After journalists revealed several years ago that former President Donald Trump was likely not as wealthy as he claimed, executives at his company scrambled to justify new allegedly inflated valuations, volleying around ideas like applying a “premium for presidential property” to certain assets, according to evidence presented during Trump’s civil fraud trial in New York.
The internal deliberations began after Forbes magazine revealed in 2017 that Trump’s Manhattan triplex, or three-story apartment, was about a third of the size he had long claimed — about 11,000 square feet, instead of more than 30,000 — and thus far less valuable.
When Trump began reflecting the true size of the property on financial statements, its value dropped by as much as $207 million, according to a Sept. 26 ruling in the case that found Trump and others liable for fraud. A trial on allegations related to the ruling is ongoing.
Allen Weisselberg, the former chief financial officer of the Trump Organization, testified on Tuesday that the difference was a proverbial drop in the bucket compared to Trump’s net worth, claiming that “when you look at the value of that apartment relative to his net worth [it] is non-material.” But in late 2017, Weisselberg was particularly interested in unique ideas for finding extra value from Trump properties, according to Friday testimony from another Trump Organization executive.
The executive, company vice president Patrick Birney, was shown a spreadsheet compiled that year in which the company proposed assessing a “premium for presidential” properties — calculating a series of re-valuations.
“15% Premium for Presidential winter residence,” read one line under Mar-a-Lago. Another line, for Trump’s Bedminster golf club, read, “15% premium for presidential summer residence.” The line for the triplex listed, “25% Premium for Presidential Personal Residence.”
All told, the nine new valuations would have added more than $144 million to Trump’s estimated wealth. Ultimately, though, the idea was scrapped.
But the episode is core to a case in which the state of New York is trying to claw back at least $250 million in what it calls “ill-gotten gains.” The state’s argument works like this: Trump, two of his children and his company lied about how much properties were worth, and how much Trump was worth, in order to get favorable loan rates and insurance deals. By doing so, the state’s argument goes, they benefited to the tune of hundreds of millions of dollars.
And, New York Attorney General Letitia James claimed in her 2022 lawsuit, those high valuations were also personally important to Trump.
“This public desire to inflate his net worth was well known amongst his children and employees,” James’ office wrote in its complaint, highlighting internal emails and deliberations about publications that assess and rank society’s wealthiest.
Weisselberg acknowledged during his Tuesday testimony another directive he gave to former Trump Organization controller Jeffrey McConney that was intended to boost the value of properties: simply say some of them are worth 30% more. That “30% premium” was not disclosed in Trump statements of financial conditions given to banks.
On Wednesday, the court heard testimony from a former Deutsche Bank executive who was involved in assessing loans to Trump. He testified that the golf courses were “unusual” collateral for a loan that he “didn’t know had value,” since the potential buyers market for golf courses is particularly small.
Still, he testified, “I assumed that the representations of the value of the assets and liabilities were broadly accurate.”
Weisselberg and McConney are also defendants in the case. Attorneys for the defense have argued in filings that the company was within its rights to add so-called “brand premiums” to its valuations.
On Friday, Birney testified about another moment, in 2018, when the public’s understanding of Trump’s wealth sent company executives scrambling.
A Bloomberg reporter emailed Weisselberg and two other executives about its “billionaire’s index.” The company was prepared to slightly reduce its estimate of Trump’s wealth, from $2.9 billion to $2.8 billion.
The executives assigned Birney to research data that might combat Bloomberg’s analysis.
Birney fired off a series of emails to the company’s bankers and others — some he said may have been dictated by Weisselberg — seeking information related to the values of various properties.
Bloomberg ultimately published its decreased $2.8 billion estimate, but the importance of Birney’s assignment is clear in his emails.
The matter, Birney wrote, was “urgent.”