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People's Exhibit 3054 Is Bad News for Trump

Tuesday, Donald Trump had a bad day in court, even though he wasn't even in court. Blame it on those pesky perjury laws. In the civil trial underway in New York, Trump's lawyers called the former comptroller of the Trump Organization, Jeffrey McConney, as a witness. He made nice to Trump. Well, until AG Letitia James' lawyer, Andrew Amer, got to ask a few questions. He showed McConney People's Exhibit 3054, concerning Trump's net worth in 2014, shown below:

Memo from Mazars to Trump

Read the second paragraph carefully. Quick quiz: Who is responsible for the statement? Answer at the bottom on the page. Then Amer asked McConney about the hand-written note in the upper right corner that reads: "DJT To Get Final Review." Amer asked: "Donald Trump would get the final review?" McConney, seeing the exhibit (possibly for the first time) and surely having been warned by his lawyers about the perjury laws, said: "That was my understanding, yes." Then Amer asked if Trump would get the final review of every net worth statement until Jan. 20, 2017 (after which time Eric Trump had approval authority). Again McConney answered: "That was my understanding, yes." When asked if the annotation in the upper right corner of the exhibit was made by him, McConney admitted it was.

All this matters. A lot. Even to McConney. On Monday, McConney testified that the chain of command for financial statements was McConney > Allen Weiselberg > Mazars (Trump's accountant). Note the absence of Donald J. Trump in the loop. Now faced with his own handwriting on a document and his own testimony under cross-examination a day later, McConney changed his story to include Trump in the loop. In fact, he included Trump as the final and crucial step. So McConney could now be charged with perjury, although it seems unlikely James will do that. He's not the real target.

But the combination of Tuesday's testimony and People's Exhibit 3054 show that Trump's defense of "I didn't know what was in my net worth statements because the accountants handled that alone" is a complete lie. Judge Arthur Engoron is not stupid and has been around the track a couple of times. He knows that people lie under oath sometimes and that it is his job to make a best estimate whether a witness is telling the truth or lying. And when a witness says something on Monday and the exact opposite on Tuesday, Engoron has to use his judgment. But when one of the statements is backed by a written document and the other is not, it becomes a lot easier. James has asserted that Trump (illegally) inflated his net worth by $3.5 billion in 2014.

But there is more. On the 2015 edition of Trump's net worth statement, McConney made a handwritten note reading: "This computation also includes forecasted deals that have not signed yet with a value of $151 mil. Do you want to delete these deals?" So McConney knew the statement was fake since you can't include the profits from a deal you haven't made (yet) in a statement of your net worth. He was alerting Trump to the "mistake" of $151 million in fictional assets. Here is that document:

Trump's 2015 net worth statement with comment by Jeffrey McConney

So what did Trump do? He ignored McConney's unambiguous warning and signed the document as prepared. This kills the defense of "I didn't know there was a 'mistake' there." His own comptroller pointed it out explicitly in writing and Trump signed it anyway, unmodified. If that doesn't show intent to defraud, we don't know what does. Trump could have told McConney or Mazars to delete it or double-check it or something. But no, warning or no warning, he signed it anyway. Unless Engoron happened to doze off at the moment this came up, we imagine he will take it into account when deciding how much Trump's fine should be. Remember, he already ruled that Trump committed fraud. This is the penalty trial. This is why "intent" matters. The fine for intentional fraud Trump perpetrated might just be a wee bit more than for a typing error some junior accountant trainee at Mazars made.

Oh, one more thing (please read that sentence in the voice of Columbo). James' office got these documents from Mazars, not from Trump in response to the subpoena sent to him to turn over all relevant documents. So Trump also ignored Engoron's order to turn over all the relevant documents. Judges tend to understand the concept of "intent" when someone who has been subpoenaed somehow "forgets" to turn over incriminating documents and he gets them anyway from a different source.

Clearly Trump's lawyers made a mistake putting McConney on the stand, knowing that one of James' lawyers would cross examine him. Of course, if they hadn't put him on their witness list, James would have put him on hers. The trial will resume post-turkey with the testimony of the chief accounting officer of Trump Hotels, Mark Hawthorn. Maybe he will testify that Trump counted hotel rooms that were still empty at 11:00 p.m. as occupied and paid for since 80 guests could still show up spontaneously at 11:55 p.m. All in all, the trial is not going well for Trump. He's lucky it is a civil trial, not a criminal trial. Damn the people and their exhibits. (V)

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