I appeared this afternoon on Fox Live Now to talk about the civil trial of Donald Trump and numerous Trump organizations for allegedly inflating property valuations to deceive banks and insurance companies.
The backdrop to the interview was Trump’s statement as he entered court earlier in the day:
We previously covered the finding of fraud entered by the state court judge on summary judgment, based on the papers submitted without hearing live testimony, NY State Judge Finds Trump Organizations Repeatedly Provided Fraudulent Valuations To Lenders and Insurers.
The judge ordered New York business certificates for numerous Trump entities cancelled. That alone could have a devastating impact on the businesses. The current trial is just about the additional penalties sought, including hundreds of millions of dollars in fines and an order barring Trump and his organizations from doing business in New York State. That would be, as Trump has said, a business death penalty.
This all is egregious. There is no claim that consumers or banks and insurance companies lost money, or were defrauded out of money. That may not be an element of the offenses, but if you are going to destroy a massive business built over decades over property valuations without any impact on the public, it’s an overreach. And obviously politically motivated.
Here is my segment, with some short excerpts below.
WAJ (01:45): I think there were two cases going on here. There’s the case inside the courtroom and there’s the case in the court of public opinion, so to speak. And it seems that Trump has probably come to the conclusion he’s going to lose this case. He’s already lost liability, he’s going to lose the damages and he can’t win inside the courtroom. So he’s going try to limit the damage to him politically and turn it to his political advantage by portraying himself, as he keeps saying, as the victim of a witch hunt. So I think Trump is fighting a different courtroom battle than the judge is fighting, because I think Trump’s concluded he’s going lose with this judge.
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WAJ (02:57): He’s been attacking all the judges in all of his cases pretty much. So they’re aware of that, that that’s who he is. It can’t be helping him if he thinks he’s going intimidate the judges. They have the power, he doesn’t have the power. So I think it’s a futile effort, but he is who he is. Even if his lawyers are telling him not to do it, he’s going do it anyway. That’s his persona. And I think what he cares about is winning, getting nominated and winning an election. He doesn’t seem to care very much about the norms of how you conduct yourself in court. And from his point of view, they have violated all those norms. So he’s just going go out there and talk to the TV camera and not even try to convince the judge himself, I mean his lawyers will, but I think he realizes it’s futile.
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WAJ (04:45): Valuations are a combination of market factors. You have comps, everybody knows when they’re pricing their house. You look for what the comps are selling for. And there are various measurements to do that. And based on what’s in the indictment, I should say in the judge’s findings of fraud, there are some properties where there’s a good argument, maybe it was inflated, he increased the square footage of different properties, things like that. There are others where it’s very murky and it’s unclear. The whole finding that Mar-a-Lago was grossly over inflated was based, the judge said, on what the tax assessor valued the property at. But everybody knows that the tax assessors valuing it for one purpose. It may have market value. That’s another.
And one point Trump made outside the courtroom, which I think is extremely important and valid, is he was dealing with sophisticated people. He wasn’t borrowing money from mom and pop down the street. He was borrowing money from sophisticated banks who probably do their own valuations, have their own internal audit teams, have their own sets of lawyers, and if they’re going to lend him money on a property based on his estimate, I doubt they took his estimate at face value. They probably had their own internal people validate that. You don’t lend somebody tens or hundreds of millions of dollars in a commercial transaction if you’re a major bank unless you have your own internal team vetting that.
The notion that Donald Trump puts a number on a piece of paper and some big bank just says, oh, okay, that’s what it’s worth. That’s not how it works.
And he’s right about that. Fraud, normally you have to show that you actually deceived somebody. They actually relied on what you did. I don’t know that the prosecution here, the state, has proven that. And that’s why I think it was a mistake for the judge to rule on this pre- evidentiary hearings. The judge should have heard the evidence, should have heard the testimony, should have heard all these arguments, and then could have decided the matter. So procedurally, I think that was a huge mistake that may come back to haunt the state on appeal if an appeals court says the judge acted precipitously by deciding these valuation issues based on papers rather than based on live testimony.
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WAJ (09:06): … I think he referred to it as a business death sentence. I think that’s pretty close to right. I mean, if you’re a major national corporation and you can’t do business in the State of New York and you can’t do business in New York City, the financial hub of the country, it’s going to be very hard for you to do business. Even if you ran a hotel in Florida, you want to be able to take reservations from people in New York City. You want to be able to use booking agencies that are in New York City. You want to be able to use advertising agencies that are in New York City.
So this is completely disproportionate. Nobody is claiming that the Trump organizations were fraudulent organizations. These are legitimate organizations that have legitimate businesses. And one piece of what they did, the State of New York claims, was fraudulent, which was inflating property valuations. But to then bar the entirety of the companies, to destroy this business and this brand because of one thing, where you had sophisticated commercial parties on the other side? Nobody lost a penny. This is not a case where he has alleged to have defrauded people such that they lost money.
This is highly political. I mean he’s absolutely right. Letitia James ran for office for the attorney general on a platform of not only getting Donald Trump but getting his family. She said this, it’s on tape. It’s not a matter of my opinion. It’s I think disgusting that an Attorney [General], someone would run for the highest law enforcement position in a major state, or in any state, on a platform of getting a particular person and their family.
So I think that this is really pretty disgusting. If they wanted to charge him with fraud and penalize him for these appraisals, fine, but to then try to put him out of business, I think shows how political and how vindictive this is.
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