will be even worse for the Trump Organization. Solomon called the Mazars’ sudden exit “a dark cloud” that would easily drive away any other reputable accounting firm to take its place.
And that, in turn, invites unscrupulous characters from all over the world to come to the rescue.
“This explodes the national security risk by a factor of 10, because now he will be desperate for new loans. Legitimate banks won’t touch him. So it expands the universe of shady characters who can be loaned to him in exchange for favors that could include the disclosure of American national security secrets,” said Joseph Cirincione, a member at a think-tank, the Quincy Institute for Responsible Legislative Studies, said.
Any influx of foreign money is sure to re-ignite an active effort by Democrats in Congress, who sued, unsuccessfully in 2017, to install him for president for violating the laws of the United States. rules on receiving gifts and benefits from foreigners. Their efforts, that died in federal appeals court in 2020, showing how difficult it is to hold an American president accountable for governance terms emoluments of the United States Constitution.
“Whether it’s Saudis, Russians, drug terrorists – anyone with access to hundreds of millions of dollars is going to run for Donald Trump’s new loan officer,” Cirincione said. . “That’s why you don’t give confidential information to people who are financially compromised.”
And the American public won’t know much about it unless Trump returns to the White House.
But for all the financial trouble this causes for Trump’s family company, the Mazars’ decision to step down could be the catalyst to bring down Trump himself because alleged crime because any proven fraud puts additional pressure on Indicted CFO, Allen Weisselbergwho will face trial later this year.
Barbara A. Res, a former construction executive at the Trump Organization who wrote a tell-all book called Tower of Liesnote that any bank loan officer would have dealt directly with Weisselberg throughout the years.
“Weisselberg is in trouble right now. He was probably the one who provided all the information to the accountant. They don’t put it out into thin air. They worked with Weisselberg, He’s the man. They didn’t check [real estate values] we. They are not real estate people,” she said.
“I hope that they debunk Weisselberg, because this is a big deal for him. I think he’s the one who’s going to go to jail for this,” she added.
Res, who currently speaks on women in the construction industry, recalls ways she saw Trump cheat on business partners in the 1980s and 1990s. She told The Daily Beast that Trump never went. went so far as to falsify financial statements for years because “people wouldn’t let him do things like that. We have him under control. But he got to the point where no one would reject him anymore. “
“If he gets away with this, then there’s no God and no reason to live,” she said.