The Daily - Will a Top Trump Deputy Flip?

Episode Date: July 13, 2021

In its investigation of the Trump Organization’s financial affairs, the Manhattan district attorney’s office has zeroed in on Allen Weisselberg, the company’s former finance chief, who spent almost half a century working for the Trump family. Criminal charges have been brought against Mr. Weisselberg in the hopes of getting him to cooperate in an investigation of former President Donald Trump. Will he flip?Guest: Ben Protess, an investigative reporter for The New York Times; and Michael Rothfeld, an investigative reporter for The Times’s Metro Desk. Sign up here to get The Daily in your inbox each morning. And for an exclusive look at how the biggest stories on our show come together, subscribe to our newsletter. Background reading: The Trump Organization has been charged with running a 15-year scheme to help its executives evade taxes by compensating them with fringe benefits that were hidden from the authorities.In nearly half a century of service to Mr. Trump’s family businesses, Allen Weisselberg has survived — and thrived — by anticipating and carrying out his boss’s dictates in a zealous mission to protect the bottom line. His fealty has now landed him in serious legal jeopardy. For more information on today’s episode, visit nytimes.com/thedaily. Transcripts of each episode will be made available by the next workday. 

From The New York Times, I'm Michael Barbaro. This is The Daily. Today, prosecutors in Manhattan are pursuing what many believe may be the best and last chance to hold Donald Trump legally accountable for his conduct as a businessman. I spoke with my colleagues Ben Protess about the story behind the case and Michael Rothfeld about the Trump loyalists whom prosecutors need to cooperate. It's Tuesday, July 13th. Ben, because Donald Trump is no longer president, I think it's safe to say that we all follow the legal and investigatory machinations around him a little less closely.

Maybe not you, because this is your beat, but for the rest of us lay people, this is all feeling pretty distant. But then all of a sudden there's this indictment a few weeks ago of the company that bears his name, the Trump Organization. And I want to know, what is the story behind that case? Do you remember Stormy Daniels? Stephanie Clippard, a porn star who goes by the stage name Stormy Daniels, said she and Donald Trump had sex once in 2006. He's like, wow, you are special.

You remind me of my daughter. After Trump won the Republican nomination, Daniels says Cohen reached out with the now infamous $130,000 offer, which came with a nondisclosure agreement. She's the adult film star who said she had an affair with Donald Trump and she threatened to tell her story on the eve of the presidential election. And so Trump's fixer, Michael Cohen,

at the time, pays her $130,000 to keep quiet and essentially shelve that story. Right. So that payment drew the attention of federal investigators in Manhattan who were already scrutinizing Cohen. And they conclude that this payment was potentially an illegal campaign violation.

It was excessive past what campaign donations are allowed to be. And it was not recorded. But it was majorly impactful of the election, they concluded. And so it was a federal crime. Cohen pleaded guilty in August to dodging taxes, lying to Congress, and violating campaign finance laws. And ultimately, Cohen pled guilty to that August 2018, as well as a host of other crimes. And he stood up in court and said that he did so at the direction of Donald Trump. And ultimately, a few months later, he had his sentencing.

Michael Cohen is going to jail. Cohen has just been sentenced. To three years in prison. The prosecutors confirmed just that very fact. They say that the payment was made for the benefit of and at the direction of Donald J. Trump. And there are rules you can't indict a sitting president. There are various, you know, issues they encountered in terms of proving intent of Donald Trump's knowledge of the campaign finance laws at that time. But Michael Cohen was a lawyer. Michael Cohen should have known and ultimately pleaded guilty to this.

Although, you know, no charges were filed against the president at that time, it still implicated him as part of that scandal. Right. Implicated him, but couldn't really touch him. And I remember thinking, like, well, that's that. The feds have gotten Michael Cohen, but not Trump. Right. And the feds continued to investigate his company because it wasn't just Michael Cohen acting as a rogue agent, or at least that's not what the feds thought. The feds came to believe that Donald Trump

and some people in his company were involved in these payments, perhaps even directed them. But believing something and proving something are two very different things. And so despite, you know, digging and interviewing various witnesses and doing what they could to prove the Trump organization and Mr. Trump's involvement in the hush money, they ultimately wound down their case in July of 2019. Mr. Trump was not accused of any wrongdoing. Donald Trump essentially is able to argue that this was the actions of Michael Cohen and Michael Cohen only, who he described as a rat and as somebody who was disloyal to him. And he was able to basically brush it off as overzealous prosecutors targeting somebody

who he was no longer aligned with. So what happens next? How do we end up getting to where we are now? So as the federal investigation wound down, you have just a few blocks away, Cy Vance, the DA in Manhattan, keeping a very close eye on all of this. And pretty soon after the investigation wound down in the federal sphere, you have Mr. Vance's office issuing some subpoenas. Right. As far as we can tell, Vance's office wanted to tell whether or not there was a sort of

improper effort to deduct the hush money payments as legal expenses from their tax returns. So they needed to look into the tax returns themselves and see what was in there. Now, I think they started to get a sense that if they opened up that Pandora's box, they might be able to see other things as well. And so they didn't just ask for one or two years of tax returns. They asked for eight years of tax returns. So Trump's lawyers sue, and they say, absolutely not. We're not turning that over. We're not having our accountants turn that over. And this case basically works its way through the courts, and Trump keeps losing at every level until it reaches the Supreme Court. The fight over Donald Trump's tax returns hitting the Supreme Court in a historic standoff.

Where he, once again, in a very consequential opinion. We have breaking news coming in right now from the U.S. Supreme Court. Loses again. Which just decided that a New York prosecutor can get the financial records of President Trump. So effectively, after some delay... After an 18-month court battle, prosecutors investigating former President Trump for possible fraud have obtained his tax and financial records. The DA's office gets those records, and that is just a major turning point in the investigation.

And so what does the district attorney of Manhattan, Cy Vance, what does he and his team find once they have the Supreme Court ruling and suddenly eight years of the president's tax documents in their hands? So the DA's office seems to identify a few potential issues. One is that there seems to be a concern that the president's company essentially keeps two separate sets of

books. One set of books for his lenders and another set of books for the tax authorities. Explain that. So in the lender's set of books, you get a glowing picture of the president's finances. And it's everything you would want to see from a potential client that you would want to lend to. They're in great financial shape. They are a company that's very worthy of getting loans. And then to the tax authorities, they paint a different picture, a company that has some financial issues and that does not have full occupancy in its buildings. And this contrast between what was told to the lenders, what was told to the tax authorities, raises some eyebrows. And so that's

one area of interest for them. But then they also seem to identify this separate issue, which is that the company seems to have been paying out perks and bonuses and various luxury items to some of its top executives totally off the books. And as they identify this and sort of unspool that, that leads them to this potentially vast, as they describe it, 15-year scheme to defraud the government out of getting tax income. Okay, so after the DA finds what may be financial fraud, telling lenders one thing which is very rosy, telling tax authorities another which is very dire, and after finding what may be tax fraud in the form of these untaxed executive perks, what does the DA do with these discoveries? How does he act on them? act on them. He acts by zeroing in on the Trump organization's longtime CFO, Alan Weisselberg. He really drilled down on Mr. Weisselberg's perks and everything that Mr. Weisselberg had been receiving from the company over the years. And that included Mercedes-Benzes. That included

a rent-free apartment in the west side of Manhattan. That included tuition for his grandchildren at a prep school in Manhattan. So these were things that immediately caught their attention, it seems. Why though? I mean, what's wrong with a generous boss? There's nothing wrong with a generous boss. You just got to record it on the books as compensation.

And you can give people company cars. You can give them apartments. You can even pay tuition. But the problem is you have to tell the IRS and you have to tell New York State that these are perks that you're giving so that everyone pays the taxes on it. bonuses and fringe benefits that he received that were never reported to the tax authorities, which means he owed the IRS, he owed the state, he owed the city nearly a million dollars. A dramatic legal moment unfolding in front of the cameras here in New York. CFO Allen Weisselberg arriving in court in handcuffs.

So that's ultimately what the district attorney's office decided to indict Mr. Weisselberg for. He and the former president's business empire were charged in what prosecutors today called a sweeping and audacious scheme to avoid paying taxes. The DA also indicts the Trump organization and accuses the Trump organization of conspiring with Mr. Weisselberg to participate in this scheme and not just enabling his scheme, but itself avoiding some of the taxes it would have had to pay. And lawyers say they have the receipts, 15 years worth of digital drives, bookkeeping records, tax records, witness statements, and more.

So this is something that they basically argue went back to 2005 and are reaching back all the way into that period. But Ben, here again, we seem to have a case where prosecutors, first it was federal prosecutors, now it's city prosecutors, have made a case against an underling of Donald Trump, but do not seem to be able to prove anything against Trump himself. At this point. So this is a key moment in the investigation,

and this is how these investigations work. You start with someone lower on the totem pole. And keep in mind that Allen Weisberg is not low. He is the CFO of the company. He's a senior level executive. He helped run the company. Mr. Trump was in the White House. So the step here is to indict Weisselberg and indict the company and put them on the defensive and ultimately squeeze Weisselberg as hard as possible to cooperate against Trump. So going after Weisselberg is really about going after Trump, but on what charges? What are they trying to get Weisselberg to implicate Trump as having done? There are at least two avenues that they can pursue. One is these sort of two sets of books, what Trump told his lenders versus what he told the local tax authorities. And then there's this track of what did Trump know about all these perks and bonuses that were handed out.

And for all we know, there's other avenues that they're pursuing as well. But even if you just take those two, without Allen Weisberg, it's very hard to prove that Donald Trump knew he was breaking the law. Why? Explain that. Donald Trump doesn't use email. It's very unlikely that there's any kind of written record of Donald Trump instructing lower-level employees to break the law. You need somebody who was in the room with him to narrate what happened. This all comes down to intent and willfulness and whether or not Donald Trump knew he was playing fast and loose and knew he was breaking the law. And it's very hard to prove that without any kind of cooperating witness. I'm not saying it's impossible. I'm saying it's very hard to prove that without any kind of cooperating witness. I'm not saying it's impossible. I'm saying it's very hard.

Right. So for this case to work, for there to be any chance, after all these investigations and all these years of sub knew what he was doing, knew what he was saying, and knew what he was thinking. They need, as Trump would say, a rat. After the break, I speak with my colleague Michael Rothfeld about Allen Weisselberg. Michael, our colleague Ben Protis just told us that the DA's larger case against former President Trump really hinges on this one executive, Allen Weisselberg, and whether he will cooperate with prosecutors. So what should we know about Weisselberg to understand that? How did he become Trump's money man? Allen Weisselberg is a guy who has been around the Trump organization basically as long as anyone. He comes from a pretty humble background.

I mean, he grew up deep in Brooklyn and went to high school in East New York and went to Pace College and graduated with a degree in accounting. graduated with a degree in accounting, and then worked as a teacher for a little bit in some small financial firms before he went to work for Fred Trump, who was a prominent developer in Brooklyn and Queens at the time. And through working for Fred, he met Donald. And at the time, Donald Trump is a young, ambitious guy who's looking to move into Manhattan and start making his name there. And Alan Weisselberg makes a connection to him. And he goes to work for Donald Trump on nights and weekends while still working for Fred Trump during the day. And sort of over time moved over and went to work for Donald Trump full time in 1986 and has been there ever since. And what exactly does he do for Donald Trump?

Anything involving money, Alan Weisselberg has his fingers in. I mean, his main function is to just watch the dollars and cents and, you know, just keeping track of where everything is. He does get involved in other things like tax returns and financing deals. He established an accounting department there. But one thing that people told us is that Allen Weisselberg really specialized in preventing vendors from charging any more than they could and just delaying payment as long as possible. So if the Trump organization hires a law firm or any other kind of vendor, he would delay as long as possible. And then, you know, if there's any way to knock anything off the bill, Weisselberg would find a way to do that. And that's something that Donald Trump asked of a lot of employees, but Weisselberg is in charge of the money.

So really is sort of the top guy for that. So a kind of financial enforcer who tracks every penny and tries to save every penny. That's right. And he's also involved in Donald Trump's personal finances. He had helped with the tax returns. And like when the Stormy Daniels payment was done, he certainly would have been involved if Donald Trump had committed to making the payment and agreed to make the payment, which is a point of dispute.

So Weisselberg is pretty much enmeshed with all of Donald Trump's finances. And in fact, because the Trump Organization is Donald Trump's personal company, in a way, it all sort of bleeds together. And Weisselberg is just woven into the fabric of this company and into Donald Trump's personal finances as well. So in Allen Weisselberg, Trump has a pretty loyal executive, maybe somebody cut out of a familiar cloth when it comes to the Trump orbit, right? Somebody who is willing to do what has to be done to please the boss. That's exactly right. And Donald Trump has looked for people like that throughout his entire business career. He's looked for people who are willing to cross lines for him

and in a way to insulate himself and become fixers like Michael Cohen was. And, you know, in Allen Weisselberg, he found a kind of a financial fixer. So, you know, people have told us when we were reporting on Weisselberg, you know, that Weisselberg would basically do anything that Trump asked. He was pretty much available to whatever the boss's whim was, and that when good things would happen, he would run in and let Trump know immediately. And when you'd walk in, if you're a Trump Organization employee into Donald Trump's office, you'd often find Allen Weisselberg already there, seated in the chair to the right in front of Donald Trump's desk. He'd be in the office late at night. When you left,

he'd be there early in the morning when you came in. He has said he never takes a vacation. He's working all the time, nights and weekends. He was just, you know, a steadfast presence and was available for whatever Donald Trump wanted. And why do we think that is? And why was he willing to do almost anything for Trump? Well, a lot of the people that Trump found that were willing to do this for him sort of came from backgrounds that were not too glamorous, right? Like Michael Cohen grew up in suburban Long Island. You know, Weisselberg grew up in sort of deep into Brooklyn.

suburban Long Island. Weisselberg grew up in sort of deep into Brooklyn. And these people encounter Trump and then they're just enamored of sort of the glow of this glamorous guy who's in the tabloids with beautiful women and is building these glittering skyscrapers. And replacing George this week is my chief financial officer, Alan Weisselberg. And you think Georgia's tough? Wait till you see Alan. Alan Weisselberg even shows up on The Apprentice, Donald Trump's reality show, and he makes a cameo. Alan? I felt that Andy losing his lines of communication was a very serious matter.

If this was a military maneuver and he lost his line of communication, he could lose an entire battalion. I mean, that's just not something that you would ever think would happen if you're a guy growing up in Brownsville in East New York. You have to find a way to communicate with your CEO or leader and convince him or her that a change is necessary. I agree with you. And to stay in the path of destruction doesn't work. I agree with you. And to stay in the path of destruction doesn't work. I agree with

you. Money guys inside real estate firms generally don't end up starring in primetime reality TV shows. No, not usually. So, I mean, that's just the kind of thing that you can see that would have appealed to Allen Weisselberg basking in the glow of Donald Trump. And Trump takes advantage of that and finds people who are just so happy that he has taken them into his circle, that they are just willing to do whatever he asks. So how do the perks that Ben talked to us about that have come up in this indictment,

the free cars, apartment, tuition, those would seem to further strengthen whatever loyalty Weisselberg has to Trump and maybe deepen that enamoredness. That's absolutely right. And so as Weisselberg gets more enmeshed in Trump's finances and perhaps does things that Donald Trump really needs. Trump then cements his loyalty by giving him all of these perks, these fringe benefits, and also pays him incredibly well.

I mean, for like a decade, Allen Weisselberg was earning an average of $800,000 a year in total pay. And a couple years ago, his pay was almost a million dollars, his total compensation. Okay, so that I think naturally brings us to the question of cooperation, the essential question of whether Allen Weisselberg will be willing to work with the district attorney's office against Trump. And everything you've just laid out, Michael, is a portrait of somebody who would be pretty reluctant to turn on his very generous longtime boss. But we haven't talked about the prosecution's case against Weisselberg and the pressure that he's going to

face to flip because of that. So how should we think about that? Well, it's a very complicated question, and you really can never tell who is going to flip and who isn't going to flip. With Weisselberg, you have these factors that bind him to Trump, right? Like his 50 years of service to the Trump family, the fact that his own family is involved in Trump. They fly down to Florida on the Trump jet to their house near Mar-a-Lago. All of these things really tie Allen Weisselberg closely to Trump. And he's so well paid. On the other hand, Allen Weisselberg is 73 years old, right? He's facing possible prison time.

And, you know, he theoretically, if he gets convicted, has to pay all these taxes that the government says that he owes, you know, and those are really complicated issues to weigh. Well, what kind of prison time is Weisselberg facing? Because that would seem to be key to understanding his deliberations here. Yeah, that's going to be a huge factor in how he decides to proceed. So the most serious count, grand larceny, could carry up to 15 years in prison. That is a pretty extreme and unlikely scenario. People have told us, experts, that with most of these charges, it could be as low as probation. He has no previous criminal record, and that would definitely carry weight with a judge. Or it could be one or two years in prison,

and then you get some time off for good behavior. You know, he might decide that he can handle that at this point in his life. You know, maybe after he gets out of prison, he will be rewarded for his loyalty. Maybe Donald Trump gives him a huge bonus or finds some other way to compensate him for all the time that he served in jail. of the time that he served in jail. Hmm. So Weisselberg's choices seem to be, one, don't cooperate and maybe beat the charges and win Trump's affections and maybe reap even more financial rewards, or cooperate and ensure no jail time and freedom, but almost assuredly incur Donald Trump's wrath, which

can be very meaningful. Yeah, turning against Donald Trump can be a pretty scary thing. This is a guy who is willing to go after pretty much anyone who crosses him in a really sort of vicious way. And then, you know, there's other motivations for him to want to remain in the fold, including just the emotional one of having spent two-thirds of his entire life in this Trump family business, you know, starting from 50 years ago with Trump's father and when you're in your 20s. So it's not natural to want to abandon someone that has basically been like a family to him for half a century. that has basically been like a family to him for half a century. And for now, Weisselberg is not cooperating, and he has resisted incredible pressure from prosecutors to do that.

Right. He's pleaded not guilty. But let's assume for a moment that Weisselberg does cooperate, does flip. It's a big assumption. We have watched a lot of people around Trump cooperate in prosecutions. You mentioned Michael Cohen. There's also Michael Flynn in the Russia investigation. And it never seems that that cooperation ever really hurts Donald Trump. And I wonder how strong a possibility that is in this case, that Allen Weisselberg could, I mean, he's been doing that for decades, you know, after crossing lines and having some people turn against him.

He has kept his hands clean, and his fixers are the ones that go down for him rather than him personally, and he's done that very effectively. But if anyone were to be able to damage Donald Trump, Alan Weisselberg might just be the guy. I mean, you know, money is Donald Trump's, his lifeblood. And Alan Weisselberg is the guy in charge of the money. So if there's anyone who knows where the bodies are buried, Alan Weisselberg is the person.

So he is, I think, probably more of a threat than anybody has ever been to Donald Trump, if he were to choose to help the prosecutors. You're saying Weisselberg could be the one cooperating witness, if he chooses to cooperate, who could defy this history and could actually implicate Trump and ensure he's held accountable. I think that's right. of Donald Trump being prosecuted after decades of escaping any consequences for many things, we're going to find out whether somebody finally is able to lay a hand on Donald Trump. Well, thank you, Michael. We appreciate it. My pleasure. On Monday night, the Times reported that the Trump organization has begun removing Allen Weisselberg from every leadership position he had held within dozens of the company's subsidiaries. The move appeared to be an acknowledgement by the Trump family that it was untenable for Weisselberg to hold those positions while facing criminal charges.

But it was unclear whether or how the decision might influence Weisselberg's thinking about cooperating with prosecutors. We'll be right back. Here's what else you need to know today. On Monday, President Biden called on the government of Cuba to heed the demands of thousands of demonstrators who took to the country's streets on Sunday to protest power outages, food shortages, and a lack of medicine. D.J. Way!

D.J. Way! D.J. Way! The protests are Cuba's largest in 30 years and represent open defiance of the country's communist government. The Times reports that the protests were touched off by an economic crisis. The pandemic has largely cut off tourism to Cuba,

a crucial source of revenue and employment, leaving its citizens increasingly desperate. And in another setback for Johnson & Johnson's COVID-19 vaccine, the FDA plans to introduce a new warning that it can lead to an increased risk of a rare neurological condition. The condition, known as Guillain-Barre syndrome, involves the immune system attacking nerves. Still, the risk appears to be low. The CDC says that after the administration of nearly 13 million doses of J&J's vaccine in the U.S., there have been about 100 suspected cases of the syndrome. Today's episode was produced by Rachel Quester, Nina Potok, and Rob Zipko. It was edited by Dave Shaw, contains original music by Dan Powell and Marian Lozano,

and was engineered by Chris Wood. That's it for The Daily. I'm Michael Barbaro. See you tomorrow.