FROMLINE: Jeff Karoub, Michigan News
Expert Q&A: As the presidential primary season heats up, so do various civil and criminal cases and countless indictments against former President Donald Trump. Will Thomas, an assistant professor of business law whose research focuses on the fundamentals of corporate and white-collar crime, offers insight into what happened and how things might evolve in the run-up to the upcoming election.
What legal problems does Trump face?
There are a lot. Start with criminal law. Trump still faces four criminal charges – state charges in New York and Georgia, federal charges in Washington, D.C. and Florida – all related to alleged crimes he committed to further his political career. All of these cases are still in the preliminary hearing phase. Just this week, the US Court of Appeals for the D.C. Circuit released a blockbuster opinion rejecting Trump’s claims of blanket immunity from criminal charges for his role in the 2021 insurrection.
Next, Trump’s companies face two major civil lawsuits in New York: a defamation lawsuit from E. Jean Carroll and a fraud lawsuit from the state attorney general. Finally, Trump’s presidential campaign is fighting with Colorado, Maine and several other states over whether he can appear on the ballot for November’s presidential election.
What’s next?
The civil and regulatory proceedings are moving quickly: A New York jury has just ruled against Trump in his defamation case. This is Carroll’s second defamation lawsuit against Trump in as many years; She won her first case, after which Trump immediately repeated the same statements that were found defamatory in the first case.
This background explains the massive verdict that was handed down – the jury concluded that Trump should pay her $83 million in damages, including $65 million in punitive damages for the repeated defamation.
And $83 million in damages could be just the beginning of a difficult 2024 for Donald Trump. His fraud trial in New York concluded in early January. The state’s attorney general wants to siphon $370 million from Trump and his companies and ban Trump from participating in the New York real estate business.
The court originally planned to release its decision in January, but now expects to make a decision on the case by mid-February. And the Trump campaign is going to the U.S. Supreme Court this month to argue that Trump remains constitutionally eligible to run for president despite his involvement in the Jan. 6 insurrection.
What should we pay attention to?
The Trump fraud trial is the next big case to watch. The trial last month sought to determine whether there was criminal behavior and whether and to what extent Trump and his company should have reaped previous profits.
In a sign of trouble for Trump’s defense team, the trial court had already granted partial summary judgment to the attorney general. Specifically, the court found that the Trump Organization and several of its executives – including Trump himself and his two sons – violated a state law that prohibits New York companies from engaging in fraud or deception.
Perhaps most controversially, the court also declared that the legal charters of Trump’s companies must be revoked – a decision that would have potentially seismic consequences for Trump’s business empire if upheld.
Once you’ve completed the trial, here are two things you should pay attention to. First, will the court change its mind about revoking the Trump Organization’s charter? Buried in his most recent brief, the attorney general is now recommending that a court-appointed observer supervise the organization, but that the business should otherwise be allowed to continue operating. That outcome may not be much consolation for the Trump family — the attorney general also wants to ban Trump and his sons from engaging in New York real estate — but it would mean the organization wouldn’t be forced to close down any time soon.
What will happen here? Given that it is the Attorney General who is making this recommendation, it would not surprise me if the Court opts for this approach and reverses its original decision to revoke Trump’s business certificates.
Second, how much is Trump expected to lose? The attorney general is asking the court to impose a huge disgorgement penalty that Trump may have to pay personally. Trump’s defense team spent much of the trial trying to convince the court that even if he lied about his finances, he didn’t harm anyone. By arguing that Trump’s lenders definitely financed his businesses and noting that none of his loans went unpaid, Trump is essentially arguing that there were no victims and therefore there should be no compensation.
The problem for Trump: New York allows the court to impose disgorgement, which is different than damages. In short, confiscation refers to ill-gotten gains; It’s about how much money you were able to make through fraud, not how much money you defrauded from your victims. So the disgorgement can often be much greater than the damage.
For example, if Trump gained a business advantage by lying about his personal assets – in this case, for example, by getting a lower interest rate than a bank would otherwise have given him – then it doesn’t matter whether the bank relied on it left or would not have given his false information or given him a loan anyway. In other words, the question of whether there were victims of the Trump Organization played a role in some of the issues in the trial, but is unlikely to have a direct bearing on the calculation of the amount Trump may ultimately have to pay.
What does this all mean for Trump’s political future?
That remains to be seen. Obviously, exclusion from the polls in the states could fatally damage Trump’s presidential campaign. It’s pretty hard, but not impossible, to run for an important office if you don’t vote in the election. A criminal conviction could be just as bad; I can’t imagine the legal and constitutional problems of having an imprisoned candidate, let alone an imprisoned president.
On the other hand, Trump’s core voter support has proven remarkably durable over the years. Will the financial damage impact his ability to run? Will the impact on his company’s reputation cause his support to wane? We hope to have more clarity in the coming weeks and months as the presidential primaries move forward.