The New York State civil trial brought by NY Attorney General Letitia James against ersatz billionaire and indicted felon Donald Trump for falsifying records to financial benefit himself will open on Monday, and there’s a lot on the line for the former president–perhaps jeopardizing something more important to Trump than a potential jail term.
Regardless of the outcome, the trial will disclose all of Trump’s businesses’ financial dealings and will likely expose not just fraud, but also the fact that Trump has far less wealth than he portrays. That’s something Trump cannot allow to happen. He cannot allow anything that puts a chink in his personae’s armor that may make his minions doubt him. And the public finding out Trump inflated his financials like he overstates everything would be extremely embarrassing.
After years of motions to dismiss the case, the Trump Organization, Donald Trump and many of his corporate officers, including his two oldest sons, will face trial. They’re charged with defrauding banks, insurance companies, the government and others by manipulating the stated values of Trump companies to either increase potential credit or decrease tax liability. Though it’s not a criminal trial, granted, it’s still one fraught with risks for The Donald.
Judge Arthur Engoron has already done serious damage to Trump. Earlier this week, Engoron dealt Trump a serious blow: based solely on the company’s paperwork and other documentation, Engoron ruled that Trump et al had, in fact, committed fraud and ordered all the Trump Organization’s component LLCs registered in New York State have their business licenses revoked. (The umbrella Trump Organization survives, however, as a corporate entity.).
Obviously, this is a massive hit to Trump: each one of the buildings he owns, manages or operates has its own LLC. The order means those businesses will have to be re-formed. (More on this later.) According to Trump’s financial disclosures released while he was in the White House, he has more than 250 LLCs dealing with everything from his failed airline to his failed mortgage company to his failing social media company.
A few things to remember about this trial. First, it’s a civil case, not a criminal trial, so the level of certainty needed for Trump to be found liable is a majority of the evidence. It’s not the “beyond reasonable doubt” of a criminal trial, so this increases the likelihood of the AG emerging victorious.
Next, this is a bench trial, meaning that the judge determines the outcome, not a jury. So basically, if Engoron finds it’s more likely than not that Trump et al committed fraud, he will rule in favor of the Attorney General. It’s really that simple. One man, one decision.
The fact that this is a civil trial also plays into if, and how, Trump testifies. Unlike in a criminal trial where a jury is not supposed to infer anything from a Fifth Amendment assertion, in a civil trial, asserting the Fifth to prevent you from divulging incriminating information can be interpreted as an admission of guilt. While Trump says he’s going to attend the trial’s opening, and he’s even listed on the list of prospective witnesses, I seriously doubt he would subject himself to the possibility of digging his own grave by testifying in this case and having to repeatedly claim the Fifth because he doesn’t want to get himself into a potential criminal liability.
Of course, even without Trump testifying, his words will be used against him. Trump’s made damning statements publicly about the values of his properties. While they aren’t sworn or attested statements and will be dismissed by the defense as bravado, the AG can–and likely will–present them as evidence of Trump’s willingness to manipulate the stated values of his properties to meet his needs. If you’re James, wouldn’t you prominently display the posts of Donald and Eric claiming Mar-a-Lago is worth $1.8 billion next to an enlargement of the statement by Trump’s own real estate appraiser who puts the value around $27 million? The discrepancy is stark.
When it’s all said and done, assuming further bad news for Trump at the trial’s conclusion, a lot will change. Trump will have to come up with tens–if not hundreds–of millions in cash to pay the judgment, which was initially estimated to be in the quarter billion dollar neighborhood, but could go higher.
Similar to what happened in the civil suit about the fraudulent Trump Foundation, Engoron could ban the three Trumps from being officers in any corporate entity registered in New York. That would require one of two things to happen: Trump would have to reestablish each individual corporation in a different jurisdiction–which would require the cooperation of all the partners in those organizations, something those partners might not be willing to do given the reorganization became a necessity because Trump was found liable for fraud. Trump will likely be forced to refinance many of these properties, with banks offering less favorable terms–if he can find lenders at all.
While there’s been plenty of idle speculation online about Trump handing his properties to Melania or Ivanka… well, would you? The Trophy Wife takes over a billion-dollar portfolio? The cold, calculating daughter usurping her father’s empire–and worse yet, she’s rumored to be librul!? Neither will work in Trump’s paranoid universe.
Most likely, Trump will be forced to sell off some of his prized properties to pay off the fines, fees and taxes that will be incurred in the aftermath of the trial, something a fundraising effort won’t be legally allowed to cover because this obviously deals with his personal businesses, not his campaign.
Trump said he will sit at the defense table on Monday as the trial begins, and then he’ll likely abandon the proceedings for the rest of the trial. He’s got other legal issues to deal with.