Back in 1975, an up-and-coming real estate tycoon unknown to most New Yorkers said a successful proprietor had to be ruthless to get ahead.
“To make it in this city as a landlord, you’ve got to fight everything that’s done, practically,” a 29-year-old Donald Trump told the Daily News.
“This isn’t the real estate business. This is combat. It’s like being in the infantry.”
Almost a half-century later, Trump on Monday will be forced to account for the relentless methods he employed as a developer to cheat the system and boost his bottom line by billions in historic testimony at his Manhattan Supreme Court fraud trial.
The former president — and current frontrunner in the 2024 race — is expected to face a day-long public grilling about his tenure at the Trump Organization in state Attorney General Tish James’ case against his real estate empire.
The stakes couldn’t be higher for Trump, with the case cutting to the core of the real estate kingpin narrative he rode to the White House after inheriting the nearly century-old family enterprise founded by his grandmother from his father, Fred.
On the line is the power to ever again lead a company in New York. James is also seeking to bar him, his adult sons and top executives from cutting commercial real estate acquisition deals and borrowing money for ventures for five years. She’s also seeking to recover $250 million in ill-gotten gains.
“He’s never had anything like this happen to him before. I mean, he’s always gotten out earlier than this,” Barbara Res, Trump’s former executive VP who oversaw the construction of Trump Tower, told The News on Sunday.
“When I knew him, he lied about everything, really,” Res said. “How much money he had, how many apartments he sold in Trump Tower, the size of the apartments, people that were interested in the apartments that weren’t, like Princess Diana. He just said anything that came into his head, and he got away with a lot of it.”
Trump will find himself in the unusual position of having to provide simple “yes” or “no” answers to questions about his notorious tendency to lie and exaggerate. He’ll be unable to rely on personal attacks as a defense in a courtroom with officials regularly on the receiving end of his ire. And it will see him go under oath before the world’s media as he’s leading President Biden in the latest New York Times-Siena College poll a year out from the election.
At the root of the case are annual financial statements that reflected Trump’s net worth from 2011 to 2021, most of which Judge Arthur Engoron deemed to be fraudulent and illegally used to deceive financial institutions before the trial started.
The ruling on the AG’s top fraud claim was based solely on evidence Trump does not dispute, showing he exaggerated his worth by up to $2.2 billion between 2014 and his last year in office. James alleges the disputed numbers raise that figure to $3.6 billion.
If the ruling is upheld on appeal, Trump could lose control of marquee properties in his portfolio, like his sawtooth high-rise Trump Tower on Fifth Ave. and green lantern-topped skyscraper on Wall St.
Still to be determined is how much he and his crew should have to pay back and whether they committed six other crimes in New York’s penal code relating to the conspiracy underlying the valuation scheme and insurance fraud.
Whether to persuade banks to lend him more than they should, brokers to agree to coverage at higher limits and lower premiums, or Forbes to place him high on its Rich List, Trump and his top executives ballooned the value of his namesake assets more than 200 times in the decade covered, according to evidence in the AG’s case.
The bogus figures were tallied by Trump’s convicted finance chief, Allen Weisselberg, and his deputy, company controller Jeffrey McConney, who fudged the numbers by representing he had cash on hand he didn’t, changing valuation methodologies without reason or notice, including brand premiums against the advice of outside counsel and other techniques, according to trial evidence.
The Trump Org lieutenants did so with input from Trump and his eldest kids and executive vice presidents Don Jr., Ivanka, and Eric, who ran separate departments managing their dad’s different assets, according to trial evidence. Trump personally verified the statements’ accuracy up until he became president, when Weisselberg and Don Jr. became trustees of his fortune. Trial evidence showed he restored himself as a trustee on his way out of the White House while contesting the election was stolen.
Weisselberg, still loyal to his longtime boss since becoming a felon in a separate 2022 criminal case, told the court on Oct. 10 that Trump “periodically” had feedback on the numbers. Trump’s former fixer, Michael Cohen, also convicted of felonies for his work for the ex-prez, was more explicit. He said Trump implied he and the CFO should “reverse-engineer” his asset classes “based upon a number that he arbitrarily elected.”
“He would say, ‘I’m actually not worth $4.5 billion, I’m really worth more — like six,’” Cohen testified Oct. 25.
In their testimony last week, Trump’s sons sought to pin the blame on outside accounting firm Mazars, which compiled the figures into reports relied on by financial institutions before advancing hundreds of millions of dollars to Trump’s businesses. The Trump scions said that they shouldn’t be held responsible for business records they signed off on.
Having personally overseen their construction, the AG says Trump knew well that sky-high price tags for his eponymous assets were based on lies, like claiming his chandelier-filled Trump Tower triplex was upwards of 30,000 square feet when it was less than 11,000, puffing up its cost to $327 million — higher than any city apartment has ever sold for.
Team Trump is expected to begin their defense case after Ivanka is called as the state’s last witness on Wednesday. She was previously a defendant in the case but won dismissal on appeal for time-barred claims.
Trump’s lawyers have argued that valuing buildings is an art, not a science. He has also claimed that banks got richer by doing business with him and that he never defaulted on loans. He said his statements contained a disclaimer advising banks to do their own due diligence.
Engoron — who heard from an expert last week that estimated Trump’s lies cost financial institutions a neat $168 million in lost interest — rejected those arguments in his pretrial ruling.
The victims, the judge found, were honest brokers of “all shapes and sizes.”
“The next borrower, or the one after that, might default, and if its [statements] are false, the lender might unfairly be left holding the bag,” Engoron wrote on Sept. 26. “This will distort the lending marketplace and deprive other potential borrowers of the opportunity to obtain loans and create wealth.”
Though Trump’s liberty is not at stake — Engoron’s pretrial ruling determined he and his crew committed crimes, but the case is civil and does not carry prison time — his decision to attend the trial seven times so far makes clear the case is of profound personal importance.
While notorious for going on the attack against his critics, Trump has been especially furious over the proceedings, drawing a gag order for attacking the judge’s principal law clerk. He’s been fined $15,000 for violating it twice.
The indignant former president has looked watchful and animated at the defense table during testimony, at times appearing outraged. He was last seen storming out Oct. 25 while Cohen was on the stand when Engoron denied a defense motion to toss the case.
“The significance is obvious,” Cohen said Sunday. “His finances represent his id, ego and superego all mashed into one narcissistic sociopath.”
The civil fraud case is one in a gulf of legal challenges encircling the 77-year-old Trump ramping up in tandem with his campaign. He faces 91 felonies in four criminal matters and a slew of lawsuits demanding hundreds of millions in damages.
In his 1975 interview with The News — when he presided over thousands of properties owned by his father across four boroughs — Trump celebrated a court win challenging rent stabilization rates he said didn’t enrich landlords enough.
He was described as proudly recalling to The News a friend’s observation “that he probably spent more time in courts than any businessman his age.”
That might still be true.