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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 (and Georgia) On My Mind
One of my kids is studying law, and I’ve read a bit over her shoulder as she prepped for exams. Two critical things stand out: unlike in literature, words in the law have very specific meanings (lie, fraud, possess, assault), and intent matters quite a bit. The latter is very important, because people say things all the time they do not mean, such as “If Joe in Sales misses that deadline I’m gonna kill someone.” No one’s life is actually in danger, we all understand. Same for all those neighbors who were going to but never did move to Costa Rica if Trump was elected.
Misunderstanding words as moving from the general to the very specific when you pull them out of a conversation and try to bring them to court, and determining intent based on what you “believe,” are really at the root of the ever-growing string of failed legal actions against Trump (there are some 19 still pending.) We have, and this is just hitting the highlights, all of Russiagate, the Mueller Report, Impeachment I, Impeachment II, Stormy Daniels, failed accusations of real estate valuation fraud in New York and most recently, a grand jury seated to look into election fraud in Georgia.
For example, in Impeachment I, the Ukraine caper, the entire brouhaha hinged on Donald Trump’s own words in the transcript of his call with the Ukrainian president. But did they mean Trump was demanding foreign interference in the 2020 election? Or was he asking an ally to run down unethical actions by Joe Biden as a public service before he might become president? What was Trump’s intention when he said “A lot of people want to find out about that so whatever you can do with the attorney general would be great.” Later in the call Trump suggested some aid to Ukraine might be withheld, though not in specific reference to any investigation into Biden.
The people who brought the impeachment proceedings decided all that constituted an illegal solicitation of a foreign in-kind contribution to Trump’s re-election campaign, maybe even extortion. The allegation was referred to the Justice Department, which declined charges. Many Democrats though that unfair, failing to see the lack of anything coming of it (i.e., no investigation by Ukraine), the lack of anything withheld (the aid was eventually delivered) and overall the lack of intent to commit a crime by Trump. The legal definition tests for words like solicit and extort were not met and Justice correctly dumped the case and there was no conviction in the Senate.
Same story in New York, where the facts seemed to support Trump valued real estate at a lower price for tax purposes and a higher price when used as loan collateral. It’s called valuation and is legally done all the time. But some decided saying one thing to one person and another to another person to gain something was “fraud,” and everyone pursuing the case forgot that they also had to prove intent, that Trump lied with the intention to commit a crime and gain by ill begotten methods. The case rightfully collapsed.
Yep, same with the Stormy Daniels saga, where the facts seemed to be Trump, via Michael Cohen, paid money to Stormy to keep quiet about their affair. Sleazy enough, but paying someone as part of a non-disclosure agreement is not illegal. It would be a crime if the money was paid by Trump with the intent of influencing an election, which he suggested was not true, the cash-for-silence was maybe to protect his marriage. Campaign finance laws require proof a person was willfully violating the law. Prosecutors would have to demonstrate that willingness by Trump alongside showing his principal goal was to influence the election. If this kind of case would have ever reached court, Trump would have simply denied intent.
Another example can be found in the incitement allegations surrounding the speech Trump made just before his supporters entered the Capitol building January 6. A democracy can’t lock up everyone who stirs up a crowd. Speech which inspires, motivates, or warms the blood cannot be illegal as it is the very stuff of democracy. Trump thought the election was unfair and had a right to say so. Brandenburg v. Ohio refined the modern standard to 1) the speech explicitly or implicitly encourages the use of violence or lawless action; 2) the speaker intends their speech will result in the use of violence or lawless action, and 3) imminent violence or lawless action is the likely result of the speech. Brandenburg is the Supreme Court’s gold standard on what government may do about speech that seeks to incite others to lawlessness.
The key is always intent. You have to prove, not just speculate, the speaker wanted to cause violence. Listeners’ reaction to speech is not alone a basis for taking action against a speaker. You’d need to prove Trump wanted the crowd to attack the Capitol and set out to find the words to make that happen. It ain’t gonna fly for the January 6 Committee.
Which brings us to Georgia, where the NYT asks “Will Trump Face a Legal Reckoning in Georgia?” On January 2, 2020, facing an election loss, Trump called Georgia’s Secretary of State to demand he “find 11,780 votes,” one more than Joe Biden’s tally. Did Trump encourage the secretary to commit election fraud? That prosecution will fail, as did all of the ones above, for the same two reasons: words are not solely what they seem, and intent is hard to prove.
For example, to the Democratic lay person “find” means commit election fraud to come up with votes. But well before anything goes to court, it will be made clear that “find” in this context can also mean, in just one example, recount all legal ballots to see if a mistake can be found which legitimately sends more votes to Trump. The other issue is again intent; to prove solicitation of election fraud, Georgia law requires a person intentionally “solicits, requests, commands, importunes or otherwise attempts to cause” another person to engage in election fraud. Trump and his associates need only to maintain they meant “find” as in recount, not as in cheat. Case closed.
In seeing the same mistakes made over and over, you’d start to think maybe the Democrats need some better lawyers. But don’t worry. Democratic lawyers know just as well as Republican lawyers none of these cases ever had a chance in a real court. Their purpose was purely political, to manufacture some headlines, to influence voters, to create the impression Trump has to be guilty of something if only he could be stopped from wriggling away. The goal is to convince voters to ignore the rule of law and take matters into their own hands in 2024 to stop Trump.
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.
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