“You can’t con people – at least not for long,” Donald Trump observed in his 1987 bestseller The Art of the Deal. “You can create excitement, you can do wonderful promotion and get all kinds of press, and you can throw in a little hyperbole. But if you don’t deliver the goods, people will eventually catch on.”
The former president spent decades trying to create excitement with wonderful levels of promotion, getting all kinds of press, and throwing in more than a little hyperbole. But did he have the goods?
This is the central question Justice Arthur Engoron, of the state supreme court in Manhattan, has been considering over the last five weeks. On Monday, the fraud trial enters its final, fateful leg. Trump himself will take the stand. The stakes are high. Although Trump will not go to jail, regardless of the outcome, because this is a civil case, he is fighting for the future of his corporate empire.
The case against Trump, although inextricably linked to his political rise, is focused on his business dealings. Hundreds of millions of dollars are at stake as the ex-real estate tycoon prepares to take the stand.
Letitia James, the New York attorney general, has accused Trump and key members of his inner circle at the Trump Organization of fraudulently inflating his wealth to secure better loans from banks. She asked for $250m and the cancellation of Trump’s business licenses in New York, a move that would end the Trumps’ ability to run businesses in the state.
This is not a jury trial, and Engoron has already made up his mind on the foundation of the case, finding Trump and his adult sons guilty of financial fraud before the trial started. Should an appellate court uphold this ruling, Trump will essentially lose the ability to operate his business in New York – and control of properties including Trump Tower in midtown Manhattan, from whose golden staircase Trump launched his successful presidential campaign.
“The judge has already found fraud,” said Jed Handelsman Shugerman, professor of law at Boston University. “The question is the extent of the liability and the remedy. It seems like it’s going in a direction that will be a very serious liability and very serious remedy.”
The court’s attention turned this week to his eldest sons. This is a family business, after all, officially run by Donald Jr and Eric since their father assumed the presidency.
Both brothers sought to distance themselves from the alleged fraud, insisting it was up to others to ensure financial records were correct. “For purposes of accounting, I relied upon the accountants,” Don Jr, executive vice-president of the Trump Organization, said. “I never had anything to do with the statements of financial condition,” Eric, also executive vice-president at the company, added hours later.
Their sister, Ivanka, is also scheduled to be questioned on Wednesday. Unlike Don Jr and Eric, she is not a named defendant in the case. While her lawyers argued she should not have to testify, this request was denied by an appeals court.
While the family appearances are grabbing all the headlines, Engoron might ultimately be more interested in testimony that could help gauge the liability of the alleged fraud. On Wednesday Michiel McCarty, chair and CEO of the investment bank MM Dillon & Co, said the inflation of Trump’s wealth allowed the Trump Organization to secure better rates for loans. He calculated that banks lost more than $168m in interest payments as a result.
The media spotlight on this trial has been brightest when high-profile witnesses – from Michael Cohen, Trump’s former fixer turned foe, to the former president himself next week – take the stand. But at the heart of the action sit stacks of emails, contracts and financial statements. “There’s enough evidence in this case to fill this courtroom,” Engoron remarked last month, as he rejected another bid by Trump’s lawyers to obtain an early verdict.
Gregory Germain, professor of law at Syracuse University, said prosecutors must demonstrate that Trump was “unjustly enriched” by falsified financial statements. “In order to do that, the attorney general needs to show that somebody took these statements at face value, believed they were true, and made loans at lower interest rates that they would have, or priced an insurance policy at a lower price – something to show they were harmed by this, and he was enriched.”
This element was “completely missing in the earlier stages of the case”, Germain added.
Trump is set to be grilled over allegations that documents fraudulently magnified the value of his assets. Earlier in the trial, for example, prosecutors noted that his Trump Tower apartment was once listed as 30,000 sq ft and worth $327m, despite other paperwork – including one document signed by the former president in 1994 – reporting that the apartment was actually under 11,000 sq ft.
Commentators expect Trump, like his sons, to try and distance himself from the accounting. But he is likely to be asked by prosecutors about allegations that he directly, if not explicitly, instructed executives to inflate his net worth.
Cohen, his former personal attorney, testified that Trump would scrutinize the value of his assets and declare, “I’m actually not worth $4.5bn, I’m really worth more like 6,” before sending senior executives away. They would return to him “after we achieved the desired goal”, according to Cohen.
A current Trump Organization employee, Patrick Birney, testified that the chief financial officer Allen Weisselberg informed him between 2017 and 2019 that Trump – by this point in the White House – wanted his net worth to go up.
Since Engoron’s pre-trial ruling, Trump has argued he is worth “much more” than what is shown in his financial statements, which don’t include what he describes as his “most valuable” asset: his brand. The Trump Organization has been “slandered and maligned”, he has complained, denying his fortune was exaggerated.
The former real estate mogul will attempt in the coming days to make the case that his empire was accurately valued. Even after Engoron ruled otherwise, Trump insists no one lost out as a result.
Prosecutors are confident they are on the cusp of bringing Trump to justice. They believe – to paraphrase the defendant’s observation some four decades ago – that he didn’t have the goods, and they’re catching on. On Monday we may see who really has the goods.
