NEW YORK (AP) – Manhattan district attorney Cyrus R. Vance Jr. struggled for a year and a half to gain access to former President Donald Trump’s tax records.
Now, thanks to a US Supreme Court decision, he will soon have them. But what will this mean for the Democratic grand jury’s investigation into Trump’s business?
Former prosecutors say the treasury of records may give investigators new tools to determine whether Trump lied to creditors or prosecutors, before or after taking office.
“Prosecutors look for discrepancies in the paperwork. For example, if Trump tells the IRS that he is bankrupt and the creditors that he is rich, this is the kind of discrepancy around which they could build a case, ”said Duncan Levin, a former federal prosecutor who worked on a wide range of white-collar cases as Vance’s head of asset forfeiture.
“These documents are a very important piece of the puzzle,” said Levin.
Whether Trump’s records will contain evidence of a crime is uncertain. The former president, a Republican, has argued for years that he has not violated any law and has been unjustly targeted by Democrats for political reasons.
Here’s a look at where tax records can be useful, and where they might not help much, in the prosecutor’s investigation:
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MORE THAN JUST RETURNS
Trump made an extraordinary effort to prevent his federal income tax returns from becoming public, but these are not the only valuable documents included in this survey.
Trump’s accounting firm, Mazars USA, is required to deliver not only the final versions of Trump’s tax returns, but also preliminary versions of those statements and “any and all financial condition statements, annual statements, periodic financial reports and independent auditors” reports ”held by the company.
Mazars’ subpoena also sought engagement agreements that define the role of accountants in creating tax returns and financial statements; source documents that provide accountants with raw financial data; and working and communications roles between the company and Trump representatives. This would include communications showing how the raw data was analyzed and handled in preparing the records.
This could give state prosecutors an “open book” on Trump’s finances, said Adam D. Citron, a former state prosecutor and partner at Davidoff Hutcher & Citron. “It’s really the kitchen sink.”
Examining these other documents may be the key to determining whether Trump or his companies have provided tax authorities with different information about their revenue than that presented to other authorities, such as banks and business partners.
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BRIBERY
When the district attorney’s investigation began, one of the initial subpoenas sent to the Trump Organization asked for information about the payments that former Trump attorney Michael Cohen arranged for women who claimed to have had extramarital sexual encounters with Trump.
Cohen said the Trump company later reimbursed him for one of these payments, to adult movie actress Stormy Daniels, disguising it in the form of attorney fees.
It is not clear, however, whether Trump’s tax records will add much to this part of the investigation. The New York Times, which obtained years of tax data from Trump, wrote that it contained “no new revelations” about the payment to Daniels and did not include any detailed payments to Cohen.
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TAX BREAKS
The district attorney’s office has been investigating some of the arrangements Trump has made to reduce his tax bill. The return data can be essential to analyze if any of these maneuvers exceeded the legal limits.
One of the failures under analysis is that Trump managed to donate part of his property in Seven Springs, north of New York City, for a conservation fund. Some experts question whether Trump overvalued the land to gain a greater opportunity than he deserved.
Investigators have subpoenaed and received many documents related to the land business. Trump benefited from a similar conservation donation in California.
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STATEMENTS FOR CREATORS
Vance’s office did not reveal the full nature of his investigation. But in lawsuits, prosecutors pointed to news articles that questioned whether Trump had chronically overstated the value of his assets to banks and insurance companies. The Associated Press reported last month that Vance’s office recently interviewed Cohen for hours, asking him, among other things, about Trump’s relationship with Deutsche Bank, his biggest and oldest creditor.
A Washington Post story quoted by prosecutors detailed how various Trump Organization financial disclosures inflated the number of residential plots for sale on a California golf course, the acreage in one of its vineyards and the number of stories in Trump Tower, while excluded debt information on its Chicago and Las Vegas Hotel Projects.
Tax records will only be a tool that prosecutors will use to examine whether any of these statements constitute fraud.
“They will analyze the valuations and property values,” said Citron of state prosecutors. “They are going to look at lawyers’ bills to see what their expenses were for.”
Monday’s decision does not guarantee that the public will see Trump’s financial records. For now, they are protected by the grand jury secrecy rules. Even if the charges are brought in the case, these documents would likely be heavily edited if filed in the registry.
“Still, I’m sure there will be a lot of litigation over this,” said Citron.