Complaint Asks FBI to Probe Trump Claims on $50M Loan

With Roger Sollenberger, Political Reporter

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This week’s Big Dig . . . How a New Complaint Might Force the DOJ to Probe Trump’s Potential $50 Million Tax Dodge

A watchdog group is asking the Justice Department to investigate whether Donald Trump repeatedly lied in sworn statements to the federal government—including his own administration—about a $50 million loan that apparently never existed in the first place, and which could be evidence of tax evasion.

The criminal complaint, filed Thursday by watchdog Citizens for Responsibility and Ethics in Washington and first obtained by The Daily Beast, asks the FBI and the Justice Department’s Public Integrity Unit to probe whether Trump “knowingly and willfully” lied about the loan on his personal financial disclosures.

Trump has filed nine of those statements with the Federal Election Commission and the Office of Government Ethics over the years, personally swearing to their accuracy, which could expose him to criminal liability if found to have been intentionally false.

The complaint comes after The Daily Beast first reported in January that the court-appointed special monitor in Trump’s New York business fraud case buried a bombshell claim in a footnote to a status report: A mysterious $50 million loan, which Trump reported owing to one of his own LLCs, “never existed.”

Legal experts previously told The Daily Beast that the revelation suggests the arrangement may have allowed Trump to evade taxes on tens of millions of dollars in income.

Brass tax

In a statement to The Daily Beast, CREW president Noah Bookbinder slammed Trump’s continual lies.

“Donald Trump has a long history of lying about his finances for his personal benefit—he’s on trial in New York right now for doing just that—and this appears to be another example,” the statement said, referencing the criminal hush-money trial now underway in Manhattan.

As the complaint notes, The Daily Beast and other outlets have reported that Trump’s claims about this loan may indicate a tax-avoidance scheme, potentially to the tune of $48 million.

While CREW’s complaint doesn’t directly allege tax evasion, it does say that Trump’s alleged lies about this loan could constitute “material false statements” that would prevent officials from assessing whether Trump was “in compliance with applicable laws and regulations.”

Loan shark

The complaint walks through the loan’s complex history—an inscrutable irregularity that has flummoxed financial reporters for years. That mystery was revived this January, when a court filing in Trump’s New York fraud case delivered explosive news.

In a letter to New York state judge Arthur F. Engoron, special monitor Barbara Jones—charged with reviewing the Trump Organization’s finances—claimed that the company recently informed her that the loan did not exist.

“[I]n recent discussions with the Trump Organization, it indicated that it has determined that this loan never existed—and thus that it would be removed from any upcoming forms submitted to the Office of Government Ethics (OGE),” Jones wrote.

Weeks later, Engoron found Trump and his company guilty of engaging in years-long, systematic business fraud, misrepresenting their assets in order to gain favorable terms from lenders. He fined Trump and other Trump Org officials $364 million, and has since bestowed “enhanced” powers on Jones as Trump’s financial babysitter.

Gimme shelter

In a response to Jones’ filing, Trump’s legal team accused her of “falsehoods” and “deliberate mischaracterizations,” claiming the Trump Org never told her the loan wasn’t real. As evidence, the response included an internal memo about the loan—dated Dec. 4, 2023—which Trump’s lawyers said they’d provided Jones.

But as the CREW complaint notes, that memo “does not evidence the loan’s prior existence,” but “merely represents that as of December 4, 2023, ‘no amounts are due or payable’ and ‘no liabilities or obligations are outstanding’” for a loan related to Trump International Hotel & Tower Chicago.

In a conversation with The Daily Beast as the Trump Org was preparing its response to Jones in January, the company’s chief financial officer Alan Garten contradicted the memo—which his own company had inked the previous month. Instead, Garten insisted that the Chicago LLC actually owed the money to Trump.

“Yes, the loan existed,” Garten said, claiming the debt was “an internal loan” where Trump “lent money to the entity that he owns.”

But again, as the CREW complaint notes, all of Trump’s financial disclosures clearly state that it was the other way around: It was Trump who owed the money to his LLC.

Evasion nation

After nearly a decade of public scrutiny, this massive loan remains a mystery, though Jones’ letter may provide some clarity. According to legal experts, it could very well be tax evasion.

Tax experts told The Daily Beast that, typically, the forgiven amount of a loan—in this case $48 million—would qualify as reportable, taxable income. Instead, those experts said, Trump could have invented this loan to make it look like the debt wasn’t forgiven, but repurchased from Fortress—a scenario where it wouldn’t be income.

“It would appear, assuming Judge Jones’ letter is accurate, that this amounts to tax evasion,” Martin Lobel, a prominent Washington, D.C., tax attorney, told The Daily Beast at the time.

Remarkably, this aligns with one version of the story that Trump himself has promoted. In a 2016 interview, Trump told The New York Times that he had indeed purchased this loan.

“I have the mortgage. That is all there is,” Trump said at the time. “Very simple. I am the bank.”

This is an excerpt—more details can be found in the full version of this story, here.

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FROM ROGER AND MINI’S NOTEBOOKS

Hari Kari. GOP senatorial hopeful and inveterate Arizona election denier Kari Lake’s joint committee—the “Kari Lake Victory Fund” (KLVF)—just turned in some unbelievable fundraising numbers. That’s because one particular item seems literally impossible.

In its quarterly filing this week, KVLF claimed it raised a negative amount of “unitemized” donations—that is, contributions from individual donors who have not yet given the committee more than $200. Committees must report how much they raise from those donors, but they aren’t required to publicly file identifying details—including names, addresses, employers, and occupations—though they must maintain that information and disclose it if any of those donors eventually give an aggregate amount of more than $200.

In all, the KVLF disclosure, which covers the first three months of 2024, lists -$28,265 in unitemized contributions—representing 142 individuals, at minimum.

It’s unclear how this is even possible. While negative amounts typically indicate a committee refunded or disgorged more than it took in, KLVF’s only prior report showed a total $1 in unitemized contributions. That indicates the committee didn’t have $28,265 in unitemized donations on hand that it could have refunded in the first place, seemingly rendering the negative amount logically impossible.

But even if the amount does somehow reflect refunded donations, the report itself doesn’t back that up. That’s because the committee also reported actual refunds on the same filing, in a total amount of $10,100 kicked back to one donor—less than half the negative contributions, returned to a contributor who was way above the itemization threshold.

Brendan Fischer, deputy director of Documented and a specialist in campaign finance law, couldn’t figure it out. One potential possibility—that the JFC had received $28,265 in unitemized donations but refunded them in the same reporting period—would come out as a wash, Fischer said, and would be reported as a flat $0.

“I don’t see how they get to negative unitemized contributions,” he told Pay Dirt. “The committee seems to be making the impossible claim that it is refunding more than it received in the first place.”

We don’t have answers. May we suggest, perhaps, an audit?

Bushwhacked. For the past few months, the Justice Department has been investigating progressive superstar Rep. Cori Bush (D-MO) for allegedly misusing donor funds to pay for security services. Her latest campaign filings suggest the probe has been costly.

The Squad member paid more than $139,000 in legal fees to six different firms in the first three months of 2024 alone—nearly a quarter of the $608,000 she brought in over the same period. The campaign also racked up another $78,000 in new legal debt—costs that were incurred in the same period, but weren’t paid. That represents a significant spike over the roughly $32,000 she spent on legal expenses all last year—when Bush beat back an earlier investigation by the Office of Congressional Ethics over the same matter—and much more than the few thousand the campaign spent on lawyers before that.

Furthermore, Bush has continued the pattern that seems to have landed her in hot legal water in the first place. As Forbes reported this week, and FEC records confirm, Bush continued paying her husband $2,500 every two weeks after the DOJ investigation became public.

The congresswoman has maintained that the arrangement is above-board, pointing out that candidates can pay relatives for campaign services at fair market value. The OCE agreed, dismissing the matter in October. But congressional ethics probes rarely carry consequences, and DOJ investigators have more tools at their disposal.

The investigation comes at a politically precarious time for Bush, one of the most left-leaning members of Congress. Since the Oct. 7 attack on Israel, Bush has advocated relentlessly for a ceasefire, prompting pro-Israel donors to spend against her. She faces a serious primary challenge from St. Louis County prosecuting attorney Wesley Bell, who outraised her in the first quarter.

Collect ’em all. Sen. Ted Cruz (R-TX) has famously ranked at or near the top of the list of the most hated people in Washington for years—an epithet that the notorious troll embraced as a branding opportunity. Fitting, then, that one of the most hated industries in the country—debt collectors—seems to love him a little too much. This week, the FEC notified the ACA International PAC—the trade association for America’s debt collectors—that they’d given above the legal amount to Cruz’s 2024 re-election bid.

Also this week, Cruz got hit with a follow-up complaint targeting his unprecedented iHeartMedia podcast. Last week, Cruz’s arrangement was targeted in a campaign finance complaint from nonprofit watchdogs Campaign Legal Center and End Citizens United. On Wednesday, CLC followed up with a Senate ethics complaint after we reported new details that raised questions about whether Cruz violated the ban on “honorarium,” or speaking fees.

Also this week, Cruz—like so many of his colleagues—requested and received an extended deadline for his 2023 calendar year financial disclosure, which now comes due in August. While that document could provide tantalizing details about any agreement Cruz may have with iHeartMedia, the deal—first struck in 2022—didn’t appear on his previous disclosure.

MORE FROM THE BEAST’S POLITICS DESK

New court filings in the DOJ’s foreign influence case against Sen. Bob Menendez case have confirmed The Daily Beast’s previous reporting—that his wife’s work for a COVID testing firm was tied to an alleged bribery scheme. Will Bredderman, whose investigative reports have pretty much called this entire thing in advance, takes yet another well-earned victory lap here.

House Speaker Mike Johnson is gambling that he can get a direly needed Ukraine aid package over the finish line—and that it won’t cost him his speakership. But as Riley Rogerson and Reese Gordon reported this week, it might cost him the gavel.

After an alternately contentious and soporific first few days, Trump’s first criminal trial now has 12 jurors—and one angry man. But, as Jose Pagliery reported today, the slog is far from over, as prosecutors and defense lawyers must now screen dozens of other candidates to decide on the half-dozen New Yorkers who will serve as alternates.

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