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Thank you for your patience on getting to the Trump fine. On Friday, NBC ran an eye-popping story headlined, “
Judge fines Donald Trump more than $350 million, bars him from running businesses in N.Y. for three years.”
I realize it’s difficult to keep up with the rogue’s gallery of politically-partisan judges and prosecutors pursuing President Trump, but by now you’ve probably heard plenty about the historic $354 million-dollar criminal penalty pinned on President Trump and his New York companies on Friday. The case started last year with an equally historic premise, using a statute that had never been used this way before against anyone, never mind against a President, and relying on a logic-defying factual allegation of financial fraud even though the banks that got Trump’s allegedly fraudulent financial statements said
everything looked fine to them.
There are two major prongs in civil cases:
liability and
damages. You need to prove both to win a civil case. It is not quite the same way in criminal cases but it’s comparable, especially where, as here, the alleged crime (fraud) has a civil analogue. Proving criminal fraud everywhere but in New York requires proof of three things: an intent to deceive, a victim’s reliance on a deliberately-false representation, and an actual injury caused by the victim’s reliance on the deceptive representation.
New York’s novel criminal statute (never used this way before) strips two of the three elements, dehydrating the age-old ‘crime’ down to a new-age essence:
the mere intent to deceive. Judge Engoran — a partisan democrat from way back — had no trouble finding that Trump intended to deceive the banks. It doesn’t matter whether the bankers said they were deceived or not, that’s
reliance, an antique element jettisoned from New York law after State Attorney Letitia James woke up one morning with her brain hurting on the left side.
In other words, they’ve reduced the crime to the democrats’ absolute favorite:
a thought crime. The only wrinkle under the statute is that the intent to deceive must be
financially-related and
written down. The fact the crime is only based on Trump’s intent is democrat partisans are proud of. For example:
Next up is the damages, or the lack thereof. Under our Constitutional system of criminal justice, punishments must be
proportional. That’s basic Eighth Amendment law going back to the very beginning. There can be no cruel or unusual punishment. Which includes excessive fines. That is undisputed.
Here’s what the New York Times reported about the damages back in November:
So
how did Judge Engoran calculate that his $354 million fine was
proportional? Proportional to
what?
The judge buried that calculation in a mind-numbing array of complicated hypotheticals, such as imagining that — despite what the bankers
said — Trump might have paid a higher interest rate on the loans if his financials had looked different. That got the judge part of the way, and then he imposed a massive $250-million clawback of what he decided were “unjust profits.”
All the judge’s complicated calculations elided the requirement of
proportionality to the damage actually caused.
So what comes next? An appeal. Unlike the $83 million civil verdict against President Trump in the bizarre sex assault case, there is no
remittitur available for a criminal fine. So Trump will proceed directly to appeal — an appeal demonically calibrated to inflict the most possible pain, since under New York law, in order to appeal Trump must first post a bond in the full amount of the fine plus interest — over $450 million dollars.
President Trump can either put up the cash or buy a bond. Appeal bond fees cost around ten percent of the total, or $45 million dollars, which Trump would never get back. If he ultimately loses, the bonder would pay the fine but keep $450 million in Trump’s collateral, which the President was required to pledge to secure the bond. If Trump wins, he pays nothing further, but the bonder still keeps the bond fee.
Trump’s appeal now must work its way through New York’s liberal court system. Ironically, the state names its courts backwards — the trial court is called the “supreme court” — but the basic idea is the same as everywhere else. Trump must appeal first to the appellate division, and from there to New York’s supreme court, and from there to the U.S. Supreme Court — but he can only appeal to the USSC on Constitutional issues, of which there are several.
Everyone wants a prediction, but the case is a unicorn, which makes it utterly unpredictable. The one predictable part has already occurred, which is that the hyper-partisan judge and prosecutor reached
this result. It was inevitable, everyone knew it, the threat of this judgment was meant to dissuade Trump from running for President. Now the unpredictable appellate part begins.
It is
literally unthinkable that any court of appeals would uphold this decision. The
criminal statute that the judgment was based on is Constitutionally infirm because it is vague; businesspeople in New York can’t accurately predict what conduct is prohibited. The
judgment itself is Constitutionally infirm because it is wildly disproportionate to any legitimate harm caused to victims, despite Judge Engoran’s best efforts to find the victims’ testimony not credible and to calculate injuries they denied having.
Trump has excellent arguments for each of the legal aspects of the case. It’s almost an understatement to say the facts favor Trump, not least that the banks testified they weren’t harmed. The case itself was always tailor-made for an appellate court, with its high profile nature, political implications, celebrity defendant, and media interest.
As a lawyer advising clients, my rule of thumb in normal cases only handicaps using three percentiles: 25%, 50%-50%, and 75%. So I might say
this case is a dog, you’ve got a 25% chance to win. Or,
this is a great case, we’re looking at a 75% probability of winning. Seventy-five percent is as high as I go
in a normal case, because even good judges and juries make mistakes, never mind bad ones.
Celebrity cases like this one break the rules. There’s nothing to compare them to. But the good news is that Trump’s lawyers have everything they need to win. It might’ve been the other way, with Trump facing difficult law and hard facts. But he’s in the best possible position to win, which should be encouraging.
Lately I often hear people complain about the use of donor money to pay Trump’s litigation expenses. That seems wrong-headed to me. Trump is only facing the litigation because he’s running for President. Donald J. Trump is the one taking all the risk — risk of bankruptcy and prison. If people don’t donate, he’s a dead Donald. So his litigation costs
are campaign expenses. It’s that simple.
It might be time for a Trump multiplier. What do you think?
The baffling and mysterious epidemic of sepsis, explained; and — finally! — my thoughts about Judge Engoran’s whopping $354 million dollar fine against President Trump.
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