Donald Trump has spent his entire life escaping the consequences of his actions. This does not mean he has avoided failures and humiliations. Trump Airlines was grounded. Trump Magazine was pulped. Trump University never conferred any credits or diplomas, and Trump had to fork out $25 million to settle fraud claims. Trump’s casinos bet the house and lost.
The Donald J Trump Foundation, his eponymous charity, was deployed as a personal slush fund. Its most infamous disbursements were spent acquiring three portraits of Trump, which were then displayed in his various properties. After a litany of legal violations, and a $2 million restitution payment, the foundation was forced to dissolve by the New York attorney general’s office.
Imagine the reaction if the Clinton Foundation had done any of this.
Trump is an incredible spruiker, but an awful businessman. He has the reverse Midas touch. His companies bleed cash. Trump owned businesses have filed for bankruptcy six times. Despite the blows to his wealth, he has never been forced to declare personal bankruptcy — a fact of which he is unduly proud. Such is the protection afforded by the corporate veil.
Through it all, Trump has always lived to fight another day. Notwithstanding his trail of ruin, Trump’s Teflon touch has meant that every abuse has been flushed down the memory hole to be replaced by the next. With each fresh outrage his critics wonder whether this time will be different. So far they are still waiting.
But now his luck may have run out. On February 9 his longtime accounting firm, Mazars USA, terminated its relationship with the Trump Organization, Trump’s private holding company. Mazars informed the Trump Organization that 10 years of corporate financial statements from 2011 through 2020 “should no longer be relied upon”, and recommended that the company inform any recipients of said documents that they are unreliable. This is accountant speak for “these numbers are not worth the paper they’re printed on”.
This is not normal. Accountants do not typically abandon their clients so bluntly. Mazars’ comment that a “non-waivable conflict of interest” prohibited further work for Trump’s firm also raises multiple possibilities, none of them good for Trump.
Why does this matter? The Trump Organization is propped up by debt. After Trump’s repeated business collapses, and questionable practices, most major banks refused to finance his schemes. Deutsche Bank, Germany’s biggest bank, was a notable exception. However, even Deutsche pulled the plug in 2021, after Trump left the Oval Office, by confirming that it would not lend him any more money.
Due to its assessed credit risk, much of the Trump Organization’s debt is personally guaranteed by Trump. This was the only way he could borrow the money. Hundred of millions of dollars in loans outstanding are due for repayment in the next few years. If the loans cannot be repaid, Trump is on the hook.
In the ordinary course, a company could refinance its loans with new borrowings, or sell assets to raise cash. Dodgy financial statements make both options much harder. Trump will have a hard time finding new funders without trustworthy accounts. And it’s difficult to imagine any credible accounting firm risking its reputation and legal exposure by stepping in to assist him.
Loans with longer maturations could also become a headache, because they will likely have covenants that will have been triggered by Mazars’ action. Those covenants would give lenders the power to call in their debts early. No one wants to be left empty handed if the house of cards collapses.
It has long been believed that Trump has relied upon financing from Russian sources to stay afloat. This view is reinforced by Don Jr.’s and Eric’s loose-lipped boasts to that effect. This is considered a key reason that Trump was so obliging to Vladimir Putin during his tenure in the White House. The sanctions arising from Putin’s invasion of Ukraine will stifle this pipeline in future, not least because of the potential national security implications.
Meanwhile Trump is hoping to raise cash with a windfall profit from his money-losing flagship hotel in Washington DC. The property is owned by the federal government, but was leased to the Trump Organization for 60 years in 2013, shortly before Trump became president. Now Trump wants to sell the lease for at least $100 million over its estimated fair market value. Absent reliable financials, the government may block the sale, or the purchaser may back out.
If all this weren’t bad enough, the Trump Organization and its chief financial officer, Allen Weisselberg, are under felony indictment for a battery of alleged crimes. They will stand trial later this year. Should the company be convicted, it will be akin to a corporate death sentence. This could be curtains for the Trump Organization. It might also unleash a domino effect that could unravel Trump’s business empire.
This is apart from the whirlpool of legal liability that confronts Trump and his family. New York State is investigating them for tax and accounting fraud, which is how Mazars’ letter came to light. Multiple jurisdictions are assessing claims of election interference arising from the 2020 vote. The January 6 committee will soon report its findings on the insurrection and Trump’s role in the attempted coup. The Department of Justice, which does not disclose ongoing inquiries, may be probing multiple potential offences.
As the financial and legal pressure mounts, and the walls close in, Trump is likely to become more erratic and reckless. This won’t help him.
Trump will never be broke. He may not see the inside of a prison cell. But if his empire is reduced to rubble, that would be a humiliating blow to his ego.
Mazars has lit the fuse. Now we wait.
It would be nice to know, how much of the money being donated by his adoring fans, to fight the allegedly stolen election, is actually going to paying off Trump’s debts? And to maintaining the Trump family’s elitist lifestyle, despite all that debt. If it’s significant, then I guess that would be grounds for another prosecution.
As I guess you know, Trump has a long history of ignoring any inconvenient rules separating his personal, political, corporate or charitable enterprises, as well as tax regulations and much else. So the answer to your question is obvious. Grounds for another (failed/stalled/blocked) prosecution, of course.
I’m pretty sure I read that they have a disclaimer in their fine print authorizing the money be spent on anything and everything they like.
Quite possibly. Probably next to the tiny print, that says, what you thought was a one off donation, will now be coming out of your account once a month; until you notice and go through the hassle of cancelling the payment.
“Mazars has lit the fuse. Now we wait.”
And Trump waits too. That’s the problem, nothing is being done quickly enough to succeed. At the end of the year at the mid-term elections it is very probable Congress will return to full Republican control. Then the only question is whether Trump retains control of the Republicans. If so the party will save Trump by sabotaging or ending all the investigations. If Trump has been replaced by one his equally rabid rivals, then it’s possible his luck runs out if they cannot be bothered to save him, but not otherwise. So it’s really a political question.
As already noted in a comment here, promising investigations into Trump and his businesses are already being derailed by partisan obstruction and investigators are resigning in disgust.
Yes, typical modern right wingers: tough on crime, unless it’s their own.
That’s how it also is with the Australian religious right.
The New York State investigation continues. Doubt whether Republican majorities in Congress can stop that (or any DOJ investigation for that matter).
I was sure someone would mention state investigations. Unfortunately that no longer provides any protection from interference. The criminal investigation that fell over last week was a NY state investigation under the Manhattan DA, so even without Congress getting involved an investigation being run in a Democrat controlled state has collapsed because a DA was scared of Trump. Once the Republicans have Congress that just adds to the ways they can interfere. There are plenty of ways a Republican Congress can persuade states to drop investigations, carrots and sticks, threats and bribes, no matter who runs the state. Where there’s a will there’s a way.
Of course the theory is that the judiciary and the justice system generally are independent of the legislatures and it should make no different who is elected, but in practice it is almost entirely partisan throughout now.
Clearly you are wrong. The criminal investigation that fell over last week was a NY state investigation under the Manhattan DA, so even without Congress getting involved an investigation being run in a Democrat controlled state has collapsed because a DA was scared of Trump. Once the Republicans have Congress that just adds to the ways they can interfere. There are plenty of ways a Republican Congress can persuade states to drop investigations, carrots and sticks, threats and inducements, no matter who runs the state. Where there’s a will there’s a way.
Of course the theory is that the judiciary and the justice system generally are independent of the legislatures and it should make no different who is elected, but in practice the DoJ, the Supreme Court, the DAs, the other benches of judges – it is becoming entirely partisan throughout, or else intimidated into being useless.
True – but my point was that the civil case being investigated by the New York State Attorney continues. We will have to wait and see how this develops..
And my point was that when the Republicans take Congress that will make it a whole lot easier to shut that down too. Even without that, today’s news shows the civil investigation stalling again and agreeing to delays demanded by Trump. There is really very little chance of Trump being touched by any of this unless the Republican Party decides that’s ok, most likely because it has a new improved Trump v.2.0 installed and the old model no longer has any use. There are several in development and looking promising.
Keir Semmens has a more optimistic view – lets hope that he turns out to be right.
The ModBot is being really, really, ridiculous now. I cannot make any relevant reply.
It shows what a cheep-cheep job was done of its algorithm that the word contained in the word between the words “…investigation being run in a Democrat con*****ed state has collapsed..” caused it to freeze.
Your comment 4hrs earlier “…Republican control it…” lacked that evil extra ‘L’.
Same as the coin which was a 20th part of the old pound has wicked letters.
Thanks for that helpful explanation. I don’t imagine we will ever find out why the ModBot is so terrified by creatures of Scandinavian mythology being smuggled onto the page.
Tekky hamsters, esp the cheaper ones, tend not to be very well read which is why there should be a soft machine overseeing them.
I was expecting someone to make that claim.
In NY state a civil investigation continues, but the NY state criminal investigation was sabotaged by the new DA and fell apart last week; and that’s in a Democrat run state. When Congress returns to Republican control it makes it so much easier to wreck any investigation anywhere, including at state level, because through Congress they have even more means to exert influence. And don’t imagine the DoJ or any other part of the judicial system retains independence. It’s mostly too corrupted or politicised to stand up to political influence or intimidation both at federal and state levels, and its rapidly getting worse.
The rest of the world could see Trump was shifty but he was still elected by millions with questionable IQ levels. Who will the next US president be is the question.
Femme vs femme? This crusty ol white guy is bored with crusty ol white guys. Give someone else a go,
It’s highly likely the Dems will proceed with Harris as their nomination (assuming Biden won’t want it). Now getting the GOP to nominate a “lady” so we can have your preferred contest might prove difficult.
Biden will need batteries and AI for another term. The republicans would need a heart and a personality transplant to select a woman. Is there no republican Oprah? Rhonda Rousey perhaps?
And we’re meant to follow Washington without questions.
On past – not just recent – evidence there is no need for a prez to have a functioning brain, surrounded as they are by ‘advisers’ to correct mispeakings, gaffs, tantrums, walk back idiotic claims etc and keep the nuke football out of reach.
Veep Harris ticks all of the boxes on the constantly growing list of a society that has long forsaken any claim to be treated seriously.
Her inability to string together a recognisable English phrase, let alone an entire sentence, is not therefore a problem presentation-wise and it is only about appearance, not reality.
The real worry is a competent repug stepping into Trump’s shoes.
His interregnum spared the world 4yrs of Killary & the MIC – normal service has now resumed.
“…there is no need for a prez to have a functioning brain…”
In Aesop’s fable, the frogs, if they had any sense, would have been grateful to Zeus for sending them Old King Log and his completely inert rule.
Not so fast – Glenn Kirschner (ex JAG/Prosecutor) reports that the the NY AG seems to be getting cold feet, or at the very least showing little enthusiasm for becoming a political target: https://youtu.be/e4XUoOHekH0
The link refers to the New York/Manhattan investigation. The New York State investigation mentioned in the article is unaffected.
Even if Trump becomes a total has-been, it doesn’t matter. That train has left the station. The Republicans are well on their way to turning the USA into a fully fledged “illiberal democracy” after the fashion of Hungary and Poland. By the end of the decade any semblance of free and fair elections will have gone down the drain and the Republicans will be permanently in power where it matters.
This has been going on for about 150 years in bursts. I don’t think Trump initiated it just now, but he certainly set the scene for it. It’s incredible to see how once the bobsleigh started it’s run down the political Cresta Run just how many people managed to leap on board. I see further up the page a mention of “questionable IQs” so true.