of Donald Trump indictment by a New York grand jury less than four months after the Trump Organization was indicted on 17 counts criminal tax fraud is another cloud over the real estate firm, which legal experts said could have trouble getting financing and closing deals.
Trump, perhaps more than any politician in US history, is known for his wealth and celebrity as qualifications for the highest office in the land. While that may have burned his company’s reputation in the heady glow of his 2016 victory, Trump’s role in the Jan. 6 attack on the Capitol and deepening legal woes since leaving office risk tarnishing the Trump Organization’s once-golden brand.
Although Trump is the one facing charges, his company also played a role in the affair, which prompted the investigation by Manhattan District Attorney Alvin Bragg. In 2017, Trump Organization executives reimbursed the former Trump’s lawyer, Michael Cohen for a payment he made to adult star Stormi Daniels, allegedly in exchange for her silence about a sexual relationship with the former president before the 2016 election.
“I think they are doomed. Who would want to do business with this organization or with Trump?” said Bennett Gershman, a law professor at Pace University and a former prosecutor with the New York State Anti-Corruption Bureau.
Trump Organization companies rely on financing to build resorts, hotels, golf clubs and residences. According to Gershman, the Trump Organization criminal conviction last year made the company “toxic” to many potential creditors and business partners. While the charge against the former CEO may not directly add to these legal problems, it could further tarnish the company’s reputation.
“The corporation is already toxic. Now that the head of this corporation, the head of this corporation, is indicted, it doesn’t help the image of the corporation,” Gershman said. “It seems to me that they have already taken this big hit, there are already problems and now Trump is making them worse.
A spokesman for the Trump Organization did not respond to a request for comment.
Republicans in Congress stood in full defense of the former president, deriding the indictment as a politically motivated assassination.
“These are political figures who are fighting the leading political candidate,” Trump’s attorney Alina Haba told WABC News Radio on Thursday. “They are all people trying to find a reason to remove Donald Trump again as the next president of this country.
Of course, the subject of an accusation, like anyone accused of a crime, is presumed innocent. However, “The fact that we know, legally, it’s just an allegation and not proof — that’s not relevant here,” Gershman said. “The impeachment is the perception of wrongdoing, and the perception of wrongdoing by the head of a corporation makes people anxious.”
According to Randy Zelin, a criminal defense attorney and professor at Cornell Law School, the biggest legal threat to the Trump Organization is civil action filed in September by New York’s attorney general seeking to bar the company from doing business in the state.
That lawsuit “would really be the final nail in the coffin,” Zelin said. “People will start, if they haven’t already, to distance themselves.
The New York lawsuit, which is scheduled for trial in October, accuses the Trump Organization, as well as Trump, Donald Trump Jr., Eric Trump and Ivanka Trump, of years of trying to defraud inflated property values. New York Attorney General Leticia James said the alleged fraud added “billions” to the value of Trump’s properties.
The company and the Trump family have denied the allegations.
It’s hard to say what financial impact, if any, his legal troubles have had on the Trump Organization. As a private company, it is not required to publicly disclose its finances, and if it runs into trouble with American creditors, it can draw money from abroad.
The Daily Beast reported that after Deutsche Bank, a longtime Trump lender, turned it down as a client in 2021, the Trump Organization secured a loan from Axon Bank, an online-only lender. A $4 billion deal the Trump Organization struck last year with Dar Al Arkan, a Saudi real estate developer, appears to be on track, with the developer this month opening up part of the project for sale.
And as the New York Times reported last year, the Trump Organization may not be looking for new deals. “Instead of pursuing new projects in recent years, the company has largely looked after its existing properties,” the Times said.
With reporting by Graham Cates and Amy Peachey.