Trump financial statements not reliable, says accounting firm
14 February 2022, 23:04
Mazars said it worked on the statements ‘in accordance with professional standards’ but could no longer stand by the documents.
The accounting firm that prepared Donald Trump’s annual financial statements says the documents “should no longer be relied upon” after New York’s attorney general said they regularly misstated the value of assets.
The statements were used to secure lucrative loans and burnish Mr Trump’s image as a wealthy businessman.
In a letter to the Trump Organisation’s lawyer on February 9, Mazars USA LLP advised the company to inform anyone who had received the documents not to use them when assessing the financial health of the company and the former president.
The letter came weeks after New York attorney general Letitia James said her office had uncovered evidence that Mr Trump and the company used “fraudulent or misleading” valuations of its golf clubs, skyscrapers and other property to get loans and tax benefits.
“While we have not concluded that the various financial statements, as a whole, contain material discrepancies, based upon the totality of the circumstances, we believe our advice to you to no longer rely upon those financial statements is appropriate,” Mazars general counsel William J Kelly wrote to his Trump Organisation counterpart, Alan Garten.
Mr Kelly said Mazars performed its work on the financial statements “in accordance with professional standards” but it could no longer stand by the documents in light of Ms James’s findings and its own investigation.
He also informed Mr Garten that Mazars could no longer work with Mr Trump because of a conflict of interest and urged him to find another tax preparer.
Mazars said its conclusions applied to Mr Trump’s financial statements for 2011 to 2020. Another accounting firm prepared his financial statement for 2021, according to court filings.
Ms James’ office included a copy of Mr Kelly’s letter in a court filing on Monday as she seeks to enforce a subpoena to have Mr Trump and his two eldest children give evidence in her civil investigation. A state court judge, Arthur Engoron, is scheduled to hear arguments in the dispute on Thursday.
The Manhattan district attorney’s office is running a parallel criminal investigation into Mr Trump’s business practices.
He has given his Statement of Financial Condition — a yearly snapshot of his holdings — to banks to secure hundreds of millions of dollars of loans on properties such as a Wall Street office building and a Florida golf course, and to financial magazines to justify his place on the list of the richest people in the world.
In a statement, the Trump Organisation said Mr Kelly’s letter “confirms that after conducting a subsequent review of all prior statements of financial condition, Mazars’ work was performed in accordance with all applicable accounting standards and principles and that such statements of financial condition do not contain any material discrepancies. This confirmation effectively renders the investigations by the DA and AG moot”.
