Trump Organization and Top Executive Are Indicted
in Tax Investigation
The former president’s family business and its chief
financial officer, Allen Weisselberg, are expected to appear in court on
Thursday.
Allen H. Weisselberg, right, has been a loyal Trump
employee for decades. “Allen was good at doing what Donald wanted him to do,”
said a former Trump Organization executive.
By Michael
Rothfeld, Jonah E. Bromwich and Ben Protess
June 30,
2021
A grand
jury in Manhattan has indicted Donald J. Trump’s family business, the Trump
Organization, and one of its top executives in connection with a tax
investigation into fringe benefits handed out at the company, people familiar
with the matter said on Wednesday.
The
specific charges against the company and its chief financial officer, Allen H.
Weisselberg, were not immediately clear. The indictment was expected to be
unsealed Thursday afternoon after Mr. Weisselberg and lawyers for the Trump
Organization appear in court.
But
prosecutors in the Manhattan district attorney’s office have been examining
bonuses and luxury perks that Mr. Weisselberg received — including an apartment
in Manhattan, leased Mercedes-Benz cars and private school tuition for at least
one of his grandchildren — and whether taxes should have been paid on those
benefits.
The
indictment is a major development in the investigation led by the district
attorney, Cyrus R. Vance, Jr., who has been conducting a sweeping inquiry into
Mr. Trump and his business dealings along with the New York State attorney
general, Letitia James.
The charges
will deal a blow to Mr. Trump, who has denounced the investigation as political
persecution. Although he could rally supporters around the idea that he is the
victim of what he has called a “witch hunt,” defending his company on criminal
charges could be an expensive distraction as he considers another presidential
run.
The indictment
will also amplify the pressure that prosecutors have placed on Mr. Weisselberg
for months to turn on Mr. Trump and cooperate with their ongoing investigation.
In nearly a half-century of service to Mr. Trump’s family businesses, Mr.
Weisselberg, 73, has survived — and thrived — by anticipating and carrying out
his boss’s dictates in a zealous mission to protect the bottom line.
Interviews
with 18 current and former associates of Mr. Weisselberg, as well as a review
of legal filings, financial records and other documents, paint a portrait of a
man whose unflinching devotion to Mr. Trump will now be put to the test.
“Allen is a
soldier,” said John Burke, a former Trump executive who worked with Mr.
Weisselberg in the early 1990s. “Allen was good at doing what Donald wanted him
to do.”
A
bookkeeper by training who grew up in Brooklyn, Mr. Weisselberg rose steadily
within the Trump Organization to become perhaps the former president’s most
trusted business adviser. Over decades, Mr. Weisselberg’s personal and family
life became increasingly fused with the company and with Mr. Trump, who is just
14 months older.
After
raising their sons on Long Island, Mr. Weisselberg and his wife moved into a
Trump-branded building on Manhattan’s West Side, where they lived rent-free for
years. He bought a home in South Florida, not far from Mr. Trump’s Mar-a-Lago
resort, and traveled there and back on weekends on Mr. Trump’s jet. His older
son, Barry, went to work for the company managing Wollman Rink in Central Park
and acted as the D.J. for Mr. Trump’s Christmas parties, where Allen
Weisselberg let loose on the dance floor, according to people who attended. In
2004, Mr. Weisselberg appeared in an episode of “The Apprentice,” Mr. Trump’s
reality television show.
“They are
like Batman and Robin,” said Barry Weisselberg’s ex-wife, Jennifer, who has
aided Mr. Vance’s investigation after a contentious divorce. “They’re a team.
They’re not best friends. They don’t spend all their time together, but the
world became so insular for Allen that he did not know anything else.”
Mr.
Weisselberg had become so woven into the fabric of the Trump Organization that
when Mr. Trump moved into the White House in 2017, he entrusted Mr.
Weisselberg, along with the former president’s adult sons, with running his
company. His earnings reflected his importance: Between 2007 and 2017, his
total pay averaged nearly $800,000 a year; in 2018, he earned more than
$977,000 in salary and deferred compensation, according to tax return data
obtained by The New York Times as part of an investigation published last year.
A lawyer
for Mr. Weisselberg, Mary E. Mulligan, declined to comment. A lawyer for the
Trump Organization could not immediately be reached for comment.
Even before
the indictment, Mr. Weisselberg had in recent years been drawn publicly into
Mr. Trump’s controversies and scandals, including investigations over the
misuse of charitable funds by the Donald J. Trump Foundation and payments to
women on Mr. Trump’s behalf to buy their silence about affairs they said they
had with Mr. Trump.
Mr. Trump’s
former lawyer, Michael D. Cohen, testified in Congress that Mr. Weisselberg had
helped orchestrate a cover-up to reimburse him for a $130,000 payment to the
adult film actress Stormy Daniels, and that together they had concocted phony
valuations of the company’s real estate holdings to suit Mr. Trump’s needs at
any given moment.
Mr.
Weisselberg has maintained that keeping a close eye on the organization’s
finances and accounting had not given him insight into potential malfeasance at
the company. In a 2015 deposition, he made it clear that it was not his job to
ensure that the company complied with the law; it was the job of the Trump
Organization lawyers.
“I’m the
last guy you want to go to for legal advice,” Mr. Weisselberg said in the
testimony, for a class-action lawsuit accusing Trump University of fraudulent
marketing. Mr. Trump eventually settled litigation over the defunct for-profit
venture for $25 million.
For most of
his professional career, Mr. Weisselberg operated behind the scenes, looking
the part of the prototypical accountant: a man of middling height in a
pinstriped or dark suit, with glasses, a mustache and a raspy voice. He seemed
to be always at work, from early in the morning to late at night, and almost
never took vacations, by his own account and those of others. Employees
entering Mr. Trump’s office often found Mr. Weisselberg already inside, seated
in the chair to the right facing the boss’s desk.
Mr.
Weisselberg studied finance and accounting at Pace College and, after a brief
stint as a teacher and at small financial firms, began working in 1973 for Mr.
Trump’s father, Fred, then a prominent developer in Brooklyn and Queens. A few
years later, he took on projects at night and on weekends for Donald Trump, who
was establishing his own presence as a developer in Manhattan. Mr. Weisselberg
joined Donald Trump full-time in 1986, he testified in the 2015 deposition.
In the
early years, he held the title of controller, and eventually, Mr. Trump
elevated him to the loftier post of chief financial officer. Mr. Weisselberg
had a wide portfolio: He established an accounting department at the Trump
Organization, worked on the financing and management of properties and helped
with the company’s and Mr. Trump’s personal tax returns, he has said.
Among the
tasks Mr. Weisselberg attacked with fervor, former employees recalled, was
ensuring that, per Mr. Trump’s direction, no dime left the company’s coffers
unless absolutely necessary.
“He and
Trump were like Frick and Frack when it came to stiffing vendors,” Mr. Cohen —
who at times took on that same role for Mr. Trump — wrote in a book published
last year. Mr. Burke, who served as chief financial officer for Mr. Trump’s
casino business, said any Trump employee who dealt with vendors knew to “squeeze
every penny” out of people, and that Mr. Weisselberg excelled at minimizing and
delaying payment.
In the
office, different sides of Mr. Weisselberg’s personality emerged. With Mr.
Trump and his children, or anyone on his level or higher, he appeared mild-mannered,
even solicitous. When he received good news about some financial matter, he
would hurry down the hall to inform Mr. Trump, said Angel Lopez, who worked in
the Trump Organization’s accounting department between 2007 and 2014.
“He always
wanted to impress Donald Trump,” Mr. Lopez said.
With those
who worked for him, Mr. Weisselberg could be collegial in one moment and
volatile in the next. He would often accompany a few of the men in the
accounting department to buy lunch at the same deli on West 56th Street. But if
he perceived that someone made a mistake, he would yell so loudly he could be
heard from behind his closed door, Mr. Lopez said.
Mr.
Weisselberg acknowledged he could be a “micromanaging” boss.
“People do
know it’s important to involve me when it comes to financial matters,” he said
in the 2015 deposition. “Because later on, if things don’t prove out to be
where they should be, they’ll have to deal with me on answering the question as
to why.”
Mr.
Weisselberg did not flinch when it came to denying raises or cutting bonuses to
achieve Mr. Trump’s ends.
Rana
Williams, who managed Mr. Trump’s sales and leasing division, accused his
company in a 2013 lawsuit of illegally withholding $735,000 from her after the
company reduced agents’ commissions to 25 percent from 35 percent as the
financial crisis unfolded in late 2007.
After her
plea to keep the commissions higher was rejected, she sent a letter explaining
why she would continue to bill Mr. Trump at the 35 percent rate. Mr. Weisselberg
scrawled a note to an assistant at the bottom: “Change Rana’s payment to 25
percent,” he wrote. “Ignore her letter.”
Mr.
Weisselberg said in a deposition for that lawsuit that the company had every
right to cut the commissions and that Ms. Williams had been free to leave. She
testified that she held Mr. Trump responsible. “Allen was delivering a
message,” she said.
The lawsuit
settled on undisclosed terms. Reached by phone this week, Ms. Williams declined
to comment except to say that she is “a fan” of Mr. Weisselberg. She continues
to market multimillion-dollar apartments at Trump Tower in Manhattan, according
to the listing page at her current brokerage.
But more
recently, Mr. Weisselberg’s actions on behalf of Mr. Trump have made him
vulnerable. When federal prosecutors charged Mr. Cohen in 2018 with various
crimes, including campaign finance violations for the payment to Ms. Daniels,
they described Mr. Weisselberg as “Executive-1,” according to people familiar
with the matter who requested anonymity because they were not authorized to
discuss the case. Mr. Weisselberg instructed a subordinate to classify the
reimbursement to Mr. Cohen as legal fees, even though no legal services were
performed, prosecutors wrote.
In his
congressional testimony, Mr. Cohen pinned blame for masking the repayment
scheme on Mr. Weisselberg.
Ultimately,
the federal prosecutors scrutinized whether Mr. Weisselberg had committed
perjury when he told a grand jury that he was unaware that the payment to Mr.
Cohen involved reimbursement for the hush money, according to people with
knowledge of the matter. (A person familiar with Mr. Weisselberg’s account has
said he disputed Mr. Cohen’s assertions that Mr. Trump was involved in the
payment to Ms. Daniels or the reimbursement.)
By July
2019, the investigation appeared to be over, and the federal prosecutors never
accused Mr. Weisselberg of any wrongdoing.
Since then,
Mr. Vance’s investigation has picked up speed, and Mr. Weisselberg has remained
in the public eye.
The ordeal
of living in the cross hairs of a criminal investigation, and seeing his name
in a drumbeat of recent media coverage, has not discouraged Mr. Weisselberg
from working. Over the last few months, he has continued to show up at Trump
Tower, at times coming face-to-face with Mr. Trump.
But now,
the Trump Organization’s lawyers have taken steps to avoid the appearance of
any impropriety. In the past, many of Mr. Trump and Mr. Weisselberg’s
conversations were private and behind closed doors. Now, they are under
instructions to meet in the presence of a witness.
Reporting
was contributed by Russ Buettner, Kate Christobek, Susanne Craig and William K.
Rashbaum. Susan Beachy contributed research.
Michael
Rothfeld is an investigative reporter on the Metro desk and co-author of the
book “The Fixers.” He was part of a team at The Wall Street Journal that won
the 2019 Pulitzer Prize for national reporting for stories about hush money
deals made on behalf of Donald Trump and a federal investigation of the
president's personal lawyer. @mrothfeld
Jonah E.
Bromwich is a courts reporter for the Metro desk. @jonesieman
Ben Protess
is an investigative reporter covering the federal government, law enforcement
and various criminal investigations into former President Trump and his allies.
@benprotess
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