Hours before Donald Trump took to the stage at his Mar-a-Lago home to announce a third run for the White House last month, a jury in a stuffy Manhattan courtroom struggled to stay alert while examining a decade-old expenses spreadsheet from the former president’s businesses.
On Tuesday, those documents helped land the first significant legal blow on the Trump empire, with a criminal conviction on 17 counts of tax fraud against two corporate entities that bear the native New Yorker’s name.
The relatively minor white-collar crimes of which Trump’s companies were convicted, including keeping executive perks like luxury cars and riverside condominiums “off the books”, were not the ones that prosecutors had originally hoped to pin on the then president when the Manhattan district attorney’s office started investigating his finances in 2019.
The offences carry a potential fine of $1.6mn, hardly an existential matter for The Trump Organization, which is estimated to bring in hundreds of millions of dollars in annual revenue.
But the Manhattan verdict was “an important step” in holding the “organisation that is [Donald Trump’s] alter ego” accountable, said Cyrus Vance, who led the DA’s office at the time of the probe, adding that it could pave the way for further convictions.
The decision is the first in a flurry of cases and investigations that have beset Trump since he left office. The New York attorney-general has brought a related civil case attempting to bar his entities from doing business in the state altogether, and numerous authorities are investigating his conduct during and after his presidency.
“At a certain point you have to go with what you’ve got,” said Vance, whose initial investigation was into hush money payments allegedly made by Trump to porn star Stormy Daniels in the run-up to the 2016 election.
“We were under some time constraints which are beyond our control,” he added, referring to a procedural deadline at the end of April for the grand jury weighing the initial evidence, which piled pressure on prosecutors to bring some charges.
Reacting to the jury’s unanimous decision, Trump reiterated his claim that prosecutors across the country were engaged in a politically-motivated “witch hunt” designed to destroy his chances of re-election.
He previously insinuated that the Manhattan investigation should not have taken priority over the murders and violent robberies that often preoccupy the district attorney’s office.
“From a public relations perspective, it does leave room for this particular spin . . . coming from Trump that this is a hit job, that this kind of crime usually goes undetected because it is so small,” said Rebecca Roiphe, a former Manhattan assistant district attorney, now professor at New York Law School.
Still, the four-week trial provided an unflattering glimpse into the inner workings of the real estate empire that helped Trump amass wealth, fame and political clout.
Witnesses described a company run by a small group of close advisers who communicated via long lunches or handwritten notes, and who for decades neglected to put in place the formal structures that are common for companies of that size.
Allen Weisselberg, The Trump Organization’s former chief financial officer who pleaded guilty to tax fraud and was a key witness in the case against his employers, revealed how the Trump businesses went through a “clean-up process” soon after their boss was elected to the White House.
Executives decided to “make sure we correct everything”, he said, adding: “I started paying my rent directly.”
The 75-year-old Weisselberg also testified that he was present for an informal conversation between Donald Trump Jr and his father on the subject of schooling, after which the former president turned to Weisselberg, his close lieutenant, and said “maybe we will pay for your grandkids too”.
The Trump Organization said the companies would appeal the conviction. Speaking directly after the verdict was delivered, Trump Organization lawyer Alan Futerfas said the defence team would focus its challenge on the use of an arcane corporate liability law from the 1960s that he claimed had been “central to the case”.
“A novel and really interesting issue developed during the trial — the definition of ‘in behalf of’ and what that means,” he said, referring to a term that jurors were told was crucial to determining whether Weisselberg had acted for the Trump companies’ benefit rather than solely his own.
In the meantime, Trump’s business entities could face significant difficulties in accessing loans from financial institutions or passing the due diligence processes required for large deals.
The victory in downtown New York also brings with it the fraught question of whether the former president himself should now be in the crosshairs of Manhattan criminal prosecutors.
A failure to bring a case against Trump led Vance-appointed assistant district attorney Mark Pomerantz to resign in March. He condemned a decision by Alvin Bragg, who took over from Vance as Manhattan district attorney in January, not to pursue a personal conviction as “misguided and completely contrary to the public interest”.
Although he was not personally on trial, Trump loomed over the case, with his signature featured prominently on a lease for Weisselberg’s Upper West Side apartment.
Earlier this week, Bragg announced the appointment of a seasoned Department of Justice lawyer, Matthew Colangelo, to his team, who will focus on the DA office’s “most sensitive and high-profile white-collar investigations”.
For Vance, that signals a criminal charge could now be on the horizon for Trump after all.
“This stage is over,” he said. “More to come.”
Source: Financial Times