Judge Rejects Trump Company’s Privilege Claim in New York Probe
(Bloomberg) -- President Donald Trump’s company can’t use the attorney-client privilege to shield an engineer’s documents from a property-valuation probe by New York state’s top lawyer, a judge ruled.
The Trump Organization failed to provide evidence to justify extending the privilege to communications between the company’s former land-use lawyer and an engineer whose work was used to appraise a property at the center of the probe, state Supreme Court Justice Arthur Engoron ruled Tuesday in Manhattan.
New York Attorney General Letitia James is seeking the documents as part of an investigation into whether the president’s real-estate business falsely reported property values to get loans or tax benefits. The company has said the probe is politically motivated and denies wrongdoing.
The investigation has emerged as one of the biggest potential threats to Trump after he leaves office in January following his election loss to President-elect Joe Biden. He and his Manhattan-based business also face an active criminal probe by Manhattan District Attorney Cyrus Vance.
James, a Democrat, sued in August after Trump’s company failed to comply with subpoenas seeking documents from a series of real-estate and tax transactions as well as testimony from the president’s son, Eric Trump, who refused to sit for a deposition. The judge in September ruled largely in New York’s favor, including by ordering Eric Trump to sit for a deposition before the Nov. 3 election.
Narrow disputes over attorney-client privilege have persisted since then. The privilege can extend to non-lawyer third parties, but only if their assistance to a lawyer was necessary -- not just helpful -- in providing legal advice to a client. Engoron ruled Trump’s company didn’t meet that burden.
Tuesday’s ruling related to communications involving Ralph Mastromonaco, an engineer who performed work that was used in the appraisal of Seven Springs, a property on 212 acres in Westchester County, outside New York City. James is examining whether Trump’s company gave an accurate valuation for the property when it served as the basis for about $21.1 million in tax deductions for donating a conservation easement for the 2015 tax year.
Mastromonaco in November said he had been interviewed by the attorney general’s office several months ago and wasn’t aware of the appraisal until then. The engineer said his work was limited to the attempted subdivision of Seven Springs, which took place earlier.
On Oct. 30, the judge ordered former Trump land-use lawyer Charles Martabano to hand over hundreds of documents after finding that he had gone too far in asserting attorney-client privilege over his communications with the company.
The probe was triggered by congressional testimony by the president’s former personal lawyer and fixer, Michael Cohen, who fell out with his ex-boss before alleging a variety of financial shenanigans at the president’s company. Trump’s 40 Wall Street skyscraper and his Chicago hotel are among the properties that are part of the probe.
The case is People v. The Trump Organization, 451685/2020, New York County Supreme Court (Manhattan).
©2020 Bloomberg L.P.