Donald Trump Jr. is expected to testify on Wednesday in the state of New York’s civil fraud trial against the Trump Organization, which is accused of wildly inflating the value of assets to banks and investors.
Before junior takes the hot seat, investment banker Michiel McCarty is expected to testify as an expert witness for the state. Trump’s defense team has been trying to block his testimony, but Judge Arthur Engoron ruled in favor of the state.
McCarty’s testimony follows Tuesday’s testimony from David Orowitz, a former Trump Organization vice president who described Ivanka Trump’s “significant involvement” in loan negotiations.
Reporters we will be following throughout the day for their live coverage from New York:
Lisa Rubin – MSNBC legal analyst
Henry Rosoff – Brooklyn political reporter for PIX11
Erica Orden – Politico Senior Reporter
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And now Robert and Habba are up too, and Habba accuses Faherty of testifying, to which she takes umbrage. Engoron says not every part of the statement of financial condition is relevant.
— Lisa Rubin (@lawofruby) November 1, 2023
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Faherty continues to ask about how Jr. reported back to the Trump Org. that licensing and management deals for which TTT Consulting was paid were struck. He does not recall.
— Lisa Rubin (@lawofruby) November 1, 2023
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Trump knows he is cornered. He becomes defensive, saying he depended not only on the “intimate knowledge” of Mazars but that of Weisselberg, who he describes as an accountant. (The answer is struck because it was “all over the place.”)
— Lisa Rubin (@lawofruby) November 1, 2023
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Faherty then directs him to the portion of the 2017 statement dealing with real estate licensing and developments, the $246 million value of which was based on an assessment by the trustees, in conjunction with the professionals they hired.
— Lisa Rubin (@lawofruby) November 1, 2023
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But he does not recall whether he did or not.
— Lisa Rubin (@lawofruby) November 1, 2023
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Trump has no knowledge whether he receives distributions to this day from TTT. And we’re done for the day.
— Lisa Rubin (@lawofruby) November 1, 2023
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He does not recall anyone serving as a trustee with him other than Weisselberg or his dad. Eric, for example, was not a trustee, but he had authority to do things within the Trump Org. and Jr. would have consulted him on projects where Eric had greater involvement.
— Lisa Rubin (@lawofruby) November 1, 2023
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(This is smart on the AG’s behalf. They know the Trumps are self-aggrandizing and will claim broad expertise.)
— Lisa Rubin (@lawofruby) November 1, 2023
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And Kise is now on his feet, objecting that TTT Consulting is irrelevant to this case and asked that the AG move it along. Engoron echoes that request—but it’s not clear anything must or will change.
— Lisa Rubin (@lawofruby) November 1, 2023
We’re back.
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Now the AG’s Colleen Faherty is showing Trump Jr. a cover email from Feb. 2022 between Alan Rosen, a Trump Org lawyer, and Alan Garten, the org’s general counsel, attaching trust-related docs.
— Lisa Rubin (@lawofruby) November 1, 2023
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The document reflects that Trump Jr. would resume his role as trustee six months later on July 7, 2021. But Trump has no memory of not serving as trustee or being restored.
— Lisa Rubin (@lawofruby) November 1, 2023
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Trump is shown a new document starting with an email from Sherri Dillon, a prior outside tax counsel to the Org. and was counsel to the trustees. Trump said, “I believe she set it up.”
— Lisa Rubin (@lawofruby) November 1, 2023
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(Trump Jr. was well prepped: He says he won’t speculate about notes on a document he did not receive and has not previously seen.)
— Lisa Rubin (@lawofruby) November 1, 2023
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Faherty probes the timing of Allen Weisselberg’s departure from the Trump Organization.
Trump Jr. said it was after his indictment, but he says he doesn’t know when.
Q: Did you ask him to leave?
A: I did not.Q: Did your brother ask him to leave?
A: I’m not sure.— Adam Klasfeld (@KlasfeldReports) November 1, 2023
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He claims he doesn’t know the specifics of why Weisselberg is no longer employed there and didn’t terminate him. Whether Eric did, he does not know.
— Lisa Rubin (@lawofruby) November 1, 2023
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Trump, Jr. is presented with a document he says he does not recognize. It is a power of attorney for his father, as the principal, that was executed in March 2017.
— Lisa Rubin (@lawofruby) November 1, 2023
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Asked if he’s familiar with rent-stabilization law, Don Jr says: “I was then. I probably forgot most of it now.”
— Adam Klasfeld (@KlasfeldReports) November 1, 2023
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At some point, he became an Executive Vice President at the Trump Org., although he could not pinpoint when. He confirmed that he has served in that capacity since 2011.
— Lisa Rubin (@lawofruby) November 1, 2023
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Still, he initially could not list any activities for which he needed Weisselberg’s authority from 2011-2013. Pressed, he said he would not have done a refinance without Weisselberg but would not have sought Weisselberg’s approval for a licensing deal. (He could not recall any…
— Lisa Rubin (@lawofruby) November 1, 2023
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In 2017, he said, they stopped reporting to his father with respect to decisions involving the business. That’s when a combination of he, Eric, and Weisselberg took control, he testified, but did not remember any changes in title to reflect those changes.
— Lisa Rubin (@lawofruby) November 1, 2023
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Asked who his employer is, Trump Jr. replies: “I believe it’s still Trump Payroll Corp.”
— Adam Klasfeld (@KlasfeldReports) November 1, 2023
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Jr. says he began his employment at the Trump Org. in 2001 as a project manager for a Hudson Waterfront Associates project.
— Lisa Rubin (@lawofruby) November 1, 2023
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He then handled construction and development at Trump Park Avenue, including overseeing the banking relationship there. There are certain units there that are “hotel stabilized,” or rent stabilized as a matter of law, he testified.
— Lisa Rubin (@lawofruby) November 1, 2023
And here we go.
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Pool photographers are being admitted to take the requisite pictures of Trump, Jr. Meanwhile, Chris Kise, who participated in today’s 1 pm hearing in the classified documents case remotely, is back in the courtroom.
— Lisa Rubin (@lawofruby) November 1, 2023
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Trump testifies that he received a B.S. in real estate finance and marketing from the Wharton School of the University of Pennsylvania. He also holds a license as a real estate broker, as sponsored by Trump International Realty, the organization’s brokerage arm.
— Lisa Rubin (@lawofruby) November 1, 2023
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He also spent the bulk of the last hour establishing what assets were excluded from the collateral posted for certain loans and therefore reduced the amount of Trump’s personal guarantee in ways that should have also reduced McCarty’s differential between the real interest rate…
— Lisa Rubin (@lawofruby) November 1, 2023
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In any event, McCarty says, the testimony of David Williams, a DB exec, and DB’s pricing grid for different risk profiles/kinds of loans were not material to his analysis. He says he also did not consider whether DB’s pricing grid would have remained the same even if his net…
— Lisa Rubin (@lawofruby) November 1, 2023
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Doral, 2021
Actual Int % – 1.8318%
CRE Int % – 10.0000%
Term – 8/11/23
Loan Amt Adj – $125,000,000
Interest delta – $10,210,313— Molly Crane-Newman (@molcranenewman) November 1, 2023
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The Old Post Office, 2020
Actual Int % – 1.9348%
CRE Int % – $8.0000%
Term – 8/11/24
Loan Amt Adj – $170,000,000
Interest delta – $10,310,840— Molly Crane-Newman (@molcranenewman) November 1, 2023
Trump attorney Christopher Kise is objecting to McCarty’s assessment.
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They did not, he maintains, so it’s inappropriate for McCarty to reconstruct that decision now. Kevin Wallace counters that the AG has already proven persistent, repeated fraud in the statements of financial condition, a conclusion Deutsche Bank has not disputed.
— Lisa Rubin (@lawofruby) November 1, 2023
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Judge Engoron wants more clarity as to what McCarty relied on in reaching his conclusions. McCarty says he based his calculation on the same term and amount of the loan; what changed is that he used a different interest rate based on what DB gave other parties in the market for…
— Lisa Rubin (@lawofruby) November 1, 2023
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Had Trump’s statements of financial condition more accurately reflected the true value of his assets and liabilities, McCarty explains, the risk premiums for multiple loans would have increased as well. He cites the Doral, the Old Post Office, and Trump Chicago as three examples.
— Lisa Rubin (@lawofruby) November 1, 2023
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He acknowledges that banks have historically been willing to loan to high net-worth individuals at low rates because the loans are usually repaid. He also said it’s hard to find “direct comparables” in terms of loans for major real-estate-related transactions posing similar…
— Lisa Rubin (@lawofruby) November 1, 2023
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2/ Before Don Jr., we’ll see 2 others on the stand. “Witness entering!” an officer yells out. In walks David Orowitz, a former Trump employee, who was involved in the bid to secure a lease to Washington DC’s Old Post Office, which Trump spent more than $200M turning into a hotel.
— Dan Alexander (@DanAlexander21) November 1, 2023
And away we go!
