New York, Aug 11

Former US President Donald Trump kept his date with New York Attorney General in Manhattan but declined to answer questions from the latters office, a calculated and yet surprising gamble in a high-stakes legal interview that will likely determine the course of a civil investigation into his companys business practices of whether he has misused tax breaks.

Shortly after questioning began on Wednesday morning, Trump's office released a statement saying he would invoke his Fifth Amendment right against self-incrimination, explaining that he "declined to answer the questions under the rights and privileges afforded to every citizen under the US Constitution".

Two informed sources confirmed that he was refusing to answer questions, citing the Fifth Amendment, The New York Times reported.

Since March 2019, Attorney General Letitia James's office has investigated whether rump and his company improperly inflated the value of his hotels, golf clubs and other assets.

Trump has long dismissed the inquiry from James as a partisan "witch hunt".

In his statement on Wednesday, he cast it as part of a grander conspiracy against him, linking it to the FBI search at Mar-a-Lago, his home and private club in Palm Beach, Florida, on Monday.

"I once asked, ï¿½If you're innocent, why are you taking the Fifth Amendment?'" he said in the statement. "Now I know the answer to that question."

Trump said that he was being targeted by lawyers, prosecutors and the news media, and that left him with "no choice".

But there were other reasons Trump may have decided not to answer questions. While James's inquiry is civil, and she cannot file criminal charges against the former President, the Manhattan District Attorney's office has been conducting a parallel criminal investigation into whether Trump fraudulently inflated valuations of his properties.

Any misstep from the former President in his deposition could have breathed new life into that inquiry, The New York Times said.

Trump priorly was not expected to invoke his constitutional right against self-incrimination. He has long considered himself his best spokesman, and those who had questioned him in the past, as well as some of his own advisers, believed he was unlikely to stay quiet. His decision could have a significant impact on any trial if James's investigation leads to a lawsuit. Jurors in civil matters can draw a negative inference when a defendant invokes his or her Fifth Amendment privilege, unlike in criminal cases, where exercising the right against self-incrimination cannot be held against the defendant.

Staying silent could also hurt Trump politically at a time when he is hinting that he will join the 2024 presidential race; it could raise questions about what he might be trying to hide. In the past, Trump has ridiculed witnesses for invoking their Fifth Amendment rights, once remarking at a rally that, "you see the mob takes the Fifth", and, "if you're innocent, why are you taking the Fifth Amendment?"

The District Attorney, Alvin L. Bragg, had developed concerns about proving a case against Trump, but he has said that he is monitoring James's investigation and planned to scrutinize Trump's responses on Wednesday. The former President's decision not to answer those questions may forestall new avenues in that investigation.

Trump is also contending with a litany of other inquiries. Along with the FBI search at Mar-a-Lago, federal prosecutors are questioning witnesses about his involvement in efforts to reverse his election loss; a House select committee held a series of hearings tying him more closely to the January 6, 2021 attack on the Capitol; and a District Attorney in Georgia is investigating potential election interference on the part of Mr. Trump and his allies.

James's inquiry could wrap up sooner than those investigations. Rather than file a lawsuit that would take years to resolve, she could first pursue settlement negotiations with the former President's lawyers to obtain a swiffer financial payout. But if she ultimately sues Trump, and if James prevails at trial, a judge could impose steep financial penalties on Trump and restrict his business operations in New York.

In seeking to fend off a lawsuit from James, The New York Times said that Trump's lawyers are likely to argue that valuing real estate is a subjective process, and that his company simply estimated the value of his properties, without intending to artificially inflate them.

While James has contended in court papers that the Trump Organization provided bogus valuations to banks to secure favourable loans, the former President's lawyers might argue that those were sophisticated financial institutions that turned a hefty profit from their dealings with Trump.

The depositions represent the culmination of months of legal wrangling. In January, Trump asked a judge in New York to strike down a subpoena from James seeking his testimony and personal documents. The judge, Arthur F. Engoron, sided with James and ordered the Trumps to testify, a ruling that an appellate court upheld.

And at James's request, Justice Engoron held Trump in contempt of court, finding that he had failed to comply with the terms of the AG's subpoena seeking his documents. It was an embarrassing two-week episode that compelled Trump to pay a $110,000 penalty.

At an April court hearing for the contempt order, one of James's lawyers, Kevin Wallace, indicated that the investigation was nearing its conclusion. James's office, he said, would need to bring an "enforcement action" in the "near future".

The lawsuit, or a settlement agreement, would be likely to accuse Trump and his company of fraudulently inflating the value of his golf clubs, hotels and other properties on his annual financial statements. Trump's company provided the statements to banks in hopes of obtaining loans.

James revealed in a court filing this year that Trump's long-time accounting firm, which compiled these statements, had cut ties with him. The firm, Mazars, essentially retracted nearly a decade's worth of Trump's financial statements, The New York Times said.

Trump's deposition marks the final stage of the AG's three-year civil inquiry, teeing up one of the most consequential decisions of her tenure: whether to sue Trump and his company.

James, a Democrat running for re-election in November, has assumed the role of Trump's chief antagonist in New York. And in recent months, she has adopted an unusually aggressive legal strategy,including persuading a judge to hold the former President in contempt of court, as she battled to obtain his documents and testimony.

But Trump invoked his constitutional right against self-incrimination during the deposition, declining to answer questions. He has long dismissed the inquiry from James as a partisan "witch hunt", and in a statement released as questioning began, he painted James as an overly zealous and politically motivated prosecutor.

The argument that James's investigation was politically motivated had not been convincing to judges: Trump's lawyers attempted to leverage it while trying to avoid the questioning, and were unsuccessful.

James, a former New York City councilwoman from Brooklyn, who rose to become the city's public advocate, was elected attorney general in 2018, becoming the first Black woman to hold statewide office. The victory placed her at the forefront of the legal fight against Trump's policies by states with Democratic leadership. She succeeded Barbara D. Underwood, who already had several cases pending against Trump, including an investigation into his charity and lawsuits to stop immigrant families from being separated at the border.

James vowed to continue the office's scrutiny of the president.

"He should know that we here in New York, and I, in particular, we are not scared of you," she said in her victory speech. "And as the next attorney general of his home state, I will be shining a bright light into every dark corner of his real estate dealings, and every dealing, demanding truthfulness at every turn."

She kept her word, becoming a thorn in Trump's side. In March 2019, she started a civil investigation that focused on whether Trump had systematically mis-stated the value of his assets to gain financial advantage with lenders and tax authorities. In January this year, she accused the Trump Organization of repeatedly misrepresenting the value of its assets to bolster its bottom line, saying that the company had engaged in "fraudulent or misleading" practices. That filing came in response to Trump's effort to block James from questioning him and two of his adult children under oath.

Three months later, she filed a motion to hold Trump in contempt for failing to turn over documents. The filing cited a response from Trump's legal team argued that the AG's requests were "grossly overbroad, unintelligible, unduly burdensome" and did not "adequately" describe the requested materials. A judge ruled in James's favour and imposed a $110,000 penalty.

James won a big victory when a judge ordered Trump to face questioning about his net worth and pattern of alleged financial embellishment.

Trump invokes 5th Amendment, refuses to depose before AG in NY