Live Updates: Trump Organization’s Chief Financial Officer Testifies in Company’s Trial

After decades of loyal service to Donald J. Trump, Allen H. Weisselberg on Tuesday testified in the criminal tax-fraud trial of the former president’s family business, kicking the proceedings into high gear as he assumed an uncomfortable role: star witness for the prosecution.

Mr. Weisselberg, the company’s longtime chief financial officer, pleaded guilty this summer to the same crimes for which the company is now on trial in a Manhattan court. As part of his deal, which is expected to spare him a lengthy prison sentence, Mr. Weisselberg agreed to give evidence against the company, even as he remains on its payroll and has refused to implicate Mr. Trump.

Mr. Weisselberg, who took the stand on the same day that Mr. Trump was expected to announce his third run for president, provided crucial facts to bolster the Manhattan district attorney’s case, which centers on lucrative off-the-books perks that the company paid to Mr. Weisselberg and other executives. The benefits — including apartment rentals, leased cars and extra cash at Christmastime — afforded them a comfortable life in an expensive city.

In under two hours of testimony, Mr. Weisselberg admitted that he had received such perks, and that he knew he owed taxes on them that he had not paid. And when the lead prosecutor, Susan Hoffinger, asked him why he did not simply ask for a raise, he responded that a raise would have required the Trump Organization to pay more money to him and to the tax authorities. That roped the company into a scheme that its lawyers have tried to pin wholly on Mr. Weisselberg.

“In order to get a raise to be able to pay for those expenses, the Trump Corporation would have had to give me double the amount of those expenses,” Mr. Weisselberg explained to the courtroom, referring to the Trump Organization entity that employed him.

When his testimony resumes on Thursday, Mr. Weisselberg is expected to admit to conspiring with the Trump Organization to dole out the off-the-books perks to himself and other senior executives. And he may acknowledge that the company failed to withhold income taxes on those perks.

Yet Mr. Weisselberg may not give prosecutors everything they want. To prove their case, they must show that Mr. Weisselberg was acting “in behalf of” Mr. Trump’s company, not just to benefit himself, and it is unclear whether he will help them establish that. He has also refused to implicate Mr. Trump, who is not accused of taking part in the scheme, but is the focus of a broader investigation by Manhattan prosecutors into his business practices.

If the company is convicted, Mr. Weisselberg’s plea deal will undoubtedly have played a key role. In exchange, he is likely to receive a much reduced punishment: a five-month jail sentence that, with good behavior, may require him to spend only 100 days behind bars.

The unusual bargain — his own lawyer called the deal “unique” — thrusts Mr. Weisselberg into an awkward middle ground between the prosecutors he cut a deal with and the company that still employs him.

While on the stand, Mr. Weisselberg illustrated his continuing ties with the company, testifying that he had continued acting as a senior adviser to the Trump Organization as recently as last month, and that his $640,000 salary had not been reduced since he went on paid leave. Asked whether his $500,000 bonus had been reduced, Mr. Weisselberg simply said: “I don’t know yet.”

An accountant who got his start with the Trump family nearly a half century ago under Fred Trump, the former president’s father, Mr. Weisselberg described to jurors how he climbed through the ranks. Before Mr. Trump became president, Mr. Weisselberg was one of his trusted lieutenants, talking to him daily about business transactions, football and their plans for the future. “It ran a gamut,” Mr. Weisselberg said.

Because he did not sign a traditional cooperation agreement with prosecutors — and will testify only about the crimes to which he pleaded guilty — Mr. Weisselberg was under no obligation to meet with them before his testimony. Ultimately, he agreed to meet with both defense lawyers and prosecutors before the trial.

“Mr. Weisselberg is giving both sides the opportunity to ascertain in advance what truthful testimony they may elicit from him,” said his lawyer, Nicholas A. Gravante Jr.

Mr. Trump’s company, in its own statement at the time of the guilty plea, called Mr. Weisselberg “a fine and honorable man who, for the past four years, has been harassed, persecuted and threatened by law enforcement, particularly the Manhattan district attorney, in their never-ending, politically motivated quest to get President Trump.”

But in opening arguments, the Trump Organization’s attorneys pointed the finger at Mr. Weisselberg. “It started with Allen Weisselberg and it ended with Allen Weisselberg,” Susan R. Necheles, one of the company’s lawyers, said in her opening statement.

On cross-examination at trial, the Trump Organization’s lawyers might suggest that Mr. Weisselberg agreed to testify only under duress, noting that he could have faced years in prison if not for the plea deal.

Under the arrangement, Mr. Weisselberg must pay nearly $2 million in taxes, penalties and interest after accepting the off-the-books perks, including leased Mercedes-Benzes, an apartment on the Upper West Side of Manhattan and private school tuition for his grandchildren.

Still, the deal could have been sweeter. During plea negotiations this summer, the judge overseeing the case, Juan Merchan, indicated that if the Trump Organization agreed to plead guilty as well, he would impose an even shorter sentence on Mr. Weisselberg, The New York Times reported at the time.

The judge warned that Mr. Weisselberg’s only chance for avoiding jail altogether was cooperating with the broader investigation into Mr. Trump’s business practices. That investigation is focused in part on whether Mr. Trump fraudulently inflated the value of his hotels, golf clubs and other assets to secure favorable terms from lenders and insurance companies.

Even now, Mr. Weisselberg’s sentence is not guaranteed. If Justice Merchan concludes that he lied on the witness stand, Mr. Weisselberg could face up to 15 years in prison.

Mr. Weisselberg was the third witness of the day, following Jeffrey S. McConney, the company’s controller, who until Tuesday had been the only witness from whom jurors had heard. Deborah Tarasoff, who worked in the company’s accounting department and reported to Mr. McConney, also testified, confessing that she was nervous on the stand.

Prosecutors successfully asked to have Mr. McConney classified as a hostile witness, allowing them more freedom in the way they pose questions, and he revealed the Trump Organization’s methods for dodging taxes as it rewarded its executives. At one point, a prosecutor, Joshua Steinglass, all but mocked Mr. McConney for being an accountant who said he was unaware that $100,000 worth of rent or $60,000 worth of private school tuition should have been reported to the authorities as compensation.

Ms. Tarasoff’s testimony was altogether different. Although she, too, admitted knowledge of certain perks that Mr. Weisselberg received, she was less evasive than Mr. McConney and was treated far more gently by Mr. Steinglass. She also helped a defense lawyer, Michael van der Veen paint a complicated but sympathetic portrait of Mr. Weisselberg.

At one point, Mr. van der Veen asked Ms. Tarasoff whether she would do something if Mr. Weisselberg told her to, even if it was wrong.

She paused for a moment.

“I guess I would,” she said. “Because he’s the boss.”

Lola Fadulu contributed reporting.

Read More: Live Updates: Trump Organization’s Chief Financial Officer Testifies in Company’s Trial

2022-11-15 23:09:58

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