Reprinted with permission from ProPublica.
New York Mayor Bill de Blasio said Friday that he had asked Manhattan’s district attorney to investigate discrepancies ProPublica and WNYC revealed last fall between what President Donald Trump’s company reported in filings to city tax officials and what it reported in loan filings. The discrepancies made his properties seem more profitable to a lender and less profitable to the city’s tax authorities.
After ProPublica published its findings, de Blasio said Friday, the city decided to examine the issues. That process resulted in one matter being turned over to the district attorney in November. De Blasio said he made the referral “because there is a possibility of a criminal act having been committed.” The referral related to Trump’s historic downtown skyscraper at 40 Wall Street, a city spokeswoman added.
De Blasio’s comments came during a conversation with WNYC reporter and “Trump, Inc.” podcast co-host Ilya Marritz on the “Ask the Mayor” segment of “The Brian Lehrer Show.” De Blasio, who ended a presidential bid in September, said Trump’s efforts to avoid taxes have gone beyond the measures taken by most wealthy Americans. He “consistently has believed he was above the law, even before he was president,” de Blasio said. “So this is a real problem, and I think there could be some real exposure here.”
In an emailed statement, a Trump Organization spokeswoman blasted de Blasio for “using the power of his office to try and launch an investigation into his political opponent.” The statement called the allegations “unfounded and clearly motivated by politics.”
A mayoral spokeswoman said that “the Manhattan DA is the proper jurisdiction to investigate these claims, as the city can only review what is directly reported to us. The DA has the jurisdiction to take appropriate steps if they find wrongdoing.”
A spokesman for Manhattan District Attorney Cyrus Vance Jr. declined to comment.
For its October article, ProPublica used New York’s Freedom of Information Law to request records from Trump’s property tax appeals for four buildings, among them 40 Wall Street, Trump Tower and the Trump International Hotel and Tower. ProPublica compared those records with loan documents that became public when Trump’s lender, Ladder Capital, sold the debt on his properties as part of mortgage-backed securities. Both sets of records list multiple real estate and financial metrics, including occupancy, income and expenses.
In the case of 40 Wall Street, for example, documents intended for investors showed a striking rise in occupancy, illustrating the sort of “leasing momentum” that lenders and investors like to see. The company had told a lender that 40 Wall Street was 58.9 percent leased on Dec. 31, 2012, rising to 95 percent a few years later. But in filings with tax officials, the company reported it was already 81 percent leased as of Jan. 5, 2013.
A refinancing occurred in 2015, but as of 2018, the building had not met underwriters’ profit expectations, spending three months on a servicer’s “watch list” in 2016 because of lagging profit.
The story also found that in the lender’s reports, the building cited lower expenditures for property insurance and a ground lease than it did in filings made to tax officials some years. That made 40 Wall Street appear more profitable to lenders than it did to tax authorities.
A subsequent ProPublica story found that Trump Tower’s tax and loan filings also exhibited inconsistencies, even as to how much space the Trump’s company occupied in Trump Tower. The tower’s overall occupancy rate during three consecutive years appeared 11, 16 and 16 percentage points higher in filings to a lender than in reports to city tax officials, records showed.
Trump Organization attributed the discrepancies to differences in the reporting requirements for preparing tax submissions and loan submissions.
The city’s Tax Commission, which handles property tax appeals, also reviewed submissions by Trump’s company for space it owns in the Trump International Hotel and Tower, a person knowledgeable about the commission said. Trump’s company had failed to report income from antennae it rents on the roof. The commission’s examination, according to the person, found no problem.
Last year, former Trump lawyer Michael Cohen, who is now in prison, testified before Congress that Trump sometimes boosted the value of his assets in documents given to lenders in order to secure loans and reduced those values to lower their tax value. The Trump Organization and Trump himself are fighting multiple subpoenas for financial and tax records.
Photo Credit: Gage Skidmore