NEW YORK (AP) — How did Donald Trump’s oldest sons — entrusted to run his real estate empire when he became president — react when they learned that a top executive was scheming to dodge taxes on lavish corporate perks?
They gave him a raise, according to testimony Friday at the Trump Organization’s tax fraud trial.
Allen Weisselberg, the Trump Organization’s former chief financial officer, testified that Eric Trump raised his pay by $200,000 after an internal audit spurred by Trump’s 2016 election found that he had been reducing his salary and bonuses by the cost of the perks.
The raises boosted Weisselberg’s annual pay to $1.14 million, extra cash he said he used to pick up the tab for things Trump and the company had previously been paying: rent on a Manhattan apartment, Mercedes-Benz cars for him and his wife, his grandchildren’s private school tuition, and more.
The company continues to pay Weisselberg his usual $640,000 in salary and $500,000 in holiday bonuses and punished him only nominally after his arrest in July 2021, reassigning him to senior adviser and moving him to a different office at Trump Tower. He is now on a paid leave of absence.
Weisselberg discussed his pay boost on his third and final day of testimony at the trial.
He testified that Eric Trump and Donald Trump Jr., both executive vice presidents at the Trump Organization, knew from the audit that Weisselberg had not reported his company-paid apartment as taxable income, as required by law.
Weisselberg told jurors he stopped his scheme after the audit. Soon after, he said, he asked Eric Trump for a raise, conveying to him that “since the practice was no longer going on I would need some additional income to pay for those expenses.”
Weisselberg said Eric Trump, who handles day-to-day operations at the company, signed off on his raise and is now in line to approve his latest $500,000 Christmas bonus — even as Weisselberg prepares to shuffle off to New York City’s infamous Rikers Island jail complex.
Other executives accused of scheming to avoid taxes on company perks also kept their jobs and pay, Weisselberg said. They include his son, former Central Park ice rink manager Barry Weisselberg, and the company’s chief operating officer, Matthew Calamari Sr.
Weisselberg, 75, pleaded guilty in August to taking $1.7 million in off-the-books compensation. His plea agreement requires him to testify as a prosecution witness in exchange for a five-month jail sentence. Weisselberg, who had been facing as many as 15 years in prison, said he previously rejected an offer of one to three years in prison.
Manhattan prosecutors allege that the Trump Organization helped top executives avoid paying taxes on company-paid perks and that it is liable for Weisselberg’s wrongdoing because he was a “high managerial agent” entrusted to act on its behalf.
The tax fraud case is the only criminal trial that has arisen from the Manhattan district attorney’s three-year investigation of Trump and his business practices. if convicted, the company could be fined more than $1 million and face difficulty getting loans and making deals.
Weisselberg’s testimony Friday suggests that key executives at the Trump Organization and members of Trump’s own family condoned his behavior once it was discovered, rather than firing him and reporting him to the authorities. Weisselberg said the company benefited from his scheme because it did not have to pay him as much in salary.
Company lawyers, however, argue that the Trumps are deeply loyal — stressing how Weisselberg was “among the most trusted people they knew” and how they continued to stand by him, even as he acknowledged betraying their trust. His lawyers are being paid by the company.
Trump, who announced Tuesday that he is running again for president in 2024, is not expected to appear at the trial. But he signaled Friday that he has been following along, defending Weisselberg and bashing prosecutors in posts to his Truth Social platform.
Trump wrote that the case had “fallen apart” after Weisselberg testified Thursday that neither Trump nor Trump’s family were involved in his tax avoidance scheme.
“Did a longtime executive pay tax on the use of a company car, or a company apartment, or payments (not even taken by us as a tax deduction!) for the education of his grandchildren. For this he get handcuffs and jail?” Trump wrote, describing the situation as “VERY UNFAIR!”
Trump was elected president in November 2016 and took office in January 2017, inviting fresh scrutiny of the Trump Organization, a privately held entity through which he and his family manage its golf courses, luxury towers and other investments.
Weisselberg said he and another company executive, Jeffrey McConney, decided around the time of the election that the company needed to start changing some of its dubious pay practices and financial arrangements. They brought in a Washington lawyer who audited the company’s tax practices and wrote a long memo detailing her findings.
McConney, the senior vice president and controller, helped Weisselberg fudge payroll records to reduce his income tax bill. He received immunity and testified earlier in the trial.
Michael R. Sisak, The Associated Press