What Trump’s Tax Returns Could Tell Us About His
Dealings with Russia
In the wake of Harry Reid’s
accusations, it’s critical to America’s national security for Trump to open up.
By Norman Eisen and Richard W.
Painter
October 31, 2016
Over the weekend, as controversy raged over FBI Director James Comey’s letter to Congress about Anthony Weiner's laptop, Trump campaign manager Kellyanne Conway responded by calling for “full disclosure and transparency, honesty and immediacy.”
That same standard should be applied by Trump to an issue he himself has avoided for months: his tax returns and what they might say about his dealings and holdings overseas. For the past four decades, every other presidential candidate has released his or her returns. Only Trump has refused.
Trump says his tax returns reveal nothing that is not already disclosed on his official candidate financial disclosure, called Form 278e. As ethics counsels to the past two presidents, we dealt with both their tax filings and their Form 278's and so we know that Trump is wrong. His tax filings have an enormous amount of additional information which, in this case, could be critically important to determining whether his business overseas might affect his decision-making as president. That is because Trump’s 12,000-page tax return may tell us a great deal about his Russian and other foreign business ties that is not on his 104-page campaign financial disclosure. It’s now more vital than ever that we get that information in light of Trump's embrace of Russian hacking, leaking and interference in our election.
If the public saw Trump's taxes, we could check his Russia connections for ourselves. That should start with the troubling discrepancies in how he and his closest associates talk about his Russia ties. Trump has claimed, for example, that “the reason they blame Russia [for hacking into Democratic emails] is they are trying to tarnish me with Russia. I know about Russia, but not about the inner workings. I have no business there and no loans from Russia. I have a great balance sheet.” But that’s very different from the claims that the Trump Organization was making before he decided to run for president. Trump's son said in 2008 that “Russians make up a pretty disproportionate cross section of a lot of our assets” and “we see a lot of money pouring in from Russia.”
Trump’s tax returns could reconcile the tension between these statements. Even if Trump really does have no loans from Russia and no business in that jurisdiction, what about other financial connections with Russians outside of their land? His statement does not rule out such ties, including shared partnership interests, equity interests, joint ventures or licensing agreements with Russia or Russians—both by Trump and his affiliated companies.
More broadly there is the issue of Trump’s business dealings around the world. U.S. tax filers with financial dealings outside the country are required to provide detailed information about their foreign business activity to the IRS.
If we had Trump's tax returns, the documents could, for example, allow closer scrutiny of the widespread foreign deals licensing his name for projects and products. The needed vetting is not only a matter of who the foreign licensors are (including participants in partnerships and firms doing the licensing). It also concerns the critical question whether he is using offshore tax havens to own these licensing assets or shelter income from them. In his foreign licensing deals, Trump emphasizes the importance of political connections, Vanity Fair reported in August. “The nice part [of the licensing model] is you have local people, local developers: they know the government, they know the presidents of the country, the prime ministers of the country, and all of those things,” Trump said. “Now, I help them a lot: If they need zoning, and they say they are doing a Trump job, every single time they get their zoning because the government wants Trump.”
There are other problems with Trump's sole reliance on his 104-page campaign disclosure under the current circumstances. That document may be missing some foreign entities with which he is associated because of exclusions: The 278e need not show assets with losses, for example, if they no longer have a positive value. Given the way Trump does business, there may be many such assets that do show up on his tax returns, and that could reflect Russian or other foreign ties.
One other shortcoming of the campaign disclosure: It is a current report, which doesn’t go back before the reporting period. That period varies for the different parts of the 278e report, but is generally no longer than the preceding calendar year or two. By contrast, Hillary Clinton has provided 38 years of her tax filings. Given the heightened scrutiny called for by Trump's extraordinary statements about Russia, don't we need to know if he had Russian business dealings three or more years ago and what those dealings were?
Trump may counter these questions by asserting that his taxes contain no such information. But should we take his word for it, given his apparent support for Russian criminal meddling in our democratic process? Clinton did not ask people to trust her assertions of what was on her tax filings; she disclosed them. So has every other recent presidential candidate. Ronald Reagan’s adage for arms negotiations with the Soviets two decades ago was “trust but verify.”
Perhaps it is time for voters of all political persuasions to tell Trump the same thing that Reagan told Mikhail Gorbachev: no verification, no deal.
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