Trump’s potential New York legal woes

Donald Trump on November 26th.
Donald Trump on November 26th.
Official White House photo by Sheelah Craighead
Donald Trump on November 26th.

Trump’s potential New York legal woes

The president is the subject of several investigations in the Empire State.
December 3, 2020

Investigations from New York prosecutors seem to be weighing heavily on President Donald Trump’s mind as he’s on his way out of office. In his 46-minute video posted on Wednesday propagating falsehoods about election results, he turned his attention to criticizing the numerous probes into him and his businesses.

“These same people that failed to get me in Washington have sent every piece of information to New York so they can try and get me there,” he said, before accusing State Attorney General Letitia James of investigating him for political reasons.

His criticisms take on new urgency without the insulation of the presidency. There is the possibility that the Justice Department under President-elect Joe Biden could choose to investigate Trump, though Biden himself doesn’t seem interested in doing so. Trump has already begun to mull the possibility of preemptively pardoning his children, Donald Trump Jr., Eric Trump and Ivanka Trump, son-in-law Jared Kushner and his personal lawyer Rudolph Giuliani. It’s also possible Biden could choose to pardon him to avoid having the cloud of Trump litigation overshadow his presidency.

But any such pardons wouldn’t apply to violations of state and local laws. Which means investigations from James and Manhattan District Attorney Cy Vance wouldn’t be hampered by any such efforts. City & State revisited each of the lawsuits and investigations Trump has faced from entities in New York after the president’s latest video comments. 

Attorney general investigates Trump Organization projects

James officially revealed that her office was investigating Trump’s business dealings this past August, with an eye on four Trump Organization properties and his failed attempt to buy the Buffalo Bills. The civil probe is examining whether the company fraudulently inflated asset values to access loans and other benefits. Eric Trump, an executive with the Trump Organization, was deposed in October as part of the investigation. And The New York Times reported last month that James and Vances’ offices both issued subpoenas to the Trump Organization for records related to consulting fees. The inquiry comes after the paper’s bombshell report on Trump’s tax returns, which found that Trump reduced his taxable income by writing off millions of dollars of consulting fees, some of which were paid to his daughter Ivanka. She denounced the inquiries as “harassment” motivated by “politics, publicity and rage.”

In March 2019, The New York Times reported that the state attorney general’s office had subpoenaed Deutsche Bank and Investors Bank for information regarding the financing of several Trump Organization projects. James issued the subpoena as a result of the congressional testimony of Michael Cohen, the president’s former personal lawyer and fixer, who said that Trump has inflated the worth of his assets in financial documents. Trump dismissed the subpoena on Twitter, saying it is “All part of the Witch Hunt Hoax. Started by little Eric Schneiderman & Cuomo.”

Manhattan district attorney’s criminal probe

Vance’s office has been conducting its own inquiries into Trump and the Trump Organization for more than two years now. The investigation initially focused on Trump’s former personal attorney Michael Cohen’s “hush money” paid in the lead up to the 2016 presidential election to two women who claimed to have sexual relationships with Trump. But Vance indicated this summer that the criminal probe has a broader scope, including allegations of bank and insurance fraud.

The district attorney’s attempts to obtain Trump’s tax returns as part of the investigation landed them in the U.S. Supreme Court as Trump unsuccessfully attempted to argue he was immune from the probe because he was president. The higher court is again in play as Trump sued to block a subpoena for his tax returns and other records.

Unknown Southern District of New York investigation

While testifying before Congress in 2019, Michael Cohen said that the U.S. attorney for the Southern District of New York was investigating “illegal actions” taken by Trump as part of a non-public inquiry. He could not offer additional details, saying that prosecutors had asked him not to discuss it.

Southern District of New York investigation into Trump inaugural committee

The Wall Street Journal reported in December 2018 that federal prosecutors in New York had opened an investigation into Trump’s 2017 inaugural committee in order to determine if it misspent any of the record $107 million it raised. They will also look into whether donors gave money in exchange for access to the administration. Several months later, in February, prosecutors subpoenaed the inaugural committee for records relating to donors, vendors and franchises, as well as documents that may indicate donors received any “benefits” in exchange for their donations.

Southern District of New York investigationinto Giuliani associates

Two businessmen who helped Giuliani dig up dirt on Biden in Ukraine were arrested last year and charged with campaign finance violations. As part of the inquiry, federal prosecutors were said to be examining Giuliani’s financial dealings as well. When asked about it, he denied any wrongdoing and told New York Magazine: “If they’re investigating me, they’re assholes. They’re absolutely assholes if they’re investigating me.” In September of this year, Lev Parnas – one of the associates – faced new charges accusing him of defrauding investors in a company that he founded and that Giuliani consulted for. However, prosecutors didn’t implicate Giuliani, who denied any involvement.

State tax department looks into fraud allegations

Following the 2018 investigation by The New York Times into Trump and his family’s business dealings that included revelations of potential tax fraud and tax evasion, the state Department of Taxation and Finance said it would review the allegations to determine if Trump or members of his family broke any state laws. Trump’s lawyer called all the allegations “100% false and highly defamatory” in a statement. A few days later, New York City officials also announced they would investigate the allegations made in the Times story in cooperation with state efforts.

Manhattan district attorney indicts Paul Manafort

Immediately after a second federal court handed down its sentencing of former Trump campaign chairman Paul Manafort, Manhattan District Attorney Cyrus Vance Jr. announced a series of state indictments against Manafort. Vance implied the purpose of the charges is to ensure Manfort serves jail time even if Trump issues a pardon for Manafort's federal crimes. A New York appeals court sided with Manafort in October that the charges brought by Vance would violate double jeopardy laws because he had been tried and convicted for the same crimes on the federal level. Vance is pushing back against the ruling, arguing that his inquiry is exploring different aspects of the alleged crime.

Attorney general lawsuit against the Trump Foundation

The Donald J. Trump Foundation was dissolved in 2018 and was forced to pay $2 million to eight charities under a settlement last year, in which Trump also admitted to misusing charitable funds to boost his presidential campaign and to pay off his companies’ debt. The settlement required mandatory training for Trump’s oldest children who were officers of the foundation, and imposed restrictions on Trump if he were to become the director of another nonprofit.

The investigation by the state Attorney General’s office began soon after the 2016 presidential election and following an investigation conducted by The Washington Post that uncovered many of the questionable expenditures addressed in the lawsuit. These included using foundation money to pay for legal expenses incurred by Trump’s private businesses, paying for a new fountain outside of Trump Tower and purchasing a $10,000 portrait of Trump that used to hang in one of his golf clubs.

The lawsuit alleged that the Trump Foundation effectively became an illegal arm of the Trump campaign, with emails showing that then-campaign manager Corey Lewandowski directed the foundation’s spending, even though that is illegal. The attorney general’s office is seeking over $2.8 million in restitution, stating that is the sum that the foundation raised in illegal in-kind campaign contributions.

When the lawsuit was announced, Trump responded to it on Twitter by calling it an attempt by “sleazy New York Democrats” to smear him and that he has no plans to settle.

Tax department investigation into the Trump Foundation

About a month after the attorney general’s office announced its lawsuit, The New York Times reported that the state Department of Taxation and Finance opened an investigation to examine whether the Donald J. Trump Foundation violated state tax law. 

A day after Cohen’s guilty plea in federal court, the department subpoenaed Cohen for this investigation, requesting documents relating to the Trump Foundation. The night of that plea, Cohen’s lawyer Lanny Davis made appearances on cable news, telling CNN that his client “has information about Mr. Trump that would be of interest both in Washington as well as New York state,” and telling MSNBC off-air that Cohen has information about the Trump Foundation that would be of interest to the New York attorney general.

U.S. Attorney’s Office for the Southern District of New York prosecutes Cohen

After a referral from special counsel Robert Mueller, the FBI executed a search warrant and raided Cohen’s office in 2018. Although Mueller uncovered information that led to the raid, it did not fit into his line of inquiry into Russian meddling in the 2016 presidential election. So he handed it off to the U.S. attorney’s office for the Southern District of New York, which began its own case. (U.S. Attorney Geoffrey Berman, who was appointed by Trump, recused himself. He has since been fired by Trump. The investigation is being overseen by his subordinates.) In the raid, the FBI searched for documents related to, most notably, the payment Cohen made to adult film actress Stormy Daniels, whose real name is Stephanie Gregory Clifford and is one of the women who alleged to have had an affair with Trump, before the 2016 election.

In addition to investigating the pay-off to Daniels and whether or not it violated campaign finance laws, reports emerged that Cohen was under investigation for over $20 million in loans related to his taxi business. Cohen pleaded guilty to eight counts, including tax evasion, bank fraud and campaign finance violations. As part of his plea, Cohen admitted to paying Daniels and one other woman in exchange for their silence regarding alleged affairs with Trump. He implicated the president as well, saying that he arranged those payments at then-candidate Trump’s behest.

The plea reignited an ongoing debate about whether or not a sitting president can be indicted, since one has now been directly implicated in a crime. Following Cohen’s plea, Trump said he knew about the payment after the fact, but said that since the money did not come from his campaign account, it was not illegal. This is not true.

Attorney general investigation of Cohen’s finances

Following the completion of the federal investigation, then-state Attorney General Barbara Underwood decided to take a crack at Cohen as well. She was looking to begin a criminal tax investigation into Cohen, which would be separate from the federal tax evasion he has already pleaded guilty to, thus avoiding New York’s strict double jeopardy laws. Underwood had been seeking a referral from the state Department of Taxation and Finances, which is necessary before the state attorney general’s office can begin its inquiry. The current status of that potential investigation remains unknown.

Rebecca C. Lewis
is a staff reporter at City & State.
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Kay Dervishi
is a staff reporter at City & State.