A judge late Thursday denied efforts by Donald Trump’s lawyers to withhold testimony suggesting that one of his companies kept at least two sets of financial projections — one for internal use, according to court records, and a “heightened” or “more aggressive” set whose function has so far been withheld from public view.
The order, issued late Thursday, followed a legal action filed by BuzzFeed News arguing that the testimony should not be withheld because Trump’s business record is particularly important to the public because he is the Republican Party nominee for president — and that his lawyers failed to meet the legal standard of showing the remarks were “trade secrets.”
The testimony concerns Trump’s $200 million project to transform the Old Post Office building — a taxpayer-owned landmark just five blocks from White House — into a luxury hotel. If Trump’s hotel company, owned by the candidate and three of his children, made decisions based on conservative expectations but presented more positive numbers to stakeholders such as bankers or government officials, that could raise serious ethical and even legal questions.
Trump Organization General Counsel Alan Garten said, “We respectfully disagree with the judge’s ruling,” and called it “unprecedented.”
“I thought it was a basic principle of the legal system that all litigants should be treated equally,” Garten said in an interview late Thursday. He said it appears Trump is being treated differently because he is running for President of the United States.
About the testimony that could show Trump’s hotel company kept two sets of financial projections, a spokesperson for the Trump Organization emailed BuzzFeed News the following statement: “Because no one can predict the future, it is standard practice in virtually every industry for businesses to run multiple financial models analyzing projected performance based on varying outcomes. Once again, this is yet another example of the media attempting to make something out of nothing.”
In the order, Judge Brian Holeman of DC Superior Court said that both sides — Trump and the defendant in the case, celebrity chef Geoffrey Zakarian — but particularly Trump’s, had “undertaken great efforts to prevent the public from accessing records normally made available to the public.” He said “the public’s interest is heightened in an action involving a candidate seeking public office.”
Trump’s side “apparently expects this Court to ‘rubber stamp’” its requested redactions “even in the absence of required support materials,” the judge wrote.
The judge denied requests by Trump’s lawyers to withhold large sections of testimony, including a statement by Donald Trump and large parts of depositions given by a financial analyst for the project, as well as videotaped depositions of Donald Trump and Donald Trump Jr.
Because the judge denied the request for secrecy by Trump’s lawyers, he did not address BuzzFeed News’ motion in his order.
The testimony about financial projections arose in a lawsuit Trump has brought against Zakarian, known for his appearances as an “Iron Chef” on the Food Network. The chef had contracted to open "a first-class, high quality modern French/American Bistro” on the ground floor of the hotel, with windows and sidewalk seating right on Pennsylvania Avenue.
But then Trump announced his bid for the presidency and made incendiary remarks about Mexican immigrants, saying: “They're bringing crime. They're rapists. And some, I assume, are good people.” Zakarian pulled out, and Trump sued him, demanding $14 million.
As part of that suit, financial analyst Raymond Flores, who worked for Trump’s hotel company, was deposed in May. Excerpts from his deposition were released last month, but key passages were redacted at the request of Trump’s lawyers. Still, those excerpts contain passages that suggest the Trump team had more than one set of financial projections.
After one brief statement by a lawyer that has been redacted, the lawyer went on to ask Flores: “And then for internal use you have a different set of projections. Is that right?”
“Correct,” Flores answered. That set of projections, he said, was “our best guess of, you know, how we would reasonably do if we didn’t hit it out of the ballpark on all cylinders.” He said the estimates are used to “manage our expectations internally” and give “a realistic projection of what you’re going to do or what the downside risk is.”
In another exchange about what Flores called “base model” projections, a lawyer asked, “Is it your understanding that this is going to be the rosier model of the sort that you would provide to [REDACTED]?” Flores replied that the model “has heightened projections that we would likely have shared with a [REDACTED].”
Zakarian’s lawyers, who took Flores’ deposition, paraphrased the redacted portions in court papers filed July 19. Referring to the candidate’s hotel company, they wrote: “Mr. Flores acknowledged that Trump OPO regularly prepares two sets of financial projections — one for internal use, on which the business people would actually rely, and a ‘rosier’ set for other purposes.”
Flores’ deposition first surfaced last month when excerpts from it were filed with a motion by Zakarian’s lawyers asking the judge to reject the damages Trump claimed he was owed. Holeman refused to rule on that motion and a separate one filed by Trump’s lawyers because the deposition excerpts filed with them were “woefully incomplete,” he wrote, leaving him without enough information to make an informed decision.
Holeman ordered both sides to file by this Friday full transcripts of every deposition they cited in their motions, including those of Flores, Trump himself, Ivanka, and Donald Jr.
This week, Trump’s team asked the court to keep numerous passages confidential, including Flores’ full comments about the different financial projections. They also requested that a brief passage from Trump’s own deposition be kept secret. In response, BuzzFeed News filed a motion arguing that Trump's ownership of the company “alone makes the litigation of his business disputes a matter of significant public interest in the midst of a presidential election campaign.” Requests for secrecy by Trump’s lawyers fall “far short of protectable trade secrets and instead seek to shield potentially embarrassing information.”
Flores was responsible for preparing estimates of the hotel’s future financial performance using a model that shifted based on conversations with colleagues and changing assumptions about room rates, occupancy, and expenses, he said in the deposition excerpt. Flores’ reports may influence how the court views Trump’s claim that the financial impact of Zakarian’s withdrawal from the hotel project totaled $14 million.
An attorney representing Zakarian’s restaurant company, Deborah Baum, declined to comment and directed a reporter to her team’s legal filings. Trump’s lawyers on the case also declined to comment.
Trump’s company won a competitive process in 2013 to transform the Old Post Office building into a hotel. His team gained advantage by making certain promises, including promises about a co-investor that later withdrew and an architect who was removed from the team shortly after Trump won, BuzzFeed News reported earlier this year.
When he signed the lease, Trump had put down an equity investment of $2.4 million, according to a lease document later obtained by BuzzFeed News under the Freedom of Information Act. He gave more than 22 percent ownership of the project to three of his children, Ivanka, Eric, and Donald Jr., even though the document shows they did not put in any equity of their own.
This article has been updated to reflect the judge's decision and reaction from the Trump Organization's general counsel.
Daniel Wagner is an investigative reporter for BuzzFeed News and is based in Washington, DC.
Contact Daniel Wagner at Daniel.Wagner@buzzfeed.com.
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