S1: David Farenthold, how would I describe your beat for The Washington Post? Is someone come up with a nice compact name for it? Yet I cover the Trump organization and President Trump’s conflicts of interest still fits on a business card. Barely. David Farenthold is the guy to talk to when you have questions about the Trump family business. But he’s the first person to tell you he still has more questions than answers. You’ve been piecing together the Trump family business for years now. And it should be said, without the cooperation of the Trump organization, are you getting closer to a complete picture of its interests and operations?
S2: Closer is the keyword. We know a lot more about the state of its businesses, its business partners, the pressures it’s under, and its business with the federal government than we did when we started.
S3: But, you know, it’s in many ways it’s still a black box. There’s still a lot I don’t know.
S1: Recently, Farenthold learned he’s not the only one trying to dig into the Trump organization, the New York state attorney general revealed in a court filing her office is also investigating.
S2: That’s an office that has investigated Trump before. It prosecuted cases against the Trump organization because of the Trump Foundation and because of Trump University. But we didn’t know until pretty recently that they were doing a pretty deep dive into the Trump organization. And so the core business and it was really interesting, they were looking at things that, you know, were not sort of flashy, big picture, you know, wasn’t Russian money. It wasn’t, you know, some sort of major thing. It was basically inflating the value of assets to get tax benefits and loans, which is not the most heinous of crimes. But they seem to have dug further into those incidents than anybody had before.
S1: This is just the latest investigation into Trump’s business practices. There are many legal battles involving Trump tend to drag on for years. So Farenthold is careful not to predict how these cases might shake out.
S3: The best way to sum it up is that the Trump organization is facing a level of legal scrutiny that it really has never faced before. It has always sort of skated by both because Trump was so difficult to deal with. He was so contentious when you went after him as an investigator. And because it wasn’t very big, it’s you know, it’s none of its balance sheets were ever that big. And so people didn’t feel like it was worth the trouble. Now, that’s changed and it’s facing some pretty serious investigations and that could cost it a lot of money in legal fees, but it could also bring some significant damages. And perhaps most importantly, it could crack open this black box of a company in a way that we really have not seen before.
S4: On today’s show, the slow work of figuring out how President Trump runs his businesses. I’m Ray Suarez, filling in for Mary Harris. You’re listening to what next? Stick with us.
S1: You could be forgiven for not being able to keep track of the investigations into the president’s business. There are so many investigations, they take a long time. They are complex and they defy a basic requirement of a viral news story. There’s no linear story structure. A perfect illustration for me of sort of the one step forward, one step back nature of these stories is the much ballyhooed decision in New York that, yes, in fact, the president was going to have to turn over his tax returns to the New York D.A. It was portrayed as a big setback in court for the Trump family. And then yet another court saying, well, hold on, not so fast and slowing things down again. Where does that stand?
S3: In that case? The Second Circuit Court of Appeals has said they want to hear it and they don’t want Trump to have to turn over his tax returns until they do hear it. And these are slow processes. So I think they’re going to ask for briefs to be filed in September. Maybe there’ll be arguments in October. If there is a decision before Election Day, it will come right before Election Day. And so if the question is, will we see Trump’s tax returns before Election Day, that was always a long shot, because even if the Manhattan D.A. gets these tax returns, they’ll be under grand jury secrecy rules. It’s not like he’s going to post them on his website the same day, but now it’s looking more and more like he may not even get them until around Election Day or maybe even after the president and his family have lost a fair number of rounds in various federal courts.
S1: And yet the tax returns still have not been released. Details from his company’s dealing with banks, having exposure of various kinds to the family business setbacks along the way. But there’s been kind of no payoff, no aha moment where here’s the final thing, the missing key to understanding a lot of other things. Do you feel like you have a better handle on this, even though are there little details that leak out in these wins and losses and sort of ties that happen in court where you find things out almost by accident?
S3: Generally? No, that’s one thing it’s been frustrating is as the cases that they’ve been fighting and there’s been a number of them in federal court and in state court, what’s happened so far is sort of procedural wrangling. That doesn’t tell you anything at all about the underlying questions. You know, how much foreign money has gone to the Trump Hotel in D.C., you know, has Trump the Trump break the law with the way that his company handled the Stormy Daniels payments? There’s been a lot of talk about that. You know, who gets to look at those documents and what they might say. But we haven’t learned anything about what they actually do say. To be honest, the most revelatory document we’ve gotten was the one thing that’s been filed by the New York attorney general’s office, which at least laid out the specific cases that the New York A.G. is interested in, is interested in a few different properties where Trump allegedly inflated the value of his properties. Again, that’s not the biggest, you know, offense, but at least we know now which properties they’re interested in. And we can go dig in to what Trump has said about those values. Everything else has been a very frustrating but I guess illuminating course in how you can use the legal system to delay accountability.
S1: Well, that overstatement of value of Trump Organization properties is we’re not talking about, you know, 10000 dollars here or there. New York sources say by as much as 261 million dollars. If you’re applying for loans and you have to declare your assets and liabilities, what’s the practical effect beyond simply inflating your net worth for your own PR reasons of overstating the value of your assets?
S3: The value for Trump would be that he could get lenders to think he was a better risk than he actually was. If you made them think that he had more assets than in lower debts than he really did, they might be more more likely to give him more debt. His pitch was always to these folks, look, I have so little debt now. I’m a great credit risk. Obviously, a lot of banks were skeptical of him after he went way too far on debt and lost it all in the 90s. He’s now trying to say, look, I’ve changed my ways. I’m a you know, I have a lot of great cash, a lot of great assets. So lend me some money. And if he was fooling them, you know, that’s a potential legal problem for him. I guess the question will be, were the banks really fooled and was it reasonable? Would they look at the document Trump gave them and reasonably believe it was true?
S1: Well, over here at the Suarez organization, when we’ve applied for financing, there’s a part at the end of the documents where you say when you sign that document, you attest to the fact that everything you’re telling them in that document is true. If the Trump organization did what the state attorney general is hinting they may have done, is it a crime?
S3: Well. The problem with that question is we don’t exactly know what the state attorney general is accusing them of. Some of the details are redacted. If there was a document that they signed, as you said, that said, you know, all these are are these are the accurate assessments of my my debts and assets. And I’ll sign this under the penalty of perjury, they could be in real legal trouble. Whoever signed that form, the things that we know about are kind of in a more legal gray area. Trump had these things called statements of financial condition that were made up by his accountant that were not legal forms. It was just sort of a brochure listed. What he said his his his properties were worth. And it actually had a disclaimer at the beginning from the accountants being like, listen, we’re the accountants and we put this all together, but we didn’t check any of it. It’s all Trump’s opinion. And we didn’t even you know, we want to tell you that some important things have been left out. I have not seen any legal test of that question because it was such a weird thing that Trump did kind of uniquely that if he sent that to a bank and they relied on it, despite that disclaimer, you know, is that Trump’s fault or is it the banks?
S1: Well, Eric Trump, the president’s middle son, who’s been running the business lately while his older brother crisscrosses the country for the campaign, agreed and then refused to talk to investigators, citing constitutional protections. Can he be compelled to appear?
S3: That’s what the New York attorney general is trying to do now, is to say he has refused to cooperate. The AG has asked a state judge to force Eric Trump to cooperate. The the constitutional Trump said, citing my constitutional rights. Basically, that doesn’t cut it. You know, you can’t say in a vague way, you know, I won’t come in because I have constitutional rights. If you’re going to take the fifth, you know, to invoke your right against self incrimination, if that’s truly what he’s doing there, you still have to come in. That’s not that’s not a way to avoid an interview. It’s something you do during the interview when you come in and the A.G. asked you about something and you think you’re going to incriminate yourself, you you take the fifth in response to that specific question and then to the next one and then to the next one. They want you on the record taking the fifth about specific issues. You know, you can’t just say at the beginning, well, I’m not coming in because I could get myself in trouble.
S1: Well, so far, there have been very few depositions and very few court appearances by any of the principles of the Trump organization.
S3: Right. The one exception that I know of is Alan Weisberg, who was the CFO of the Trump Organization, sort of the most powerful non Trump in the company. He’s been with Trump forever in the Trump Foundation case, which happened a couple of years ago. They interviewed New York, interviewed him, and he actually provided a lot of really illuminating and damning information. A lot of what they got out of Alan Weisberg sort of prove the point that the Trump Foundation was not really a charity, but just sort of another tax exempt improperly. Tax-Exempt Arm of the Trump Organization.
S1: Now, these would be nodi legal and business problems for any business anywhere at any time, but here we have crossing jurisdictional boundaries. The president is the head of the executive branch of the United States and holds a position in a private business, a business I think is still headquartered in the state of New York. And while there’s a lot of precedent and a lot of ink being spilled and briefs being filed about who can accuse him of what that is, state or federal crimes, where that is, Washington where he lives, or Florida where he has a residence, or New York or the many states where he’s doing business like New Jersey, when that is while he’s still president, or if he loses in November, once he becomes a private citizen. It seems like even after three and a half years, none of this has really been nailed down.
S3: No, and that’s what’s really surprising. I think the one thing that I’ve learned about Trump and about the country is that Trump has always exploited honor systems. He’s always look for places where people obey the law, not because they have to, but because it’s sort of seen as the right thing to do. They don’t they don’t want to go against social convention. And so they follow the rules. But there’s not like when you break the law, it’s not like a cop steps out from behind a pillar and arrests you and he takes this off. It takes advantage of that when he finds a place where there’s an honor system, he exploits and he does what the honor system doesn’t expect. And he often gets a huge advantage out of that from doing what people don’t expect him to do. He did that in his church and his business often, but he did it at his charity. You know, he didn’t follow charity rules and he took advantage of the fact that the charity system takes a long time to catch up with you if you do that. And what we found is that the presidency is an honor system on purpose. We did not write a lot of laws that govern the presidency because that’s supposed to be held by a person of honor who will follow honor systems about not mixing government and private business, not mixing government and politics. And Trump is again taking advantage of that. There’s so many cases in which he said, I know it says I can’t do this or other people haven’t done this, but I’m going to do it and try and stop me. I’ll see you in two years. What we’ve seen in all these court cases is that that worked and also that Trump’s opponents, the Democrats in Congress and people in law enforcement didn’t understand who they were dealing with and often sort of seemed to expect that Trump would follow the honor systems, even in his whole life, had shown that he would not.
S1: Are the kids on the hook in any important way? And if so, are they kind of an Achilles heel for just that approach that Trump, the man, has swallowed, as you describe?
S3: I think they could be in the New York Jews case mentions Eric Trump specifically. He’s linked to a couple of transactions. They’re interested in Trump’s approach. It only works for a while and sometimes that’s enough. I mean, it got him. Think about what how well it worked for him in 2016 and got him elected president. But eventually it comes down on him. I mean, that happened with Trump Foundation. It happened with the Trump University. It’s happened with a number of other things in his life. You know, eventually the system sort of stirs to life and comes after him. So the whole organization and him could be in that position next year. If Trump loses, you know, he will finally have the honor system, you know, catch up to him, the kids. And Trump, if he’s re-elected, though, you know, he may get a protection from it, that that will last long enough to effectively be permanent. But they won’t. They won’t. But I wonder how hard anybody will go after them if he’s the president. But one sort of depressing thing we’ve seen about the law enforcement is I feel like the his shield of of unaccountability sometimes seems to have extended to his kids. So I don’t know I don’t know what will happen, but I wonder if he’s re-elected, if there will be a serious effort to hold the children accountable, especially since a lot of these things that we know, we know are being investigated happened before Trump took office, when Trump himself was in charge.
S1: I follow you on social media and you’re not shy about asking publicly for hints, leads, evidence, documents. Is that done from the assumption that by sheer necessity there are more people who know about the president’s business dealings than just Donald Trump and the kids?
S3: That’s right. It’s basically an effort to get around the black box that they’ve always tried to put around the Trump organization. The effort was always, you know, it’s a private company. It releases very little about itself. What it does release sometimes is untrustworthy. They wanted it to be so that the only person who could tell you about Donald Trump’s finances was Donald Trump himself. And when he told you something, you had no way of checking it. And that’s still their approach. So what we try to do is look for other people who have insights into little corners of the Trump organization, people who are investors in Trump properties and get updates on that property of vendors, lenders, anybody who might know about a little corner of the business. And so one of the hard things is for me is figuring out who those people are. You know, sometimes it’s hard to know who who may be out there sitting on a little. Bit of interesting information, and so that’s why I try to make my searches as public as possible, because if you’re out there and I don’t know your name, you know, now you know what I’m doing and you can reach out and help me. Has it worked? Definitely. Just to cite one particular example, the New York AG’s case that focuses on these statements, a financial condition. We got those statements, a financial condition from anonymous tipsters. People saying we were doing realized they had a little bit of Donald Trump and asked them for a loan years and years ago. They still had this document sitting around and they sent it to us. So last year, right after Michael Cohen testified about the statements of financial condition, you know, voila, we had we had two or three ready to go and we could write a story showing how they were flawed. And I think that actually helped give rise to this New York Agee’s investigation, often in a story.
S1: There is a sort of nexus fact, a crossroads fact, not that once you untie it, a lot of other things loosen up in this. Beat over the years, has there been a sort of great white whale? Fact or document or piece of data that is sort of the key to understanding other things, that you’re you’re Ahab out there still trying, still trying to get your hands on?
S3: Oh, yeah, certainly. I mean, there’s a in Trump’s case, there would be a lot of them. Tax returns would obviously be probably a clue to able to solve a lot of different mysteries. But I’ll just tell you about one of them. It’s my sort of favorite mystery Trump owes alone. He says on his financial statements that he has to file as president. He owes a 50 million dollar plus loan. So some loan of more than 50 million dollars to a company called Chicago Unit Aquisition LLC. Now a Chicago unit Aquisition, LLC is basically a shell company, has no employees as no offices, and its headquarters is Trump Tower. Trump owns it, so he owes a 50 million plus dollar loan to himself. Now, why would you do that? It comes out, he says it started in twenty twelve and it has to do with Trump’s hotel in Chicago. And so one of the things we’re trying to figure out is whose loan is that? How did he get it? You know, what would be the tax benefits to doing that? And even more intriguing, what the thing Trump has said about that loan, the only thing he said about it, which is that he bought his own loan back from his creditors, I can’t find any evidence that’s true. The loans on his he had two big loans in the Chicago properties. And I know what happened to both of them. And that wasn’t the case in either one. So that’s maybe wouldn’t be the key to all of his finances. But if I could understand what happened there, what caused this really weird mystery, I’d at least unlock, I think, a pretty important portion of his finances. And I should say, I think the New York attorney general has zeroed in on the same thing. And I have a I have a faint hope that maybe they because they have subpoena power. We’ll figure it out before I do.
S1: Are there things that you’re starting to suspect you may never find out? If Donald Trump ceases to be president, they’ll a certain zest for pursuing him will simply disappear in the legal world and he won’t be compelled to come clean.
S2: I do. I’m sure there are a lot of mysteries about his finances that we won’t know this year or next year, maybe ever. So certainly I worry about that. In Trump’s case, it will be interesting to see if he does lose in November to Joe Biden. It becomes a private citizen in in twenty twenty one. I wonder about that. Will that will the zest for prosecuting him or investigating him go away completely just because for purely partisan reasons, the Republican Party has no other leader? I mean, this is you know, there’s no other person ready to step in here. Trump is the Republican Party and he will still be in twenty, twenty one. Even if he loses, Trump will still be the most important figure in Republican politics and a huge thorn in the side of Joe Biden if Joe Biden is president. So I wonder if if the zeal to investigate him will disappear, especially because so much there’s so many questions that Trump has managed to run the clock out on that are still standing.
S1: Well, it’s well-known both in the city of Washington and in the profession more widely that your work has not made them very happy. And it has surfaced. That they are preparing a dossier on you, is there anything I ought to know before I read it in that in that dossier? I mean, they haven’t contacted me. I want to reassure and you can also trust me, I won’t tell them what I know. Good. But it must be seriously, though, a little bit of a shiver to find out that, you know, the tremendous power of the presidency, that they are mad at you.
S2: Yeah. I mean, I suppose that’s true. I mean, you know, I definitely have had presidents. He’s mad at me before what the dossier threat was. So it was at least the way they phrased it was not like we’re out to get you. It’s like we’re out to show that your stories are false. Now, obviously, if they think our stories are wrong, I want to know we ask him a bunch of questions before the story runs and, you know, give him a chance to comment on everything. But if they still think something’s wrong, they got to tell us. And that’s the you know, that’s true for presidents. It’s true for anybody. And they haven’t there’s been no challenge to anything we wrote. And that’s the particular story that they’ve cited that in response to or any other story this year. So, you know, if they want to come to us and say our stories are wrong, we are all ears. But that has not happened.
S4: Pulitzer Prize winner David Farenthold covers the Trump family and its business interests for The Washington Post. David, great to talk to you. Thank you. That’s the show What Next is produced by Jason de Leon, Danielle Hewitt, Mary Wilson and Elana Schwartz were led by Allison Benedikt and Alicia Montgomery. I’m Ray Suarez, filling in for Mary Harris tomorrow in the feed. Look for what next TBD with Celeste Headlee. What next will be taking Labor Day off. So I’ll catch you back here Tuesday. Thanks for listening.