Donald Trump Jr. on Wednesday testified in the fraud trial that threatens to bring his family company down and deflected responsibility for the financial statements that led New York Attorney General Letitia James to file a $250 million fraud lawsuit against his family and business.
Trump Jr., testified that he relied on longtime accounting firm Mazars USA to prepare the company’s financial statements, arguing that he had no significant knowledge of the accounting standards known as the Generally Accepted Accounting Principles (GAAP), according to The Washington Post, which noted that the trial has shown evidence that the Trump Organization’s financial statements did not comply with those standards.
“I know nothing about GAAP — I leave it to my accountants,” Trump Jr. said. "I rely on their opinions and their assessments to make those decisions."
But CNN legal analyst Norm Eisen argued on Wednesday that Trump Jr., who took over the company along with his brother Eric after their father was elected president, “can’t pass the buck completely, he has some legal responsibility to make sure they’re accurate.”
“We've seen a ton of evidence that they were not accurate," he said. "So I think today, New York State set him up. He was already visibly uncomfortable with some of the questions. We're going to see the payoff tomorrow. Probably not so good for Trump Jr. or for the Trump family's standing in this case."
Trump Jr. is expected to resume his testimony on Thursday, followed by Eric Trump.
Fellow CNN legal analyst Elie Honig, a former federal prosecutor, noted that Trump Jr. “did not try to argue” that the inflated valuations at the heart of the lawsuit “were actually accurate.”
“He tried to argue, ‘I didn't really know about them, I wasn't part of this.’ He tried to distance himself from the actual valuations,” Honig said.
"Donald Trump Jr. would have had the option of taking the Fifth Amendment," he said. "This is a civil case, but he still could say, I refuse to testify because my testimony could be used against me. He's decided not to do that, and so now as a result, everything that he's testifying to is fair game for prosecutors to consider. Prosecutors have looked at this case. They have chosen not to charge it as a criminal case thus far, but that could change based on Donald Trump Jr.'s testimony, so there's an inherent risk in taking the stand here."
Former federal prosecutor Kristy Greenberg told MSNBC that the Trumps’ “M.O.” appears to be to “just point the finger at somebody else, whether it’s the CFO, whether it’s the accountant, whether it’s the lawyer, anybody that doesn’t have the last name Trump.” But Trump Jr. ultimately “signed these statements of financial condition and said that they were accurate.”
“You can’t have it both ways,” she added. “If he was on ‘The Apprentice’ right now, you’d be fired.”
Judge Arthur Engoron, who is presiding over the trial, already found the Trump family and company liable from persistent fraud, an order he put on hold after Trump’s appeal. The trial will determine the scope of the sanctions.
"This isn't going to help," conservative attorney George Conway said of Trump Jr.’s testimony, adding, "The judge can take findings and say, 'I don't believe that he didn't remember that. I don't believe that he was relying on the accountants. The story doesn't make any sense.'"
Conway told MSNBC that while the Trump Organization can appeal any ruling, the process could take “a couple of years” to pan out in the appellate courts.
“But there's already been an interim receiver appointed. They basically can't move assets around, can't hide them — they're stuck,” he said. "That's one of the reasons, I think, why he is so mad. Donald is upset and showing up at the trial every day. Basically, he's in financial handcuffs already. Who is going to loan money to these people? They're going to go out of business."
Trump himself is expected to testify next week. Engoron also ordered Ivanka Trump, who was exempt from the lawsuit, to testify but she has appealed the ruling.
Eisen predicted that “she’s unlikely to be successful in that appeal.”
"It is true that she was dismissed from the case because her management responsibilities in these businesses came outside of the statute of limitations,” he said. “But she still has firsthand evidence about these gaps in the valuation, where they shift. Sometimes there are many times the actual value of the properties shifts. The judge and the state are entitled to that testimony.
"She also could be potentially a very damaging witness against her father and her brothers and the Trump Organization," Eisen added. "And I think she is going to be forced to testify."
