Trump Organization’s accounting firm cuts ties over dubious financial statements

The longtime accounting firm of former President Trump has cut ties with him, stating they could no longer stand by a decade of financial statements they prepared for the Trump Organization. This latest news comes amid ongoing criminal and civil investigations into Trump’s financial assets. Andrea Bernstein, who has long reported on Trump’s finances for NPR, joins Lisa Desjardins with more.

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  • Judy Woodruff:

    The longtime accounting firm of former President Donald Trump has cut ties with him, saying it could no longer stand by a decade of financial statements they prepared for the Trump Organization.

    Lisa Desjardins has more.

  • Lisa Desjardins:

    The accounting firm, Mazars, told the Trump Organization in a letter that financial statements from 2011 to 2020 should — quote — "no longer be relied upon" and said that the company should inform others that the documents are not reliable.

    This news comes amid ongoing criminal and civil investigations into the former president's financial assets.

    Andrea Bernstein is an investigative reporter and author of "American Oligarchs: The Kushners, the Trumps, and the Marriage of Money and Power." She has long reported on Trump's finances for NPR, and joins me now.

    Andrea, OK, translate this for us. What exactly is this accounting firm saying in their accounting language, and how significant is this in their long history with President Trump and his Trump Organization?

    Andrea Bernstein, Author, "American Oligarchs",: It is significant.

    And it's significant because Donald Trump is no stranger to accusations of financial fraud. There have been congressional investigations. There have been previous investigations. There was an indictment last June by the Manhattan district attorney. And his accountants have stood by him.

    And we learned yesterday due to a court filing that they are no longer standing by him, that they say they have an irreconcilable conflict of interest, and that they cannot stand behind almost a decade's worth of financial statement. That's a big deal. Millions of dollars in loan decisions and other decisions were made in part on the basis of those statements.

    And now the accountant says they can't be considered reliable, and you need to tell everybody who's seen them that same fact.

  • Lisa Desjardins:

    What does this mean for the multiple investigations facing both the former president and his organization, all of which center around financial fraud? Do we know what this means?

  • Andrea Bernstein:

    Well, not exactly. But it is a sort of — a signal flare.

    What it tells us is that — and we do know members of this accounting firm, Mazars, have been pressed for information, documents. There's been testimony before a criminal grand jury. And so it suggests a couple of things. It suggests that they're under a great deal of pressure.

    And, also, it really says something that the president's — the former president's longtime accountants are making this public statement about him at this moment, where we know the Manhattan district attorney is actively engaged in an ongoing grand jury investigation into whether there was further criminality, further fraud at the Trump Organization, and the New York attorney general is investigating whether the Trump family business failed to pay its share of New York taxes.

    It's not a moment where you want the accountant to say, we're not standing by the statements we issued over 10 years.

  • Lisa Desjardins:

    The Trump Organization hasn't been shy about handling league matters in the past. How are they reacting to this? What are they saying? What is the former president saying?

  • Andrea Bernstein:

    So, there was a key line in the letter.

    And the accountants said, we did not conclude that the statements are not reliable.

    And the spokesperson for the Trump Organization leaned into that, and they said, well, that is a vindication, and it means both the district attorney and the attorney general should drop their cases.

    This is a familiar, to me, Trump Organization and Trump legal response, to say something vindicates them that does not vindicate them, and, therefore, everyone shall move on. So far, in these two cases, at the tactic has not worked.

  • Lisa Desjardins:

    Another Trump trademark, however, is, he has long bragged about his ability to brag, openly declared himself smart for finding ways around paying taxes.

    So, I'm curious, a big-picture question here. How hard is it to prove fraud against someone like former President Trump or the Trump Organization?

  • Andrea Bernstein:

    Well, so we don't know what the New York attorney general is going to do. We don't know what further steps the Manhattan DA is going to do.

    But we do know from what has been charged that the district attorney has gathered a great deal of evidence that the former — the financial — the chief financial officer for the Trump Organization and two Trump companies deliberately did not pay U.S. taxes, according to the indictment. Now, they have pleaded not guilty.

    But what the charge is, is that, for 15 years, including while Donald Trump was the head of the U.S. government, his eponymous company, according to the indictment, cheated the U.S. government. That is quite a chart.

    Now, again, they have denied all the charges and the president himself has not been charged with any crimes.

  • Lisa Desjardins:

    Do you think, then, going forward here, are we still — are we facing years before we understand kind of what all of this means? Or where are we in these cases?

  • Andrea Bernstein:

    Well, I don't suspect years.

    I mean, we do know we have already a great deal of information in the civil investigation. This is an investigation by New York Attorney General Letitia James. And because the Trump Organization has resisted turning over information, has resisted getting testimony, her office has put a great deal of evidence into the public record.

    In addition, in the separate criminal matter that is brought by the Manhattan district attorney, the judge in that case indicated he wants there to be a trial in September. So, what we could see is the specter of the chief financial officer of the Trump Organization and the former president's companies being on trial for criminal fraud just as we are turning into the 2022 midterm election season.

  • Lisa Desjardins:

    No shortage of fascinating drama in the business world surrounding former President Trump.

  • Andrea Bernstein:

    Indeed.

  • Lisa Desjardins:

    Andrea Bernstein — Andrea Bernstein, thank you so much for joining us.

  • Andrea Bernstein:

    Thank you so much.

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