Trump Has 30 Days to Pay $450M in Fines and Penalties From Civil Fraud Case

The legal setbacks facing leading Republican presidential candidate Donald Trump are piling up. He now has 30 days to pay $450 million in fines and penalties from a civil fraud case brought by New York Attorney General Letitia James. His two eldest sons face a two-year ban and were each ordered to pay $4 million. Trump says he plans to appeal the ruling, which he described as a “complete and total sham.” But the appeal is unlikely to succeed, says Russ Buettner, a Pulitzer Prize-winning investigative journalist whose reporting for The New York Times led to the state’s case. He lays out how records showed an “overwhelming pattern” of Trump’s businesses “lying to their lenders.” Buettner, who describes Trump as cash-poor, says the penalties will result in “a blow to his personal finances and his business finances that he really can’t handle at this point.”

TRANSCRIPT

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AMY GOODMAN: We begin today’s show with the legal setbacks that continue to pile up against leading Republican presidential candidate Donald Trump, even as more trials loom. Trump’s latest legal defeat came in a New York court as part of a losing streak in his home state. On Friday, a New York Supreme Court justice ordered Donald Trump to pay $450 million in penalties and interest for illegally inflating the value of his assets in order to secure more favorable loans and insurance for his New York real estate empire. Trump’s assets, including Trump Tower in Manhattan, could be used to pay the fine as a 30-day deadline looms. Trump is also barred from running any business in New York for three years. Trump’s two eldest sons face a two-year ban and were each ordered to pay $4 million.

Judge Arthur Engoron also said Judge Barbara Jones will continue to act as independent monitor of Trump’s businesses, and ordered an additional independent director of compliance at the Trump Organization. In his ruling, Justice Engoron criticized Trump and his sons, Donald and Eric, saying, quote, “Their complete lack of contrition and remorse borders on pathological,” unquote.

The ruling came in a case brought by New York Attorney General Letitia James, who spoke to reporters after the ruling.

ATTORNEY GENERAL LETITIA JAMES: Today justice has been served. Today we proved that no one is above the law. No matter how rich, powerful or politically connected you are, everyone must play by the same rules. We have a responsibility to protect the integrity of the marketplace. And for years Donald Trump engaged in deceptive business practices and tremendous fraud.

AMY GOODMAN: Donald Trump plans to appeal the ruling, which he described as a “complete and total sham.”

This comes as more than $27 million in Trump campaign funds went to legal costs in the last six months of last year.

For more, we’re joined by Pulitzer Prize-winning New York Times investigative reporter Russ Buettner. His team’s reporting led to Letitia James’s case.

Russ, we welcome you to Democracy Now! And it’s great to have you with your former colleague, Juan González, to talk about this case. Why don’t you start off by talking about this unprecedented ruling? What exactly are we talking about when we’re talking about more than $400 million that President Trump has to pay? And when does he have to do this, and in what way?

RUSS BUETTNER: Well, I think what we’re talking about is a blow to his personal finances and his business finances that he really can’t handle at this point. He doesn’t have that much cash. When we looked at him five years ago, we had 20 years of his financial records and his tax returns, and he was down to below $50 million in cash, both personally and in his businesses. He’s had a couple of one-shot things from selling some assets, an asset he doesn’t control refinanced. As recently as last year, he may have had over $300 million, but our experience with him is that his businesses eat cash, generally, and require constant infusion. So, if he had that much then, he wouldn’t now.

He’ll have to pay that if he chooses to appeal, which it seems he certainly will. He would have to put up some sort of bond or put the full amount, essentially, into escrow when he files the appeal within 30 days. If he does the bond, from what we’ve understood, he might have to guarantee to repay that amount plus an extra 20%. So, we believe that he’s negotiating now, trying to find somebody, an insurance company, to put that bond up for him. And that would require him to most likely put a lien on some of his properties.

But the long game here is that he’s most — if this judgment holds and withstands appeal, he would most likely have to sell several assets. And that could pose an existential threat to him, because he has some assets that make money, those would be the most likely ones to sell, and that would pose a real threat to the rest of his enterprise, if that happened.

JUAN GONZÁLEZ: And, Russ, first, hello. We haven’t talked in many years. We used to work together at the New York Daily News. But I wanted to ask you: What about the appeal situation here? What’s the likelihood, from your sense, that he might — his appeal might be successful or at least involve a reduction of the fine?

RUSS BUETTNER: Yeah, it’s great to be with you, Juan.

From what I’ve seen and what I’ve been told by other lawyers who have looked at this, it doesn’t seem like there’s much chance to overturn the entire judgment. This is a 92-page judgment. Judge Engoron goes through, blow by blow, each allegation. This was a case that was based on records, not really testimony. The testimony in the case was mostly a way just to get the records into evidence. And it’s an overwhelming pattern of them lying to their lenders about what they’re doing. And that’s the threshold in the law, that you can’t mislead your lenders about what’s happening.

There is always a possibility with these sort of appeals that the judgment might be reduced. Because Judge Engoron, again, seems to have presented a very well-reasoned argument as to the ill-gotten gains, that’s what all of this is. The judge ruled that there — following the attorney general’s recommendation, that there was $170 million, roughly, in beneficial interest rates that they wouldn’t have gotten if they had been truthful, and that they were able to sell two assets — a golf course and a hotel in Washington, D.C. — that they wouldn’t have been able to buy initially if they hadn’t fraudulently obtained these loans and continued to lie to their lenders to keep those loans active. So, there’s some possibility that could be reduced, but it doesn’t seem like it would be likely to be reduced down to like $30 million. It seems like it’s going to remain a very high number.

Should take about — I think appeals in New York generally take about a year and a half to get all the way through. So, possibly by this time in a couple years or towards the end of next year, we might have a kind of final ruling and the ultimate day of reckoning for the Trump Organization.

JUAN GONZÁLEZ: And also, the impact of the judge continuing the judge, Barbara Jones, as an independent monitor over Trump’s businesses and his ordering an additional independent director of compliance, isn’t this actually a much more long-term problem for the Trump Organization in terms of being able to conduct its normal way of business?

RUSS BUETTNER: Well, its normal way of business doesn’t seem to be a normal way of business. It’s a very unusual organization. I’ve talked to people who have worked there off and on over the last 40 years. One of the unique things about it is there’s really nobody there who knows how each business is performing, except Donald Trump and his longtime financial accountant Allen Weisselberg. So, the idea that somebody else is overseeing the movements of money there, I think, is really intrusive to him, and possibly kind of embarrassing.

There are — one of the unique things about those businesses is that they’re constantly moving cash from one or two businesses or his fortune from entertainment money into the different businesses. The U.K. golf courses have all lost money. They required tens of millions of dollars just to stay open. The Post Office hotel in Washington, D.C., he was pumping $7 million to $10 million of new cash into that every year to make up for operating losses.

Now you’re going to have somebody overlooking all of that, telling him what he can’t move, trying to maintain the value of what’s there to make sure that he can pay whatever judgment comes through. That’s a very intrusive process to a guy who had basically spent his entire life in a bubble, that first his father financed and then a fortune from entertainment financed, and he didn’t have to answer to anyone, not a board, not an investor, rarely even a bank. That’s going to be a hard blow for him.

AMY GOODMAN: Judge Engoron said, “Their complete lack of contrition and remorse borders on pathological.” Talk about the significance of this, Russ Buettner.

RUSS BUETTNER: Well, I think it goes, really, to — it’s a very, I think, important element of the appeal. When a judge — when a factfinder, whether it’s a judge or a jury, generally comes to a conclusion about the reliability of a witness, and they are basically — the only defense they had was their testimony of them not being reliable, that’s very tough for an appellate court to overturn. I don’t believe that happens very often.

But I think it’s also — it’s a tough message to send out to the business world. You know, Donald Trump had to get these loans initially because he had defaulted on $285 million in loans on his Chicago tower. That’s just money he received and never paid back. So he was really put into a bind. His son-in-law got him intoduced to the personal financial — the personal wealth division at Deutsche Bank. That’s why he had to promise that he would meet these thresholds every year, to keep $50 million in cash and be worth two-and-a-half billion dollars. That’s how he got there.

And I think, really, what the message is, that, like, Donald Trump doesn’t do contrition, in any circumstance ever. What he does is division. And you see here he divides the world into people who praise him and people who are horrible people. He has not really addressed the facts of this case, not during the trial. They’ve been very misleading in the comments that they’ve made publicly about this. And that’s a tough message to send out in the business community at a time when he’s going to need loans, he’s going to need an insurance bond to come up with this, that he’s not a reliable person, that when they sign their name to a document, as they did in this case every year, to say they’re meeting these thresholds, that it’s really meaningless, and that he thinks that’s OK. That’s the message he sent out to the business community. I think that’s going to be a tough blow for him, Trump.

AMY GOODMAN: You add to this E. Jean Carroll, owing her like $80-something million, you’re talking about Trump paying out more than a half a billion dollars Now, how transparent are those who might make loans to them? For example, you’ve got MBS, Mohammed bin Salman’s, you know, sovereign fund in Saudi Arabia investing $2 billion in Jared Kushner, not in this case. He’s the son-in-law, though, the husband of Ivanka. You know, what about a foreign government giving him that money? Would the public know about this?

RUSS BUETTNER: That’s not entirely clear to me. I would think in a court system, the way the courts usually work, there would be some transparency on that. You would think that the — Barbara Jones is a very experienced federal judge and very experienced in these monitor situations and reports regularly to the court. They would be, I think, aware of what’s happening there.

But anyplace where there’s a potential for outside money to come in and influence the Trumps, I think, is a real threat here. And I think that’s something that everybody is going to have to pay attention to. That’s been a threat to the way his businesses operate for years. You didn’t have to pay Donald Trump when he was president. You could just buy a block of memberships at Mar-a-Lago, which happened, and then he took that new membership money out as distributions out the back door. So, that’s always a threat with him. And our system of governance and monitoring the finance of politicians is not really set up to catch these sort of things. So I think that’s something — it’s an excellent point, Amy, and I think everyone is going have to pay attention to that going forward.

JUAN GONZÁLEZ: And, Russ, following up on that, in terms of the Trump Organization investments abroad, assuming that Donald Trump does get elected in November as president again, there will at least be — hopefully, with this court monitoring of the Trump Organization finances, we’ll supposedly have a better idea what his foreign entanglements or the foreign entanglements of his organization would be. Is that accurate?

RUSS BUETTNER: I mean, I — certainly the monitor will, and certainly the compliance officer will. I’m not sure that’s going to be their primary responsibility. I think their primary responsibility is to make sure that he’s not pulling money out of the businesses so when the judgment finally comes down, there’s not enough there to pay the judgment, and he’s already, you know, sort of disgorged it to his own personal finances. I think that’s their primary focus.

It does give them, obviously, a window to those sorts of things, but I’m not sure that there would be a mechanism for them to report concern about money coming from someplace else. I think, certainly, if there’s illegal transactions, there’s illegal flows of large amounts of cash into some of his businesses, they would certainly notice that. But again, it was really apparent during his presidency, the financial disclosure forms, the oversight agency that looks into those things is really not equipped to handle something like his very unique situation, where he’s getting millions and millions of dollars from just endorsement deals around the world and millions of dollars from people just staying in his hotels and buying memberships in some of his clubs. And I think we’re going to have to at some point come to a realization that those systems need to be overhauled.

AMY GOODMAN: Did you ever think that your reporting back in 2016 would lead to a Pulitzer Prize and to this epic state investigation into the past president of the United States, who could be the future president of the United States?

RUSS BUETTNER: I don’t think I’ve ever, like, started a day thinking, “This might win me a Pulitzer Prize.” I get sort of enamored with the idea of digging into these things, and I love figuring out really complicated things. But you never know where it’s going to go. I think Letitia James had her own ideas on how to pursue this, and I hope we, hopefully, helped to inform that process a bit. But, no, I don’t think you ever think that what you’re doing on a Monday morning is going to someday lead to, you know, nice awards or the involvement of a president of the United States in a multimillion-dollar lawsuit.

AMY GOODMAN: Russ Buettner, Pulitzer Prize-winning investigative journalist at The New York Times. Since 2016, his reporting has focused on Donald Trump’s personal finances.

Next up, to The Hague, where the International Court of Justice is holding a six-day hearing where over a quarter of the world’s countries are testifying against Israel’s occupation of the Palestinian territories. Stay with us.