The filings reveal discrepancies in how the company reported occupancy rates to tax officials and potential lenders.
New documents uncovered by ProPublica and published on Wednesday show discrepancies in how the Trump Organization reported occupancy rates at Trump Tower to potential lenders and tax officials.
In 2011 and 2012, the Trump Organization told potential lenders that the occupancy rate of Trump Tower was significantly higher than the Trump Organization reported to New York City property tax officials. ProPublica used a combination of open records laws and publicly available information to reveal the discrepancies, which are in addition to discrepancies at two other Trump Organization properties in New York City.
The Trump Organization told the lender that Trump Tower specifically had an occupancy rate of roughly 99%. But in January 2012, the Trump Organization told tax authorities that the building had an 83% occupancy rate. ProPublica reported that there are tax incentives for a company to report vacant space to tax authorities. Conversely, lenders look more favorably upon properties with high occupancy rates.
Experts told ProPublica that there could be legitimate reasons for such discrepancies, saying that a small portion of the 2012 difference appeared justified.
However, the size of the discrepancies alarmed some financial experts.
Nancy Wallace, a professor of finance and real estate at the University of California-Berkeley told ProPublica that the discrepancies were "versions of fraud." And Kevin Riordan, a financing expert and former accountant, told ProPublica he was unable to give an explanation for the discrepancies, even after reviewing the tax and loan records.
In 2012, the Trump Organization refinanced a $27 million Trump Tower debt with a $100 million loan, pocketing the additional cash. The terms of the loan, according to ProPublica, were "relatively favorable."
The Trump Organization did respond to a request for comment. However, in a comment to ProPublica, the Trump Organization argued that the "comparing the various reports is comparing apples to oranges" because requirements of what must be reported to each entity are different.
An organization submitting false filings can face fines or criminal charges, ProPublica noted.
Under questioning from Rep. Alexandria Ocasio-Cortez (D-NY) in February, Trump's former attorney Michael Cohen explained how Trump would regularly manipulate the values of Trump Organization properties in order to lower the tax bill.
When asked how Trump lowered his real estate tax bills, Cohen claimed that he would "deflate the value of the asset" before asking the tax department for a deduction. Cohen concurred that it would be helpful for Congress to have Trump's personal and business tax returns in order to more fully understand if any malfeasance occurred.
The Trump administration has thus far refused to comply with a congressional demand to provide Trump's personal and business tax returns in what some experts claim is a clear violation of the law.
Trump was head of the Trump Organization at the time of the discrepancies described by ProPublica. When Trump became president, he handed operational control of the organization to his two adult sons, Donald Jr. and Eric Trump.
The elder Trump still profits from the company.
Published with permission of The American Independent Foundation.