At a congressional hearing in Washington, D.C. on Wednesday, former Trump Organization attorney Michael Cohen testified that President Trump purposely inflated the values of his New York real estate holdings in order to obtain a loan from Deutsche Bank.
The requested loan was connected to an attempt to acquire the Buffalo Bills football team and the Forbes media company, Cohen said.
As one example of the value exaggerations, Cohen cited 40 Wall Street, which in exhibits presented to the committee, Trump pegged at $524.7 million in 2011. Cohen said Trump used comparable figures from similar properties, which is typical industry practice, but that ultimately the value “was based upon what [Trump] wanted to value the asset at.”
“Find an asset that is comparable, find the highest price per square foot that’s achieved in the area and apply it to that building,” he told members of Congress. “Or, if you’re going by the rent roll, you go by the gross rent roll times a multiple — and you make up the multiple, which is something he had talked about —and it’s based upon what he wanted to value the asset at.”
In fact, the Trump Organization obtained an official appraisal from Cushman & Wakefield for 40 Wall Street in 2015, in a similar amount ($540 million), which it then used to sell mortgage-backed securities. The Morningstar credit ratings agency, however, assessed the value in a pre-sale report and cut it by more than half, to just $262.3 million, after adjusting for millions in annual rent concessions and leasing fees.
Cohen, who was sentenced to three years in prison for previously lying to Congress and payments made to Stormy Daniels and Karen McDougal, was disbarred by the State of New York this week. On Wednesday he testified that company CFO Allen Weisselberg and Donald Trump, Jr. were complicit in the hush money arrangement, and that he believes Trump, Jr. is the “Executive-2” referenced in federal prosecution filings for approving Cohen’s reimbursement. Several news outlets have reported that Trump Organization executives other than Cohen were of interest to prosecutors for their potential role in Cohen’s reimbursement for the payments.
However, after the the hearing, the Wall Street Journal reported, based on familiar sources, that “Executive-2” is company controller Jeffrey McConney, and not he president’s son.
Cohen’s testimony touched on real estate projects, such as plans for a Trump Tower in Moscow that Cohen and associate Felix Sater worked on at Trump’s behest during the 2016 presidential election. The plans are currently being scrutinized by Special Counsel Robert Mueller in his investigation into potential collusion with Russians during the campaign.
Trump has repeatedly denied a close relationship with Sater, who is a convicted felon with known Russian mob ties, including saying in a 2013 deposition that he wouldn’t be able to recognize Sater in a room.
Asked about this Tuesday, Cohen answered “[Trump] distances himself when things go bad for someone and at that time it was going bad for Mr. Sater.”
Cohen was also asked about all-cash real estate purchases by Russians at Trump properties and denied any knowledge of oligarchs buying condos from Trump. Cohen quipped that nobody shows up with a “satchel of rubles” to buy a home.
Other subjects of Cohen’s testimony included alleged directions from Trump to intimidate people and racist comments allegedly made by Trump. In response to this, Rep. Mark Meadows (R-NC) gestured to New York HUD regional director Lynne Patton, who worked for the Trump Organization and stood up behind Meadows during the hearing, as evidence Trump could not be racist. The stunt angered Rep. Brenda Lawrence (D-MI), who called it “totaling insulting.”
The Trump campaign responded to Cohen’s testimony in a Wednesday statement: “Michael Cohen is a felon, disbarred lawyer, and a convicted perjurer, who lied to both Congress and the Special Counsel in a ‘deliberate and premeditated’ fashion, according to the Special Counsel’s office. Now he offers what he says is evidence, but the only support for that is his own testimony, which has proven before to be worthless.”