Under the agreement's terms, the ex-CFO still has $1.25 million in payments left — and clauses restricting what he can say
On top of the five-month prison sentence he was ordered to serve at one of New York's most notorious jails, the Trump Organization’s ex-chief financial officer had to pay $2 million in back taxes, penalties and interest in connection with his conviction on more than a dozen counts of criminal fraud.
The day before Allen Weisselberg's sentencing back in January of this year, he also had signed an agreement with the Trump Organization to pay him exactly that amount in severance — in quarterly increments of $250,000 over the course of two years.
Testifying Thursday in a separate civil fraud trial where he's a co-defendant alongside Donald Trump and other company brass, Weisselberg insisted that nobody should read too much into the mirror image $2 million figures.
“Coincidence,” remarked Weisselberg, in response to insistent and incredulous questioning by an attorney for the state of New York.
Attorney General Letitia James’ counsel, Louis Solomon, made clear that he believed the severance agreement colored Weisselberg’s cooperativeness with state prosecutors who have been peppering him with questions during the trial about the credibility of the Trump Organization's finances. Solomon noted that the severance agreement barred Weisselberg from voluntarily cooperating with his office, except through a subpoena.
Legal experts say that the terms of Weisselberg’s agreement with former President Donald Trump’s namesake company, entered into evidence during his first day on the witness stand, could explain why that testimony has appeared evasive.
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“Under his severance agreement, Allen Weisselberg has a strong incentive not to admit to any criminal activity during his testimony,” said former federal prosecutor Mitchell Epner, who is now a partner at Rottenberg Lipman Rich PC.
Weisselberg previously pleaded guilty to tax fraud in a separate criminal case brought by Manhattan District Attorney Alvin Bragg, a case that led to his months-long stint in Rikers Island. That plea deal obligated Weisselberg to testify against the Trump Organization in criminal court, but legal experts told The Messenger that his newly-public agreement with the company might make him clam up in his ongoing civil fraud trial.
Weisselberg's scheduled payouts aren't done yet
Under the terms of his agreement, Weisselberg was scheduled to receive only three of his eight quarterly $250,000 payments, which the Trump Organization agreed to pay in full by Dec. 31, 2024.
That leaves a full $1.25 million of Weisselberg’s severance unsatisfied as he sits on the witness stand, where he spent his first morning on Tuesday answering 60 questions with variations of “I don’t recall” — and more than 30 with variations of “I don’t know.”
Former federal prosecutor Renato Mariotti, the co-host of the podcast “It’s Complicated,” described such agreements as classic ways used to undermine a witness’s testimony.
“Whenever a witness has a financial reason to support one side in a lawsuit, they will be attacked on cross-examination as biased,” Mariotti told The Messenger.
In the ongoing civil fraud trial, Weisselberg is both a witness for the state and a co-defendant, reversing the usual tenor of the questioning. Direct examination by James' counsel Solomon has been confrontational, as Solomon repeatedly tried to pin down Weisselberg into yes-or-no answers.
Other clauses of Weisselberg's punish admissions of criminal conduct
Since Weisselberg’s testimony was interrupted to accommodate the schedule of another witness, the ex-CFO has not yet faced cross-examination, but any questioning he may face by his own attorneys and co-defendants will likely be friendly.
Both Epner and Mariotti expected the AG’s office to cite the severance agreement to call Weisselberg’s testimony into question during closing arguments.
Beyond the matter of cold, hard cash, the severance agreement contains a lengthy provision titled “Employee Promises” obligating Weisselberg “not to verbally or in writing disparage, criticize or denigrate the Company or any of its current or former entities, officers, directors, managers, employees, owners, or representatives.” There is also an indemnification agreement that has him attest that he “acted in good faith” and had “had no reasonable cause to believe his conduct was unlawful.”
Epner described this as “standard language” for New York indemnification agreements.
“Nevertheless, if Weisselberg were to admit that he knowingly engaged in criminal activity, he would run a real risk of Trump refusing to pay his legal bills,” Epner told The Messenger.
“In addition, if a receiver were to take over the Trump Organization, it is possible that the receiver would refuse to pay the amounts called for by the severance agreement if Weisselberg testified that he had knowingly engaged in criminal activity on behalf of Trump – as those payments would be voidable as payments for criminal acts," Epner added.
Weisselberg's testimony continues on Thursday afternoon.