Why is Trump Keeping Two Sets of Financial Records for His Business Deals?

Because Trump is a truth-teller. And a good businessman, or something.

From Buzzfeed News:

One of Donald Trump’s companies prepared financial estimates for its lenders and investors that were “rosier” than the projections it used internally, a financial analyst for the company said in a deposition obtained by BuzzFeed News.

The testimony concerns Trump’s $200 million project to transform the Old Post Office building — a taxpayer-owned landmark just five blocks from White House — into a luxury hotel. The company developing the hotel is owned by Trump and three of his children, Ivanka, Donald Jr., and Eric.

Raymond Flores, a financial analyst, testified that lenders were sold a bill of goods (kind of like Republican voters) that promised the project could draw millions more in revenue that what the internal numbers said. For those within Trump’s organization, the numbers tended to be a bit more muted.

In other words, the Trump-backed organization pushing this project had no reasonable expectation of the level of success they promised, based on their own findings, but misrepresented the earning potential of the project, in order to get money.

Representatives from the Trump campaign and the Trump Organization did not respond to requests for comment Friday evening. But earlier this week, before the full depositions were released, a spokesperson for the Trump Organization emailed BuzzFeed News the following statement: “Because no one can predict the future, it is standard practice in virtually every industry for businesses to run multiple financial models analyzing projected performance based on varying outcomes. Once again, this is yet another example of the media attempting to make something out of nothing.”

Financial experts say many companies prepare multiple sets of projections, and there’s nothing inherently illegal about that. The potential trouble arises when projections are used to misrepresent what management knows to be true.

That would be lying. The one thing Trump is actually good at.

From a legal perspective, a projection about the future is more opinion than fact, said Robert Bartlett, a professor at the University of California Berkeley School of Law who specializes in securities regulation and capital markets. Still, he added, the existence of two sets of books could help illuminate the matter.

“It smells a little fishy,” he said. “If the internal set of books was what they held out to themselves as the true and likely scenario, then that would seem to be circumstantial evidence that the rosy projections were not honestly held projections.”

Flores was speaking in a deposition in May by the lawyers for chef Geoffrey Zakarian. He’s a celebrity chef who pulled out of the hotel project when he took offense to Trump’s words about Mexicans. Trump’s lawyers sought to have the testimony kept under wraps, but Buzzfeed News has filed a motion to have that testimony released.

At one point, a lawyer representing Zakarian asks Flores about exactly how “heightened” the lender-focused projections were. The lawyer said that the “current model” lists room revenue “at $40 million and change. And under the base model that you said was the rosier or lender-focused projections, you show room revenue at roughly $10 million more, or $50 million and change. Correct?”

Flores responded: “Looking specifically at Year 2018, yes.”

Flores went on to acknowledge that food and beverage revenue was $15.7 million for the “current model” versus “roughly $32.5 million” for the lender-focused projections.

The revelation about the “rosier” financial estimates given to lenders was one of those things Trump’s lawyers sought to keep quiet from the media, but on Thursday night, a judge ruled that Trump’s lawyers had failed to meet the legal standard necessary to keep the information out of the hands of the media, per the Freedom of Information Act.

So Trump is willing to say anything to get money for his projects, and anything to get voters sucked in, even as his inner circle knows better.

There’s a lesson in this, somewhere, but we may not see it until after the general election.

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