Executive at Donald Trump’s company says ‘presidential premium’ was floated to boost bottom line
NEW YORK (AP) — Donald Trump’s top corporate deputies considered adding a “presidential premium” to his Trump Tower penthouse, Mar-a-Lago resort and other assets during his White House years, a gambit that would’ve padded his net worth by nearly $145 million, an executive at the former president’s company testified Friday.
Trump Organization Assistant Vice President Patrick Birney told Trump’s New York civil fraud trial that they ended up scrapping the idea, but state lawyers contend that merely going through the exercise underscores how Trump and his underlings were intent on finding ways to beef up his bottom line. Trump is expected to return to court for the trial next week when fixer-turned-foe Michael Cohen is scheduled to take the witness stand.
Birney said Trump executives considered tacking 25% onto the Trump Tower apartment’s value as a “premium for presidential personal residence” in 2017, his first year in office. They weighed doing the same for Trump’s winter and summer homes at Mar-a-Lago and his Bedminster, New Jersey, golf club, Birney said.
A “presidential summer residence” premium at the same rate would’ve added $18.9 million to the Bedminster golf club’s price tag on Trump’s annual financial statements, Birney said, increasing its listed value to about $145 million. Trump executives gamed out adding 15% premiums for other properties where Trump didn’t spend much time. At one point, they considered adding a 35% “Ex-President” premium to certain assets.
Birney was testifying at the end of the second week of a non-jury trial in New York Attorney General Letitia James’ fraud lawsuit and will return on Monday. He is the third Trump Organization executive to take the witness stand, following longtime Chief Financial Officer Allen Weisselberg and Senior Vice President and Controller Jeffrey McConney. Both of them are defendants in the case and have since retired.
In a pretrial decision last month, a judge ruled that Trump and his company committed years of fraud by exaggerating the value of Trump’s assets and net worth on his financial statements. Those documents were given to banks, insurers and others to make deals and secure financing.
As punishment, Judge Arthur Engoron ordered that a court-appointed receiver take control of some Trump companies, putting the future of Trump Tower and other properties in doubt, but an appeals court paused that from taking effect, for now.
The trial concerns related allegations of conspiracy, insurance fraud and falsifying business records. James, a Democrat, is seeking $250 million in penalties and wants Trump and other defendants banned from doing business in New York.
Birney, the only witness to testify Friday, indicated Trump executives started pondering a potential “presidential premium” as they sought ways to recoup a loss in value incurred from correcting the size of Trump’s 10,996 square foot Manhattan penthouse, which had been wrongly valued for years at nearly three times that square footage.
That fix was made in Trump’s 2017 financial statement, after Forbes magazine published an article revealing the true size of the Trump Tower apartment. At the same time, the Trump Organization was going through what McConney previously dubbed a financial “clean up,” scrubbing some pay practices and financial arrangements in the wake of Trump’s election.
“Was applying a presidential premium to a series of assets something you would have done on your own?” state lawyer Eric Haren asked.
“No,” Birney responded.
“Who directed you?” the lawyer asked.
“I don’t really remember, but probably Allen Weisselberg,” Birney said.
Birney, who took on a central role in preparing Trump’s financial statements beginning in 2017, previously testified that Weisselberg, referring to Trump’s net worth, told him “Donald likes to see it go up.” He testified that one of their discussions happened in a Trump Tower bathroom.
Weisselberg wasn’t asked about the “presidential premium” when he testified on Tuesday and Wednesday, nor in a deposition he gave in May in the case. But he and McConney did acknowledge adding other types of premiums to Trump’s property values.
In some years, Weisselberg testified, he instructed McConney to add a 30% premium to the values listed for Trump’s golf courses on his financial statements, based on his brand and intrinsic value. McConney told the trial last week that, years before Trump became president, he added $20 million to the value of Trump’s penthouse partly because of his celebrity.
Birney said the “presidential premium” prices they calculated were removed from consideration in October 2017 and were never included in any of his financial statements.
State lawyers argue that Trump and his lieutenants weighed and used a variety of methods to boost his net worth on his annual “statements of financial condition,” but didn’t disclose them to people relying on the documents for an accurate picture of his wealth and holdings.
For example, they calculated the values of some Trump properties based on the asking prices for other comparable properties, not the sales prices that are used in professional appraisals. For Mar-a-Lago, they calculated a rudimentary price-per-acre metric based on the selling prices of comparable Palm Beach, Florida properties, then added extra value to account for a ballroom and other amenities.
Trump, who’s pegged his net worth in excess of $6 billion in recent years, has estimated that his “brand” alone is worth “maybe $10 billion.” In his April deposition for the case, he called it “my most valuable asset” and attributed his political success to the ubiquity of his name and persona.
But Trump insisted he never accounted for his brand in his financial statements, testifying in April: “If I wanted to create a statement that was high, I would have put the brand on.”
Trump’s financial statements themselves aren’t as clear. Year after year, they’ve included a confusing clause suggesting that Trump’s fame was both a factor — and not a factor — in assessing his assets.
Trump’s name conveys a “high degree of quality and profitability,” which “significantly enhances” the value of his properties, the clause states. A few sentences later, it says: “The goodwill attached to the Trump name has significant financial value that has not been reflected in the preparation of this financial statement.”
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