A8 EZ RE THE WASHINGTON POST.TUESDAY, NOVEMBER 23 , 2021
BY DAVID A. FAHRENTHOLD,
JONATHAN O’CONNELL,
JOSH DAWSEY
AND SHAYNA JACOBSThe Trump Organization owns
an office building at 40 Wall
Street in Manhattan. In 2012,
when the company was listing its
assets for potential lenders, it
said the building was worth
$527 million — which would
make it among the most valuable
in New York.
But just a few months later, the
Trump Organization told proper-
ty tax officials that the entire
70-story building was worth less
than a high-end Manhattan con-
do: just $16.7 million, according
to newly released city records.
That was less than one-thirtieth
the amount it had claimed the
year before.
That property is now under
scrutiny from the Manhattan dis-
trict attorney and New York at-
torney general, along with sev-
eral others like it for which the
Trump Organization gave vastly
different value estimates, accord-
ing to public records and people
familiar with their investigations
who spoke on the condition of
anonymity to discuss ongoing
inquiries.
After the indictment of the
Trump Organization’s chief fi-
nancial officer this summer for
income tax fraud, prosecutors
now appear to be examining
whether the company broke the
law by providing low values to
property tax officers, while using
high ones to garner tax breaks or
impress lenders.
New York Attorney General
Letitia James (D) has said she is
considering a lawsuit, and pros-
ecutors in the Manhattan District
Attorney’s Office have also con-
vened a new grand jury, which
could vote on criminal charges,
according to the people familiar
with the investigations.
A mong the other properties
under scrutiny: former president
Donald Trump’s California golf
club, for which he valued the
same parcel of land at $900,0 00
and $25 million depending on
the intended audience, and an
estate in suburban New York, for
which Trump’s valuations ranged
from $56 million up to $291 mil-
lion. The valuations were all giv-
en in the five years before Trump
won the presidency.
Prosecutors appear to have
dug deeply into these properties,
according to court papers and
people familiar with the investi-
gation. They have compiled
reams of emails, planning docu-
ments and financial data, even
seeking the initiation fees Trump
charged golf club members as far
back as a decade ago. In Los
Angeles, they have asked for geol-
ogy reports on the rock layers
under Trump’s course — where
the value was affected by a his-
tory of landslides.
They have also sought detailed
records from two outside compa-
nies that worked with the Trump
Organization to formulate these
valuations: appraisal firm Cush-
man & Wakefield and law firm
Morgan Lewis. In court filings,
prosecutors have referred to
emails in which they said Trump
executives or a Morgan Lewis
lawyer pushed appraisers to
change their findings. Neither
Morgan Lewis nor Cushman &
Wakefield responded to ques-
tions.
Real estate appraisers said it
was highly unusual for any prop-
erty owner to give such widely
different values for the same
property during the same time
period.
“This is way, way beyond any-
thing that’s believable,” said
Norm Miller, a professor of real
estate finance at the University of
San Diego who has appraised
properties for 50 years. “I’ve nev-
er seen anything with a gap that
extreme.”
But extreme is not the same as
illegal. Legal experts said that if
prosecutors wish to prove a
crime, they will need to do more
than simply prove Trump’s valua-
tions were wrong.
“Is it an overly optimistic? Is it
an enthusiastic perception?” said
Robert Masters, a former top aide
to the district attorney in Queens.
“Does that make it a lie?”
Masters said prosecutors
would probably need to show
that the figures were wrong on
purpose — falsified deliberately,
with an intent to deceive a lender
or the government. Masters said
that may require a witness on the
inside, who could explain the
decision-making behind the
numbers.
“Is there somebody there who
can translate the books?” he said.
The Trump Organization said
in a statement on Monday that
prosecutors should focus on oth-
er problems in New York. Eric
Trump, the former president’s
son and a top Trump Organiza-
tion executive, also called the
investigations an example of the
“weaponization of political pros-
ecutors.” “It is eroding Ameri-
cans’ confidence in the legal sys-
tem and it has to stop,” Eric
Trump wrote in a statement.
This summer, Trump’s long-
time CFO Allen Weisselberg and
two Trump companies were in-
dicted on charges of felony tax
fraud. Prosecutors allege Weis-
selberg deceived income tax au-
thorities by hiding some of the
pay and benefits that he and
other company executives re-
ceived.
Trump himself was not ac-
cused of wrongdoing in that case.
Weisselberg and the two compa-
nies have pleaded not guilty, and
a trial is not expected until late
next year.
Now, the investigations into
Trump’s company appear to be
undergoing a shift — both in
leadership and in focus.
Manhattan District Attorney
Cyrus R. Vance Jr. (D), who led
the criminal side of the investiga-
tion for three years, declined to
run for reelection. He will be
replaced at year’s end by Demo-
crat Alvin Bragg.
James, who is running a civil
investigation of Trump’s compa-
ny and assisting with Vance’s
criminal probe, is staying. For
now. She already has entered thegovernor’s race for 2022.
Vance, Bragg and James all
declined to comment for this
article.
In recent months, investiga-
tors have looked beyond the in-
come tax issues that were the
focus of Weisselberg’s indict-
ment, according to public rec-
ords and people familiar with the
investigation.
They have appeared to focus
on allegations about the values of
Trump’s properties that were
first raised publicly by former
Trump lawyer and “fixer” Mi-
chael Cohen in his testimony to
Congress in 2019. Cohen said
Trump used these values to de-
ceive, inflating or deflating the
same asset to get advantages he
didn’t deserve. “Mr. Trump is a
cheat,” Cohen said then. Trump
responded by noting that Cohen
had pleaded guilty to providing
false testimony to Congress in the
past.
James’s office has even com-
missioned its own appraisals of
some Trump properties, to pro-
vide a standard to which they
could compare Trump’s valua-
tions, according to two people
familiar with the investigation.
Investigators seem focused on
the valuations of at least four
Trump properties, according to
court filings and people familiar
with the investigation.
One is the office building at 40
Wall Street. Another is in Califor-
nia, where Trump owns a golf
course atop oceanfront cliffs in
the Los Angeles suburb of Ran-
cho Palos Verdes.
The cliffs have a history of
landslides: In 1999, when some-
body else owned the course, a
2,000-foot slide pulled the 18th
hole into the ocean. After Trump
bought the land in 2002, he
sought to make extra money by
building homes along the course
— but city officials blocked those
plans in one section of the course,
saying a layer of slippery ash
inside the cliffs made it vulner-
able to slide again.
After that, records show,Trump’s company seemed to tell
two divergent stories about the
same land.
In filings with property tax
authorities — when it was advan-
tageous for the land to be worth
less — Trump seemed to bow to
the difficulty of developing the
land. In 2013, he told the county
tax assessor that the entire 17-
acre parcel was worth just
$900,000, less than a single
home in that neighborhood.
But when it was advantageous
for the land to be worth more,
Trump’s company said it was.
Twenty-seven times more.
That valuation came in 2014,
as Trump’s company sought to
get a “conservation easement” on
that same parcel, formally giving
up the right to build homes there.
For tax purposes, an easement
works like a charitable donation:
Instead of donating money,
Trump was donating value — the
money that the land would have
brought him, if he’d built homes
on it.
The bigger that value was, the
bigger the tax deduction could
be. In that case, Trump’s compa-
ny, relying on an appraisal from
Cushman & Wakefield, said the
plot was worth at least $25 mil-
lion.
In 2012, Trump’s “Statement of
Financial Condition”— a docu-
ment that is typically used to
demonstrate value to potential
lenders — said the course had “
home sites available for sale,”
indicating a potential source of
future cash flow.
At the time, however, the club
had only received approvals for
36 home sites and six of them had
already been sold, according to
public records.
In May — after Reuters pub-
lished an article on the club’s
fluctuating valuations — investi-
gators from James’s office con-
tacted the city of Rancho Palos
Verdes. They asked for hundreds
of thousands of pages of docu-
ments, covering the history of the
club’s efforts to get home lots
approved, according to an emailexchange released by the city’s
lawyers.
They also wanted reports on
the geology under the course —
the factor that had limited
Trump’s ability to develop it. “We
will take any reports you were
able to find issued from the year
2000 and forward,” a staffer for
James wrote, according to an
email that the city’s attorneys
provided The Washington Post.
James’s office has said it has
jurisdiction to investigate this
California course because its
owner, Trump, was a resident of
New York at the time.
Investigators have also probed
two different Trump properties
in Westchester County, N.Y., just
north of Manhattan.
One of them is a 212-acre
estate called Seven Springs. As in
California, Trump spent years
trying to get approval to build
new homes on this land. Then he
gave up those rights, again using
a conservation easement to “do-
nate” the value he hadn’t yet been
able to create.
To get that easement, Trump’s
company got another appraisal
from Cushman & Wakefield,
which valued the lost develop-
ment rights at $21 million, ac-
cording to copy of the appraisal
obtained by The Post. In court
filings last year, James’s office
alleged that Eric Trump, the for-
mer president’s son, had pushed
his attorneys and the appraisers
to increase their original esti-
mate.
Also in Westchester County,
investigators have examined
Trump’s golf club in the town of
Briarcliff Manor.
In 2015, his company sued the
local property tax authorities to
lower that club’s valuation, say-
ing the property was worth just
$1.4 million. If the town had
agreed, that would have reduced
the club’s tax bill by 90 percent.
But in the same year, when
Trump filed his financial disclo-
sures as a candidate for presi-
dent, he listed the club’s value as
being more than 35 times higher:“Over $50 million.”
Jeffrey Dugas, who later ap-
praised that club on behalf of
Trump’s company, said neither
number was accurate in his opin-
ion. But, Dugas said, the huge gap
between the two numbers was
not — to him — evidence of a
crime.
He said the two numbers were
probably prepared for different
audiences, with different meth-
odologies.
The $1.4 million figure, he
said, may have been a lowball
estimate from Trump’s lawyer, a
kind of opening offer to start a
negotiation with local tax author-
ities. And the $50 million figure
may have been Trump’s own
guess as to what the course would
be worth, if he ever got approvals
to build homes on it.
“Neither of them go together,”
Dugas said, calling them “apples
and oranges.” Trump’s lawyer in
that property tax case did not
respond to a request for com-
ment.
The New York Times reported
last month that Westchester
County District Attorney Miriam
“Mimi” Rocah (D), is also investi-
gating that course, but Rocah’s
office has not commented.
The full scope of the investiga-
tions into the Trump Organiza-
tion’s valuations is unclear, hid-
den by the secrecy of a grand jury.
New York law makes it a felony
to falsify business records, to file
false documents with the govern-
ment or to make false statements
on a sworn document.
But in every case, those laws
require proof of intent: Prosecu-
tors have to show that someone
made the false statements know-
ingly, in an effort to deceive or to
cover up a crime.
Legal experts said prosecutors
could face an especially high
burden when applying these laws
to the real estate industry —
where the value of any property is
always somewhat subjective, and
where some amount of self-serv-
ing puffery is the norm.
That opens the door to an
everybody-does-it defense.
“I’m doing what was expected.
I’m not fooling anybody. I’m
working within a system where
this is the norm,” said Rebecca
Roiphe, a former prosecutor and
a professor at New York Law
School, playing out a hypotheti-
cal argument.
Another possible defense:
Trump’s company could say he
didn’t set these valuations him-
self but relied on outside experts
such as appraisers, accountants
or lawyers. In this case, prosecu-
tors have seemed to focus on
what Trump or his executives
told those experts, and when they
pushed them to change their
original opinion.
Samuel W. Buell, a law profes-
sor at Duke University, said pros-
ecutors often look for evidence
that their targets misled their
own experts. That negates the
“gatekeeper” defense, he said,
and may show evidence of an
intent to mislead.
“You lied to the gatekeeper,
and that’s the only reason they let
you through,” Buell said.
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[email protected]N.Y. probes Trump Organization’s real estate valuations
JABIN BOTSFORD/THE WASHINGTON POST
Former president Donald Trump speaks in October at the Iowa State Fairgrounds i n Des Moines.
His business is under scrutiny from the Manhattan district attorney and New York attorney general.Records show widely
different estimates for
the same propertiesBY AMY B WANG
AND MICHAEL SCHERERRepublican Sean Parnell, who
was endorsed by former president
Donald Trump in a closely
watched Pennsylvania Senate
race, said Monday he will not con-
tinue with his campaign, hours
after it was made public that a
judge had granted his estranged
wife primary custody of the cou-
ple’s three children.
The judge’s order last week,
made public in court documents
Monday, outlined in detail the al-
legations of domestic and other
abuse Laurie Snell had made
against her estranged husband,
and concluded that “Parnell did
commit some acts of abuse in the
past.” Parnell has denied the alle-
gations.
In his decision to award pri-
mary physical and sole legal cus-
tody of the children to Snell, Sen-
ior Judge James Arner deemed
Snell “the more credible witness”
who “can truthfully give regular
status reports to Sean Parnell and,
as may be needed, to the court.”
Snell will have the sole right to
make major decisions on behalf of
the children, Arner said. Parnell
will have partial physical custody
of the children on three weekends
each month. Parnell and Snell sep-
arated in 2018, according to court
documents.
In the order, the judge said he
had also factored in Parnell’s Sen-
ate run — which would have re-
quired frequent travel as he cam-
paigned — and wrote that Parnell
“expects to win the election and to
reside parts of the year in Wash-
ington, D.C.” Snell, meanwhile,
has maintained her residence in
the area where the children are
already attending school.
Parnell said in a statement that
he was “devastated by the deci-
sion” and that he intends to appeal
the judge’s ruling.
“I strongly disagree with the
ruling today,” Parnell said in a
statement. “ There is nothing more
important t o me than my c hildren,
and while I plan to ask the court to
reconsider, I can’t continue with a
Senate campaign. My focus right
now is 100% on my children, and I
want them to know I do not have
any other priorities and will never
stop fighting for them.”
Snell has accused Parnell of
multiple forms of abuse before
their separation, including chok-
ing her and hitting one of their
children so hard he left a “full
handprint” mark on the child’s
back.
Parnell has denied her allega-
tions as “complete fabrications.”
In a court hearing earlier this
month, he countered with claims
under oath that she physically
abused him, although he declinedto offer specifics.
In his decision, Arner wrote
that he found Parnell’s testimony
“less credible,” citing his demean-
or and dress in the courtroom and
his tendency to focus on his attor-
neys and the news media while
testifying, rather than looking at
the judge.
“He was somewhat evasive.
When weighing his position
against Laurie Snell’s statements
of detailed facts about many inci-
dents, Sean Parnell’s position is
less believable.”
In May, Parnell launched his
campaign for an open Senate seat
that will be vacated by Sen. Patrick
J. Toomey (R-Pa.), who is retiring
at the end of his term next year.
Parnell, a former U.S. Army Rang-er, ran for Congress in 2020 in the
Pittsburgh area, losing by about
two percentage points.
Trump endorsed Parnell in Sep-
tember while also continuing to
assert his baseless claims that the
2020 election was rigged. Trump
claimed that Parnell had been
“robbed in his congressional run
in the Crime of the Century — the
2020 President Election Scam.”
There has been no evidence of
widespread voter fraud that
would have changed the results of
the 2020 presidential election.
However, other key members of
the GOP establishment had not
fully thrown their support behind
Parnell. Sen. Rick Scott (R-Fla.),
chairman of the National Republi-
can Senatorial Committee, de-clined to say whether Parnell was
the right candidate for the job
when asked earlier this month
about him and the abuse allega-
tions.
There was broad agreement be-
tween Parnell and his campaign
team about ending the campaign
after the judge’s ruling, according
to a person familiar with the deci-
sion who spoke on the condition of
anonymity to reveal internal dis-
cussions.
President Biden won Pennsyl-
vania in 2020, making the battle-
ground state one of the better op-
portunities for Democrats to pick
up a Senate seat in 2022. Parnell’s
departure further upends a Re-
publican primary that was already
in flux in recent months, not only
because of Parnell’s legal challeng-
es.
Carla Sands, a Republican for-
mer U.S. ambassador to Denmark
who has given her campaign more
than $3 million, brought on a new
campaign team in September af-
ter she did not win Trump’s en-
dorsement. Businessman Jeff Bar-
tos, who loaned his campaign
$1.2 million, spoke out against
Parnell, calling him unelectable in
the state in part because of the
legal conflicts with Snell.
Mehmet Oz, who rose to fame as
“Dr. Oz” on “The Oprah Winfrey
Show,” has also been exploring a
Republican campaign for Senate
in Pennsylvania, according to peo-
ple familiar with the plans. David
McCormick, a former Treasury
Department official who now runsthe Bridgewater hedge fund, has
also been approached about join-
ing the race. McCormick and his
wife, former Trump deputy na-
tional security adviser Dina Pow-
ell, recently had dinner with
Trump, according to people famil-
iar with the meeting who spoke on
the condition of anonymity be-
cause the meeting was private.
Upon news of Parnell’s deci-
sion, Democrats said Pennsylva-
nia Republicans were “in chaos.”
“This development highlights
the weakness of leading GOP Sen-
ate candidates in key battle-
grounds,” Democratic Senatorial
Campaign Committee spokesman
David Bergstein said. “And the vi-
cious infighting amongst Republi-
cans in Pennsylvania is sure to
intensify, just like it has in Senate
races across the country.”
However, the Democratic side
of the race is also up in the air, with
two major candidates offering
starkly different choices. Lt. Gov.
John Fetterman was a supporter
of Sen. Bernie Sanders (I-Vt.) in
the 2016 Democratic primary and
received Sanders’s endorsement
in his last statewide race. Marine
veteran and congressman Conor
Lamb, by contrast, is a member of
the moderate Problem Solvers
Caucus and has received plaudits
from Biden, who compared him to
his late son Beau in temperament
in his first congressional race.
[email protected]
[email protected]Alice Crites contributed to this report.Parnell ends U.S. Senate bid in Pa. after wife gets sole custody of children
KEITH SRAKOCIC/ASSOCIATED PRESS
Republican Sean Parnell speaks before a 2020 campaign rally with
President Donald Trump in Moon Township, Pa.The Trump-endorsed
Republican was accused
of domestic abuse