New York prosecutors haven’t revealed what they know about Donald Trump’s finances. But new developments suggest it’s ominous for the former president.
The New York state attorney general, Letitia James, announced on May 18 that a civil investigation into Trump’s business, the Trump Organization, is now a criminal investigation. James didn’t explain the change, but her office has been gathering detailed information on Trump’s business activity for more than two years. Trump has lost several legal cases trying to prevent disclosure of personal and business records, allowing James and other prosecutors to obtain detailed data on Trump’s real-estate empire during the last several months.
In February, James said, “until we uncover some unlawful behavior or conduct, our investigation will continue as a civil matter.” Since it has now become a criminal matter, James may, in fact, have obtained new information including evidence of unlawful behavior.
The attorney general’s probe will now align with a similar probe by New York City district attorney Cyrus Vance, who opened that Trump inquiry in 2019. Vance is reportedly probing allegations that the former president deliberately misstated property values and distorted other financial records to lower his tax bill and get better loan terms from banks than he might have otherwise. A year earlier, The New York Times, aided by Trump’s niece Mary Trump, published a detailed exposé revealing Trump financial activities it described as “improper or possibly illegal.” Trump denies any wrongdoing and says the escalation of the New York probe is "an investigation that is in desperate search of a crime."
The most serious legal inquiries Trump has ever faced
Trump has always been a prolific litigant, suing and being sued as if it’s part of his business model. But the New York cases are the most serious legal inquiries Trump has ever faced. His former lawyer, Michael Cohen, went to prison for his role in one matter prosecutors may be exploring, which implicitly paints Trump as guilty, too. There’s no guarantee prosecutors will file charges against Trump in either case, but the intensification of both probes suggests charges are coming.
For anybody who might have forgotten about Trump, or simply lost the thread of this convoluted narrative, here’s an abbreviated timeline of how the criminal inquiries have unfolded:
On Jan. 12, 2018, the Wall Street Journal broke the news that Trump, through Cohen, had paid porn actress Stormy Daniels $130,000 in 2016 to stay quiet about a sexual encounter she claims she had with Trump in 2006. Cohen also arranged a $130,000 payment to former Playboy model Karen McDougal, who says she had a 10-month affair with Trump in 2006 and 2007. That payment, supposedly meant to keep McDougal quiet, came from the company that publishes the National Enquirer, a Trump ally.
Since Trump was a presidential candidate at the time, the two payoffs could have been considered contributions to his campaign, and they exceeded the allowable limit for contributions, most likely making them campaign-finance felonies. With that evidence public, the FBI raided Cohen’s office in April 2018, without saying what they were looking for.
In August 2018, Cohen pleaded guilty to eight criminal counts, including campaign-finance violations for the two hush-money payments and other crimes unrelated to Trump.
In October 2018, the Times published its 14,000-word opus on Trump’s financial dealings, implying criminal activity. Trump’s niece, Mary Trump, later revealed she was a principal source for the Times piece, providing reams of information on the Trump family finances and schemes to lower or evade taxes.
In February 2019, Cohen delivered explosive testimony before a House committee, in which he called Trump a “cheat” and a “con man.” Among other things, Cohen corroborated the Times allegation that Trump undervalued assets to minimize his taxes but overstated them to exaggerate his personal wealth and get better terms from lenders.
In March 2019, James, the New York state attorney general, said she was following up on Cohen’s testimony by launching a civil investigation into Trump’s finances. She issued subpoenas to Trump lenders, including Deutsche Bank, for Trump financial records. Trump sued to block the release of those records.
In September 2019, Vance, the New York City district attorney, issued a subpoena to Trump’s accounting firm, Mazars USA, seeking eight years of Trump’s tax returns. This indicated Vance was looking into possible crimes highlighted by Cohen’s testimony and various media reports. Trump sued to block the release of the tax records. At some point in 2019, Vance also subpoenaed Trump records from Deutsche Bank.
In August 2020, Vance’s team made a court filing indicating it had obtained some Trump records from Deutsche Bank the prior year. In the filing, prosecutors noted their interest in “public reports of possibly extensive and protracted criminal conduct at the Trump Organization.”
The Supreme Court deals a blow to Trump
In 2020 and early 2021, Trump lost several court cases seeking to block the release of documents. The biggest blow came on Feb. 22 of this year, when the Supreme Court cleared the way for Mazars to give Trump’s tax returns to the Manhattan district attorney. Vance’s office now presumably has most or all of the Trump financial records it wants. James may now have access to those records, as well.
Trump, needless to say, has decried the investigations as a witch hunt orchestrated by political enemies. But there’s been so much public evidence of malfeasance associated with Trump and his company that it would practically be negligent for prosecutors in New York, where the company is based, to ignore it. Criminal prosecutions often arise from media reports that allege wrongdoing.
With the Trump financial info they need now in hand, prosecutors are reportedly pressing hard on the Trump Organization’s chief financial officer, Allen Weisselberg, to turn on Trump and help pinpoint possible crimes. There’s no indication Weisselberg has done that, but prosecutors could threaten him with prosecution, if they have the goods, and go lighter on the CFO if he cooperates. Cohen has said he thinks Weisselberg will flip on Trump to save himself or family members from possible jail time.
Amid all this, Trump is fending off a stack of other lawsuits, while still functioning as the de facto head of the Republican Party and teasing another presidential run in 2024. It’s possible Trump’s legal troubles will be behind him by then, but it’s also possible he’ll be a convict. Witch hunters sometimes get their witch.
Rick Newman is the author of four books, including "Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman. You can also send confidential tips, and click here to get Rick’s stories by email.