This seems wrong
Forcing a Trump fire sale plays right into his hands. Right or wrong on the facts, this is a political prosecution.
I can’t figure out if New York Attorney General Letitia James did more injury to Donald Trump or the Constitution. I don’t want Trump to win in November, but unlike many of my compatriots here at The Racket News™, I am not so sure it’s a shoe-in for him to lose, either.
The Ninth Amendment to the Constitution states that “In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law.”
The Seventh Amendment holds, in part: “nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.”
Letitia James sued Donald Trump and the Trump Organization, on behalf of the State of New York, without a single natural or legal person as a named victim. The banks, the facts showed, got paid, and made profit. Trump played a shell game with his assets, regularly overvaluing them, keeping multiple sets of books, and deceiving lenders. James deemed him a hazard to commerce, though we don’t see a long line of victims who were injured by this scam.
There are plenty of victims who were injured by Trump’s many other scams like Trump University. In November, 2016, Trump settled, paying $25 million to claimants, in a deal put together by then New York AG Eric T. Schneiderman. The settlement ended a bevy of class action, state and federal lawsuits. Trump paid because he got caught running a con.
But in New York real estate, cons are much more subtle. In fact, in all real estate, cons can go on for many years—look at the recent National Association of Realtors settlement that ended the standard 6% commission and split between buyer and seller agents. This con propped up some terrible real estate agents for decades.
In 2017, Moody’s settled with the federal government and the state of Connecticut (along with 20 other states and the District of Columbia), paying almost $864 million over its role in the 2008 subprime loan scam. In 2015, Standard & Poor’s paid $1.375 billion. Millions of homeowners lost their shirts and major investment banks went belly-up, while Goldman Sachs came out walking in wine and roses.
Yet Letitia James didn’t go for a settlement. She and her Manhattan legal blacksmiths have been after Trump with hammer and tongs, not to right some injustice and make people whole, but to make Trump broke and broken.
Judge Arthur Engoron is from Queens. He’s not a fan of Donald Trump and never has been. The law James used to sue on behalf of the state didn’t require a jury trial. Trump’s legal team didn’t insist on one—a move that could very well help Trump politically. Because, right or wrong on the facts, this is a political prosecution.
Engoron’s bench trial was as close to a kangaroo-court as you’ll ever see in America. He let Trump rave for ten minutes. Then he pronounced a death sentence to a guy who is highly leveraged, in a market where 95 million square feet of New York City office space is sitting empty in a “doom loop.”
Judge Engoron’s original order made it impossible for any bank registered in New York to do business with Trump or his company. An appeals court overturned that part. But no bank or bond underwriter wants to cover a $454 million bond against properties that have their own loans, and in default would need to pay the State of New York in full. Trump’s team tried over 30 companies (how many could even put that deal together) and came up with bupkis.
To think that Engoron and James didn’t know this—in fact Engoron’s order was engineered to cause it—is laughable. The goal here was to extract the assets of the Trump Organization and deprive its owner of collateral, cash flow, and the ability to fund campaign activities.
It was all done without a jury, and on March 25th, absent a ruling by an appeals court that offers relief, James will have the authority to enforce the judgement.
In any other context, a state government suing and seizing the assets of an operating buisness institution, without having a single natural or legal person as a victim, to pay a giant judgement, which cannot be appealed because the liquid assets of the defendant are insufficient, would be called a “taking.”
The Seventh Amendment prohibits “taking” by the government. Whether you think Trump deserves this as just-desserts or not, is this the way to do it? Politically, I think it’s a mistake.
Letitia James can seize Trump’s property, owned by the Trump Organization, which is being run by a special master appointed by the court, in one week if an appeals court doesn’t intervene. And each day, the interest on the judgement adds $112,000 to the total. The bond collateral would need to cover the judgement plus 20%, so it’s over $550 million. Trump’s team has just one week to do a deal that over 30 bond underwriters wouldn’t touch. It’s not possible. This is the kind of deal that Tevye was offered when the tzar ordered the fictional Jewish residents of Anatevka to vacate in 48 hours, selling everything.
Trump called it a “fire sale.” He’s right. It’s very possible that even as I write this, Trump is negotiating his fire sale in order to raise cash for the bond. He needs to bond to appeal the judgement. And he will use the fact that he was forced by the state, without benefit of a jury trial, without a single named victim, to sell his assets and pay the government, as proof this is a political witch-hunt.
And in fact, it is political witch-hunt. Trump really is a witch in this case. He has been running scams for decades, but nothing compared to what Moody’s, Standard & Poor’s, Coldwell Banker, Countrywide Financial, and half the top-tier banks in America were running in the early 2000s. In the latter cases, it was politics that kept many of those firms from getting the hammer and tongs treatment.
The number of Trump-affiliated people who have or will do jail time is a national disgrace. It’s a disgrace that for all the efforts that have been expended, in all the ways the Constitution has been stretched, punched, and trampled, both in defense of or to attempt to deliver the knockout blow to Donald Trump, the man still walks free, campaigns on “bloodbath” threats (it means what it means), and has a fairly decent chance of moving back to the White House in 2025.
For Letitia James to seize Trump’s property and sell it to pay a judgement handed down not by a jury but by a judge who hates Trump, seems wrong. Politically, it plays into Trump’s hands. James should not do it.
Thanks for not engaging in hate speech and presenting an objective view of the unjust and unfair persecution of Mr. Trump by AG James and Judge Engoron. You covered it well. You stated that you did not want Mr. Trump to be elected, an opinion shared by millions of citizens, all within their rights to opine. My opinion is that fining the Trump organization for irregularities is legitimate, but the amount is several thousand times what is justified. The terms of bond and appeal might even be reasonable if the fine were reasonable. The penalty imposed on Mr. Trump is equivalent to the awards for 170 victims of the attacks that occurred on September 11, 2001.
Happy to leave it to the courts to adjudicate the constitutionality of this penalty and how it was arrived at, and how it was applied. This doesn't seem to be like an innovative case procedurally. (I don't recall anyone else complaining about bench trials and whether they were Constitutionally kosher - especially when Trump HAD an opportunity to have a jury trial and waived that right.) Perhaps the size of the penalty makes this something functionally different - happy to leave that in the hands of an appeals (or Supreme) court and respect their decision.
That said, given that Trump has a decent chance of becoming President again, and he's still having problems raising money to post the bond, the lack folks rushing to his aid in a moment of his greatest peril is probably the karma of all of the one-way loyalty he's exhibited over his career finally coming due. No one wants to be the next Rudy Guiliani left hanging out to dry.