The Trump Organization says it ended a tumultuous 2022 without telling anyone outside the company how business is doing—a claim that, if believed, could be an indication of its looming financial difficulties in the face of a tsunami of legal trouble.
In practical terms, however, the claim also keeps New York state investigators from getting a clear picture of whether the real estate firm has continued lying to banks about its property values, even as investigators barrel toward a trial that could kill off the Trump Organization.
The disclosure about how the Trumps haven't made any financial statements to banks or accounting firms was made in a Feb. 3 letter written by a retired judge tasked with babysitting the Trumps’ real estate empire, in a document that was made public in court filings last week.
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The Trumps “have not provided a 2022 statement of financial condition to any third parties, and do not intend to do so,” Barbara S. Jones, a former federal judge now in private practice, wrote to the state judge who appointed her.
She’s referring to the same type of financial record that has the Trump Organization in hot water now, given that former President Donald Trump issued so many of them based on outrageously phony valuations, as documented by the New York AG’s lawsuit against the company last year.
In accounting, a statement of financial condition is a sensitive legal document that serves as a summary of a company’s assets and liabilities. But notably, it must also include disclosures describing how the numbers were put together. These are the very documents the Trumps are accused of faking for years, padding the numbers with nonexistent real estate space in Trump Tower and hyperinflated values for undeveloped land.
Jones noted that the lack of information wasn’t exactly a surprise, as the court had previously been told the Trumps were keeping mum about last year.
That line wouldn’t be alarming, were it not for two things: the Trump Organization’s financial statements are now the center of the New York attorney general’s massive fraud investigation; and any large real estate company would have to regularly make financial condition statements anytime it seeks to borrow money for a project from a reputable lender.
That means that, either the Trump Organization has fallen on hard times, found a bank willing to do business without responsible paperwork, or isn’t telling the truth.
One person with knowledge of the AG’s investigation noted that the company’s explanation only makes sense if it found a “sketchy” bank willing to do business without relying on official financial statements.
Notably, there was one bank in particular that came to the Trumps’ rescue last year amid a wave of revelations that the company had engaged in fraud for over a decade: Axos, an internet-only bank based in San Diego.
As the Trump business and political legacy began to crumble, legitimate banking and accounting firms finally started to distance themselves from the Trump Organization. Following Trump’s incitement of the Jan. 6, 2021, insurrection, his go-to German lender, Deutsche Bank, dropped him. When New York AG Letitia James revealed how her investigators discovered the company’s pattern of lying on financial forms in early 2022, Trump’s longtime outside accounting firm of Mazars USA ditched him too.
Axos Bank swooped in and refinanced a $100 million loan to U.S. Bank National Association, according to documents filed with the New York City Department of Finance and signed by Eric Trump as president of Trump Tower Commercial LLC. Axos then gave the Trump Organization a lifeline by paying off its $125 million loan to Deutsche Bank in May 2022, according to the AG’s civil fraud lawsuit against the Trumps.
Axos is run by Gregory Garrabrants, a financial executive who has donated $65,000 to GOP candidates since 2012, with the bulk of that during Trump’s time in the White House, according to Federal Election Commission records. That spending includes $9,600 on Trump’s failed re-election campaign in 2020.
Oddly, the Trumps’ business deal with Axos appeared to hinge on the ability to keep them from having to make the very disclosures that caused so much trouble in the first place, according to the AG’s lawsuit.
“During the negotiations with Axos Bank in February 2022, the Trump Organization sought to avoid submitting a statement of financial condition or making representations about Mr. Trump’s net worth. Instead, the Trump Organization pushed to provide a schedule of material real estate assets and liabilities and leave it to the lender to calculate net worth,” the AG’s office claimed.
That arrangement essentially shifted the burden over to Axos. In previous deals with other banks, the Trump Organization had put together financial condition statements summing up its value—after adding massive injections of seemingly nonexistent values based on intangible stuff like “brand value,” a claim Trump has made several times in public but also in court.
The court-appointed monitor’s Feb. 3 letter confirms the idea that the Trump Organization went the entire year without making any of the typical disclosures required when borrowing money from a financial institution.
Axos did not reply to a request for comment. The Trump Organization also did not answer questions about its deal with Axos.
Justice Arthur F. Engoron, a New York state judge, took the rare step of appointing Jones as an outside monitor after hearing the AG’s concerns that the Trump Organization might restructure itself to become an empty shell and avoid paying hefty fines that could total $1 billion. After her appointment on Nov. 14, Jones began meeting with company representatives and attorneys at the AG’s office, according to her first letter to the court. Since then, the Trumps have been turning over information “proactively,” she said.
In a subsequent letter, Jones told the judge that she has sent the Trump Organization questions more than a dozen times to clarify “their corporate structure” and “various corporate transactions.” She’s clearly getting some answers, because Jones noted she had to hire her own accountants “to carefully assess issues regarding Trump Organization entities” and has “spent considerable time reconciling and ensuring the accuracy of the extensive list of entities that fall under the Trump Organization umbrella.”
Jones did not respond to a request for comment to expand on the missing 2022 financial statements.
