Michael Cohen’s testimony has of course been the story of the last day, and one of the juicy tidbits was the potential for tax evasion and bank and insurance fraud stemming from the financial disclosures Cohen submitted with his testimony. The disclosures themselves are pretty thin—just a 1 or 2 page high-level summary for each year, 2011 through 2013. But there’s one thing that jumps out: There’s a huge jump in Trump’s stated net worth from the disclosure of June 30, 2012 to the one of March 31, 2013. It goes from $4.6 billion to $8.7 billion, and nearly all of that is accounted for by a new line in the 2013 disclosure, saying Trump’s “Brand Value” was worth $4 billion. This isn’t his licensing deals, where he lets someone else slap his name on their building for a fee; those are accounted for separately and values at just $74 million in that 2013 disclosure. So where does that new $4 billion number come from?
Now, these valuations aren’t an exact science. I’ve been on the valuation committee a few times for the small S-corporation I work for. Every year we have to assign a “value” to the company for tax and and possibly other regulatory purposes. We look at various aspects of the company and come up with multipliers for earnings and revenues. It’s not all that precise, but at the same time it has to be reasonable and justified, and we certainly can’t just pull numbers out of our asses. So going from $0 to $4 billion in 9 months seems really sketchy.
That leads to some fairly obvious questions: How was that valuation of the “brand” justified? Who came up with it, and who was involved in the discussions surrounding it? More importantly, why? Why was it so important for Trump’s net worth to nearly double in the course of 9 months? Was it, as Cohen said it might be, a vanity exercise to get high placement on a Forbes list? Or was it, as he also said could be the case, to get a loan or favorable insurance premiums? And why was the 2013 disclosure done in March instead of June like the previous ones? Was there perhaps some immediate financial need that required a loan in Spring 2013? And would that involve Deutsche Bank and connect to their Russian money laundering operation?
It seems like whenever we get some new information, it just leads to a bunch more questions. This is just getting started, folks.