7/ Klasfeld:
Don Jr shown father's statement of financial condition for June 30, 2017.
It notes the trustees were responsible for report at the time. Don Jr. became a trustee that year, the 1st of his father's presidency.
NYAG's counsel repeats series of q’s about Don Jr.'s involvement in the statements of financial condition for the other years of his father's presidency. Don Jr. remained a trustee for 2018, 2019, and 2020.
"Rinse and repeat," Don Jr. responds, w a chuckle. [Me: Asshole]
8/ Klasfeld:
Donny shown another certification to Deutsche Bank that he signed on Oct. 31 2017.
It also attached a statement of financial condition.
Q: You signed certification intending that the bank would rely on it.
A: I would be fine w them relying on it.
9/ Klasfeld:
NYAG repeats Q, Don Jr. dances around the question of his intent, even after pressed by Justice Engoron.
"It's not as simple as 'yes or no.'"
[Emptywheel notes:👆 A remarkably similar answer to the one Michael Cohen gave. Will Trump demand a directed verdict again?]
Don Jr. said that he assumed banks would perform their own due diligence.
10/ Klasfeld:
NYAG's counsel Colleen Faherty continues to systematically confront Don Jr. with his signed certifications to banks and representations on statements of financial condition.
Trump Jr., in turn, continues to emphasize the advice of his lawyers and accountants. 🙄
11/ Klasfeld:
Faherty moves on from Jr.'s representations to Deutsche Bank to others he made to acct firm Whitley Penn
NYAG shows Jr. his signature on an agreement to sell the Trump Ferry Point golf club in The Bronx.
He signed as president of Trump Ferry Point LLC.
Donald Trump
This line of q sparked objections from defense bc the deal took place this yr, well after filing of lawsuit
Engoron allows it, after Faherty argues fraudulent statements about the property were backdrop of the sale
12/ I'm back at my computer now, not just my phone, so now I can include Lisa Rubin's extensive reporting.
First, Klasfeld:
Engoron questioned Don Jr. directly:
Q: Mr. Trump, did you have anything to do with the statements of financial condition?
A: No, I did not, your honor.
13/ Rubin:
He has no specific recollection, he testifies, of signing an indemnity to Zurich Insurance in or around 2017. He recognizes his signature, however.
“Between 2011 and present, you have been generally apprised of the operating revenue of the organization?” He agrees, generally yes.
14/ Rubin:
She then shows him a “corporate modified cash flow projections vs. actual” memo from Weisselberg to him and Eric for 2017.
The adjusted net cash flow for 2017 was only $2.2 million despite a projected figure much higher.
He does not recall whether he requested that Weisselberg prepare his document but confirmed that he and his siblings regularly got these updates.
15/ Rubin:
Faherty is trying to understand if the Trump Org had made changes occasioned by their investigation. Following a back-and-forth about what questions are and are not appropriate, she is asking why Mark Hawthorne, who Jr. described as a CPA, is now CFO.
16/ Rubin:
He says because Weisselberg left. And despite the build-up, she is done, and the defense has no cross. Don Jr. just left the courtroom, followed by all his lawyers, for a five-minute break in the action.
👉🏼ERIC IS UP NEXT!👈🏼
17/ Engoron has a great sense of humor, but takes no crap from anyone.
Klasfeld:
Eric Trump enters the courtroom and sits at the defense table.
Engoron quips:
"Does everyone have their make-up on?"
(Don Jr. joked that he should have worn make-up when the photographers and videographers came in yesterday, as they're doing again now.)
NYAG's counsel Andrew Amer calls the witness to the stand.
Eric Trump is sworn in.
18/ Rubin's take:
Don Jr. is off the stand, having engaged in a mostly pleasant and dull back and forth with the AG’s office that was no less damning. And now, we await his taller, younger co-defendant and brother, Eric, who just strode in.
19/ Rubin:
Andrew Amer of the AG’s office is now examining Eric, but before he started, he asked that any lengthy disputes about evidence should happen outside the witness’s earshot and that Eric should be excused if that happened.
Eric is, as expected, softer-spoken and has to be prodded by Engoron to speak into the mike. He affirms he reported to his father between 2014, when he became an EVP, and January 2017 and confirms he did not report to anyone else.
20/ Rubin:
Weisselberg was at the same level as the three Trump children during his period, Eric confirms, and McConney was “directly under Mr. Weisselberg.”
Klasfeld:
Eric Trump denies involvement in the statements of financial condition:
"That is incorrect. I never had anything to do with the statements of financial condition."
That line of q came up when NYAG counsel Andrew Amer confronted him w this notation on a data supporting spreadsheet for the 2013 statement of financial condition.
21/ Rubin:
But between Jan. 2017 and Jan. 2021, fair to say you ran the day-to-day operations of the Trump Org., alongside Weisselberg and Jr.? Yes, Eric says.
Eric did not report to anyone during this period, he testifies. And his father relied on him and the two trustees — Weisselberg and his brother — to run the business, although he took directions from his dad if and when they were given.
22/ Rubin:
LOL I bet >>“Some of the best years of my life,” Eric says of his living on the Seven Springs property, for which he later had responsibility beginning in 2012.
Eric too says, “I never had anything to do with the statement of financial condition … People asked me questions all the time, but I never worked on the statement of financial condition.”
23/ Rubin:
Asked whether he even understood his dad *had* a statement of financial condition as of 2012, Eric says, “Not that I recall.” He clarifies, “I don’t know what I knew at the time.”
(This matters because in his supporting data worksheets underlying the statements of financial condition, McConney cited phone conversations with Eric in 2012 and 2013 as the basis for the valuation of Seven Springs.)
24/ [btw, I bracket my own comments like this, & usually start w/ "Me:..." to differentiate. Or I >> at a quote. Emojis are mine.]
Rubin:
Amer moves on to discuss Trump’s Charlotte, NC golf club, which was acquired in 2012. A board member of that club shared with Eric in Jan. 2012 a letter sent to club members on the prior day about the potential purchase of that club by the Trump Org.
25/ Rubin:
Eric recalls club members had to approve the sale by a vote & were told their options included the sale of club assets to the Trump Org. That letter also states “Trump drafted a few and approved all statements related to that offer.”
Eric remembers being a key negotiator of that deal but does not recall whether he was involved in drafting or reviewing the statements made as part of the offer. He says, “It would depend on the statements.”
[Me: Drinking game yet on "I don't recall"?]
26/ Rubin:
(The import of this line of questioning is not readily apparent to me, given that the transaction took place in 2012, but my guess is that it is designed to show Eric’s awareness and access to representations about his net worth dating back to well before the statute of limitations kick in.”)
27/ Rubin:
Amer shows Eric a summary of the due diligence done by the club members about Trump’s financial condition. Eric says he can’t confirm language referring to a “financial statement prepared by a CPA firm reflecting Donald Trump’s net worth” is about the statements of financial condition.
That summary further states “the cash and cash equivalents was in the hundreds of millions. The assets in the billion of dollars were more than 10 times the liabilities on the financial statement.”
28/ Rubin:
[Me: DRINK!] Eric does not recall whether he helped arrange for that member to review Trump’s statement of financial condition. Amer now shows him an email from the member to Eric and Weisselberg reflecting his travel to the Trump Org. to review that information.
29/ Rubin:
Eric still does not recall the meeting, but doesn’t dispute it happened. Eric also told Weisselberg in a Feb. 2012 email that the deal was “on the one yard line.” Eric confirms he wanted to get it done.
30/ Klasfeld hasn't posted for awhile. I may just stick with Lisa Rubin. She's so thorough. If Klasfeld adds anything, I'll post.
Reminder: Emojis mine.
Rubin:
Now Amer moves on to further emails between that member, Weisselberg and Eric about the member’s due diligence as to Trump’s financial condition. Eric’s response to the member reflects — 👉🏼despite his lack of recollection now 👈🏼— that he reviewed the due diligence summary.
31/ ["Pique."]
Eric’s response shows some pique: They showed him the financials in person because of their sensitivity and that he was “bound by confidentiality.”
Eric asks in the email for the member’s assurance that the due diligence summary will not be distributed and that he would limit communications to assuring members that Trump had the financial wherewithal to make the purchase.
32/ Rubin:
Eric confirms they would want to keep them confidential, “no different than any other private company in the world.” He says he wouldn’t have wanted 1200 people to have access to the financials.
Amer is asking Eric whether
by 2012, he was aware that the Trump Org was using the statements of financial condition to demonstrate the company’s financial wherewithal to a third party,
Eric is steadfast: The member met with Weisselberg; “that’s not what I did at the company.”
33/ Klasfeld is back. Some redundancy here bc I'm sharing multi reports:
Eric Trump is shown an email chain about the purchase of North Carolina golf club.
Allen Weisselberg asked Eric Trump on Feb. 12, 2012:
“Before I respond I want to make sure you and your dad are still going forward with this deal. Your dad did not sound very upbeat about the deal. He spoke about how little we would make and that he did not see himself going to NC etc.”
34/ Klasfeld:
Eric Trump replied to Weisselberg the next day that the deal was still on track to move ahead:
“We have bigger fish to fry but we have it on the one yard line.”
35/ Klasfeld:
Another email exchange from Feb. 15, 2012, bw Eric & Philip Delk, who was performing due diligence for the North Car club.
Eric reminded Delk that his inspection of the company's financials was "bound by confidentiality."
In the email, Eric Trump told Delk the company "without question" had the "financial wherewithal to purchase, renovate and operate this asset."
"I trust you understand and would appreciate you giving me your reassurance that this will not be distributed.”
36/ Back to Rubin:
👉🏼Amer is incredulous. You had no idea you had no financials the member was looking at as part of his due diligence? That’s your testimony? Eric says yes, he knew he was looking at “financials” but he did not understand what specifically he was looking at.👈🏼
“Can we at least agree that by 2012, you were aware the company had personal financials to demonstrate to third parties that the company had the financial wherewithal?”
37/ Rubin:
And Eric’s answer amounts to a no: “I was not aware of the statements of financial condition, I did not work on the statements of financial condition. I have been very clear about that.”
Amer asks whether it’s true that McConney specifically represented to Eric that he needed information about the value of Seven Springs for his dad’s statements of financial condition.
👉🏼Eric says no. But here comes the email proof.👈🏼
38/ 😏 #WompWomp
Rubin:
McConney told Eric expressly in 8/20/13 email, in connection w a call between them reflected in the work papers, that he needed assistance w valuing 7 Springs for his father’s statement of financial condition. And McConney attached an excerpt from his supporting data spreadsheet.
So Eric now admits that by Aug 2013, he had seen portions of work papers underlying the statement of finan condition & he mustv been aware of existence of the statements of final condition.
39/ [LOL. Eric's floundering]
Rubin:
Looking at spreadsheet, Eric testifies he easily cd have given McConney the facts abt which portions of the parcels are to be developed/used but says the value seems to have been determined the prior year, prior to his involvement in the project.
Klasfeld's take next.
40/ 🤭
Klasfeld:
Earlier, Eric flatly denied having "anything to do w" his dad's statements of financial condition.
Amer confronts him with then-Trump Org controller Jeff McConney's Aug. 20, 2013 email to him.
“I’m working on your Dads annual financial statement."
41/ Rubin:
“I think it’s established that this predated me…At least that’s not I’m reading this.” Amer explains he just wants to know whether the detail about the 7 mansions was within his knowledge at that time. Eric says yes.
Amer goes back to the email: McConney tells you that he needed your help in *valuing* Seven Springs. It’s a fact, isn’t it, you knew your father’s statement of financial condition was provided to a bank well before then, in Feb. 2012? “Not to my recollection.”
[DRINK!]
42/ [Loving the old "Oh yeah? Well here's the email, Dimwit McTrumpKlan!"]
Rubin:
Amer then takes out a 2012 email between an employee of First National Bank of Long Island and Weisselberg that the latter forwards to Eric, along with an attached confidentiality agreement.
“The chance of my reading a confidentiality agreement that I didn’t execute is close to zero,” Eric states, 👉🏼even though he admits he received it and it references Donald Trump’s statement of financial condition.👈🏼
43/ [Eric's always been... cracked]
Rubin:
Eric finally cracks a little, raising his voice in saying, “We are a major corporation. Of course we had financial statements!”
👉🏼And finally, Amer gets the admission he wants: that at least by the time of his 2013 communications with McConney, Eric understood that his father had statements of financial condition with which his help was needed.👈🏼 #WompWomp
45/ LOL, you love to see it.
Rubin:
Eric Trump is back on the stand at the New York Attorney General’s civil fraud trial, and👉🏼 his temper is flaring👈🏼, saying where he thinks “we’re getting tripped up” is that he did not register that the questions McConney was asking were for statements of financial condition.
Amer insists on a yes or no question; 👉 Eric concedes it appears he knew he was being asked for assistance with his father’s annual financial statements.👈
46/ Rubin:
Later in Apr. 2013, Weisselberg tells Eric in an email that Amer shows him that he wants to delay paying off a loan in connection with Seven Springs 👉🏼to keep the cash balance in his dad’s financial statements were as high as possible.
Eric admits that he understood as of the date of that email that the statements were prepared as of 6/30 of each year and that it had a cash balance component.
47/ Rubin:
Amer persists, “You understood as of the date of this email that your father had an annual financial statement that included liquidity as well as his overall net worth?” 👉🏼Eric: Yes. 👈🏼
Now, they are looking at a July 2013 email exchange between Weisselberg and Eric about the Trump Las Vegas project. In it, Weisselberg told Eric that his dad’s financial statement was needed to secure a line of credit; Eric replied they would not need a line of credit and emphasizes this now.
48/ Rubin:
>>“You read it, right?” Eric acknowledges he did and that by reading it, he would have understood that the Trump Org. was contemplating giving a bank Trump’s statement of financial condition.
Amer moves on to a 2013 email between McConney and Eric in which McConney asks for input on the footnotes of statement of financial condition. Eric says yes, maintaining that it would have been information about two golf properties he was working on.
49/ Eric's being Tish'd.
Rubin:
Amer is asking whether he understood, based on the email, that McConney sent him a portion of his dad’s statements of financial condition.
Eric won’t give that and just says he understood his input was being solicited before finally admitting he understood McConney attached a portion of his dad’s draft financial statement.
50/ Rubin:
>>Now Amer is showing Eric video excerpts from his deposition, where he says he does not recall ever seeing or working on statements of financial condition before this case arose. (Amer is not shown, but it appears he took the deposition as well.)
“To the best of my knowledge, it’s not something I saw… it’s just not in the purview of what I do.”
51/ Dimwit McTrumpKlan is struggling. Real shame. Being on the losing side hurts. 🎻
Rubin:
Eric also disclaimed providing information for use in the statements of financial condition—and he disclaimed that eight ways from Sunday.
Amer: Will you now concede that you were well aware of your dad’s statements of financial condition by the time of those emails?
“No, I was not very familiar with my father’s statement of financial condition.”
52/ Rubin:
But he does admit — in contrast to his sworn deposition testimony — that he knew as of August 2013 that McConney was soliciting information from him for use in the statements of financial condition.
Amer: Will you now agree that you knew about the backup for the statements of financial condition? Eric tries to provide some caveats around the admission,👉🏼 but says yes.
53/ Rubin:
At his deposition, Eric testified that he never had an understanding when speaking to McConney that he was seeking information for the statements of financial condition.
💡Eric now testifies that it did not register with him then, but it now appears that he did know.💡
Amer objects to the speechifying. Engoron agrees. Amer tells Eric, “Your lawyers will have an opportunity to question you. They might not take it, but they’ll have it.”
54/ Rubin:
Now we’re talking about the conservation easement donation on the Seven Springs property, in which Eric played a key role.
Amer is now trying to establish that that donation was contemplated for some time, showing Eric a 2012 letter through which a law firm retained an appraiser’s services in connection with discussions about an easement.
(The law firm involved was where Trump outside tax lawyer Sherri Dillon was then practicing.)
55/ Couldn't resist this from Dan Alexander:
Donald Trump, their father, has not showed here to watch his sons testify so far.
Eric Trump is back on the stand after lunch, and this is getting ugly. The AG's office is juxtaposing a series of documents with what Eric said during his sworn deposition and what is saying now. There seems to be contradiction after contradiction.
56/ Rubin:
Amer is now trying to get into an email between Dillon’s colleague, another lawyer representing Trump the elder, and the appraiser. Trump’s side objects on hearsay grounds; Amer is ready with the rule that permits the admission of conversations between and among a party’s agent.
Notwithstanding the appraiser’s view of the value per lot at Seven Springs, the spreadsheet prepared months later does not appear reflect any of the information obtained from the appraiser.
57/ Rubin:
Do you recognize any of these figures as coming from the appraiser, Amer asks? I don’t recognize any of these figures, so no, Eric says.
58/ Rubin:
We are now, at long last, talking about Trump’s securing appraisal services from David McArdle of Cushman & Wakefield. Eric insists Sherri Dillon was closer to this process,
👉🏼another indicator of their “blame the (now-fired/resigned) experts” strategy.👈🏼
59/ 🦈::Cue: Jaws Theme::🦈
Rubin:
But Amer is building up to a critical point about Eric’s intent:
Eric worked with a professional appraiser to value the donation of the conservation easement at Seven Springs and even signed the engagement letter.
But that appraiser was terminated months later, as reflected in an email shown to Eric, and then reengaged the next year, according to Amer.
60/ Rubin:
Eric affirms that in 2015, he directed Sherri Dillon to get that appraisal finalized so they could complete the donation by the end of the year.
>>I suspect Amer will ultimately force an admission that the resulting appraisal was discarded and/or discounted by the Trump Org., and concealed from Mazars and others in order to inflate Trump’s net worth.
61/ Lol at Ross/Rachel reference.
Rubin:
But now, we are on a break, as Ross and Rachel might have said. So stay tuned.
62/ Klasfeld:
We're back.
Eric Trump is being questioned about the appraisal of the 71 units at the Trump National Golf Club, in Westchester, New York.
63/ Rubin:
We’re in last stretch of Trump trial testimony for today w Eric still on stand about appraisal of another property: Trump Briarcliff, where the org was planning to build 70-something residential units.
As with most of what we’ve seen today, this occurred before the statute of limitations started to run—but to the extent the related valuations are incorporated in statements of financial condition for years to come, they are relevant to the AG’s remaining claims as well as relief.
64/ Rubin:
Amer just shows Eric an email where the appraiser says, per a conversation with Eric, that he intends to perform a discounted cash flow analysis to reflect the expected income from the as-yet unbuilt units. Eric says he didn’t understand what method would be used.
(Spoiler: The ultimate valuation did not, in fact, discount that projected income but valued the units as if the income could be realized immediately and without any deduction for costs of building, marketing, etc.)
65/ Rubin:
Appraiser tells Eric over email he’ll be doing a discounted cash flow analysis & looks fwd to receiving comparable sales figures, which Eric then receives from Trump International Realty staff and forwards to the appraiser. Eric disputes none of this.
By September 2013, the appraiser writes to Eric and says he’s ready to share his valuation conclusions. 👉🏼Eric doesn’t recall whether any call happened nor does he have any recollection “of this whole subject,” he testifies.👈🏼 [Drink!]
66/ Rubin:
The appraiser later says he’s holding off on sending a written appraisal per his conversation with Sherri Dillon. Hmmmm.
At the time, the appraiser told Dillon the “more supportable value” was $45 million and that Dillon indicated Eric learned that and was pleased. 👉 Eric again has zero recollection of this. [Drink!.. Hic!]
67/ Poor Schmucky McNoBrain keeps getting busted.
Rubin:
He doesn’t remember whether it was his decision to hold off on the written appraisal. But Amer shows him the supporting worksheet for the statement of financial condition reflecting that the value of the sell-out was based on comps, as learned from a conversation with Eric.
Trump: Eric who?
...or leftovers!
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