Trump accountant says a decade of financial statements are unreliable
LEILA FADEL, HOST:
The longtime accountants for former President Donald Trump and the Trump Organization have quit. The accounting firm Mazars USA says it can no longer stand behind a decade's worth of financial statements that it prepared and signed. The decision could have a major impact on hundreds of millions of dollars in bank loans. And the withdrawal of support from Mazars USA comes at a precarious moment for the Trump family business. Joining us to discuss the development is NPR's Andrea Bernstein. Good morning.
ANDREA BERNSTEIN, BYLINE: Good morning.
FADEL: So, Andrea, the accounting firm says, quote, Statements of Financial Condition from "June 30, 2011, to June 30, 2020, should no longer be relied upon," end quote. It adds that the Trump Organization should let anyone who has relied on these statements - should let anyone know who has relied on these statements. So break down what this actually means and what prompted it.
BERNSTEIN: So it sounds kind of dry. But it is a fascinating business divorce. These are longtime accountants of the Trump Organization. And they have been with the Trump Organization through a lot of accusations of financial hanky-panky. Right now, there are these two big investigations in New York, including a criminal indictment and a civil case that is being investigated by the New York attorney general, Letitia James. She's looking at whether Trump has lied to lenders and tax authorities about his property value. So it's a pretty dramatic development when the accountants say, everything we said about your Statements of Financial Condition for a decade, those cannot be considered reliable.
BERNSTEIN: It's not really good footing for the Trump family business, which has already been repeatedly accused of committing different kinds of fraud.
FADEL: So what kind of impact could this have?
BERNSTEIN: So we don't know all of the specifics, who gave what, when, all that chain of custody. But some interesting details have emerged from the court filings. For example, if you look at the Washington, D.C., hotel, the Trump resort in Doral, the Trump family business has hundreds of millions of dollars of loans from Deutsche Bank that are coming due beginning next year. And now what you have is the Trump accountants saying statements that were presumably given to this lender for it to make its financial decisions - unreliable. Now the bank is going to have to be looking at this as the loans come due. It is really uncharted territory.
FADEL: So what's the Trump Organization saying?
BERNSTEIN: So the accounting firm, in its letter, said that they had not concluded that there were, quote, "material discrepancies" in the accounting statements. And the Trump Organization has leaned into that and said, oh, look; they found nothing wrong. Therefore, both New York investigations should be called off. Now, of course, that is not exactly what the accountant said. But it's a familiar Trump legal tactic to claim that something vindicates them when it does not.
FADEL: And what's next?
BERNSTEIN: So there's going to be a court hearing later this week over whether Donald Trump, his son, Donald Jr., and his daughter, Ivanka, have to testify in this civil investigation. But with the ongoing civil case and the ongoing grand jury investigation, we are sure to learn a lot more.
FADEL: NPR's Andrea Bernstein. Thank you so much.
BERNSTEIN: Thank you. Transcript provided by NPR, Copyright NPR.