New York State Attorney General Letitia James is investigating whether the Trump organisation falsely and fraudulently valued assets. Photo: Reuters
New York State Attorney General Letitia James is investigating whether the Trump organisation falsely and fraudulently valued assets. Photo: Reuters
New York State Attorney General Letitia James is investigating whether the Trump organisation falsely and fraudulently valued assets. Photo: Reuters
New York State Attorney General Letitia James is investigating whether the Trump organisation falsely and fraudulently valued assets. Photo: Reuters

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Donald Trump faces legal action to comply with New York attorney general's inquiry

Letitia James had opened an investigation into the Trump Organisation in 2019

The National

January 19, 2022

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New York Attorney General Letitia James took legal action to compel former US president Donald Trump and his closest family members to give sworn evidence on Wednesday, part of a continuing investigation into the Trump Organisation’s financial dealings.

The probe will also summon his son Donald Jr, and daughter Ivanka, to explain irregularities in the Trump Organisation's financial disclosures.

Papers that were filed on Wednesday make it clear that the Trump family members mentioned were directly involved in one or more transactions under review, Ms James's office said.

  • Supporters of Donald Trump cheer as the former president speaks at a Save America Rally in Florence, Arizona, on January 15. AP
    Supporters of Donald Trump cheer as the former president speaks at a Save America Rally in Florence, Arizona, on January 15. AP
  • Mr Trump throws "Save America" caps to people at the rally at the Canyon Moon Ranch festival grounds in Florence, south-east of Phoenix. AFP
    Mr Trump throws "Save America" caps to people at the rally at the Canyon Moon Ranch festival grounds in Florence, south-east of Phoenix. AFP
  • Thousands turned up at the rally, where Mr Trump and other speakers claimed that the 2020 US election was stolen. AP
    Thousands turned up at the rally, where Mr Trump and other speakers claimed that the 2020 US election was stolen. AP
  • The former president whips up the large crowd in Arizona before making his speech. AP
    The former president whips up the large crowd in Arizona before making his speech. AP
  • Texas Attorney General Ken Paxton speaks in support of Mr Trump at a previous Save America Rally in Washington. AP
    Texas Attorney General Ken Paxton speaks in support of Mr Trump at a previous Save America Rally in Washington. AP

Earlier this month, the Trumps filed a motion to quash these interviews.

In a tweet sent on Tuesday evening Ms James announced her office's intentions to force the Trumps into compliance, saying that “no one in this country can pick and choose if and how the law applies to them.”

“For more than two years, the Trump Organisation has used delay tactics and litigation in an attempt to thwart a legitimate investigation into its financial dealings,” she said.

“Thus far in our investigation, we have uncovered significant evidence that suggests Donald J Trump and the Trump Organisation falsely and fraudulently valued multiple assets and misrepresented those values to financial institutions for economic benefit.”

Ms James opened an investigation into Mr Trump and the Trump Organisation in March 2019, after Mr Trump’s former lawyer, Michael Cohen, testified before Congress that annual financial statements inflated the values of the former president’s assets to obtain favourable terms for loans and insurance coverage, while also deflating the value of other assets, to reduce real estate taxes.

For more than two years, the Trump Organisation has acknowledged attorney general's authority to investigate the matters alleged, but it has only recently begun to produce the bulk of the documents called for in summons issued as far back as December 2019.

Mr Trump and his children, Donald Jr and Ivanka, have refused to appear to give testimony.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Updated: August 10, 2022, 1:50 PM
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