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Leticia James’ Desperate Hail Mary Lawsuit Against Trump
No one is above the law, but some actions are beneath it. Just ask Leticia James, the New York Attorney General who filed a $250 million civil suit against Donald Trump, what may turn out to be the last gasp of a multi-year effort to criminalize the electoral process in America. As she prepares for trial in early 2023, let’s see what she has to go on.
During her 2018 campaign for attorney general, James declared: “Trump should be charged with obstructing justice (in connection with Russiagate.) I believe that the president of these United States can be indicted for criminal offenses and we would join with law enforcement and other attorneys general across the nation in removing this president from office.”
James tweeted the campaign endorsement from Rep. Maxine Waters when that still mattered that James would be an attorney general who “who will investigate Trump” and promised that “the president of the United States has to worry about three things; Mueller, Cohen, and Tish James.” For the record, Robert Mueller has retired to the dark side of the moon after his investigation proved nothing (though there are still those who believe, as there are people who enjoy circus geeks, and the Venn diagram of the two groups is a circle), Michael Cohen is a convicted felon lucky to be called as a guest once a month on the Howard Stern Show, and of course Tish. In her 2018 election night victory speech, James boasted: “I will be shining a bright light into every dark corner of his real estate dealings….” and before taking office repeated her threat to target Trump world: “We will use every area of the law to investigate President Trump and his business transactions and that of his family as well.”
She even pulled Trump into her victory speech, saying her win “was about that man in the White House who can’t go a day without threatening our fundamental rights.” All of that sounds like she had it in for Trump; had an attorney general ever said such things about a private citizen not named Trump it would be likely grounds all by itself for dismissal for bias. That said, Trump sued James last year seeking to halt her investigation, alleging it was “baseless” and motivated solely by her desire to harass a political opponent. A judge dismissed the suit in May.
Tish does deserve a few points for being the last one standing. In an unprecedented sweep over the last five years, Congress tried to impeach Trump twice. The FBI tried to indict for espionage itself. The Southern District of New York (the Feds, DOJ) could not find anything to indict Trump on after he left office. Same for the Manhattan District Attorney’s office. Only Tish was able to drop paper on Trump’s desk out of all those smart lawyers and cops.
Remember things started with Trump as a literal Russian intelligence officer, the actual Manchurian candidate, what would have been the most noteworthy political story of American history, had it been true. Tish as the last in line cannot be that choosey. Her law suit, a civil case which means there is no threat of jail time, alleges, inter alia, Trump overvalued some of his real estate to obtain loans and then undervalued the same real estate to pay lower property taxes on it. This is so common in the New York real estate world that these disputes are not even typically handled by a court, instead adjudicated through a tax commission grievance process. The result is typically a levy or a fine if the owner is found to have manipulated prices egregiously.
To prove the same as a civil case and then demand significant penalties ($250 million and Trump can no longer do business in New York state) is a big ask. Even The New York Times had to admit James will have a hard time proving the case: “Property valuations are often subjective, and… all his loans are either current or were paid off, some before they were due.” Factors that can legitimately affect properties’ stated value include potential for future income, the view from their upper floors, zoning laws and proposed changes, and the like. If Deutsche thinks they got the deal right and is not suing, who is the attorney general protecting here?
The presumed victims in James’ suit aren’t Mom and Pop customers Trump defrauded, big league contractors he stiffed, or shareholders he lied to. The victims are banks (primarily Deutsche Bank, one of the world’s largest) and insurance companies that supposedly undercharged Trump for loans and insurance policies, all because Trump told them his properties were more valuable than they actually were. Boo hoo.
See the government doesn’t usually sue on behalf of big businesses that have their own well-staffed legal departments; it is a huge tell against James that Deutsche is not suing anyone. Financial firms rely to some extent on customers self-reported data. But they also do their own due diligence on what real estate collateral is worth for the explicit purpose of assuring they don’t commit money based on a deal they’ll lose out on. It works the same way with less zeros when you apply for a home mortgage. The bank does not write a check with no questions asked. Instead, it does a credit check, sends out an appraiser to value the property, gets insurance on everything, and prices the loan according to the risk it believes it is taking. Trump could make whatever claims he wanted to about his properties at Mar-a-Lago and 40 Wall, but no one was really listening. You know, trust but verify.
Oh right, some of the deals were already verified, such as Trump’s sale of rights to the Old Post Office in Washington, DC., whose sale at its Trump-stated value was approved by Joe Biden’s General Services Administration, though Tish includes that sale in her lawsuit. None of Trump’s creditors lost money on any of his loans. Every one is paid off or current in being paid off. There were no allegations of an actual crime by anyone in law enforcement or the private sector. Instead, James started an investigation hoping to find a crime. By making this a civil suit she avoids the higher standards of proof and grand jury proceedings if this was a criminal case.
It is no small surprise that Tish is up for reelection as Attorney General in November, and so that after waiting almost her entire term in office now files this lawsuit against Donald Trump, following through on her earlier campaign promises to “get him.” James is also fund raising off the lawsuit, writing to campaign supporters: “These men think they can rattle me and scare me off my path, but the truth is, they have only reaffirmed why I went into this work in the first place.”
It is extremely likely if James loses in November (polls show she is currently in a dead solid tie with her Republican opponent) that her successor will drop the suit entirely, the way the Manhattan DA’s office gave up on Trump when the top job changed hands. Should she win again, Tish will spend the next few years of taxpayer money fending off motions from Trump to dismiss, to change venue, and most of all over seating an impartial jury. Trump could easily move the case out of liberal Manhattan to bright red upstate New York, where he beat Joe Biden in 2020, stalling until the 2024 election is over and one way or another none of this will ever matter again.
And small world, Tish may even then have one more stop on her legal adventure tour — concerns over past prosecutorial abuse of power led to the creation in 2021 of the New York Commission on Prosecutorial Conduct, designed to hold prosecutors “to the highest ethical standards in the exercise of their duties.”
Copyright © 2020. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.
Second Verse, Same as the First: NY’s Civil Suit Against Trump
New York Attorney General Letitia James filed a lawsuit against former President Donald Trump, three of his adult children, and other senior members of the Trump Organization alleging business and insurance fraud as well as conspiracy for the same, marking the end of a three-year investigation into Trump and his business. The civil suit is basically a version of the criminal indictments the Southern District of New York (SDNY) and the Manhattan and New York State Attorneys General have failed to generate at the federal and state levels. The suit claims in a nut shell what the criminal cases claimed; Trump over-valued the worth of his properties to use them as collateral for new loans, and then undervalued those same properties come tax time to pay lower taxes.
The criminal cases have fallen flat because of the need to prove actual criminal intent, that Trump lied intending to commit a crime. This proved impossible when the Trump family would not confess (Trump took the Fifth some 440 times during recent questioning) and when no one could be found to Fredo him by turning states’ evidence in return for some lower sentence himself. What’s left in what has clearly become a prosecution driven by the political need to do something ahead of 2024 is this civil suit. Basically same accusations, same weak evidence, but lower standards of proof with lower penalties.
Enemies of Trump hope this works out better than previous attempts in New York to prosecute him by the Southern District of New York (SDNY) and failing that, the New York State Attorney General Letitia James. The former already failed in 2012 to indict Trump’s children after they were accused of misleading investors, and faced judicial rebukes in the past for sloppy work and political motivations.
The narrative runs like this: both offices had been compiling nasty stuff against Trump for years, held back only by custom which prevented them from indicting him as long as he was the president. As of January 20, 2021 he became open game. But since then both offices failed to indict Trump. The New York state system is no such kangaroo court, and affords defendants far more protections than federal courts. There are strict rules governing evidence that can be presented to a grand jury, and even minor procedural errors can result in indictments being thrown out. “If you’re a white-collar defendant, you’d rather be in New York State court than in federal court any day of the week,” said SDNY’s former top deputy.
The current try is kinda of pathetic, just a lawsuit, which carries no potential criminal jeopardy, so no formal indictment, no possibility of jail time. The suit holds Trump misvalued some New York real estate from 2011-2021 to obtain loans and pay lower taxes, a civil offense at worst usually settled with new assessments or a fine.Yet even this case against Trump could be difficult to prove. Property valuations are subjective, and most all financial statements include a disclaimer stating that they have not been audited. Now underline this part: Deutsche Bank and Trump’s other lenders were hardly victims; all of his loans are either current or were paid off, some early. Trump does not use email, so any instructions he might have given his employees about the company’s financial statements are unlikely to be in writing. The lack of a damning email, or a witness inside his company willing to testify against him, will complicate efforts to show Trump intentionally used his financial statements to defraud lenders and insurers.For people not named Trump (a key giveaway that this is all political) the city of New York assesses a value to each property for tax purposes. Nearly every property owner in NYC believes his or her assessed value is too high and pushes back, to the point where these disputes are not even handled by a court, instead through a tax commission grievance process. Owners want a lower value to pay less tax, except when they approach a bank for the equivalent of a refi loan, when they want their property to seem more expensive to secure a bigger loan at a better rate. It is the bank who then decides what a property is worth to them as collateral, via their own due diligence.It is always complicated, as much art as science; beyond the usual valuation factors of location, location, location, some buildings in New York are iconic, or famous for their brand name (cough, cough, “Trump”), what history they represent, etc. Some just have nice views. Sometimes the bank is generous because in return for the loan they’ll secure some other business of value to them. Over-valuing/under-valuing real estate in New York City is sport, but as a crime is so much not ado about nothing it is not going to send anyone to jail. Imagine the yawns as a jury listens to forensic accountants explain Trump’s tiered exemptions, and how their value is subtracted from the DOF assessed value to calculate a taxable value which is then multiplied by the current tax rate for the specific assigned property class. Next session we’ll talk about somewhat sketchy easements Trump obtained going back to when Mayor Koch was in charge.The jury will quickly discover the regulations governing how one values a NY property are dense. Built into the law is an automatic fudge allowing the same property to have both a high market value and a lower asset value. Problems are sorted out as civil matters and usually settled with the city sending out a bill, especially if the bank is not claiming fraud, only the DA, as in Trump’s case.And in the end, what? The lawsuit seeks to permanently bar the Trump family members named from serving in officer or director positions in any corporation or business licensed in New York State. The attorney general also seeks to bar the former president and the Trump Organization from entering into any New York real estate acquisitions for five years, and to take back all financial benefits obtained through the allegedly fraudulent practices, estimated to total $250 million. None of those things, even if the suit if fully successful, is likely to have an effect on Candidate Trump and none would prevent him from running for president. Business-wise, Trump merely needs to re-incorporate in another state, maybe business-friendly Florida, to re-start operations.The Democrats’ plan to find Trump guilty of something, anything, seems to be coming to its own sad ending, the lawsuit beyond a whimper, not a bang. They have tried to turn belief Trump is evil into crime over the last five years — Emoluments Clause, Russiagate, impeachments I and II, Stormy Daniels, obstruction of justice, and incitement. On the sidelines were extra-judicial attempts connected with the 25th Amendment, having doctors who never examined the man declaring Trump mentally ill, and even accusations of incest. The Southern District of New York previously failed to indict Trump’s children and failed to prosecute Paul Manafort. E. Jean Carroll’s rape-cum-defamation case was so egregiously lousy even the Biden DOJ took Trump’s side. The convictions of Trump associates lawyer Michael Cohen and accountant Allen Weisselberg did not touch the principal himself.The SDNY brought no charges. Early this year, the Manhattan district attorney, Alvin Bragg, instructed prosecutors to halt their effort to seek an indictment of Trump. It looks like Letitia James is all who is left to make the last flaccid move and then turn off the lights on her way out.
Copyright © 2020. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.
Trump is Just Not Going to Jail
If you had “Trump goes to jail” in the office pool, better double-down on “Trump Gets a Minor Civil Fine.”
The end of any possible criminal prosecution out of New York over Trump’s finances has come as the grand jury seated to find them has sunseted. The possibility of a civil penalty, likely a fine, looks poor but anything is possible. This is all a long way from predictions when these cases were initiated through the Southern District of New York (SDNY) that the walls were supposedly closing in. Dems, dragging all their Biden baggage along, are going to have to beat Trump at the ballot box, assuming anyone can afford the gas to drive out to vote.
We need not spend too much time on all the failures preceding those of the SDNY, though a list is educational: DNC server, Putin’s agent, all of Russiagate, Mueller Report, Impeachment I, Impeachment II, and Stormy Daniels. The January 6 campaign is floundering. The IRS has had Trump’s taxes in hands for decades without any criminal prosecutions, and the New Jersey Gaming Commission held Trump’s casino financials without incident. It is possible to conclude however much one might hate Trump, he just is not guilty of any crimes.
Each prosecutorial dream began with the certainty Trump did something wrong, that the evidence was growing, that some stooge would flip (and the mindless Godfather references), followed by… nothing much. The true believers will always believe, but for most Americans the over-stimulus followed by the let down followed by mumblings it all wasn’t fair again have grown tiresome. Yet there are always teachable moments, even in such farce, and the most recent failure in Manhattan to bring down Trump is one of those.
Like all of the capers, it begins with the premise Trump is sleazy and any success he enjoyed must be due to cheating. In the instant case, the DA claimed The Trump Organization had over-valued some properties to obtain loans from Deutsche Bank, and then under-valued those same properties to pay lower taxes to the city of New York. This is all that’s left in the civil action in New York against Trump. The investigation along these lines has been running since 2019, so far with no actionable results. The most recent legal move was a contempt citation against Trump over not turning over a couple of cell phones, that after Trump already complied with millions of pages of documents and 13 employees of the Trump Organization sent up for interview. The belief seems to be there must be something in there somewhere.
For anyone who has owned property in New York, either directly like Trump or via the co-op system like millions of middle class New Yorkers, none of this is a headline. It literally happens all the time. For example, Building A sits on land the City has taxed for hundreds of years. The value of that land in that context is hardly in contention. But if someone wanted to use that land as collateral for a loan, they might instead explain how the ground floor of the building is now ready for flush post-Covid clients to return. They might cite a new luxury building across the street, which will raise local real estate prices. They might show how the average tenant stays longer in their building then elsewhere, assuring stability. What something is worth — a building, a Pokeman card, a drink of water in the desert — is very much a negotiation between two sides. This is known as “valuation.” There are numerous methods of assessing the value of a property. In New York you have your assessed value, your transitional value (Tax Class 2, 3, and 4 only) and other variables such that there are lawyers who specialize in nothing else.
Banks, which look to the future to make sure their loan will be profitable, understand well what the DA is trying to avoid, that property valuation is inherently subjective. It is important to note Trump loan seller Deutsche Bank has raised no objections, made no claims of fraud, and has not asked the DA to look into all this. Nope, the Manhattan DA’s office itself scanned the skies over Gotham and decided they saw a crime. Some say it was a political action, because in almost every other value dispute case in New York history the issue was sorted out by negotiation, and at last resort, by a special civil court that does nothing else. No one can say Trump is the only instance where the City has jumped from valuation to a criminal case with a grand jury, but it is damn hard to find another modern example.
For the New York DA to “win” a political case like this, some written decision by a no-name magistrate judge’s tax court saying Trump should pay some more property tax is far from enough. So, they had to imagine the case as a criminal one, and that’s where everything falls apart (as with obstruction, as with incitement.) Though the law differs with obstruction and incitement to some extent, basically to win these as a criminal cases the DA has to prove criminal intent. So prosecutors would have had to prove not just that Trump inflated the value of his assets, but that he intended to break the law doing so. Even harder is to show the valuation was Trump’s personal decision, near impossible to do with massive, complex corporations where the actual decision maker is traditionally obscured exactly to avoid such liability.
Prosecutors fell victim to their own prejudices. They had hoped to “flip” Allen Weisselberg, the Trump Organization’s longtime finance chief by drumming up equally weak criminal tax charges against him. Those charges have to do with Weisselberg accepting car service and apartment payments from Trump and allegedly not declaring them properly as income on his taxes. These cases are again typically settled with a fine (though Weisselberg maintains innocence) not jail. The infamous Al Capone tax case is infamous because it was so unique. Weisselberg, with his years of financial experience, has a pretty good idea he is not going to jail and thus has little incentive to rat out Trump if indeed he had anything to rat about.
That pretty much left prosecutors with Michael Cohen, the guy who pleaded guilty to nine criminal offenses, including lying to Congress, tax fraud, and campaign finance violations. Cohen would have faced questions of personal bias, given his own multiple lawsuits against Trump. He would have faced questions about whether he received a benefit from prosecutors, early release from prison, for cooperating. If a liar like Cohen is your only witness on Trump’s intent, you really have no witnesses.
There are still 19 cases pending against Trump, including a number of civil suits. Maybe one of them will land a blow. But none have the potential to be the knock-out punch Dems thought was an easy route to winning 2024.
Copyright © 2020. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.
The Taxman as Progressive Hero: The Latest Trump Prosecution
Political prosecutions are not new in America but political pograms are. It is sad to watch the Democratic party embrace such third world practices as policy. It is sadder to note there has never in history been a more sustained yet unsuccessful effort to oust or destroy one man.
Even before Donald Trump took office Democrats claimed Russia elected him, the Manchurian Candidate. The intelligence community-Democratic Party-media tripartite axis then swung for the fences, using wiretaps obtained through FISA fraud, honeytraps, Australian and Israeli cutouts, intel scrubbed by GHQ, and every other trick in the spy biz.
They came up so empty-handed even a Deep State O.G. like Robert Mueller could not find anything indictable. Mueller is a forgotten hero, knowing he had nothing and willing to let his legacy be just that, a fade to black, rather than be remembered as the guy who took a dump on the rule of law. You won’t see such courage in failure again; keep reading.
Despite their beat down over Russiagate’s failed putsch, post-Mueller the Democrats almost immediately set out to impeach Trump on much of nothing. An anonymous whistleblower was planted and then dug up among the intel community, and impeachment hearings kicked off with the speed of a pre-fabbed garage erection. A long string of State Department clones and one sad-sack warrior-bureaucrat basically said they didn’t care for Trump’s Ukraine policy, so let’s impeach him. The whole thing collapsed because a) there was no impeachable offense and b) the more Democrats rooted in the sty for evidence against Trump the more they kept ending up with the Joe and Hunter Biden Ukraine scandal in front of them.
Not content with one failed impeachment, the Democrats impeached Trump a second time, as a private citizen after he had left office. The set up was to exaggerate unorganized vandalism at the Capitol on January 6 into a full-on coup attempt. Left out was that the vandals had no path whatsoever to overturning the election, were quickly chased out of the building, and just went home. The faux Reichstag moment was then pasted onto Trump’s back like a Kick Me sign in full defiance of the speech-as-incitement rules set by the Supreme Court. A silly show trial failed again.
In the background were political prosecution attempts so pathetic they never made it to full-failure: the Emolument Clause cases, Stormy Daniels, all things Michael’s Avannati and Cohen, E. Jean Carroll’s rape-cum-defamation case, that one so egregiously lousy even the Biden DOJ took Trump’s side, 25th Amendment shenanigans, plus all the sideshow accusations against Trump family members, including incest. The Southern District of New York leading the current case already failed in 2012 to indict Trump’s children and failed to prosecute Paul Manafort. All the smoking guns fired blanks.
But why quit now? The state and city of New York just filed criminal fraud charges against Trump CFO Allen Weisselberg and the Trump Organization for failing to pay taxes on fringe benefits such as lodging and transportation offered to Weisselberg. Most of the alleged acts took place years ago, before Trump was even president.
Feel bad for the poor CNN intern whose weekend was ruined after being told to read through New York tax code and “look for dirt.” What he’ll find is a complex mess of taxable and non-taxable fringe benefits. For example, a company car is not taxable when used for business trips but is taxable, on a per mile basis, when used to commute. You’re supposed to keep records. That of course is unless you elect to use the ALV rule, or if the fair market value exceeds set amounts in the year the vehicle was assigned. Imagine the jury spending days sorting this out only then to also be asked to assess intent; did the Trump Organization intend to commit criminal fraud by mistakenly applying the cents-per-mile standard instead of the ALV? No proven intent means no criminal conviction. And when you’re done with that, members of the jury, move on to the equally dense text covering fringe benefits such as lodging, tuition, and parking.
The sad thing is all of this is usually dealt with via a tax bill and perhaps an administrative penalty — the point in every previous (non-Trump) case was simply for the state to collect the tax revenue owed. Even NYT admitted it is “highly unusual to indict a company for failing to pay payroll taxes on fringe benefits alone.” But in this case and this case alone prosecutors went further, criminalizing the affair claiming it was intentional fraud. That raised the specter of jail time, and sent the case into the headlines where it was supposed to be for maximum political impact.
As for the jail time, that is designed specifically to pressure the only person actually accused of anything here, Trump accountant Allen Weisselberg, age 73, to trade dirt on Donald Trump for leniency in his golden years. Amid all the tiresome Godfather cliches is the certainty there has to be more, and that Weisselberg knows everything. For those tracking third world touch points, ask yourself how that all looks, the full power of the government being screwed against the aged Weisselberg for the sole purpose of coercing him to testify against his will. If they’d used wooden clubs to beat him instead of law books we would call it torture, Gitmo-style: You must know something and I’m gonna beat you until you tell me.
That one of the key prosecution witnesses is Weisselberg’s son’s now-divorced acrimonious wife is only where questions raised will begin. The defense, in explaining the blatant political nature of the case, will no doubt ask why here and why now. Some of the alleged infractions go back 15 years. Why didn’t the state, or the IRS, uncover any of this during all that time? The IRS has had the Trump Organization under audit since 2010 yet somehow never noticed a thing? Why is this prosecution only happening at the state level in Democratic New York, safe from the federal level where it could more clearly backfire on Biden? And by the way, did multi-millionaire Trump CFO Weisselberg himself sit down each year with a copy of TurboTax to do his own taxes? If not, why isn’t his accountant on trial? The uber question of course is since these tax cases have to everyone’s knowledge solely been handled as administrative matters in recent memory, why in this case alone are criminal charges stacked on?
Of course since this indictment is the result of over a year of investigation by both state and city attorneys general and involved two trips to the Supreme Court, the amount of money in question must be H-U-G-E. Except it is not. The government says the total amount of undeclared benefits over a 15 year period is $1.7 million. Assuming it is all truly taxable, at a 20 percent tax rate that’s $22k a year. To rubes like you and me it sounds like a lot but seriously friends, it is not. Democrats are also counting on voters to agree there is no crime in New York otherwise deserving of the resources used in this case.
Of course the MSM is a twitter claiming this is just the tip of the iceberg, that Weisselberg with flip, the walls are closing in, etc. Don’t believe it. You heard all that before with Russiagate and two impeachments and it amounted to zilch. And as with Russiagate, if the prosecutors actually had something real to work with (i.e., Trump was a Russian spy, here’s the evidence) they would have led with that, not some piddle of a complex tax case. But Al Capone! Yes, mobster Al Capone went to jail on tax evasion, but that was based on his failing to file any Federal taxes at all for eleven consecutive years on income fully illegally obtained to include murder for hire. Not quite the same thing here.
In the end the “jury” which really matters here is not the one who’ll like assign some sort of tax penalty against Weisselberg. The real jury will be the voters, because even if Trump does not run he will be a kingmaker. There are of course those True Blues who live to see Trump disemboweled on TV by progressives wearing George Floyd masks and celebrate any misfortune. But if purple voters come to see this prosecution as petty and vengeful, realizing the offenses occurred long before Trump was president and were overlooked until they could be used as political cudgels, the risk is in making Trump a martyr. Wait for him saying at his next rally “I told you they were unfair and now look at this.” Meanwhile Dems are trying to make a people’s hero out of… the taxman? Coupled with Biden’s crumbling agenda, it is a bad spin heading into midterms. Trump is not going to jail and anything less than that makes him stronger.
This level of paranoid vengefulness is scary, a sign a portion of the electorate’s critical thinking skills have been eaten by political syphilis. The Democrats should carefully consider the secondary effects of their actions, and ask (as voters will) if the goal is law enforcement or a political kill shot. If it is the latter, they better not miss again. This trial is potentially one of the most divisive acts of modern American politics.
Copyright © 2020. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.
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