Legal and political analysts argue that New York Attorney General Letitia James’s $250 million lawsuit against former President Donald J. Trump will likely energize his base for the 2024 election but may not address broader issues.
As Trump’s civil fraud trial resumes, his legal team, despite losing a bid for an early verdict, plans to vigorously defend him and challenge the legality of his business dealings.
Trump asserts that James has unfairly targeted him, branding the case as a disgraceful attempt to hinder his political aspirations.
“I think this case is a disgrace. It’s a disgrace for people wanting to move into New York. You have people being murdered on the street, and you have an attorney general sitting watching my every move. Legal scholars are saying it’s the most unfair witch hunt they’ve ever seen. It’s election interference, because you want to keep me in this court house all day,” President Trump said under cross-examination from government lawyers.
Despite the ongoing legal proceedings, experts suggest that the trial may not significantly influence real estate entrepreneurs and other businesses contemplating relocation or expansion in New York.
Rather than focusing on the case’s merits, public attention is shifting toward the selective nature of law enforcement and the apparent targeting of a political opponent. Critics note that Trump’s creditors have not raised concerns, emphasizing the lack of breach of contract or fraudulent representations allegations.
The valuations presented in Trump’s financial statements, which include diverse assets like the Trump International Hotel, Mar-a-Lago estate, Doral Golf Club, and Trump Estate in Aberdeen, Scotland, face skepticism.
Trump says that his internationally recognized “brand” imparts a value to his assets not reflected in dry calculations of value per square foot. That the Aberdeen estate derives additional value, again not reflected in the statements, from its location in an oil-rich region.
That the statements were rough estimates and included disclaimers urging banks to perform their own diligence. That in any event he was far too wealthy during the decade under scrutiny to be a credit risk for any bank that chose to work with him; that he has repaid his loans. And that, when you come down to it, the banks needed him more than he needed them.
Legal scholars and commentators are divided on the accuracy of these valuations, and the trial continues to debate the legitimacy of Trump’s use of such documents to secure loans from banks.
“The court and other disinterested commentators seem to have come to the conclusion that the valuations were inflated, and I have no particular reason to think that those commentators are incorrect,” David Hasen, a law professor at the University of Florida and editor-in-chief of the Florida Tax Review, told The Epoch Times.
While some believe that the overreach by Attorney General James could make businesses vulnerable to similar challenges, others argue that entrepreneurs, particularly in real estate, are sophisticated enough to prioritize banks’ assessments over legal actions. The trial’s impact on other entrepreneurs in different sectors remains uncertain.
Critics express concerns about selective enforcement, accusing James of targeting a high-profile figure to set an example. Observers question the absence of similar actions against financial institutions or executives involved in the 2008 financial crisis, highlighting the lack of jail sentences for individuals responsible for widespread fraud.
Despite the potential motivations behind James’s lawsuit and its implications for Trump’s political future, media coverage often overlooks the broader grievances and perceptions of a double standard.
Some believe that the trial may backfire, rallying support for Trump as individuals perceive a biased focus on anti-Trump sentiments without addressing underlying issues.
As this question undergoes legal scrutiny, individuals might ponder the concern highlighted by President Trump during his testimony on November 6. Specifically, the enduring repercussions of the lawsuit on entrepreneurs who could not have anticipated that records and statements dating back a decade or more could resurface to cast a shadow over their endeavors.
Certainly, there exists the potential for certain entrepreneurs to express a negative response to the perceived overreach of an attorney general who appears indifferent to the evaluations made by financial institutions regarding the former president’s interactions and overall standing with them. Brian Domitrovic, a visiting scholar at the University of Colorado Boulder, acknowledges this aspect of the situation.
“I certainly think that when no creditor has complained—or dealt with missed payments—and the state is pursuing charges, all businesses who transact with counterparties amicably should feel vulnerable to the same kind of challenge,” Mr. Domitrovic said.
“No creditor—and there were many over a very long term—had problems with this client,” Mr. Domitrovic acknowledged.
Several analysts deem it improbable that the enforcement measures directed at President Trump, especially as the GOP 2024 nomination race intensifies, will be replicated for other entrepreneurs in various sectors, including real estate.
There is a perception that the New York attorney general might be under pressure to set a precedent by scrutinizing a prominent public figure often regarded as the epitome of a real estate magnate, particularly given the numerous political adversaries he has.
“My view is that, if he wasn’t a celebrity, the government would not have known about the violations of law. Celebrities, big business people, and prominent politicians draw more scrutiny. That is why a lot of rich people try to stay under the radar,” Jeffrey Hooke, a lecturer at Johns Hopkins Carey Business School and former investment banker, said.
It’s crucial to note that not all individuals in this context are necessarily free of any misdeeds. The prevalent practice of inflating asset values, often referred to colloquially as “cooking the books,” within the real estate realm might render Ms. James susceptible to allegations of selective enforcement, according to Keith Naughton, who serves as the director of Silent Majority Strategies, a consulting firm situated in Germantown, Maryland.
“I think that in the real estate industry, if you’re not lying, you’re going to be out of work. So I don’t think anyone should be surprised that someone should inflate values or fudge the numbers. The question comes down to the extent of it, and whether Trump has passed some kind of threshold,” Mr. Naughton said.
“The challenge, and where Trump probably has the best argument, is where it comes to selective prosecution. If the attorney general is going to say, ‘You can’t lie,’ or ‘After a certain threshold, you can’t lie about your valuations,’ is she going to apply that to everyone in New York?” Mr. Naughton said.
“Maybe Trump hasn’t articulated this, but it’s in the back of the minds of a lot of supporters of the former president. Fifteen years ago, this country went through the biggest financial fraud that has ever happened, and it triggered the financial crisis. Nobody went to jail. And now this has come up,” Mr. Naughton said.
“If you’re going to take a hard line, then you need to do it for everyone.”
“Sympathy for Trump is partly about past grievances. What happened in the financial crisis is outrageous, and now you’ve got somebody you don’t like in politics. Suddenly you’ve woken up, and now you’re going to enforce the law,” he said.
“People see a double standard, and they have their own grievances over things that have gone wrong in this country, whether it’s that meltdown, voting fraud, or problems with elections in the past. President Trump is the vehicle that allows them to express their anger that has built up over the years,” Mr. Naughton said.
“The mainstream media and press are not accounting for that at all. They are just so focused on being anti-Trump that they’re not willing to do a hard examination of why these grievances have built up in the past, and part of it was because their allies were at fault,” Mr. Naughton said.
