Thursday, September 28, 2023

Literary Corner: Perfect


The Worthless Clause

by Donald J. Trump, 45th President of the United States

I have a clause in there
that says, don't believe the statement,
go out and do your own work:
this statement is worthless.
It means nothing. Well,
they call it a "disclaimer"--
they call it "worthless clause" too,
because it makes the statement worthless.

I hate to be boring and tell you this.
When you have the worthless clause
on a piece of paper and the first--
literally the first page
you're reading about how
this is a worthless statement
from the standpoint of your using it
as a bank or whatever--
whoever may be using it, you tend
not to get overly excited about it.
I think it had very little impact,
if any impact on the banks.

Arranged from the text of Trump's sworn deposition in the case of People of New York State vs. Donald Trump et al., as quoted in Judge Arthur F. Engoron's response to motions on both sides for summary judgment, released, I guess, on Tuesday (granting it in part, as you probably know by now, to the people, and denying it to the Trump, who is now in the first phase of losing the right to do business in New York State, which will mean he and his children and his 500 LLCs and the Trump Organization also have to give up a lot of properties run from New York, including Mar-a-Lago, the Aberdeenshire golf club, and golf courses in Florida, Pennsylvania, North Carolina, and I don't know how many more, unless he manages to absorb them into a reconstituted Trump Organization in Delaware, which Attorney General James has been trying to stop him from doing), on Trump's poetic theory of the "worthless clause", actually a whole bunch of clauses, of boilerplate that the organization prefixes to its annual Statement of Financial Conditions, which is used by financial organizations to figure out how risky it is to work with them:

Assets are stated at their estimated current values and liabilities at their estimated current amounts using various valuation methods. Such valuation methods include, but are not limited to, the use of appraisals, capitalization of anticipated earnings, recent sales and offers, and estimates of current values as determined by Mr. Trump in conjunction with his associates and, in some instances, outside professionals. Considerable judgment is necessary to interpret market data and develop the related estimates of current value. Accordingly, the estimates presented herein are not necessarily indicative of the amount that could be realized upon the disposition of the assets or payment of the related liabilities. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated current value amounts.

Which sounds pretty sensible to me—you don't want people suing your ass because your million-dollar investment realized $900,549—but methods that "include, but are not limited to" normal methods should not extend to whatever number Donald imagines, as with his Briarcliff golf course in Westchester County, assessed in 2014 at a value of $16,500,000 and valued in that year's Trump Org SFC at $73,430,217, a difference of over 300%; or his 30% interest in office buildings at 1290 Sixth Avenue in Manhattan and 550 California Street in San Francisco in partnership with Vornado Real Estate which the SFCs in 2013 to 2021 said gave him access to between $14,221,800 and $93,126,589 in cash when the partnership didn't give him access to any cash at all.

And so on, culminating maybe in his own triplex apartment in Trump Tower, which the SFC listed as worth $114–207 million dollars (the most expensive apartment ever sold in Manhattan at that point went for $88 million), based on a floor area of 30,000 square feet, which might have been reasonable, except the appartment is actually 10,996 square feet, or a little over a third that size; or his Palm Beach business/home at the old Marjorie Merriweather Post estate of Mar-a-Lago, valued by the Palm Beach County Assessor at $18 million to $27.6 million after Trump promised not to develop it for anything other than the social club it is today, but claimed in the SFCs (on the basis of what he might make if he did turn it into a condo development) as worth between $426,529,614 and $612,110,496, an inflation of at least 2,300%. I particularly like that example because it's so evident that the low value was getting him a sweet tax rate on the place:

(It should probably have been valued at $75 million, according to the Miami Herald. This is one of the rarely spotted cases of his lowballing a property value for tax fraud, which I hope will be getting some federal attention after Attorney General James gave the feds her data.)

Anyway there you are. It's a lot like the "perfection" of Trump's phone calls to President Zelenskyy or Secretary Raffensberger, as I described them—where Trump thinks he's come up with the perfect hedge for denying his criminality: it's OK for him to lie his head off in his Statement of Financial Condition because he's prefaced them with a "worthless clause". It's never occurred to him that the people he makes deals with have a right to honest information.

Trump's lawyers argued that it shouldn't be punished since no harm has been done, the organization has continued to pay its debts on time, but that's certainly not legally true, as Judge Engoron is anxious to point out: laws against fraud are meant to keep the community honest. not just to deal with particular outrages, and must be enforced even when they haven't done any special damage. It's also not clear that people won't suffer as the enormity of these financial crimes becomes clear and Trump begins to go out of business. They certainly should, because the business isn't sound. If the theory of capitalism is worth anything, Trump ought to be drummed out of it, and accomplices like Deutsche Bank with him. That's all I can say. It could turn out that the banks should have paid more attention—they definitely did a shitty job.

Cross-posted at No More Mister Nice Blog.

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