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Judge orders Trump, children to answer questions about their business practices under oath

A New York judge shot down a bid to block the state attorney general's subpoenas of the former president, Donald Trump Jr. and Ivanka Trump.

A New York judge ordered former President Donald Trump and two of his children Thursday to answer questions under oath about the Trump Organization's business practices in the state attorney general's civil probe of the company.

Lawyers for Trump, Donald Trump Jr. and Ivanka Trump had sought to quash the subpoenas from Attorney General Letitia James' office, arguing her investigation is politically motivated and designed to provide fuel for an ongoing criminal probe into the company by the Manhattan district attorney's office.

In his ruling, state Supreme Court Justice Arthur Engoron gave the green light for the three to be deposed within the next three weeks. He also ordered the former president to turn over documents and information that had been subpoenaed within two weeks and portrayed the Trumps' claims of being selectively targeted as overblown.

"In the final analysis, a state attorney general commences investigating a business entity, uncovers copious evidence of possible financial fraud, and wants to question, under oath, several of the entities' principals, including its namesake. She has the clear right to do so," the judge wrote in his eight-page decision.

The Trumps' lawyers indicated at a hearing earlier in the day that they would appeal if Engoron let the depositions proceed. "There is a likelihood that we will appeal,” said Alan Futerfas, the attorney for the Trump children.

In a statement after the ruling, Trump said James was trying to "interfere with my business relationships, and with the political process."

"It is a continuation of the greatest Witch Hunt in history—and remember, I can’t get a fair hearing in New York because of the hatred of me by Judges and the judiciary. It is not possible!" Trump said.

Kimberly Benza, a spokesperson for the Trump Organization, said, "The entire system is corrupt."

James celebrated the ruling in a statement, saying, "Today, justice prevailed."

"No one will be permitted to stand in the way of the pursuit of justice, no matter how powerful they are. No one is above the law,” she added. 

James' office is looking into whether to file a civil suit against the Trump Organization over allegations that it inflated financial statements. In court filings, her office alleged that it has “uncovered substantial evidence establishing numerous misrepresentations in Mr. Trump’s financial statements provided to banks, insurers, and the Internal Revenue Service.”

Among the items James wants to ask Trump about are several statements of financial condition involving the company that she says were inflated by hundreds of millions of dollars and that Trump had signed off on.

The attorney general's office said in January that it had not yet reached a final decision about whether the evidence it says it has found merits legal action.

Lawyers for the Trumps contended James wants to question the trio to improperly gather evidence in a related criminal probe by the Manhattan district attorney's office.

Two lawyers from James' office are assisting in the district attorney's investigation, which has led to criminal charges against the Trump Organization and Allen Weisselberg, its former chief financial officer. Both the company and Weisselberg have pleaded not guilty to the charges, which include allegations of tax fraud and falsifying business records.

The judge noted that the Trumps would be able to invoke their Fifth Amendment rights during the depositions if they had concerns about self-incrimination and noted that Trump's son Eric had taken the Fifth more than 500 times when he was deposed for the probe in 2020.

Donald Trump lawyer Ron Fischetti said this case is "special" because "this is a former president of the United States," and if he takes the Fifth while answering questions, "he'll be on every front page in the world."

Engoron countered that there's nothing in the law making a former president special. "To me, he's a citizen," the judge said.

The U.S. Supreme Court has ruled that asserting one’s Fifth Amendment rights is not an admission of guilt, but Trump offered a different perspective while running for president in 2016. “The mob takes the Fifth. If you’re innocent, why are you taking the Fifth Amendment?” he said at a rally in Iowa after an aide to rival Hillary Clinton had taken the Fifth in an investigation of her email server.

The allegations involving the financial statements have caused other problems for Trump over the past week, including his longtime accounting firm Mazars' decision to cut ties with the Trump Organization after it reviewed the statements it helped prepare.

"We write to advise that the Statements of Financial Condition for Donald J. Trump for the years ending June 30, 2011 — June 30, 2020, should no longer be relied upon," the company said in a letter.

"While we have not concluded that the various financial statements, as a whole, contain material discrepancies, based upon the totality of the circumstances, we believe our advice to you to no longer rely upon those financial statements is appropriate," it added.

In a statement Monday, the Trump Organization pointed to the line about lack of "material discrepancies" as "confirmation [that] effectively renders the investigations by the DA and AG moot.”  

Engoron mocked the claim in his ruling. "To proclaim that the Mazars' red-flag warning that the Trump financial statements are unreliable suddenly renders the OAG's long-running investigation moot is as audacious as it is preposterous," the judge wrote.

In oral arguments Thursday, Trump lawyer Alina Habba focused on a number of statements James had made about Trump both before and after she became attorney general and contended the investigation should be shut down because of what she called the James' bias against her client.

“We have an extraordinary rare case where we can prove selective prosecution because she’s put her words out there so much and taken every opportunity to voice her vendetta against Donald Trump and his family to take him down,” Habba said.

The judge criticized James' previous comments at the hearing, saying they were "very pointed, very aggressive" and helped contribute to a "circus"-like atmosphere, but he said in the ruling that there was no evidence the investigation was not legitimate.

Engoron said that if James had not investigated the company, it “would have been a blatant dereliction of duty (and would have broken an oft-repeated campaign promise).”

"Indeed, the impetus for the investigation was not personal animus, not racial or ethnic or other discrimination, not campaign promises, but was sworn congressional testimony by former Trump associate Michael Cohen that respondents were 'cooking the books,'" he wrote.

On Thursday, the Democratic-controlled House Oversight Committee, citing Mazars' disavowal of the statements, urged the General Services Administration to cancel its lease for Trump's Washington, D.C., hotel. Trump reportedly struck a deal to sell the lease late last year, and he stands to make a $100 million profit if the GSA approves the sale, the committee noted.

In a filing this week responding to specific allegations from the attorney general about the Trump Organization's financial statements, Habba said Trump denies "knowledge or information sufficient to form a belief as to the truth of the allegations.”

The day after that filing, however, Trump issued a lengthy statement defending his company's accounting, saying, "We have a great company with fantastic assets that are unique, extremely valuable and, in many cases, far more valuable than what was listed in our Financial Statements."

He said Mazars had been "essentially forced to resign from a great long-term account by the prosecutorial misconduct of a highly political, but failed, gubernatorial candidate, Letitia James, and the Hillary Clinton run District Attorney’s Office of Manhattan." 

The attorney general's office flagged the statement to the judge in a letter Wednesday.

“It is not unusual for parties to a legal proceeding to disagree about the facts,” the letter said. “But it is truly rare for a party to publicly disagree with statements submitted by his own attorneys in a signed pleading — let alone one day after the pleading was filed.”

The letter urged the judge to ignore the legal responses from Trump and his children, arguing they "improperly deny knowledge about subjects indisputably known" to them, including what Trump's positions were at the company and what Trump Jr.'s job is.

"Despite currently serving as an executive vice president of the Trump Organization, Donald Trump, Jr. denies knowledge or information sufficient to form a belief as to allegations that he is an executive vice president of the Trump Organization," the attorney general's letter said.

Futerfas responded in his own letter to the judge that the attorney general’s recital of its case included "vague" allegations and that the Trumps' responses were all made in "good faith."

Also Thursday, a judge in Washington set a trial date for a separate civil case that has been brought against the Trump Organization and Trump's presidential inaugural committee by Washington Attorney General Karl Racine. It alleges that the inaugural committee improperly used inaugural funds to enrich the Trump family. The company and the committee have denied any wrongdoing. The case is scheduled to go to trial Sept. 26.

CORRECTION (Feb. 17, 2022, 8:34 p.m. ET): A previous version of this article misspelled the first name of the Trump Organization’s former chief financial officer. He is Allen Weisselberg, not Allan.