Yahoo Finance Trump’s new image: Corporate cheat
When Donald Trump first ran for president in 2016, he pitched himself as a polished businessman who would run the country with the same aplomb he applied to the gilded company that made him a billionaire, the Trump Organization.
Eight years later, in his third presidential campaign, Trump is a convicted felon, snared by his own shoddy business practices. A series of media exposés, civil and criminal trials, and other investigations has revealed Trump to be a fraudster who has repeatedly pushed the boundaries of legality in his business career and is now paying the price.
The latest and biggest bombshell is the May 30 conviction of Trump by a New York jury on 34 counts related to falsifying business records as part of the Stormy Daniels saga that goes all the way back to 2006.
Trump's alleged affair with Daniels occurred at a celebrity golf tournament in California while he was married to his current wife Melania Trump. Daniels threatened to go public with the story when Trump ran for president 10 years later, in 2016. So Trump and some aides paid her $130,000 to keep quiet, which she did. The story only became public in 2018 as a result of dogged reporting by the Wall Street Journal.
Trump’s fling with Daniels wasn’t illegal. Nor was the “hush money” payment buying her silence. That’s not what the New York City district attorney charged Trump for.
The DA charged Trump with falsifying business records because he disguised the payments as legal disbursements on his company’s books. Trump’s lawyer at the time, Michael Cohen, made the $130,000 payment to Daniels out of his own funds in 2016, and Trump paid him back, with additions that added up to $420,000. Cohen got the payments through a series of checks Trump signed in 2017. Those checks accounted for 34 different accounting entries, which is why there were 34 charges. The jury found Trump guilty of a felony in every instance.
Most Americans haven’t been closely following the NYC trial, and some may wonder what all the hoopla is about since there’s nothing new about the Daniels affair. What is new, however, is the growing body of evidence about Trump’s fraudulent habits and the tarnish it adds to his reputation as a businessman.
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Last year, the New York state attorney general prevailed in a civil lawsuit charging Trump with overvaluing many of the properties in his portfolio, some by as much as 400%. The overvalued assets included his Trump Tower residence, a Wall Street office building, a Bedford, N.Y., estate, three golf clubs, his Mar-a-Lago club, a partnership deal with the developer Vornado, and other properties. The bogus valuations helped Trump get sweetheart deals on bank loans and insurance policies, plus it allowed him to claim a higher net worth in the billionaire surveys he takes so seriously.
When determining the penalty Trump should pay, Judge Arthur Engoron wrote, “This is not the first time the Trump Organization or its related entities have been found to have engaged in corporate malfeasance. This court finds that defendants are likely to continue their fraudulent ways unless the court grants significant injunctive relief.” Engoron imposed a massive $464 million fine and appointed an independent trustee to monitor Trump’s company.
There’s more. In 2022, the Trump Organization’s former CFO, Allen Weisselberg, pleaded guilty to 15 criminal counts of tax fraud related to his work for the company. In the same case, the company was convicted on 17 counts of tax fraud.
In 2018, the New York attorney general sued the Donald J. Trump Foundation for “persistent violations of the law,” with a settlement the following year dissolving the foundation. In 2013, the New York attorney general sued the entity known as “Trump University” for fraud, with the outcome including the closure of the operation and $25 million in payments to litigants who brought a class-action suit.
Trump, of course, maintains his innocence, and he has appealed the civil finding calling for $464 million in penalties. He seems certain to appeal the guilty verdicts in the New York City case.
At the same time, Trump has tried to turn his legal troubles to his advantage, portraying himself as a victim of political persecution and even selling copies of the mug shot taken at the beginning of the trial. Donations have rained in to his campaign following every legal reversal, suggesting sympathy for Trump’s plight among some Americans.
At the same time, the unfiltered look Trump’s trials provide into the inner workings of his business show him to be a petty cheat and, we can finally say without the descriptor “alleged,” a crook. Trump plainly got ahead by cheating, which blows up all the claims of business genius he has made in his books, his interviews, and his windy campaign speeches.
Nobody knows how the Trump criminal conviction, the first ever for a former president or a major presidential candidate, will affect this year’s election. In a normal world, it would disqualify Trump, but he may still have a plausible chance of beating the incumbent President Joe Biden. Voters may yet decide they don’t mind being led by a cheater, a convict, and a business bumbler.
Correction: An earlier version of this story was edited to reflect that Donald Trump’s alleged affair with Stormy Daniels has not been confirmed.
Rick Newman is a senior columnist for Yahoo Finance. Follow him on Twitter at @rickjnewman.
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