The Art of the Steal
The Art of the Steal
New York drops the hammer on Trump. Sort of.
“For too long, powerful, wealthy people in this country have operated as if the rules do not apply to them. Donald Trump stands out as among the most egregious examples of this misconduct.” —New York Attorney General Letitia James.
Well, yes. Getting away with stuff is pretty much his brand. And while James repeatedly stressed that there “are not two sets of laws for people in this country,” and that “no one is above the law,” for decades Donald Trump has been living proof that this is objectively not true.
As Bloomberg’s Tim O’Brien noted, “Trump has spent most of his 76 years inflating his wealth, achievements and abilities, but James’s civil lawsuit, more than 280 pages long, is the first time his carnivalesque business practices have exposed him to existential legal consequences.”
And that’s worth thinking about for a moment.
While some of the specific details of Trump’s frauds laid out in the 222-page NY civil suit are, indeed dazzling, they are not even remotely surprising to anyone who has followed Trump’s career of serial flim-flams.
Both his business and his political career sit on a throne of lies — fudged financials, inflated values, tax scams, and assorted frauds. “In fact,” the New York AG declared, “the very foundation of his purported net worth is rooted in incredible fraud and illegality.”
And that was before Trump’s sordid one-term presidency and his disgraced exile — his obstruction of justice, election lies, and attempts to block the peaceful transfer of power. There has been so much mendacity, former prosecutor Barbara McQuade quipped yesterday, that Trump’s “misconduct is a distraction from his misconduct.”
And through it all, the institutions that were supposed to hold him accountable — state, local, and federal prosecutors, special counsels, regulators, watchdogs, members of the U.S. Congress, and even the American electorate — failed. Presidential historian Michael Beschloss asks a haunting question.
Understandably, Trump has come to think of himself as Teflon; and increasingly he is now able to call upon a Republican party that has internalized the notion that he ought to be untouchable. (See below for a new book on Mitch McConnell’s impeachment decision.)
While AG James insisted that “we must hold former presidents to the same standards as everyday Americans,” a group of GOP state AGs filed an amicus brief attacking what it called the “unprecedented nine-hour search of former President Donald J. Trump’s private residence,” characterizing the search warrant as the Biden administration “ransacking the home of its one-time — and possibly future — political rival.”
For MAGA, even investigating the Orange Jesus is a crime of lèse-majesté.
**
In a best-case scenario, the New York case could mark the beginning of end of Trump’s immunity from legal consequences. From the NY AG’s statement:
The lawsuit alleges that Donald Trump, with the help of his children Donald Trump, Jr., Ivanka Trump, and Eric Trump, and senior executives at the Trump Organization, falsely inflated his net worth by billions of dollars to induce banks to lend money to the Trump Organization on more favorable terms than would otherwise have been available to the company, to satisfy continuing loan covenants, to induce insurers to provide insurance coverage for higher limits and at lower premiums, and to gain tax benefits, among other things. From 2011-2021, Mr. Trump and the Trump Organization knowingly and intentionally created more than 200 false and misleading valuations of assets on his annual Statements of Financial Condition to defraud financial institutions.
Compelling stuff, but as O’Brien notes, “Being a sloppy and mendacious grifter is grotesque, of course…. Convincing a jury that rolling that way also amounted to criminal behavior is a thornier affair.”
Even so, the consequences for Trump, his company, and his children could be grim. Because it is a civil case, James will not have to prove that the Trumps intended to break the law. Writes O’Brien: “The Trumps chose to invoke the Fifth Amendment’s protection against self-incrimination hundreds of times, which can be used against them in a civil jury trial (something James couldn’t do in a criminal case).”
The potential civil penalties would destroy Trump’s New York empire. The lawsuit seeks to:
Permanently bar Mr. Trump, Donald Trump, Jr., Ivanka Trump, and Eric Trump from serving as an officer or director in any New York Corporation or similar business entity registered and/or licensed in New York state;
Bar Mr. Trump and the Trump Organization from entering into any New York state commercial real estate acquisitions for a period of five years;
Bar Mr. Trump and the Trump Organization from applying for loans from any financial institution registered with the New York Department of Financial Services for a period of five years;
Award disgorgement of all financial benefits obtained through the persistent fraudulent practices of an amount to be determined at trial and estimated to total at least two hundred and fifty million dollars ($250 million).
Permanently bar Allen Weisselberg and Jeffrey McConney from serving in the financial control function of any New York Corporation or similar business entity registered and/or licensed in New York state;
Appoint an independent monitor to oversee compliance, financial reporting, valuations, and disclosures to lenders, insurers, and tax authorities at the Trump Organization for a period of no less than five years;
Replace the current trustees of the Donald Trump Revocable Trust with new independent trustees, and require independent governance in any newly formed trust should the Revocable Trust be revoked and replaced with another trust structure;
Require the Trump Organization to prepare, on an annual basis for the next five years, a GAAP-compliant, audited statement of financial condition showing Mr. Trump’s net worth, to be distributed to all recipients of his prior Statements of Financial Condition; and,
Cancel any certificate filed under and by virtue of the provisions of section 130 of the General Business Law for the corporate entities named as defendants and any other entity controlled by or beneficially owned by Donald Trump which participated in or benefitted from the foregoing fraudulent scheme.
As horrific as all that would be for Trump, the gravest danger may be the criminal referrals to the SDNY and the IRS.
Exit take: Trump now finds himself besieged by multiple investigations: from election interference and fomenting an insurrection, to obstruction and espionage. In the end though, like Al Capone, it may be the tax man who gets him.
Bonus: Trump’s legal losing streak continues…
An appeals court sided with the Justice Department in a legal fight over classified documents seized in a court-authorized search of former president Donald Trump’s Mar-a-Lago home, ruling Wednesday that the FBI may use the documents in its ongoing criminal investigation.
![For our part, we cannot discern why Plaintiff would have an
individual interest in or need for any of the one-hundred documents
with classification markings. Classified documents are
marked to show they are classified, for instance, with their classification
level. Classified National Security Information , Exec. Order
No. 13,526, § 1.6, 3 C.F.R. 298, 301 (2009 Comp.), reprinted in 50
U.S.C. § 3161 app. at 290–301. They are “owned by, produced by
or for, or . . . under the control of the United States Government.”
Id. § 1.1. And they include information the “unauthorized disclosure
[of which] could reasonably be expected to cause identifiable
or describable damage to the national security.” Id. § 1.4. For this
reason, a person may have access to classified information only if,
among other requirements, he “has a need-to-know the information.”
Id. § 4.1(a)(3). This requirement pertains equally to former
Presidents, unless the current administration, in its discretion,
chooses to waive t](https://substackcdn.com/image/fetch/w_600,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fpbs.substack.com%2Fmedia%2FFdOghEuaUAEZfDW.png)
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“Let’s just ignore him”
A new book, which was excerpted in the Wapo, chronicles Mitch McConnell’s decision to cave on Trump’s second impeachment.
As McConnell pondered what to do, he entertained other arguments for and against conviction from various corners of the GOP. Rep. Liz Cheney (R-Wyo.) made a personal appeal to McConnell to use his leadership position to step out against the president to give his rank-and-file Republicans political cover to do the same. She pressed him in a series of phone calls to bring the Senate back from a congressional recess before the Biden inauguration and quickly convict Trump before he left office. Republicans would follow his lead, she insisted to McConnell. And besides, Trump still posed an ongoing threat to the country.
McConnell told Cheney he did not disagree on her last point, though he was adamant that logistically the Senate could not convict Trump in a week. In his view, Trump deserved the right to find counsel and prepare a defense no matter how guilty he was. But McConnell also acknowledged another fear to Cheney that had started to creep into his psyche: that conviction might make Trump a martyr in the eyes of his followers, empowering him in the long run. That might pose even more of a threat to the Republican Party, he feared.
“We don’t disagree on the substance; we just disagree on the tactics,” McConnell told Cheney as they conferred about how to free the GOP from Trump’s iron grip. “Let’s just ignore him.”
Flashback: A.B. Stoddard wrote about “The Distinct Shame of Senate Republicans.”
“Think about what Republican senators must have known when they voted not to convict Trump during the second impeachment.”
The NatCons’ Will To Power
ICYMI, I chatted with Reason’s Stephanie Slade on Wednesday’s pod.
Here’s her piece on the NatCons we discussed:
"Wokeism is not a fever that will pass but a cancer that must be eradicated," declared a main-stage speaker at the third National Conservatism Conference ("NatCon III") last week. "In this new reality, the only institution with the power to contend with and conquer the woke-industrial complex is the government of the United States."
In the task to identify what distinguishes national conservatism from other right-wing varietals, you could do worse than to start with that quote from activist Rachel Bovard. It shows that this burgeoning political faction has at its heart a fundamentally favorable orientation toward federal power and not a mere revivification of national pride. It also makes it clear that the natcons' purpose in acquiring government power is not merely to prevent its misuse by opposing ideologues; it's to use it affirmatively to destroy opposing ideologues.
And here’s her cover story, “Both Left and Right Are Converging on Authoritarianism.”
The future of the parties is now a matter of live debate. But in both cases, the elements that seem to have the most energy behind them have something important in common: a desire to move their side, and the country as a whole, in an illiberal direction.
On the left, a new crop of socialists hope to overthrow the liberal economic order, while the rise of intersectional identity politics has supplanted longstanding commitments to civil liberties. On the right, support for free markets and free trade are more and more often derided as relics of a bygone century, while quasi-theocratic ideas are gathering support.
Quick Hits
GOP Hopes ‘Crime Talk’ is a Golden Ticket for Midterm Candidates
In today’s Bulwark, Bill Lueders writes that Fox News and GOP candidates are forcing the facts to match their narrative of a national decline into violence and anarchy.
A new TV ad from the Republican Senate Leadership Fund frames it differently: “Mandela Barnes would eliminate cash bail, setting accused criminals free into the community before trial, even with shootings, robberies, carjackings, violent attacks on our police.”
This hammering away is working. The latest Marquette Poll shows that Johnson has eradicated Barnes’s lead, which poll director Charles Franklin chalks up to the boom in attack ads against Barnes, many of which portray him as soft on crime.
Cheap Shots
Team Normal?
The Wizard of MAL
The 11th Circuit to Donald Trump:
People who are under criminal investigation often feel uncomfortable and embarrassed.
“Require the Trump Organization to prepare, on an annual basis for the next five years, a GAAP-compliant, audited statement of financial condition showing Mr. Trump’s net worth,”
Generally Accepted Accounting Principles are to TFG as crucifixes are to Dracula.