AP

Exec: Trump Organization changed pay practices post-election

Nov 1, 2022, 12:06 PM | Updated: 12:35 pm

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

Suddenly, with the boss heading to the White House in 2017, the Trump Organization found itself scrambling to scrub some pay practices and financial arrangements now at issue at the company’s criminal tax fraud trial in New York, senior vice president and controller Jeffrey McConney told jurors.

The Trump Organization changed its ways in 2017 or 2018 after bringing in a Washington lawyer to audit its tax practices following 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 lavished perks on some top executives, now stands 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 he fudged company pay records to reduce longtime company finance chief Allen Weisselberg’s income tax bill.

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

The tax fraud case is the only criminal trial that has arisen 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’s attorney general and a lawsuit brought by protesters who say they were roughed up by Trump’s security guards.

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

After Trump’s election, McConney said, the Trump Organization asked tax lawyer Sheri Dillon to conduct an investigation of the 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 company lawyers cut off further discussion with a sustained objection, citing attorney-client privilege. Nevertheless, McConney said, the company changed its tax and pay practices soon after the audit.

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

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

The company paid for a Manhattan apartment and Mercedes-Benz cars for Weisselberg and his wife, as well as parking spots, utilities and furnishings, with one receipt noting 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 Trump Organization executives are charged or accused of wrongdoing.

McConney, who was granted immunity to testify last year before a grand jury and again to testify at the criminal trial, said that Trump was the Trump Organization’s ultimate decision-maker prior to his election.

Trump signed off on Weisselberg’s salary and bonuses, signed a lease for the Manhattan apartment 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.

Some checks and documents bearing Trump’s distinct signature were shown in court, along with pay statements and other documents detailing some of the company’s since-altered compensation practices.

Steinglass projected receipts onto a large screen across from the jury box detailing how much the company was paying for Weisselberg’s perks — at one point, $6,500 per month for apartment rent, $286.95 for cable TV, and thousands of dollars in cash for him to hand out as tips at Christmastime.

Jurors were also shown documents illustrating how McConney changed Weisselberg’s pay records, trimming 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 “appreciative that the president was paying these bills on his behalf and he believed that his compensation should be reduced.”

But the fuzzy math wasn’t just out of the kindness of Weisselberg’s heart; it allowed Weisselberg to “essentially to pay his rent with pre-tax dollars … the same with the tuition for his grandchildren … his utilities … his car,” Steinglass said.

After Trump became president, his two eldest sons, Donald Trump Jr. and Eric Trump, took over 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 come 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. Send confidential tips by visiting https://www.ap.org/tips/.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

FILE - Crystal Baziel holds the Pan-African flag Monday, June 19, 2023, during Reedy Chapel A.M.E C...

Associated Press

The beginner’s guide to celebrating Juneteenth

For more than one-and-a-half centuries, the Juneteenth holiday has been sacred to many Black communities. It marks the day in 1865 enslaved people in Galveston, Texas found out they had been freed — after the end of the Civil War, and two years after President Abraham Lincoln’s Emancipation Proclamation. Since it was designated a federal […]

19 hours ago

A Boeing 737 Max suffered damage to parts of the plane's structure after it went into a “Dutch ro...

Associated Press

Plane that did ‘Dutch roll’ on flight from Phoenix suffered structural damage, investigators say

A Boeing 737 Max suffered damage to parts of the plane's structure after it went into a “Dutch roll” during a flight from Phoenix last month.

5 days ago

This photo provided by Randy Shannon shows Mooney Falls on the Havasupai reservation outside the vi...

Associated Press

Dozens report illness after trips to waterfalls near Grand Canyon

Dozens of hikers say they fell ill during trips to a popular Arizona tourist destination that features towering blue-green waterfalls deep in a gorge neighboring Grand Canyon National Park.

6 days ago

Mugshot of Rudy Giuliani, who was processed Monday, June 10, 2024, in the Arizona fake electors cas...

Associated Press

Rudy Giuliani posts $10K cash bond after being processed in Arizona fake electors case

Rudy Giuliani, a former New York City mayor and Donald Trump attorney, was processed Monday in the Arizona fake electors case.

9 days ago

FILE - White House former chief of staff Mark Meadows speaks with reporters at the White House, Wed...

Associated Press

Former Trump chief of staff Mark Meadows pleads not guilty in Arizona fake elector case

Former Donald Trump presidential chief of staff Mark Meadows and Trump 2020 Election Day operations director Michael Roman pleaded not guilty Friday in Phoenix to nine felony charges for their roles in an effort to overturn Trump's Arizona election loss to Joe Biden.

12 days ago

deadly heat wave last summer...

Associated Press

After a deadly heat wave last summer, metro Phoenix is changing tactics

Fresh memories of the deadly heat wave last summer have led Arizona authorities to launch new tactics ahead of summer 2024.

23 days ago

Sponsored Articles

...

Condor Airlines

Condor Airlines can get you smoothly from Phoenix to Frankfurt on new A330-900neo airplane

Adventure Awaits! And there's no better way to experience the vacation of your dreams than traveling with Condor Airlines.

...

DESERT INSTITUTE FOR SPINE CARE

Desert Institute for Spine Care is the place for weekend warriors to fix their back pain

Spring has sprung and nothing is better than March in Arizona. The temperatures are perfect and with the beautiful weather, Arizona has become a hotbed for hikers, runners, golfers, pickleball players and all types of weekend warriors.

...

COLLINS COMFORT MASTERS

Here are 5 things Arizona residents need to know about their HVAC system

It's warming back up in the Valley, which means it's time to think about your air conditioning system's preparedness for summer.

Exec: Trump Organization changed pay practices post-election