Where's the Victim?

 

You probably won't believe this but this guy heads one of America's 2 major political parties. pic.twitter.com/FtdRnkVrhm

— Ron Shillman (@shillman1) December 12, 2023

I'm feeling a nagging dissatisfaction with the conduct of the New York lawsuit against Trump, his older sons, and the family business over the flagrant fraudulence of their financial "disclosures", which report wildly exaggerated values for their assets as a way of getting banks and insurance companies to get them better rates than they could otherwise get.

It's not anything wrong with the case, or any likelihood that New York will lose the case, I'm feeling very cheerful about that, but the way Trump and his attorneys seem to be playing the publicity war: 

In defiant and rambling testimony on [November 7], Trump acknowledged that his asset valuations were sometimes inaccurate but said they were not relevant to banks and insurers.

Trump's lawyer Christopher Kise built on that argument on Thursday, saying banks that did business with the Trump Organization profited from the loans.

"There's no victim. There's no complainant. There's no injury. All of that is established now,” Kise said. (Reuters)

And all the New York lawyers can say is response is that they don't have to prove there was a victim. Or the statutes were the victims ("I would just basically point out," Judge Engoron said, "that the mere fact that the lenders were happy doesn't mean that the statute wasn't violated. It doesn't mean other statutes weren't violated.") "Help, I'm being violated!" cried § 175.10. Which is no doubt true from the legal standpoint, but it's just an awful look. No harm, no foul, right? If the banks are happy with it, where's the harm?

Can't we please come up with a better argument than that?

I mean for one thing, not all the banks were happy, and not even all of Deutsche Bank: DB's commercial real estate division threw him off their client list after he defaulted on a $640-million loan (for the Chicago Trump Tower, in 2008), and turned around to sue the bank—claiming his nonpayment was their fault, for helping to cause that year's global financial crisis!

But their private wealth division didn't mind so much. DB's private wealth division helped him with another loan on the Chicago Tower, from Fortress Investment Group, for $135 million, which he settled for $48 million, and the DB loan down to $334 million, of which the private wealth division loaned him $99 million.

Trump's private wealth banker, who was also Jared Kushner's banker, Rosemary Vrablic, later explained that her division was "looking for whales". She did not explain, as far as I know, that private bankers at DB as elsewhere, unlike commercial real estate bankers, earn commissions for loans, which could also help account for why she was so much more interested in working with an unqualified client than the other department was.

Kise may think DB profited from the business, but it looks to me like they lost quite a bit of money in these huge negotiated settlements, not to mention the $168 million they passed up in interest payments Trump would have had to pay if he'd valued the assets at their true value.

One email written by Ivanka Trump, shown at trial, expressed excitement at the low interest rates the company had secured through Deutsche Bank.

"It doesn't get better than this," Ivanka Trump wrote. The Trumps' attorneys have argued the excitement was mutual, and that the bank was happy with the Trump properties' performance as the loans matured.

Vrablic's testimony and exhibits shown Wednesday supported that claim.

Were they? Were they happy? Do you recall how Trump's finances looked just after the election three years ago, as the Times was reporting them? I wrote

it seems clear that he's in genuine financial trouble, his businesses not making enough money, and in a great deal of very unwise debt for which he's personally liable (something I thought he'd learned to avoid back in the 90s). Tax returns alone don't give you a clear picture—for that you'd need an account of his personal wealth—but the properties themselves are diminishing in value, because they were doing pretty badly even before the pandemic halted the hotel and golf operations altogether for a period, and he's impoverished his financial holdings in the last seven years, pulling $96 million out of his real estate partnership with Vornado in 2013 and selling some $230 million worth of stocks and bonds since 2014 (he's now down to his last $873,000 or less in equities). And a monstrous big load of loans coming due in the next two or three years, in the neighborhood of half a billion dollars, something like $350 million of it to Deutsche Bank, which is in plenty of legal trouble of its own at the moment and hardly going to be able to get away with treating him as generously as it has done in the past.

Sure he's probably exaggerating his losses for tax purposes, but he can't be exaggerating them all that much; he really is losing. In a way that seems ridiculous to you and me, since they all go on living like billionaires, but he takes all the spending as business deductions, which makes some kind of crazy sense when you think about it: being a billionaire is his brand, so that his income depends in some degree on his acting that way. It's fun to realize that his much-touted donation of his salary, $400,000 a year, must be a charity deduction, well under 1% of the $130 million in deducted charity reported in the Times filings (nearly all of which is not actual money, but conservation easements, agreements to leave a portion of land undeveloped on estates like his 200-acre Seven Springs estate in Westchester County, a summer retreat for family members after authorities refused to approve development anyway, but he also writes off the property taxes as a business deduction, though he's not even trying to make any money off of it).

Those loans looked really terrible! I seriously thought he was going to go broke after he went home to Palm Beach in 2021. And then they did somehow get paid off, it's not clear how, as the Times was reporting in April. His newest business ventures, the social media and NFT companies, are patently disasters. He's paid off the DB loans on the Doral and Manhattan Trump Tower, but taken on new ones for the same properties, with a new lender, Axos Bank (formerly known as "Bank of Internet USA"), with

a loan for $100 million to refinance the Trump Tower despite lacking solid financial reports after its accounting firm declined to back 10 years of financial statements that they produced for The Trump Organization

Presumably they were hunting for whales too.

The other thing in that Times report was a Saudi-backed project for a golf resort in Muscat, Oman, worth "more than $5 million" (that's pretty much the only value he offered for anything in this disclosure). A couple of months later we were getting notice of another Saudi adventure, the LIV golf tour, which was staging all the events it could at Trump-owned golf courses in return for Trump's backing of them over the traditional PGA, for who knows what kinds of fees (the Saudi Sovereign Wealth Fund is Jared Kushner's new private banker, of course, to the tune of a $2-billion "investment"). 

Deutsche certainly would have been harmed, or else compelled to connive with Trump yet again, if Trump hadn't gone out to find still more sugar daddies.

The bank loaned Donald Trump some $2 billion over two decades, and didn't get too much of it back, though it likely benefited in PR terms, as Vrablic hoped, for having such a "whale" on its books. It was also a pretty illegal enterprise in its own right, paying $7.2 billion in fines for its part in the mortgage-backed securities scandal that launched the 2008 financial crisis (Trump's lawyers were right about that) and others for its long history as a money launderer for Russian oligarchs, and of course the mysterious suicides of DB employees between 2017 and 2022, at least one of them directly Trump-related.

It's not really appropriate to ask whether Trump's fraud "harmed" the German bank, or greedy individuals working within it, interesting as those questions might be—we really should be asking if Trump helped DB in any way commensurate with the way DB helped him. This, the relationship between two criminal organizations, is another racketeering case, properly understood, and I really wish (with all respect and admiration for Letitia James) it could be handled that way. It would really be nice for voterrs to understand that.