Trump Organization changed pay practices post-election

NEW YORK (AP) — The election of Donald Trump as president was a wake-up call — not just for the political establishment, but for the company synonymous with it, its wealth and fame, a top executive testified Tuesday.

Suddenly, with the boss heading to the White House in 2017, the Trump Organization found itself trying to erase certain pay practices and financial deals that are now at issue in the company’s tax fraud trial in New York, jurors were told vice president and senior controller Jeffrey McConney. .

The Trump Organization changed its ways in 2017 or 2018 after bringing in a lawyer to Washington to scrutinize its tax practices after Trump’s election, McConney said in his second day on the witness stand before testing positive for COVID-19. a development that abruptly suspended the trial. until Monday.

The company, which for years provided benefits to some top executives, is now accused of helping them avoid income taxes on those extras, including a Manhattan apartment and luxury cars. McConney, who coughed at times during his testimony, told jurors that he avoided the company’s payroll records to reduce the income tax bill of the company’s longtime chief financial officer, Allen Weisselberg.

After the audit, “I was instructed at certain points to do things differently,” McConney said.

The tax fraud case is the only criminal trial to arise from the Manhattan district attorney’s three-year investigation of the former president.

It is one of three active cases involving Trump or the company in New York courts. They are also defendants in a fraud lawsuit filed by the state attorney general and a lawsuit filed by protesters who say they were harassed by Trump’s security guards.

Trump was elected president in November 2016 and took office in January 2017, prompting a new review of the Trump Organization, a privately held entity through which he and his family manage his golf courses, luxury towers and other investments. .

After Trump’s election, McConney said, the Trump Organization asked tax attorney Sheri Dillon to conduct an investigation of tax practices at its various entities. Dillon, who consulted for the company on various tax matters over the years, wrote a lengthy memo detailing her findings, prosecutor Joshua Steinglass said.

McConney said he never saw the memo, and the company’s attorneys cut off further discussion with a sustained objection, citing attorney-client privilege. However, McConney said, the company changed its tax and payment practices shortly after the audit.

“When Donald Trump was elected president in 2016, these companies finally had to clean up these fraudulent tax practices,” said prosecutor Susan Hoffinger, watching McConney’s testimony in her opening statement Monday.

Weisselberg has pleaded guilty to taking $1.7 million in off-the-books compensation and has agreed to testify as a prosecution witness at trial, likely next week, in exchange for a five-month prison sentence.

The company paid for a Manhattan apartment and Mercedes-Benz cars for Weisselberg and his wife, as well as parking spaces, utilities and furnishings, with an invoice that said the order was, “VIP FOR TRUMP.” Weisselberg’s son and another Trump Organization executive also received off-the-books compensation, prosecutors said.

Neither Trump nor any of his children who have worked as executives of the Trump Organization have been charged or accused of wrongdoing.

McConney, who was granted immunity to testify last year before a grand jury and again to testify in the criminal trial, said Trump was the ultimate decision maker for the Trump Organization before his election.

Trump signed off on Weisselberg’s salary and bonuses, signed a lease for the Manhattan apartment that the Trump Organization rented for Weisselberg and his wife, and personally paid the tuition for Weisselberg’s grandchildren to attend the prestigious Columbia Grammar and Preparatory School.

“He was the boss,” McConney said.

Several checks and documents bearing Trump’s distinctive signature were shown in court, along with pay stubs and other documents detailing some of the company’s changed compensation practices since then.

Steinglass projected bills on a large screen in front of the jury box, detailing how much the company was paying for Weisselberg’s benefits — at one point, $6,500 a month for apartment rent, $286.95 for cable TV and thousands of dollars in cash. for him to distribute. as Christmas advice.

Jurors were also shown documents illustrating how McConney altered Weisselberg’s salary records, cutting his salary and bonus by more than $195,000 in one year to reflect the amount the company and Trump had spent on rent and tuition.

McConney said Weisselberg instructed him to make the changes because he was “grateful that the president was paying these bills on his behalf and he believed his compensation should be reduced.”

But the fuzzy math wasn’t just out of the goodness of Weisselberg’s heart; it allowed Weisselberg to “basically pay his rent with pretax dollars … the same with his grandchildren’s tuition … his utilities … his car,” Steinglass said.

After Trump became president, his two oldest sons, Donald Trump Jr. and Eric Trump, took day-to-day control of the company. Donald Trump Jr. signed a tuition check for Weisselberg’s grandchildren in January 2017, Steinglass said.

As for Trump’s current status with the company, McConney said he wasn’t sure.

“I haven’t dealt with him since he’s been out of office, so I don’t know what he does for the company now,” McConney said.

___

Follow Michael Sisak on Twitter at twitter.com/mikesisak. Submit confidential tips by visiting https://www.ap.org/tips/.

Related Posts

Leave a Reply

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