Mazars—the accounting firm that spent years preparing Donald Trump’s taxes and helping put together his personal statements of net worth—told the former president last week that it is severing ties with him, and that ten years of Trump’s balance sheets “should no longer be relied upon.”

The news made waves, but it’s not much of a surprise, given Trump’s long history of lying about his wealth—and Mazars’ long history of both enabling, and trying to distance itself from, Trump’s financial charade.

On the one hand, the firm has rubber-stamped Trump’s balance sheets for years, lending an air of credibility to some of his wildest claims. On the other hand, this isn’t the first time Mazars has said that Trump’s numbers aren’t reliable. In a way, they’ve been saying it for years.

Take 2011, for example. Trump’s statement of personal financial condition from that year, published by The Washington Post, is a sprawling, 22-page document filled with big numbers like $490,000,000 (the supposed value of his Trump Tower stake) and $1,314,600,000 (how much his golf courses and clubs were allegedly worth). But first, there’s a two-page disclaimer from Trump’s accountants at Mazars, warning that the CPAs “have not audited or reviewed the accompanying financial statement” and can’t vouch for the accuracy of the numbers, which come from Trump.

That’s common for these sorts of documents, which compile numbers from a client into a single statement but don’t attempt to verify the claims, according to industry experts. Firms are expected to point out where numbers deviate from generally accepted accounting principles (GAAP). With Trump, Mazars flagged a lot.

“I was surprised at how many different things didn’t follow GAAP” on the 2011 statement, says Terri Herron, an accounting professor at the University of Montana.

There were little issues, like Trump not disclosing his ownership stakes in properties or listing cash and marketable securities together instead of separately. There were much bigger transgressions as well, like Trump completely leaving off some of his mortgages when calculating his net worth.

Other years were similar. Trump’s 2012 balance sheet contained a similar disclaimer from Trump’s accountants—and similar stretches of the truth by Trump. So, too, did Trump’s 2004 balance sheet.

In all three years, the accountants issued a word of caution: “Because the significance and pervasiveness of the matters discussed above make it difficult to assess their impact on the statement of financial condition, users of this financial statement should recognize that they might reach different conclusions about the financial condition of Donald J. Trump if they had access to a revised statement” that complied with GAAP standards.

“They were doing their own risk management,” says Francine McKenna, an accountant and former Forbes contributor.

In other words, for years Trump’s accountants were willing to sign off on their famous client’s numbers—but admitted that if you want to know what Trump is really worth, you might not want to look at his balance sheet at all. Capital One, which loaned Trump $160 million against his Wall Street skyscraper, apparently knew Trump’s math didn’t add up. According to recent legal filings by the New York attorney general, when Trump’s chief financial officer, Allen Weisselberg, tried to refinance the loan from Capital One in 2015, he touted the $550 million valuation of the skyscraper on Trump’s 2014 statement. The bank did its own analysis, which determined the building was worth $257 million. It declined to restructure the debt.

Forbes also knew better than to rely on Trump’s balance sheets. We saw a number of them over the years, and never found them persuasive. In 1990, Trump showed us documents claiming a pile of cash and securities—but left out that he had borrowed big against his portfolio. In 2006, Trump laid out documents claiming a net worth of $6 billion; our research put him at $2.9 billion. 

The day Trump announced he was running for president, he stood in the lobby of Trump Tower waiving a sheet of paper to the crowd and the cameras—his 2014 personal balance sheet, compiled by Mazars. A “big accounting firm—one of the most highly respected,” Trump bragged, had put together a summary of his net worth, pegging it $8.7 billion. The real number at the time, according to Forbes’ calculations: less than half that.

A spokesperson for Mazars said, “Due to our industry’s professional obligations Mazars cannot discuss any clients—current or former, the status of our relationships, or the nature of our services in a public forum without client consent or as required by law. We remain committed to fulfilling all of our professional and legal obligations.” A spokesperson for the Trump Organization issued a statement, saying, in part, “While we are disappointed that Mazars has chosen to part ways, their February 9, 2022, letter confirms that after conducting a subsequent review of all prior statements of financial condition, Mazars’ work was performed in accordance with all applicable accounting standards and principles.”

By admin

Leave a Reply

Your email address will not be published. Required fields are marked *