(Bloomberg) -- One of Donald Trump’s most loyal deputies will testify against the Trump Organization, in a trial that threatens to reveal the inner workings of the real estate empire that set the former president on his path to the White House.
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Allen Weisselberg, who was the company’s accounting chief for decades, will be called to the witness stand by New York prosecutors in the trial, which starts with jury selection Monday in Manhattan. Prosecutors claim the company routinely low-balled its tax exposure by paying senior executives with perks like company cars and rent-free apartments.
“The world is about to see just how the Trump Organization ran its business,” said Barbara McQuade, a former federal prosecutor who teaches at the University of Michigan Law School. “This is a significant case. The criminal charges are against Trump’s corporation, which is a small private company, but Donald Trump is the Trump Organization.”
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Trump is not on trial in the case, brought by the Manhattan district attorney’s office, and if the company is found guilty, it would have to pay back taxes and fines totaling about $1.6 million. A conviction of Trump Corp. and Trump Payroll Corp., the two entities charged, wouldn’t put the parent company out of business. But it will be the first trial involving the firm since Trump left office.
Representatives of Trump and the Trump Organization didn’t respond to emails seeking comment on the case.
It’s one of several legal proceedings that involve Trump. The list includes a probe into his treatment of allegedly classified records as well as potential election interference in Georgia and questions about his role in creating a slate of electors to overturn the 2020 results. There is also a civil case by New York’s attorney general, who is seeking to bar him and three of his children from doing business in the state and who has referred her case to federal prosecutors.
Even if the DA’s case ultimately reaches Trump himself, it may only boost his political fortunes as he weighs another run in 2024. His supporters view the probes and prosecutions of him and his inner circle as proof of a conspiracy. Political strategist Steve Bannon, a prominent exponent of that view and an architect of Trump’s 2016 presidential victory, was sentenced on Friday to four months in jail for snubbing a subpoena from the House committee investigating the attack on the US Capitol.
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Among the benefits Weisselberg received as a Trump Organization employee were an apartment, including utilities and garage expenses, a Mercedes-Benz, tuition payments to a private school for his grandchildren, unreported cash and various personal expenses for his homes and his son’s apartment, including flat-screen televisions, new beds, carpeting and furniture. Prosecutors say those items should have been taxed like income.
Weisselberg, 75, agreed this summer to plead guilty to 15 charges in exchange for a maximum jail term of five months. He is required to testify truthfully, or the deal is off and he could face up to 15 years in prison, according to his attorney Nicholas Gravante.
Prosecutors for District Attorney Alvin Bragg will probably ask him whether the same perks he enjoyed were extended to other senior executives, including Trump’s children.
“This is not a cooperation agreement in that he is not required to meet with either side to be interviewed or prepared in advance of his testimony,” said Gravante. “However, Mr. Weisselberg has elected to meet, has met, and will continue to meet with both sides in order to assure that his testimony goes smoothly. By doing so, Mr. Weisselberg is giving both sides the opportunity to ascertain in advance what truthful testimony they may elicit from him.”
Trump’s Evolving Brand
“A conviction in a criminal case is serious,” said Daniel Horwitz, a former prosecutor at the DA’s office who is now at the law firm McLaughlin & Stern. “Is it definitive that a company convicted of a crime will be shunned by lenders and creditors? Not necessarily. Is it a good thing if the Trump Organization is convicted of cheating the government of millions of dollars in taxes over the years? No, it’s not good.”
As for Trump’s brand, which grew out of his exploits as a hotel and casino developer, it has evolved.
“For the old brand, built on Trump’s ability to make money in New York, this would not be good,” said Allen Adamson, co-founder and managing partner of marketing company Metaforce. “But his brand has been completely transformed. It no longer stands for real estate. It’s gone to a different audience, outside of New York. His supporters believe that he’s trying to do the right thing, but his enemies keep going after him.”
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In any case, the trial will offer a rare view inside the company, whose holdings include marquee New York skyscrapers, Trump-branded golf courses and Mar-a-Lago, the Florida resort where federal agents this summer seized thousands of documents taken from the White House, some of which were marked classified.
And the political perception of the case shouldn’t matter, McQuade said.
Holding Business Accountable
“Some of Trump’s supporters could be unmoved by evidence of unlawful business practices,” she said, “but for people who care about the facts and the law, wrongdoing matters. It’s important to hold businesses accountable to the law.”
Starting with Trump’s father, Fred Trump, Weisselberg has worked for the family since 1973. He was an accountant and comptroller for the Trump Organization before being promoted to chief financial officer and has worked closely with Donald Trump for decades. When prosecutors were building the tax fraud case last year, they viewed him as one of the few people who could provide testimony about whether Trump had knowingly broken the law.
But the two sides never discussed a cooperation deal. When the DA’s office charged him and the Trump Organization, Weisselberg pledged to fight the allegations in court. Then, after a final attempt to get the case against him thrown out, he agreed to the deal that limits his time behind bars in return for his truthful testimony.
The case is People v. Trump Organization, 01473-2021, New York State Supreme Court (Manhattan).
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--With assistance from Patricia Hurtado.
(Updates with comment from Weisselberg’s attorney in 11th paragraph.)
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