The merits of the suit are impossible to tell at this point, but it’s hard to overstate how much of a letdown a civil action is for a woman who spent close to three years chasing the demon that is Trump, claiming it was “fueling her soul” and “I look forward to going into the office every day, suing him and going home.”
T.S. Eliot wrote in “The Hollow Man,” “This is the way the world ends, This is the way the world ends, This is the way the world ends, Not with a bang but a whimper.” The same might be said for criminal investigations into former President Donald Trump, at least so far. Earlier this year, the political and media class was rocked by the news that radical-left District Attorney Alvin Bragg had ended his office’s investigation into the former President, but progressives kept hope that New York Attorney General Letitia James would deliver. Slate.com’s Dennis Aftergut described it this way, “Those who worry that the former president has again proven to be ‘Teflon Don’ should consider the following: The Manhattan DA is not the only one with prosecutorial authority over these possible crimes. There is another prosecutor in the state who could take on Trump—Attorney General Letitia James.” Previously, her office and the District Attorney had been sharing duties: AG James was pursuing a civil inquiry and the DA was handling potential criminal matters. That was expected to change in the aftermath of the District Attorney Bragg’s announcement. “On Wednesday [February 23, 2022], James’s spokeswoman said the joint criminal inquiry ‘is ongoing and there is a robust team in place that is working on it.’ And on Thursday, Bragg announced another prosecutor would now lead the investigation.” The Washington Post reported that “James’s office wanted to take a more aggressive approach” all along, leading Slate.com to conclude she “could conceivably take over the criminal case in his stead. James’ team could maintain both aspects of the probe, criminal and civil. The attorney general has plenty of ability to do just that under her authority to investigate tax and financial crimes as well as under New York’s Executive Law §70-1.”
That was then, this is now. The progressive hope that Attorney General James would serve as the knight in shining armor that finally slew the Orange Beast, perp walking him in handcuffs before all the world to see followed by a conviction and ultimately jail time were completely dashed this past Wednesday. Rather than announcing the expected and long-awaited criminal charges, the Attorney General presented a somewhat unusual civil suit alleging massive fraud throughout the Trump Organization to manipulate the value of assets for monetary gain. She seeks $250 million in damages and a bar from Trump owning property in New York for five years. As she put it, “Claiming you have money you do not have does not amount to the art of the deal. It’s the art of the steal.” Before we get to the merits of these claims, consider how much of letdown a civil suit actually is at this point. Attorney General James began targeting then President Trump in 2018 before she even got into office. “We will use every area of the law to investigate President Trump and his business transactions and that of his family as well,” she told NBC News that December. She was ready even then with a comprehensive list of the areas to target: Trump’s real estate holdings, a campaign meeting in 2016 at Trump Tower, any government subsidies he received, the emoluments clause to the Constitution, and the Trump Foundation. “We want to investigate anyone in his orbit who has, in fact, violated the law,” she explained without having any evidence or probable cause any had done so. She even went so far as to question the President’s ability to pardon people at the federal level. According to NBC News, “she wants to be able to pursue state charges against anyone the president were to pardon over federal charges or convictions and whose alleged crimes took place in the state. Under current New York law, she might not be able to do that.” “I think within the first 100 days this bill will be passed,” she said, referring to legislation that would enable her to pursue people that were pardoned under state law. “It is a priority because I have concerns with respect to the possibility that this administration might pardon some individuals who might face some criminal charges, but I do not want them to be immune from state charges.” Attorney General James even enlisted the help of Democrat heavy hitters including former Attorney General under Barack Obama, Loretta Lynch.
Under anything resembling normal circumstances, this would have been a concerning if not outright disgusting spectacle. In the United States of America at least, investigations are not supposed to be launched, much less announced, without establishing probable cause that a crime has occured. We do not investigate people, endlessly, for anything and everything, much less target their family members as well. We investigate crimes, but there Ms. James was before she’d even been sworn into the office, announcing a plan to launch sweeping probes into a sitting President, thwart the pardon power of Presidents in general, and enlist other progressives for the cause. She wasn’t finished yet, either. Attorney General James has made even more outlandish statements on the matter, claiming that Trump was “fueling her soul” and “I look forward to going into the office every day, suing him and going home.” This is the sort of thing more suited to the former Soviet Union or the Communist Party of China, and yet she was quite literally cheered on by progressives, long willing to violate every democratic norm imaginable to take down their nemesis, Donald Trump. Something funny happened on the way to promised land, however: All the wild talk about crimes and double jeopardy for pardons and emoluments and Russia collusion completely fell away. The president himself and his immediate family remain uncharged with any crime. The Manhattan District Attorney secured a guilty plea against Trump Organization CFO Allen Weisselberg for evading taxes on some $1.5 million of benefits he received over the course of 15 years, a rounding error in an organization that generates hundreds of millions of dollars annually. He is expected to serve 100 days in prison. Otherwise, Attorney General James was able to secure $2.5 million in fines against the Trump Foundation for misusing donations, ultimately shutting it down.
This Wednesday, she was back with what appears to be her final effort to take down the former President, what has been described as a far reaching civil suit and a referral to the Department of Justice for a criminal investigation. Not surprisingly, progressives responded with glee, almost completely forgetting all of her prior promises and all of the reporting about pending criminal charges. On the surface, it is difficult to determine the merits of the suit. Progressives of course will claim it is a major development, but conservatives are not so sure. The first thing that should jump out to a fair-minded observer is that fraud is also a criminal charge. In fact, common New York criminal charges include what Attorney General James is alleging in her civil suit. Progressives outlets such as The Atlantic are actively using the criminal phrases, blurring the distinction, one might say intentionally. For example, they refer to the civil suit as alleging a “scheme.” As they describe it, “The schemes alleged are so remarkable because they don’t involve tricks like filing false documents. Trump wasn’t doctoring the numbers on forms; he was just brazenly telling different things to different people and assuming that he wouldn’t get caught, and that if he did, he could settle (as he tried to do with James this month) or bluff his way through or it make it go away with a countersuit.” In New York, scheme to defraud in the first degree is a Class A felony, but no such charges were filed. Also, much of the suit is related to the valuation of assets. For example, a property at 40 Wall Street was appraised for $200 million. The Trump Organization claimed it was worth $525 million. The organization is also alleged to have overstated the square footage of his Trump Tower apartment to inflate the value. If true, these would constitute making a false statement of credit terms, which is a Class A misdemeanor that also hasn’t been charged. Likewise, the Attorney General alleges Trump used different methods in different years to assess the value of properties, based the value of properties on land use without restrictions, or added a premium to the value because of his brand name. These are greyer areas of the New York fraud laws, but misconduct of a company official, which would be required in all of these cases, is a Class B misdemeanor, which again has not been charged. It would seem that if the accusations were as they are stated here and provable in court, the Attorney General certainly would’ve leveled these and perhaps other charges. Therefore, the first question anyone should ask is why did she choose to pursue a civil rather than criminal course of action? The second question is equally obvious: Why are none of the groups that could’ve been harmed by this supposedly massive scheme a part of the suit? If banks issued loans on fraudulent terms, why are they not as eager as Attorney General James to go after Trump?
The answer is impossible to say, but perhaps The Atlantic gets closer to the truth than they realized. Read this statement again, “The schemes alleged are so remarkable because they don’t involve tricks like filing false documents. Trump wasn’t doctoring the numbers on forms; he was just brazenly telling different things to different people.” Intentionally or not, the authors clearly have this reversed: Filing false documents and doctoring numbers are out and out crimes, but somehow the authors make it look like that would be better, or at least less “remarkable.” Telling people different things based on the context is, on the other hand, a completely normal part of even a middle-class person’s existence, much less a wheeling and dealing billionaire with dozens of properties. If you are applying for a mortgage, your broker states the highest possible value for your income and your assets. Anyone who has gone through the process has likely looked at their final net worth on the loan application and wished they had access to that figure. If you are applying for financial aid or engaged in a messy divorce, however, you are far likelier to do the opposite, downplaying your income and your assets. There’s not a person in America who uses an accountant to file their taxes who hasn’t had the same experience. Are we all criminals then as well? There is also the fact that the value of property and other physical assets isn’t fixed like the value of a stock. In some sense, it’s worth precisely what someone else is willing to pay, no more or no less, whatever an appraiser might think. It’s not uncommon for homes to sell above their appraised value. The appraiser is not the final arbiter of anything, only the buyer, seller, and the bank. The value of a brand name is even harder to say. How much is Tesla or Apple worth simply because they’re Tesla and Apple? Would people pay the same for an iPhone if I made it? Nor is there only one way to evaluate something: The value of a home is not based purely on its square footage. There are dozens of factors at play, from when it was built, how well appointed it is, to the neighborhood, to the prevailing market conditions.
Lenders know all of this of course. It’s not likely that they accepted anything at face value when issuing a Trump-sized loan. Negotiation is part of any normal business process, and above and beyond any allegations it is reasonable to assume that these values were negotiated and agreed to by both parties. In other words, the banks themselves investigated these claims to their satisfaction. The same way they do not allow a homebuyer to submit an appraisal from their brother, they certainly didn’t take Trump’s word for it. Attorney General James obviously disagrees and we will learn in due course what the courts think of the matter. In the meantime, it’s important to remember that this is entirely her side of the story. She’s made her case, but the former President has not. This would certainly not be the first time wild, explosive claims are quickly extinguished once they hit an actual courtroom where evidence is presented, examined, and judged from both sides. As even The Atlantic admits, Attorney General James is a stone-cold partisan. “Trump will claim that James is a partisan Democrat who is out to get him, and he is not entirely wrong: She is a partisan Democrat; she has pursued him aggressively, and her decision to target him certainly has political merits—she is responding to constituents who want to see Trump targeted, and could benefit politically herself.” I would also note that it’s an election year and she is trailing in the polls, suggesting a political stunt. The Atlantic ultimately concludes with what is not entirely clear. “Either the documents say what James says they do and Trump was juking the stats, or they don’t and he’s been unfairly maligned.” I would submit another option: There’s nothing wrong, illegal, or unusual about “juking” these stats. They’re a part of the normal business process, so long as both parties agree to the terms and any agreements made based on these terms are fulfilled. Regular readers of this blog will note I’ve made similar arguments about Trump’s legal jeopardy in the past: The media regularly reports on malfeasance that isn’t. What is essentially normal behavior in both business and politics is magically transformed into criminal acts when the Orange Man is involved. If I had to guess, we’re looking at the same exact thing here, simply from another angle.