Forbes invalidates Trump fraud suit in attempt to bolster it

September 28, 2022

By Tim Worstall

Forbes wants us to know that they have an exclusive recording that bolsters the New York State Attorney general’s fraud suit against former President Donald Trump.

This would be big news if it were true – the correct way to understand what they’re saying is that it entirely undermines the suit itself. The piece is headlined, “Exclusive Recording, Documents Bolster Trump Fraud Lawsuit.”

“New York state is suing Donald Trump and his business for engaging in financial fraud. Forbes has documents and a recording of Trump talking about 40 Wall Street, the first property cited in the Attorney General’s press conference, that seem to back up her claims.”

There’s a problem with this claim. Not with the documents, or what Trump might have said, but with the proof it supposedly provides. But it provides proof of entirely the opposite, that it does not back up the claims being made in the suit against Trump.

To explain – Forbes produces a list of the top 400 richest people in the world each year – with varied subsets of rich women, rich, young and so on. Trump has not exactly been shy over the years and has striven to an extent to get onto this list and to get higher upon it.

What Forbes is saying here in this piece is that Trump told them that his building – 40 Wall Street, aka The Trump Building – was worth more than it actually was. Or perhaps it was. Forbes says he told them that the interest rate on the mortgage was lower than in reality, the operating income higher, profits better. Effectively being a blowhard about how much money he had and was making from this one building.

It won’t come as a huge surprise to all that many, the story so far. It’s the implication of it that is important, however.

The heart of the Letitia James case against Trump is that this sort of activity – blowhardiness – is illegal, it’s fraud. Trump has provided high estimates of his buildings’ and thus his own net worth to people – fraud. Forbes – as we can see from that headline – is leaning in that direction, they’ve got that proof of the action. But Forbes then says this:

For decades, Trump and his lieutenants lied to Forbes about his finances, as we have duly noted over the years in the annual Forbes 400 issue listing the richest Americans.

Now, we can say that’s reprehensible. Tsk. But it also was one of the annual amusements of that Forbes rich list to see Trump complaining about how Forbes wasn’t putting him high enough on said list. Because Forbes wasn’t taking what he said as being wholly and precisely accurate. They made their own estimations and it’s those own estimations – not Trump organization ones – that decided positions on the list.

Which rather destroys, not supports, the AG’s case. If the journalists assumed – and worked to – the idea that Trump was talking up his own estimates and that they’d better come up with better ones then what were the bankers going to do? If no one at all believed Trump’s numbers then what fraud is there? For no one took action based on Trump’s numbers.

Forbes is almost certainly the world’s premier business magazine. It ranks at No. 19 in U.S. news and media publishers of all types and gains some 102 million visits a month from that position. The paper magazine also has a substantial distribution. There’s also a certain cachet that comes from that leading business magazine position – “If even Forbes says then this….” is often taken as proof that if the business world says this too then it must be so.

Which is the danger of a piece like this. “Forbes says so” is a powerful meme. So it’s necessary to understand what Forbes has really said here. Trump bigged up the value of his properties to Forbes. It is not, however much journalists might like to think it is, a crime to exaggerate to journalists. Forbes didn’t believe Trump, as they say they didn’t, meaning that there was no fraud here. At which point the AG case rather collapses – for fraud requires that people believe what they’re being told.

Wouldn’t it be fun if Forbes reported this the right way around? Possibly even less biased?


(Disclosure: The author worked freelance for Forbes for a  number of years. He did not work on the rich lists, nor interact with those who did.)


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