CORROSIVE POWER: My interview with money laundering expert Martin Sheil, who spent 30 years as an IRS investigator, retiring as a Supervisory Special Agent in the Criminal Investigation Division.

Read on for Q & A on Trump’s taxes, why the rich crave secrecy and corrosive power.
1/ Q&A:


HSC: Why is Trump fighting so hard to keep his tax returns/financials hidden?

MARTIN SHEIL: “Trump has in fact filed annual financial disclosure statements for 2017 and 2018. It is a scary thing to attempt to get in his head and I would be reluctant to speculate...”
2/ Q1 con.

MARTIN SHEIL: “But since you asked so nicely I would surmise that there is something he might find embarrassing in his tax returns. There could always be something incommensurate in his returns that does not jibe with the financial statements he has in fact filed.”
3/ Q1 con.

MARTIN SHEIL: “It is also possible that the Trump team has taken full advantage of a tax law that is constructed to advantage real estate moguls and other wealthy business owners. Some likely tax provisions utilized would include Net Operating Loss(NOL) carryforward.”
4/ Q1 con.

MS: “Trump has filed for bankruptcy approximately a half dozen times with regard to his Atlantic City casinos that were awash in cash. Multi-million dollar NOLs were likely carried forward to abate some of the profits that various Trump controlled LLC's accumulated.”
5/ Q1 con.

MARTIN SHEIL: “Also it is likely that some commercial real estate owned by the Trump Organization that flows through to Trump had Depreciation and Accelerated Depreciation tax provisions applied to whatever cash flow were generated.”

Q1 con.

MARTIN SHEIL: “This would explain how an entity earning millions of dollars of revenue ends up paying little to no tax.”

Q1 con.

MARTIN SHEIL: “Politically—that could be embarrassing for someone who relies so much on a voting base that is primarily blue collar and/or rural taxpayers who work hard for their money and pay their taxes fully expecting their neighbors to do the same.”
8/ Q1 con.

MARTIN SHEIL: “Another issue that could be embarrassing might be that the gross revenue reported on Trump tax returns is no where near the puffed up financial statements submitted to various banks to
obtain loans for such prospective deals as purchasing an NFL team.”

Q1 con.

MARTIN SHEIL: “It could also be that Trump has engaged in extensive joint ventures with foreign businessmen that would not reflect well on his politics. Quite possibly he has neglected to fully report all of his foreign assets & accounts.”
10/ Q1 con.

MS: “Perhaps his charitable contributions are more parsimonius then he would like his adoring public to believe. There are a host of other potential issues but I would rather not speculate and just wait for the courts rule that his financial data should be released.”

Q1 con.

MARTIN SHEIL: “...And the courts will eventually do so since the law is very much on the side of Congress and the Manhattan DA. The question is when. Justice delayed is justice denied.”
12/ Q1 con.

MARTIN SHEIL: “The Supreme Court must rule by the end of June 2020. How or when the financials become public is anyone's guess since there are a lot of disclosure rules/laws that govern GJ secrecy/Congressional secrecy/Tax return confidentiality.”
13/ Q1 con.

MS: “I have little respect for the legal positions the current Trump legal team has taken on the various suits. It is not like the Donald has the gun-slinging brilliant Rudy Giuliani from the eighties that I knew and respected when he was the US Attorney at SDNY.”

Q1 con.

MARTIN SHEIL: “Rudy was sharp as a tack back then. We briefed him for five minutes before an indictment was announced at a press conference in SDNY with regard to a complex financial fraud...”
15/ Q1 con.

MARTIN SHEIL: “...involving factoring of phony invoices and millions of dollars were defrauded at major NY financial institutions regarding the Irwin Feiner case. Rudy absorbed and processed numerous nuances and complexities...”
16/ Q1 con.

MARTIN SHEIL: “Rudy marched out to face the press and briefed everyone like he had personally worked the case for two years rather than the two minutes or so we briefed him. It is apparent based on his many media appearance in the past year that Rudy is long gone.”


HSC: Why would Deutsche Bank loan money to Trump after he sued them for defaulting on a $40M loan guarantee? And how did he pay it when he lost the case?

MARTIN SHEIL: “Deutsche Bank embarked on an aggressive global expansion strategy in the late ‘90s.”
18/ Q2 con.

MARTIN SHEIL: “In doing so, they took risks that few other banks were willing too. Donald Trump was a major risk given his many bankruptcies. But the timing was good for both early on. When Trump defaulted on the $40M and sued DB it was complete chutzpah by Trump...”
19/ Q2 con.

MS: “Trump was claiming that DB had contributed to the worldwide recession through their own lending policies. It was at this time that the Real Estate financing section of DB washed their hands of Trump and he was turned over to the private wealth mngt section.”
20/ Q2 con.

MARTIN SHEIL: “Coincidental to the loan default and legal suit, Dmitry Rybololev, a Russian oligarch purchased a South Florida mansion for $95M that Trump had purchased only a couple of years prior for approximately $45M.”

Q2 con.

MARTIN SHEIL: “Deutsche Bank went on to loan several hundred more millions to Trump subsequent to this ‘coincidence’.”

Q2 con.

MARTIN SHEIL: “It should be noted that Deutsche Bank was hit with billions of dollars of fines for multiple financial legal transgressions over the course of the first two decades of the new millenium.”
23/ Q2 con.

MARTIN SHEIL: “That did not seem to deter the high risk expansionist policies Deutsche Bank pursued on both sides of the pond. Further analysis of the wealth management section of DB has yielded raids and search warrants in DB hq in Frankfurt...”

Q2 con.

MARTIN SHEIL: “...the raids are with regard to offshore shell companies and bank accounts for high wealth clients located in such places as BVI, Belize, Seychelles and Cyprus.”

Q2 con.

MARTIN SHEIL: “How many Russian oligarchs are clients of DB's private wealth management section? How much have Russian oligarchs invested in DB stock? There is much to mine there.”
26/ Q3

HSC: What is your takeaway when you zoom out and look at what is essentially a small playing field of bad actors?

MARTIN SHEIL: “I’m not sure that the playing field is so small. The offshore economy is a multiple trillion dollar bonanza that is booming.”
27/ Q3 con.

MS: “There exists a whole class of bankers, lawyers, accountants, financial consultants and companies that cater to the 1%ers and facilitate their money laundering and tax evasion through the creation of shell companies, nominee directorships & secret bank accounts.”

Q3 con.

MS: “There is much truth to that famous tax felon's quote: ‘Only the little people pay taxes.’ If there really is a sincere desire to level the unequal playing field than a serious effort is needed to combat offshore tax evasion and money laundering.”
29/ Q3 con.

MS: “We will just have to see if the political will to take on special interests that contribute so much to the politicians campaigns that enable those politicians who write the tax rules and decide on the funding of financial regulatory agencies, e.g. IRS, changes.”
30/ Q4

HSC: Author of the definitive report on oligarch money infesting the GOP, Dr. @ruthcmay believes there should be far more transparency on hedge funds. Your thoughts.

MS: “Agreed, but it just won't happen.”

Q4 con.

MARTIN SHEIL: “Look at how the offshore economy has expanded in the last fifty years. The rich crave secrecy, confidentiality and anonymity with regard to their financial transactions.”
32/ Q4 con.

MARTIN SHEIL: “Blockchain cryptocurrency transactions are alleged to be transparent but the big selling feature is their relative anonymity. Facebook is pushing Libra as the financial transactor of the future...”
33/ Q4 con.

MARTIN SHEIL: “...when society is still struggling to catch up to Ultimate Beneficial Ownership of offshore shell company bank accounts in tax havens located in the far reaches of the globe.”
34/ Q4 con.

MARTIN SHEIL: “I have little confidence that more transparency will be forthcoming in the near future with regard to our financial transactions. It would be great, but I just don't think the oligarchs will allow it.”

35/ Q5

HSC: Is there any legal reason the Supreme Court could rule in Trump's favor with regard to Mazars/financial subpoenas?

MARTIN SHEIL: “None. Are there any political reasons? Hah! Essentially, Trump’s legal team is taking the position that the President is above the law.”

Q5 con.

MARTIN SHEIL: “They’re arguing that he is not accountable to Congress and no legal authority can either investigate or prosecute him. This is completely bogus. If Mueller proved anything he proved that a sitting President can be investigated.”
37/ Q5 con.

MARTIN SHEIL: “The Manhattan DA is INVESTIGATING the Trump Organization and to do so need tax returns and accounting work papers. The subpoena to Mazars - the Trump accounting firm is a third party subpoena.”

Q5 con.

MARTIN SHEIL: “It is ludicrous for the Trump legal team to suggest that such a subpoena could be distracting to a President. It is not like Mr. Trump is being asked to root around in his attic or basement for old tax returns.”

Q5 con.

MARTIN SHEIL: “The Supremes will rule for the Manhattan DA in this case and for Congress with regard to their subpoenas in my humble opinion.”


HSC: You’ve studied rogues like this your whole career. Is any of this shocking to you?

MARTIN SHEIL: “No. People are greedy. The accounting profession has conducted studies that family owned businesses commit a high percentage of fraud. Power corrupts!”
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