Government

The Trumps Could Testify Before Their Dirty Laundry Got Aired, Or After. They Chose After.

FAFO.

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Republican National Convention: Day Four

(Photo by Joe Raedle/Getty Images)

If the definition of insanity is doing the same thing over and over and expecting different results, the Trump family is out of their damn minds. Eric Trump already worked himself into a public tantrum and tried to weasel out of a deposition in the New York Attorney General’s investigation of his family business, prompting AG Letitia James to file a public motion to compel his testimony laying out a raft of embarrassing details about his family’s business.

Now the former president, Don Jr., and Ivanka Trump have been subpoenaed, so naturally they ran exactly the same play. Because it worked so well the first time! Which is how we all wound up reading that 115-page motion to compel when it dropped last night at 11pm — an hour when Trump’s lawyers were conveniently asleep and unable to jump in front of a microphone.

The major allegations weren’t new, although this was the first time the AG confirmed that her office is investigating some of them. In the main, they concern the way Trump’s habit of inflating his real estate valuations, both in financial disclosures to lenders and for the purpose of persuading Uncle Sam to subsidize his business through conservation tax credits.

The second most hilarious example involves a golf course in Los Angeles located in an area prone to landslides. After his lawyer Sherri Dillon intensively massaged the appraisal from Cushman Wakefield, Trump claimed a $25 million conservation credit for continuing to use the land as a golf course and not building houses to fall into the sea.

But the most hilarious by far is Trump’s claim that his apartment in New York was 30,000sf. In fact, it was 10,996, as Forbes worked out back in 2016 when he tried to sell this line to the magazine. But it’s one thing to look like a blowhard trying to con a reporter, and quite another thing to use the number as the basis for a financial statement. Trump’s accountant Allen Weisselberg conceded they had valued the apartment by the foot, and thus the exaggeration resulted in a $200 million overstatement of its value.

Weisselberg, who was recently indicted along with the company for tax fraud, comes in for some special attention here. His son Barry, who ran the Wollman Ice Rink for the Trump family, is already in the hot seat for possibly receiving undeclared compensation which he did not pay tax on. Now his other son Jack is in the frame, after Weisselberg shopped an appraisal of the building at 40 Wall Street which “did not reflect a good faith assessment of value” to Jack in his position at Ladder Capital.

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And in case the threat to people’s children was unclear, the AG lays out Ivanka Trump’s sweet deal on her Park Avenue penthouse, on which she paid below market rent with an option to purchase at $8.5 million, although the unit was valued at three times that amount. There’s also an ominous reference to her being “the primary contact for the Trump Organization’s largest lender, Deutsche Bank” and causing “misleading financial statements to be submitted to Deutsche Bank and the federal government.”

Trump’s lawyers argued in their motion to quash that the existence of a criminal investigation into the same matters by District Attorney Alvin Bragg forecloses their clients’ cooperation with the AG. Well, first they ranted that the entire investigation is “an unprecedented and unconstitutional maneuver” by a biased prosecutor. But when they got finished fulminating, they made a case that their clients can’t testify because they might be forced to say something that would incriminate them with the DA.

The argument rests on New York’s automatic grant of transactional immunity for witnesses subpoenaed to testify before a grand jury. Trump argues that, because AG James is coordinating with DA Bragg, the investigation is inherently criminal, and thus a civil deposition is functionally the same as un-immunized grand jury testimony.

The OAG is engaged in a criminal investigation that has an active Grand Jury. It cannot issue subpoenas for testimony under the guise of a civil investigation that will immediately become available – to its own OAG/DANY criminal investigation. New York State’s statutory and constitutional protections were not designed to be so easily avoided. The subpoenas are an obvious improper end-run around the rules.

This provided the perfect opportunity for the AG to reveal that Weisselberg and Eric Trump each pled the Fifth more than 500 times during their depositions. Clearly these parties are sophisticated enough to know how not to incriminate themselves in a deposition. And you may have the right to remain silent, but you don’t have the right to avoid being asked a question because it would be super embarrassing to have to invoke that right.

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“Each witness is free to invoke their Fifth Amendment privilege against self-incrimination,” James notes. “A witness’s exercise of that right in a civil investigation (or any other civil or administrative proceeding) is neither uncommon nor a denial of a constitutional right. Rather, witnesses routinely face such a decision and invoke the privilege—as witnesses have done in this investigation.”

Moreover, she points out that Trump’s Fifth Amendment arguments undermine any claim that his testimony would bear no reasonable relation to the investigation:

In addition, as Mr. Trump appears to concede in his moving brief (Respondents Mem. at 13), if he appears for an interview under oath and “chooses not to testify” on the basis of his Fifth Amendment privilege, then “an adverse inference may be drawn in” a civil action—should OAG choose to bring one under Executive Law § 63(12). That concession necessarily means his appearance bears a “reasonable relation” to OAG’s investigation—because the generation of an adverse inference against Mr. Trump or his businesses could support a judgment on the merits (even a grant of summary judgment) in that civil action. See, e.g., Access Capital, 302 A.D.2d at 48 (affirming summary judgment based on adverse inference resulting from defendant’s invocation of Fifth Amendment privilege against self-incrimination).

The memorandum of law and supplemental petition cover a lot of ground, but one other fun detail stands out. The AG is seeking to compel production of documents from the Trump Organization regarding the former president’s participation in preparing his own financial statements. Other parties have produced documentation that shows he played a role in their preparation, and Trump’s own accountants testified that they spoke to him about it. Nevertheless, the company insists that they have no responsive documents, and nothing that would tie Trump to his own financial statements.

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It’s not as ridiculous as Trump’s federal lawsuit trying to divest the state court of jurisdiction and get James thrown off the case. But it’s pretty ridiculous all the same.

People of the State of New York v. Trump Organization, Inc. [Docket]

Elizabeth Dye (@5DollarFeminist) lives in Baltimore where she writes about law and politics.

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