Last week, Donald Trump found out the hard way that crossing the National Archives on the Presidential Records Act was nothing but trouble. This week he's in a whole new world of pain as long-time corporate accounting firm Mazars is now disavowing a decade's worth of the Trump Organization's financial documents as the New York Attorney General's office continues to investigate Trump's company for fraud, and that could quickly mean financial disaster for Trump.
Predictably, Donald Trump wants you to think his longtime accounting firm’s decision to ditch the Trump Organization last week is no big deal. In fact, he would like you to not think about it at all.
But that hasn’t stopped members of his inner sanctum from wondering if the highly publicized investigations in New York could actually be what ultimately torches the ex-president’s sprawling family business.
Which is why after accounting firm Mazars USA dropped the Trump Organization, three people close to former President Trump told The Daily Beast they have each urged Trump—or others in his family and brain trust—to take this possibly ruinous development seriously.
“I’ll be honest with you: I have said for years that this whole thing is one big fishing expedition,” one of the sources said. “I’ve expected it to just fizzle at some point, or to turn up ticky tacky shit that can score prosecutors big headlines. The Mazars news was the first time I started thinking, ‘Hey, this might be serious.’ Could Donald Trump [and his business] be screwed? I don’t know, but I’m not as confident as I once was in saying, ‘No.’”
The question now facing the Trump Organization—which is already in hot water after being indicted in Manhattan for criminal tax fraud last summer—is whether the pillars propping up his business empire will now crumble.
The massive bank loans that fund his real estate development projects are the foundation of his empire. Banks that approved lending Trump money for his golf courses and skyscrapers relied on his personal guarantees and “statements of financial condition”—guarantees that are now shaky at best.
None of these sources who spoke to Trump believed he was taking this as seriously as he should. Two of them said the former president told them that his business empire has been doing “great,” no matter what prosecutors are trying to do to it.
But notably, all three predicted that this latest Mazars development would likely strengthen Trump’s resolve to run again for the presidency in 2024.
“Right now, all the voters care about is stopping the decline of the United States and President Trump is the one person who they know who can do it,” claimed John McLaughlin, who served as one of Trump’s top pollsters in 2016 and 2020. “Voters could care less who his accountant might be. As long as Joe Biden fails, President Trump grows stronger.”
After a day of remaining silent on the topic, the ex-president released a lengthy statement Tuesday night insisting that, among many other things, “We have a great company with fantastic assets that are unique, extremely valuable and, in many cases, far more valuable than what was listed in our Financial Statements.”
However, Mazar’s decision on Feb. 9 to disavow every financial condition statement Trump made from 2011 until 2020 does more than cast a shadow of doubt on his riches and his future.
That’s because lending agreements often include provisions that immediately cancel a deal—causing the loan to default—if the underlying documents prove false. According to a widely cited analysis by journalists at Bloomberg, the Trump Organization has had at least $590 million of debt coming due between 2021 and 2025. It’s unclear if Trump’s loan deals included a “material change in condition” clause, but if they did, as most do, the fallout could spell financial ruin.
Steven J. Solomon, an attorney in Miami who leads the bankruptcy practice at the national law firm GrayRobinson, warned about the gravity of the situation for the Trump Organization.
“It’s incredibly significant. And frankly, I’ve never heard of a situation where an accounting firm is going back retroactively 10 years,” he told The Daily Beast. “This would be a trigger point. If your lender doesn’t have confidence in you because it can’t rely on the information, you can’t be friends anymore.”
In other words, if all of Trump's lenders decide to call him out and demand their money back now, Trump goes under.
The bigger issue for Trump is that Mazars is running far, far away from ten years of being Trump's accountant, which means the NYAG office has almost certainly found dirty numbers and that Mazars doesn't want to go down with Trump. If they are now assisting the NYAG with forensic accounting issues, Trump is in real, dire trouble.
Let's remember Trump has gotten money off the books all his adult life. We know he's managed to keep his nose clean so far when it came to his mafia ties in Manhattan starting out, to the Russian mob in the last couple of decades, and to his Saudi friends for his campaign chest. But if this investigation unravels all of that bloody web, Trump's going to face real prison time.
Not to mention, the people he took money from off the books are not too forgiving about being stiffed. I agree with the assessment of the sources in the article that Trump will run in 2024, party from his huge, abyssal ego, but also because he figures winning again is the only way he stays out of prison...and an unfortunate "accident".
Trump just got a lot more desperate this week, and he's far more liable to do something stupid as a result.
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