The hits just keep coming for the Donald Trump campaign. Buzzfeed has uncovered some shady accounting practices involving Trump’s newest hotel venture in Washington DC.
It turns out that Trump’s companies keep two different sets of accounting numbers when wooing potential investors and lenders: one is a much more realistic and conservative set, with another, “rosier” set to be presented to lenders. Lenders involved in Trump’s transformation of the Old Post Office building into a luxury hotel were told they could make millions more than the internal numbers claimed.
Raymond Flores, a financial adviser on the project, testified in a case that was later made public:
“And then there are other projections where, you know, we’re pitching to a lender or an equity source, where it’s rosier… [with these numbers] we’re pushing the boundaries of — we’re pushing ranges of reasonability at those — at those projections to show, you know, what the hotel could be.”
In response to this revelation, the Trump campaign attacked one of their favorite targets: the media. They claim that this is standard business practice and an attempt by the media to make “something out of nothing.”
While keeping two sets of numbers is standard, problems can arise when one set is used to mislead potential lenders or investors. Robert Bartlett, a professor at the University of California Berkeley School of Law, had this to say:
“It smells a little fishy. If the internal set of books was what they held out to themselves as the true and likely scenario, then that would seem to be circumstantial evidence that the rosy projections were not honestly held projections.”
One number that stands out is the projected food and beverage revenue. In the internal set of numbers, the company projected to take in $15.7 million. However, when presenting the “rosier” numbers, the amount skyrocketed to $32.5 million. When asked which projection he would bet his own money on, Flores stated, “Well, ask me tonight, we’ll see.”
Somehow, Donald Trump has painted his rivals in the presidential race as “crooked” or as “liars.” Meanwhile, he continues his underhanded business practices that routinely hurt his investors, contractors, and workers. Trump’s lawyers did everything they could to keep this information from the public. What he is doing may not be technically illegal, but it reeks of a sneakiness and underhandedness with money that has to make you question Trump’s business practices.
Image via Flickr by Gage Skidmore under a Creative Commons License 2.0.
