David Trone's Financial Disclosures Don't Add Up. Experts Say That Could Land Him in Legal Trouble.

It’s unclear how much Rep. David Trone’s stake in Indiana Fine Wine & Spirits is worth, but it’s enough that the Maryland Democrat pledged it as collateral for a loan worth up to $25 million in August 2020.

But you wouldn’t know that from Trone’s financial disclosures. In both 2020 and 2022, Trone didn’t even mention the Indiana wine franchise—an extension of his Total Wine empire he launched with his brother in 2019—omissions that imply his stake in the business those years was worth $0.

For more than a decade, the Maryland Democrat has pledged at least 20 offshoots of his $2.4 billion Total Wine empire as collateral for the loan, which PNC Bank first disbursed in 2008. But a Washington Free Beacon review found that for years after launching his first campaign for Congress in 2016 and winning his first term in 2018, Trone didn’t disclose his ownership in at least eight of those offshoots in his financial disclosures to the public.

Experts say Trone’s apparent failure to disclose all his assets could land the Democrat in legal trouble.

"Our democracy depends on the trust of the people in our elected officials," said Tom Anderson, the president of Last Government Watchdog. "Congressman Trone appears to have violated that trust."

By "failing to take seriously the disclosure of all assets and liabilities," Trone is "opening the door to serious penalties of up to five years in prison and/or up to a $50,000 fine if he is found to be criminally avoiding disclosure," Anderson told the Free Beacon.

Trone, the favorite to challenge former Maryland Gov. Larry Hogan (R.) for Maryland’s open Senate seat in November, has made no secret of his wealth. The congressman signaled he would be willing to spend $50 million of his own money on his Senate campaign before entering the race in May 2023 and has since spent a record-breaking $41 million leading up to the primary.

In a primary debate on Apr. 19, Trone boasted that he was "the largest donor to Democrats in the last three cycles," and that his donations help "drive our Democratic Party. Not only in the House but also in the Senate."

Trone has Total Wine to thank for providing him with the revenue necessary to finance his political career. He’s raked in at least $120 million in distributions from Total Wine since 2018, and in 2022 he reported owning interest in 21 of the chain’s affiliates with a combined stake of no more than $80 million.

Taking Trone’s disclosures at face value, it appears he has already poured a significant chunk of his net worth into his Senate campaign. But the figures in Trone’s financial disclosures pale in comparison to Total Wine’s $2.4 billion valuation as estimated by the Bloomberg Billionaires Index. The liquor behemoth is exclusively owned by the Trone family, with at least 71 state and local affiliates, each of which operate anywhere from one to several dozen storefronts. The company raked in $5.5 billion in revenue in 2022, doubling its haul from 2017.

Trone campaign spokesman Nathaniel Philp said neither Trone nor Total Wine had any involvement in Bloomberg’s valuation.

"Whatever metrics it used to evaluate the entire enterprise has no bearing or relevance to what the Rules require," Philp said.

A Free Beacon review of Trone’s financial disclosures uncovered a slew of omissions dating back to his first filing in 2016.

When Trone launched his first congressional campaign in 2016, he had pledged his ownership in Total Wine’s affiliates in California, Massachusetts, and Washington as collateral for a loan he took out in 2008 with PNC Bank that at times has been worth up to $25 million. Trone’s interest in those business entities presumably had value in the eyes of PNC Bank: If Trone failed to pay up, the bank could seize the assets to recoup his debt.

But Trone did not mention his ownership interest in Total Wine’s California, Massachusetts, and Washington affiliates in his 2016 financial disclosure.

Even more omissions surfaced in Trone’s 2018 disclosure, which he filed after winning his first term in the House. By that time, Trone had amended his PNC Bank loan to include his stake in Total Wine’s affiliates in California, Colorado, Kentucky, New York, Tennessee, Texas, and Wisconsin as collateral. Trone didn’t report his stake in any of those businesses in his 2018 financial disclosure.

Trone’s 2019 financial disclosure is also riddled with omissions. That year, Trone didn’t disclose his stake in Total Wine’s affiliates in California, Colorado, Texas, Kentucky, New York, and Wisconsin, even as he had pledged those same assets as collateral to secure his PNC Bank loan.

Trone reported those Total Wine affiliates in his 2020 financial disclosure, saying he didn’t disclose them to the public in prior years because they were worth $0 and provided him no income. Those same companies paid Trone between $7 million to over $25 million in distributions in 2020.

Philp confirmed to the Free Beacon that Trone has maintained a minority ownership stake in all the entities he pledged as collateral for his PNC Bank loan throughout his political career, even the ones he didn’t mention in his financial disclosures from 2016 through 2020.

According to Philp, "the rules governing the House’s financial disclosure reporting did not require disclosure of these particular assets in those particular years." Trone is only required to disclose his interest in business entities that end any particular year with a "book value"—a business’s total assets after liabilities—greater than $1,000, or provided more than $200 in income that year to Trone.

Philp cited California Fine Wine & Spirits LLC, a Total Wine affiliate that operates at least 39 stores in the state, as an example. Technically, Philp said, Trone was not required to report his stake in the California business in his disclosures from 2016 through 2019 because the company ended with a negative book value those years. "The total liabilities exceeded their total assets, making the net assets of the business negative in California Fine Wine & Spirits LLC’s books and records," he said.

Trone first mentioned his ownership in California Fine Wine & Spirits in his 2020 financial disclosure. That year, Trone said he received income of over $5 million from the business, yet still maintained the company was worth $0.

Trone’s 2020 disclosure wasn’t free of omissions. During his first term in the House in 2019, Trone joined forces with his brother to launch Indiana Fine Wine & Spirits, which has since opened five stores in the state. Court documents reviewed by the Free Beacon show Trone and his brother are voting members in the Indiana venture and share a 10 percent stake in the company, with the remaining 90 percent distributed to trusts benefitting their children.

Trone amended his PNC Bank loan in August 2020 to include his stake in the Indiana business as collateral. But Trone didn’t disclose the entity in his 2020 or 2022 financial disclosures to the public.

Philp, the Trone spokesman, said the congressman didn’t have to disclose the Indiana business in his financial disclosures in 2020 or 2022 because "the year-end book-value of his share in that entity was less than $1,000" those years.

But according to Paul Kamenar, an attorney for the National Legal and Policy Center, "David Trone's financial disclosure reports appear to under report his assets." Kamenar said that "besides penalties imposed by the House Ethics Committee," Trone could face "a civil penalty of up to $50,000" and perhaps "criminal penalties."

Trone describes his PNC Bank loan as a business line of credit in his congressional financial disclosures. Maryland Uniform Commercial Code filings show Trone took the loan out in 2008 and has since amended it 13 times, most recently in August 2020.

Philp said PNC Bank did not consider the individual book value of Trone’s interest in various Total Wine affiliates when he pledged them for collateral in his loan.

"PNC required all owners to pledge the entirety of the businesses operating under the Total Wine & More tradename as collateral regardless of value," Philp said. "Additionally, Rep. Trone holds only a minority interest in almost all entities operating under the Total Wine & More tradename. There are no parallels or inferences to be drawn between the collateral PNC requires and the assets that the Rules require be disclosed."

Trone’s debt to PNC Bank has varied throughout his congressional career. In 2018, the year he won his first term in the House, Trone reported the loan was worth between $5 million to $25 million. He reported the loan had a zero balance at the end of 2020. In 2022, Trone’s latest filing, he reported his debt to PNC Bank had swelled back to somewhere between $1 million and $5 million. 

PNC Bank spokeswoman Flo Scott declined to comment, saying the company "cannot comment on specific customer accounts or financial matters due to privacy considerations."

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