Donald Trump’s indictment by a New York grand jury less than four months after the Trump Organization was convicted of 17 counts of criminal tax fraud is another cloud over the real estate firm, which legal experts said could struggle getting financing and making deals.
Trump, perhaps more than any politician in U.S. history, famously ran on his wealth and celebrity as qualifications for the highest office in the land. While that likely burnished his company’s reputation in the heady afterglow of his 2016 victory, Trump’s role in the Jan. 6 attack on the Capitol and his deepening legal woes since leaving office risk tainting the Trump Organization’s once-gilded brand.
Although it is Trump who faces charges, his company also played a role in the affair that triggered the investigation by Manhattan District Attorney Alvin Bragg. In 2017, Trump Organization executives reimbursed former Trump lawyer Michael Cohen for a payment he made to adult star Stormy Daniels, allegedly in return for her silence about a sexual relationship with the former president before the 2016 election.
“They’re doomed, I think. 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 in the New York State Anti-Corruption Office.
Trump Organization companies rely on financing to build resorts, hotels, golf clubs and residences. In Gershman’s view, the Trump Organization’s criminal conviction last year made the company “toxic” for many potential lenders and business partners. While the indictment of its former CEO may not directly add to those legal woes, it may further tarnish the company’s reputation.
“The corporation is already toxic. Now, when the chief of that corporation, the head of that corporation, is under indictment, that doesn’t help the image of the corporation,” Gershman said. “It seems to me they’ve already taken this big hit, there’s already trouble, and now Trump is making it worse.”
A spokesperson for the Trump Organization did not respond to a request for comment.
Republicans in Congress have mounted a full-throated defense of the former president, deriding the indictment as a politically motivated hit job.
“These are political figures, fighting the leading political candidate,” Trump attorney Alina Habba told WABC News Radio Thursday. “They’re all people trying to find a reason to remove Donald Trump as the future president of this country again.”
Of course, the subject of an indictment, like anyone charged with a crime, is presumed innocent. However, “The fact that we know, legally, it’s merely an accusation, not proof — that doesn’t matter here,” Gershman said. “An indictment is the perception of wrongdoing, and the perception of wrongdoing by the head of a corporation makes people worried.”
According to Randy Zelin, a criminal defense lawyer and professor at Cornell Law School, said the biggest legal threat to the Trump Organization is the civil lawsuit filed in September by New York’s attorney general, who is seeking to ban the company from dong business in the state.
That lawsuit “would really be a final nail in the coffin,” Zelin said. “People will begin, if they haven’t already, to distance themselves.”
New York’s case, which is scheduled to go to trial in October, accuses the Trump Organization, as well as Trump, Donald Trump, Jr., Eric Trump and Ivanka Trump, of a years-long effort to commit fraud by inflating property values. New York Attorney General Letitia James has said the alleged fraud added “billions” to Trump’s property values.
The company and the Trumps have denied the allegations.
It’s hard to tell what financial impact, if any, its legal issues may have had on the Trump Organization. As a private company, it is not required to publicly reveal its finances, and if it runs into trouble with U.S. lenders it could tap money from overseas.
The Daily Beast reported that after Deutsche Bank, a longtime lender to Trump, dropped him 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 made last year with Dar Al Arkan, a Saudi real estate developer, appears to be proceeding, with the developer this month opening part of the project to sales.
And, as the New York Times reported last year, the Trump Organization may not be seeking new deals. “Rather than tackling new projects in recent years, the company has largely tended to its existing properties,” the Times said.
With reporting by Graham Kates and Aimee Picchi.