Mazars – the accounting firm that spent years preparing Donald Trump’s taxes and preparing his personal net worth statements –said to the former president last week that he was cutting ties with him and that 10 years of Trump’s record “should no longer be relied upon.”
The news made waves, but it’s hardly 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 the charade. Trump’s finance.
For one thing, the company has endorsed 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 Trump’s numbers are unreliable. In a way, they’ve been saying it for years.
Take 2011, for example. Trump’s statement about his personal financial situation 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 stake in Trump Tower) and $1,314,600,000 (how much his golf courses and clubs were supposedly worth). But first, there’s a two-page disclaimer from Trump’s accountants at Mazars, warning that CPAs “have not audited or reviewed the accompanying financial statements” and cannot guarantee the accuracy of the numbers, which come from Trump.
JThat’s common for these types of documents, which compile a client’s numbers into a single statement but don’t attempt to verify the claims, according to industry experts. Companies are expected to indicate where the figures deviate from generally accepted accounting principles (GAAP). With Trump, Mazars flexed a lot.
“I was surprised at how many different things weren’t GAAP” in the 2011 statement, says Terri Herron, an accounting professor at the University of Montana.
There were few issues, such as Trump not disclosing his ownership interests or listing cash and marketable securities together rather than separately. There have also been much bigger transgressions, like Trump completely omitting some of his mortgages when calculating his net worth.
Over the three years, accountants have cautioned: “Because the importance and pervasiveness of the matters discussed above make it difficult to assess their impact on the statement of financial position, Users of this financial statement should recognize that they could reach different conclusions about Donald J. Trump’s financial condition if they had access to a “revised” GAAP-compliant statement.
“They were doing their own risk management,” says Francine McKenna, accountant and former Forbes donor.
In other words, for years Trump’s accountants were willing to sign their famous client’s numbers, but admitted that if you want to know what Trump is really worth, you might not want to consult his balance sheet. Capital One, which loaned Trump $160 million against its Wall Street skyscraper, apparently knew Trump’s calculations didn’t add up. According to recent legal documents filed by the New York Attorney General, when Trump CFO Allen Weisselberg tried to refinance Capital One’s loan in 2015, he touted the skyscraper’s $550 million valuation. in Trump’s 2014 statement. The bank did its own analysis, which determined the building was worth $257 million. He refused to restructure the debt.
Forbs also knew that Trump’s records should not be trusted. We’ve seen a number of them over the years and never found them compelling. In 1990, Trump showed us documents claiming a pile of cash and securities, but omitted that he had borrowed heavily from his wallet. In 2006, Trump formatted documents claiming a net worth of $6 billion; our research put it at $2.9 billion.
On the day Trump announced he was running for president, he stood in the lobby of Trump Tower, waiving a sheet of paper to crowds and cameras — his personal 2014 tally, compiled by Mazars . A “major accounting firm — one of the most respected,” Trump boasted, had compiled a summary of his net worth, pegging it at $8.7 billion. The actual number at the time, according to Forbes‘ calculations: less than half.
A spokesperson for Mazars said: “Due to the professional obligations of our industry, Mazars cannot discuss any client, current or former, the status of our relationships or the nature of our services in a public forum without customer’s consent or as required by law. We remain committed to fulfilling all of our professional and legal obligations. A spokesperson for the Trump Organization released a statement, saying in part: “While we are disappointed that Mazars has chosen to separate, their letter dated February 9, 2022 confirms that after further review of all previous financial statements, Mazars’ work was carried out in accordance with all applicable accounting standards and principles.