July 17, 2024

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The Trump Organization Accounting Firm Disavows Financial Statements

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A taxi passes by Trump Tower, the headquarters of the Trump Organization, in New York City on Wednesday, July 14, 2021. (AP Photo/Ted Shaffrey)

The disavowal by Mazars USA LLP of the financial statements of the Trump Organization is a big deal. It is unprecedented for an accounting firm to disavow a private company’s financial records. Mazars’ decision to walk away from the Trump Organization could mark a turning point in the firm’s history, and it is important for the company to determine how far to cooperate with prosecutors and fend off any criminal charges.

Mazars USA, the accounting firm that served the former president for nearly a decade, has terminated its relationship with the Trump Organization. The firm cites the existence of two investigations into the former president’s business practices, including a criminal investigation by the state of New York. The letter said Mazars was unable to stand by the financial statements that it had prepared for the Trump Organization from 2011 to 2020. Mazars USA told the Trump Organization it could not stand behind its financial statements because of the “totality of circumstances” in which they were prepared.

The investigation was launched by the Manhattan District Attorney’s office and the New York attorney general’s office, which is probing the Trump Organization’s financial statements. The investigation partly overlaps with the Manhattan District Attorney’s office, and the criminal investigation continues. Mazars’ findings are based on a January filing by the New York attorney general and internal and external sources. The investigation will continue to be conducted until it is concluded.

Mazars’ work with the Trump Organization has become an unsettling story. The firm has worked with the organization for decades and has advised the Trump Organization to “use financial statements carefully and not rely on them,” but Mazars was not able to finish preparing Melania’s tax returns, despite having been subpoenaed by the Manhattan DA’s office. Mazars has also been questioned by the federal bureau of investigations in the hush-money payments to adult film actress Stormy Daniels.

The story of the Trump Organization’s accounting firm is a complex one. The firm is a long-time client of Trump’s, and has been a key enabler in the president’s rise to power. Its history is colorful and tangled, contradicting the image of a respected big firm. And while the firm’s numbers have been confirmed after months of scrutiny, they are still not a large accounting firm.

Despite the letter from Mazars, the Trump Organization is disappointed in Mazars’ decision to drop out of the investigation. The company’s past involvement with the NFL has been the subject of similar lawsuits. Mazars’ former president has yet to comment on the situation. A Trump Organization spokesperson leaned into the key line in the letter saying it’s vindication for the president. This letter is a crucial step in the investigation and should be carefully examined.

Jack Mitnick, who led the Trump Organization’s accounting firm for more than 30 years, resigned amid scandals. Mitnick, who had an intense dislike for paying the IRS, was the architect of a $500 million tax scheme. He funneled hundreds of millions from Fred Trump to his children. Mitnick’s efforts kept the president in business, despite the firm’s four bankruptcy filings. The firm moved from Queens to a suburban office park in Lake Success, Long Island, a suburb.