Why is this such a big deal? Well, the language from Mazars, the accounting firm, masks it a bit, so let me translate: What they are saying is that neither Trump nor anyone who interacts with him should rely on their assessments of his relative financial health over the past decade.
The firm is, in effect, jumping off what looks like a sinking ship. And they are doing so, at least partially, because of information that has come to light as part of an ongoing investigation by New York Attorney General Letitia James.
“We have come to this conclusion based, in part, upon the filings made by the New York Attorney General on January 18, 2022, our own investigation, and information received from internal and external sources,” Mazars wrote in a letter to the Trump Organization chief legal officer, advising them to no longer rely on financial statements ending June 2011 through June 2020.
We know that James is looking into allegations that Trump’s organization over- and under-valued assets in order to win favorable terms on loans and the like. In a court filing in January, James’ office suggested it had come across information “indicating that the Trump Organization used fraudulent or misleading asset valuations to obtain a host of economic benefits, including loans, insurance coverage, and tax deductions.”
The decision by Mazars appears to be an attempt to protect itself from possible legal entanglements relating to Trump. Their desire to wash their hands fully of Trump comes across bluntly in this part of the statement:
“While we have not concluded that the various financial statements, as a whole, contain material discrepancies, based upon the totality of the circumstances, we believe our advice to you to no longer rely upon those financial statements is appropriate.”
In essence: We haven’t found any specific examples of over- or under-valuation (yet) but we believe James and want to get as far away from any blame in this situation as humanly possible. And we want everyone who relied on the financial statements provided by our firm to know that they should stop doing that.
The decision by Mazars further isolates Trump as he faces a series of legal problems. Consider that in addition to James’ investigation, Trump faces the following:
1) The new Manhattan district attorney told CNN in December that he plans to focus on the high-profile probe into Trump’s business practices and may expand the investigative team. As CNN’s Kara Scannell reported at the time: “The investigation, which has been underway for several years, appears to be coming to a head with prosecutors focusing on the accuracy of the Trump Organization’s financial statements when seeking financing, people familiar with the matter have told CNN.”
2) E. Jean Carroll is pursuing a defamation lawsuit in regards to her allegation that Trump raped her in the 1990s. He has denied her rape allegation. The case is still being litigated. In December, a three-judge federal appeals court questioned lawyers for both Carroll and Trump.
3) Mary Trump, the niece of the former President — and the author of the scathing book “Too Much and Never Enough: How My Family Created the World’s Most Dangerous Man” — sued Trump in 2020, alleging that he, his sister and his late brother had committed fraud to keep her from getting her fair share of the estate of Trump’s father, Fred Sr. In January, a New York state judge heard Trump’s request to dismiss the case.
4) Several Democratic lawmakers and police officers are suing Trump for his alleged role in the insurrection of January 6, 2021. And a House select committee continues to look into Trump’s actions tied to that day.
5) In Georgia, Fulton County District Attorney Fani Willis is looking into Trump’s attempts to overturn the results of the 2020 presidential election in the state. “This is a criminal investigation. We’re not here playing a game,” Willis told CNN recently. “I plan to use the power of the law. We are all citizens.”
6) The Justice Department is looking into a scheme to seat fake electors favorable to Trump in the aftermath of the 2020 election. Michigan Attorney General Dana Nessel, a Democrat, has noted that forgeries of public records and election records carry with them up to two decades in jail, according to state law. Nessel referred the investigation to the DOJ.
7) Former Trump lawyer Michael Cohen is suing Trump, alleging that the former President had him put in jail to keep him from promoting his book, which took a decidedly dim view of the former President.
In addition to all this, there are the ongoing questions surrounding 15 boxes of White House materials that the National Archives had to take back from Trump who had transported the documents to Mar-a-Lago.
The legal walls continue to close in on Trump. And serve as a reminder that the biggest impediment to Trump running again for president in 2024 is legal, not political.