Former President Donald Trump's company will have many of its business activities overseen by an outside monitor until New York Attorney General Letitia James's lawsuit alleging fraudulent asset valuations is resolved, a judge ruled.
New York state Judge Arthur Engoron on Thursday granted James's request for such a monitor as part of an order blocking the Trump Organization from issuing financial statements that don't disclose the "assumptions and techniques" used to value its assets or from transferring or disposing of assets without court approval.
The monitor will oversee company submissions for any statement of Trump's financial condition, financial disclosures provided to lenders and insurers, and any corporate restructuring or disposition of significant assets to ensure compliance with the court order.
Engoron gave the parties until Nov. 10 to each propose three potential candidates for monitor and until Nov. 15 to comment on the choices. After the judge appoints a monitor, the company will have two weeks to provide that person a "full and accurate description of the structure and liquid and illiquid holdings and assets of the Trump Organization."
The order potentially opens up Trump to unprecedented outside financial scrutiny — he was the first president in recent history not to release his taxes, and even now continues to fight tooth-and-nail to keep his finances secret. It's the latest fallout from his legal battle with James, who sued Trump and three of his children in September and is seeking to permanently ban them from running companies in their home state.
"Today's decision sets a dangerous precedent for government interference in private enterprise and is an obvious attempt to influence the outcome of the upcoming election," the Trump Organization said in a statement that also called James's suit "political persecution.
Engoron ruled following several hours of arguments earlier on Thursday. The decision also came a day after Trump filed a lawsuit against James in Florida seeking to stop her from imposing controls on many of his assets and obtaining information about his finances.
Kevin Wallace, a lawyer in James's office, argued the Florida filing strengthened the case for the appointment of a monitor because the Trump Organization is "seeking to preclude any visibility by the court into the structure of the revocable trust" that controls the former president's business interests."
Wallace also argued that Trump has already moved to restructure his business holdings, selling his former hotel in the Old Post Office not far from the White House on Washington's Pennsylvania Ave., and setting up a new company in Delaware.
'Political theater'
Christopher Kise, a lawyer for the Trump companies, called James's request "political theater." He frequently argued that sophisticated parties such as Deutsche Bank, Zurich Insurance Group and Mazars LLP, whom James alleges the Trump Organization misled, could take care of themselves.
"There's just no public interest here at all," he said. "It's corporate titans against corporate titans."
But Engoron turned one of those examples back on Trump in his ruling.
"Notably, New York City is the epicenter of global finance," the judge wrote. "To take an example close to home, Deutsche Bank, headquartered in Germany, lent hundreds of millions of dollars to a New York real estate conglomerate that owns properties all over the world. New Yorkers derive enormous economic and other benefits from all the money coursing through the veins of Wall Street and real estate. Our executive, legislative and judicial institutions are obligated to ensure that financial transactions are conducted truthfully, not fraudulently."
James hailed the decision on Twitter soon after it was issued.
Donald Trump and the Trump Organization cannot move assets to evade liability and an independent monitor will be installed to oversee financial compliance at the Trump Organization.
— NY AG James (@NewYorkStateAG) November 3, 2022
No matter how powerful you are, everyone has to play by the same set of rules.
Engoron has ruled against Trump a number of times in the past and held the former president in contempt for failing to turn over records to James earlier this year. Trump racked up $110,000 in fines before complying.
In a post on his Truth Social platform last week, Trump blasted Engoron as "vicious, biased, and mean." He filed requests to have the case randomly reassigned to a different judge or transferred to a different court division.
Engoron on Wednesday denied those requests as "procedurally improper and substantively unavailing." The judge noted that he has been "presiding over every aspect of the investigation" and has reviewed tens of thousands of documents.
"Judicial economy strongly militates keeping this case with this court, which will continue to preside over it 'without fear or favor,'" Engoron said.
The New York case is New York v. Trump, 452564/2022, Supreme Court of the State of New York, County of New York (Manhattan). The Florida case is Trump v. James, 15th Judicial Circuit, Florida (Palm Beach).
