Among the 15 felony charges detailed in the indictment against the Trump Organization and CFO Allen Weisselberg involves a scheme to pay Weisselberg as both an employee of the company and as a nonemployee contractor or consultant to other businesses in the Trump Organization, allegedly as a way for both the company and Weisselberg to dodge taxes.
The Trump Organization and Weisselberg on Thursday pleaded not guilty to all charges, which also included allegations of conspiracy, grand larceny, criminal tax fraud and falsifying business records.
The New York Times reported last year that a consultant payment strategy was part of investigations into the Trump Organization by Manhattan’s district attorney and New York state’s attorney general.
The probe involved Trump Organization tax write-offs on “millions of dollars in consulting fees, some of which appear to have gone to Ivanka Trump,” sources told the Times — though there was no indication at the time that the former president’s daughter was a target of the investigation, the newspaper noted.
The Associated Press also reported last year that the attorney general sent a subpoena to the Trump Organization for records related to consulting fees paid to Ivanka Trump while she was also a senior executive at the Trump Organization.
The Times reported Friday that both New York City and state investigators had issued subpoenas last year for information on tax write-offs for “millions of dollars of consulting fees” paid to TTT consulting, a limited liability company set up for Trump’s eldest three children. Only fees paid to Ivanka Trump in the last few years are publicly known, however, because she was required to reveal fees as a White House adviser.
Ivanka Trump could not immediately be reached for comment.
Weisselberg collected both a salary from the Trump Organization and “non-employee compensation” as a “self-employed” contractor for other Trump businesses, such as Wollman Rink in New York’s Central Park. This way both he and the Trump Organization allegedly dodged taxes, and he was able to shelter more of his income in a retirement account as a “self-employed” worker, even though he wasn’t self-employed, prosecutors argued in the indictment.
Maddow called it “exactly the kind of scheme” that The New York Times described involving Ivanka Trump.
The newspaper “described in detail financial records they discovered that showed Ivanka Trump being paid both as an employee of the Trump Organization and as a consultant to the Trump Organization in a way that seemed custom-designed to try to evade taxes both for the company and for her,” Maddow explained. (Check out the video of her discussion of the charges up top.)
Neither Ivanka Trump nor “other executives” beyond Weisselberg who allegedly benefited from “non-employee compensation” are named in the indictment.
The Times reported that Donald Trump reduced his taxable income by deducting about $26 million in fees to “unidentified consultants as a business expense on numerous projects” between 2010 and 2018.
“Some of those fees appear to have been paid” to Ivanka Trump, the newspaper added. On a 2017 disclosure she filed when joining the White House as a presidential adviser, she reported receiving payments from a consulting company she co-owned, totaling $747,622, that “exactly matched consulting fees claimed as tax deductions by the Trump Organization for hotel projects in Hawaii and Vancouver, British Columbia,” the Times reported.
At the time of the payments, Ivanka Trump was an executive officer of the Trump companies that made the payments, meaning she “appears to have been treated as a consultant while also working for the company” as a senior executive, the Times noted.
Times investigative reporter Susanne Craig told Maddow on Thursday it’s a “red flag” that Ivanka Trump was an officer of the Trump Organization while also being paid consulting fees by the company.
Alan Garten, general counsel for the Trump Organization, told the Times in response to the paper’s story last year “this is just the latest fishing expedition in an ongoing attempt to harass the company.”
Donald Trump has denied all wrongdoing, calling the indictments against his company and Weisselberg politically motivated.
Federal prosecutors accuse Weisselberg and the company in the indictment of defrauding tax authorities.
“The purpose of the scheme was to compensate Weisselberg and other Trump Organization executives in a manner that was ‘off the books’: the beneficiaries of the scheme received substantial portions of their income through indirect and disguised means, with compensation that was unreported or misreported by [the Trump Organization] to the tax authorities,” the indictment stated.
“The scheme was intended to allow certain employees to substantially understate their compensation from the Trump Organization, so that they could and did pay federal, state, and local taxes in amounts that were significantly less than the amounts that should have been paid,” it added.