How Trump’s legal risks are shifting
Trump supporters cheered recently when the New York District Attorney indicated he was dropping a criminal investigation into Donald Trump’s business practices. But the former president's legal woes aren’t disappearing. It’s more like they’re shifting from one venue to another.
Many legal experts once thought the New York City DA’s case was the most serious legal risk Trump has faced in his 50-year business career. It arose from allegations by Michael Cohen, Trump’s former lawyer, that Trump used wildly different valuations for his properties and other assets, based on whether a high or low valuation suited a given purpose. That would violate laws banning multiple sets of accounting ledgers for New York businesses. A 2020 New York Times exposé alleged that Trump used low asset valuations and other tricks to dodge federal, state and local taxes for years, raising the pressure on New York prosecutors to pursue Trump.
Last summer, then-New York City DA Cyrus Vance charged Allen Weisselberg, the Trump Organization’s chief financial officer, with 15 felony accounts, including grand larceny and tax fraud. Going after Weisselberg seemed like an effort to pressure Trump’s top money man into revealing other possible crimes at Trump’s real-estate firm. It was possible the DA could have charged Trump himself with crimes.
But Vance’s term as DA expired last year, and he didn’t run for reelection. Democrat Alvin Bragg won the post, and vowed to continue the probe. Bragg, however, has now stunned the legal world by apparently winding down the Trump investigation and overruling veteran prosecutor Mark Pomerantz, who insists Trump is guilty of crimes.
Pomerantz, who resigned from the DA’s office in February, wrote in a resignation letter, “The team that has been investigating Mr. Trump harbors no doubt about whether he committed crimes—he did.”
Bragg says he's not formally closing the case, but critics say he should explain why his top prosecutors are bailing and the inquiry seems to be ending. Bragg may have lost his nerve going up against a former president, or concluded that the risk of losing was too high.
'Tiptoeing up to the edge of criminal liability'
Trump, aka “Teflon Don,” has wriggled out of business jams and legal imbroglios for decades, including six business bankruptcies and a nearly uncountable number of lawsuits.
“For a half century, Trump has been tiptoeing up to the edge of criminal liability and not quite going over the edge,” Norman Eisen of the Brookings Institution, who served as special counsel to the House Judiciary Committee during the 2020 Trump impeachment, tells Yahoo Finance. “But he’s far from out of the woods. Not all prosecutors are as pusillanimous as Bragg, and his businesses still face significant exposure.”
Trump has insisted all along that criminal and civil prosecutions are politically motivated "witch hunts," with most of them originating in states controlled by Democrats. But that's not true in Georgia, where another criminal case against him is developing. After losing the presidential election in 2020, Trump repeatedly pressured Georgia state officials to somehow reverse Joe Biden’s win in the state. That culminated in a Jan. 5, 2021 phone call in which Trump told Georgia Secretary of State Brad Raffensperger “to find 11,780 votes, which is one more than we have.” Somebody recorded the call, which the Washington Post and other news outlets promptly reported.
Fulton County District Attorney Fani Willis has convened a special grand jury to probe possible charges relating to Trump’s pressure campaign in Georgia, which could include election fraud and racketeering. If Alvin Bragg in New York closes that investigation, then the Fulton County probe would be the only other known criminal proceeding against Trump.
Willis in Georgia could end up more dogged than Bragg in New York.
“The Georgia prosecutor is smart and tough and experienced and, unlike the New York City DA, unlikely to be swayed by the perception of her local political needs,” Eisen says. “You can’t tell state officials to find 11,780 votes, one more than you need to win an election, when those votes don’t exist. That is a very likely solicitation of election fraud.”
If the Georgia case gets as far as a trial and conviction, it would still have to survive appeals to higher courts in Georgia, dominated by Trump’s fellow Republicans, and probably to the Supreme Court, where conservatives also dominate. Still, Trump is losing the fealty of some Republicans who want to move on from his bogus claims of a rigged 2020 election and return to conservative principles such as smaller government.
The law is catching up to Trump
There are more than a dozen other civil cases pending against Trump, including the prominent inquiry by New York state Attorney General Letitia James. That case focuses on tax avoidance and seems to be making progress.
In one recent filing, James claimed the Trump Organization tried to value $750,000 worth of real estate assets at $49.6 million, most likely to use as collateral for financing. In another instance, James says Trump inflated the value and size of his own apartment in New York by two-thirds. In an interview with James’s office, Weisselberg “admitted that the apartment’s value had been overstated by ‘give or take’ $200 million,” according to James.
The James case was running parallel to the New York DA's criminal case, which some analysts say the Justice Department should now take over. And there’s still the open question of whether federal prosecutors will probe or charge Trump for his role in the Jan. 6, 2021 insurrection at the U.S. Capitol. In a March 28 ruling relating to a document request by the House committee investigating the Jan. 6 riots, a California judge said, “The court finds it more likely than not that President Trump corruptly attempted to obstruct the Joint Session of Congress on Jan. 6, 2021.” That doesn’t advance any active prosecution of Trump, but it could fuel a Justice Department decision on whether to prosecute Trump in the first place.
On that question, Attorney General Merrick Garland is tormenting Democrats beseeching him to prosecute Trump for his role in the Jan. 6 insurrection, and Trump allies trying to stonewall the Jan. 6 committee. Garland has said practically nothing about what he plans to do, most likely aware that the matter is politically fraught; if Justice were to prosecute Trump and fail to make its case, it would bolster Trump’s claim that prosecutions against him are politically motivated. Garland, however, still has nearly three years remaining in Biden’s term to mount a case, whereas Democrats in Congress fear losing their majority in this year’s elections, with Republicans shutting down all Jan. 6 investigations next year.
In addition to the civil and criminal cases, Trump is also embroiled in a decade-long IRS audit that could ultimately end in a ruling that costs him $100 million or more. That case could be turning against him. In February, Trump’s longtime accounting firm, Mazars, cut ties with him and said it could no longer vouch for the last 10 years’ of Trump’s financial statements. That arose from the New York City DA’s investigation. Donald Bender, Trump’s accountant at Mazars, testified in the New York DA’s investigation last December. Trump may still be ahead of the law, but the footsteps are getting nearer.
