OWhen Donald Trump announced plans in 2006 to build a golf resort on ancient sand dunes on Scotland’s Aberdeenshire coast, he told reporters it was love at first sight. “As soon as I saw it, there was no doubt about it,” he said. It would be the “largest golf course in the world”.
This week, Trump International Scotland has become a central part of a case that looks set to dominate his post-presidential life and could even put him behind bars.
Local anglers denounced Trump as a “loud-mouthed bully” during the construction of the course. Environmentalists warned that the development would destroy the natural habitat, and sure enough it inflicted such damage that the site was stripped of its protected status.
But none of this distracted Trump from his goal. Today, the Scottish resort bills itself as a “first-rate luxury golf” experience packed with a five-star hotel and helicopter landing pad, priced at a bargain price of £2,595 (3,518 $) per year.
Fifteen years later, the property has done wonders for its owner. That is, if you measure success in Donald Trump’s idiosyncratic accounting style.
He bought the 2,000-acre (809-hectare) site from Menie in 2006 for $12.6 million. In five years, it was valued by the Trump Organization in its financial statements at $161 million, an increase of almost 13 times.
In 2014, the windswept Scottish holding company was valued at $436 million.
The hike caught the eye of Letitia James, a progressive New York State Attorney General known for her relentless pursuit of the rich and powerful. How Scottish property has skyrocketed in value is one of the questions she explores in her ongoing investigation into Trump Organization finances.
In a new filing released this week aimed at pressuring Trump and two of his children — Ivanka and Donald Jr — to be questioned, James forensically dissects how such surprisingly large valuations came about. The 2011 estimate for the Scottish property, its investigators found, included around £75,000 ($120,000 at 2011 exchange rates) for undeveloped land on the site.
Investigating deeper, they discovered that the figure was created for a Forbes magazine article. The revelation sparked a line in the filing this week that must be among the most raw in US financial history.
“It therefore appears,” James writes, “that the Trump Aberdeen valuation used for Mr. Trump’s financial statements was prepared for the purpose of providing information to Forbes magazine in a quote.”
James’ legal document is full of equally juicy details. The Scottish Golf Club’s 2014 value was based in part on the expected sale price of 2,500 houses on the land, even though none of the houses actually existed and the company only had planning permission for the half that number.
In 1995, the Trump Organization purchased a plot of land in Westchester, New York, known as the Seven Springs Estate, for $7.5 million. In 2004 it was valued at $80 million and in 2014 at $291 million. That 2014 figure, James notes in another deliciously tart reference, included a $161 million valuation for “seven nonexistent mansions.”
The juiciest treat of all concerns Trump’s former home, the gilded Fifth Avenue temple to his own ego dubbed “Versailles in the Sky,” in which he lived before moving to the White House. James’s investigators were puzzled to discover that the Trump Tower triplex in Manhattan was listed at $327 million in 2015, based on the size of the apartment, allegedly 30,000 square feet.
In fact, the property measures 11,000 square feet, producing a value of $117 million. That’s an overstatement in Trump’s official financial statements of more than $200 million.
Such startling disparities matter, James insists in his 114-page brief. The financial statements that contained them were used to secure loans from banks as well as insurance, and in other cases to reduce Trump’s tax burden.
“We have uncovered significant evidence that suggests that Donald J Trump and the Trump Organization falsely and fraudulently valued multiple assets and misrepresented those values to financial institutions for economic gain,” James said after the filing of the case before a court. New York court.
The new material leaked by James was so compelling that some observers close to Trumpland are now convinced he is in serious legal trouble. Michael Cohen, Trump’s former personal lawyer and former vice president of the Trump Organization, told the Guardian: “Trump’s house is falling apart.
Cohen, who was released in November from house arrest after facing his own legal difficulties, has his skin in this game. It was his testimony before the House Oversight Committee in February 2019 that rang the bell alarm over allegedly inflated valuations in Trump’s financial statements, prompting James to open his investigation the following month.
“My testimony before the committee as well as my subsequent cooperation with the New York Attorney General has led to this day,” Cohen said. “We are seeing individuals who have continually evaded accountability for their actions finally being held accountable.”
James is pursuing his investigation as a civil matter, which means that if Trump is found liable, it could cost him dearly in fines and penalties. More seriously, James coordinates with Manhattan District Attorney Alvin Bragg, an equally tenacious and relentless prosecutor with a large and highly experienced team of investigators.
Bragg asks exactly the same questions as James: Did the Trump Organization commit accounting, banking, tax or insurance fraud? The key difference is that Bragg’s investigation is criminal, threatening Trump not with fines but with jail time.
“Trump could end up in an orange jumpsuit by the end of this one,” said Timothy O’Brien, senior columnist for Bloomberg Opinion.
O’Brien also has a personal interest in this story. His book TrumpNation, a 2005 biography that raised doubts about Trump’s real wealth in terms eerily similar to investigations by James and Bragg today, angered the real estate developer so much that he sued O’Brien for billions of dollars.
O’Brien’s lawyers filed Trump as part of his defense. For two days, they managed to do something that has rarely been done before or since – they got the celebrity to admit, no less than 30 times, that he had lied.
“My attorneys were so well prepared that when he sat down for deposition, we had documentary evidence on hand that showed the reality of what he had lied about or exaggerated. We just pushed those through- over the table towards him,” O’Brien recalled.
Many of the misleading items — the value of his golf clubs, his New York real estate assets — were virtually identical to the details in this week’s filing. That’s why O’Brien feels confident saying that the patterns James describes in his court document go back a long way.
“It’s a behavior that Trump has engaged in since he was a kid, frankly,” O’Brien said.
The libel suit was dismissed in 2009. The author was surprised that despite the mass of details he had laid out in TrumpNation about potential wrongdoing, no prosecutor showed interest.
“There was enough material in my book for prosecutors to prosecute, but no one picked it up. Law enforcement simply didn’t take Donald Trump seriously until it was too late.
The times have changed. Trump is no longer a real estate mogul turned reality TV star, he’s a former US president. The stakes have risen dramatically and with them the scrutiny.
Never before has Trump faced two coordinated teams of sophisticated investigators digging into his financial affairs, with civil and criminal charges possibly pending.
Just how serious prosecutors are about nailing their man is revealed in just one sentence of James’ new filing. She writes that the investigative team is determined to uncover “Mr. Trump’s actual knowledge of — and intent to make — the numerous inaccuracies and omissions made by him or on his behalf.”
“Intent to do” indicates that James is not just thinking civilly. It also anticipates possible criminal charges in which proof of the accused’s intent is required.
Trump continues to resist testifying, as do his two children, on the grounds that the investigations are politically motivated witch hunts (James and Bragg are Democrats). A third child, Eric, who runs the day-to-day work of the Trump Organization, was deposed but has litigated the fifth more than 500 times.
The family’s best hope is that prosecutors will struggle to meet the high bar set for criminal cases. That’s especially the case when it comes to the crucial issue of intent, said Robert Mintz, a former federal prosecutor.
“The criminal case is more dangerous since it involves potential incarceration. But that requires criminal intent and that is difficult to prove, especially in complex financial frauds involving organizations,” Mintz, now a partner at McCarter & English, LLP, told the Guardian.
Prosecutors will have to prove that Trump knowingly and willfully violated the law. This can be difficult – showing discrepancies in financial statements, no matter how juicy, is not enough.
“Big investigations take time and are extremely difficult to prove without the help of cooperating witnesses and documentation,” Mintz said. “These parallel investigations are clearly moving forward, but it is difficult to predict how they will end.”