December 19, 2023 • 43 mins
Donald Trump’s civil fraud trial in New York is drawing to a close – testimony recently ended – and sometime in early 2024 a state judge will rule on the case. It’s within the judge’s power to impose a fine of as much as $250 million on Trump and permanently ban him and his company from ever doing business in New York again. The state where Trump grew rich may send him into financial exile. The New York case is one of several lodged against the former president, all landing while Trump appears to be well on his way to securing the Republican nomination for the presidency next year. It’s serious. It’s a mess. And the rule of law is being severely tested. Andrew Weissmann is a professor at NYU Law School and spent many years as a federal prosecutor and investigator.
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Episode Transcript
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Speaker 1 (00:01):
Welcome to Crash Course, a podcast about business, political, and
social disruption and what we can learn from it. I'm
Tim O'Brien. Today's Crash Course. Trump versus his first big
fraud verdict. Donald Trump's civil fraud trial in New York
is drawing to a close. Testimony recently ended, and sometime
in early twenty twenty four, a state judge will rule
(00:23):
on the case. It's within the judge's power to impose
a fine of as much as two hundred and fifty
million dollars on Trump and permanently ban him and his
company from ever doing business in New York again, the
state where Trump grew rich, may send him into financial exile.
State prosecutors alleged that Trump arbitrarily inflated the value of
his assets to secure bank loans and deceive insurers, while
(00:46):
deflating the value of those same assets whenever he wanted
to lower his tax bill. Trump, his two eldest sons,
and their lawyers all say they never misled anyone and
nobody suffered any financial damages. They say, no harm, no foul.
The New York case is one of several lodged against
the former president. He also faces criminal fraud charges in
(01:07):
New York state election fraud chargers in Georgia, and two
federal cases involving the January sixth insurrection at the US
Capital and the misappropriation of classified documents. All of this
is landing while Trump appears to be well on his
way to securing the Republican nomination for the presidency next year.
It's serious, it's a mess, and the rule of law
(01:28):
is being severely tested. So I am jazz to discuss
all of this with Andrew Wiseman. Andrew, a professor at
NYU Law School, spent many years as a federal prosecutor
and investigator. He tackled organized crime cases with the US
Attorney's Office and fraud cases at the Department of Justice.
President George W. Bush appointed him as the FBI's lead
(01:49):
investigator in the infamous Enron case. Special Counsel Robert Muller
recruited him to be the lead prosecutor in his probe
of Team Trump's intersection with Russia before and during the
twenty sixteen presidential election. And Andrew, the author of Where
Law Ends, knows a lot. Welcome to Crash course, Andrew.
Speaker 2 (02:08):
So great to be here.
Speaker 1 (02:10):
You know you had this reputation as a pit bull prosecutor.
That's what they said during the Enron prosecution. And I'm
sure that Trump team were freaked out when Robert Muller
recruited you to join in his effort. And I've always
found you to be an absolute sweetie, you know, easy
to talk with, articulate, judicious. I would never call you
a pit bull. But I actually haven't ever been prosecuted
(02:33):
by you either, so.
Speaker 2 (02:36):
I haven't had that pleasure yet.
Speaker 1 (02:37):
I haven't had that pleasure yet. Would you describe yourself
as a pitbull?
Speaker 2 (02:41):
A friend of mine on the Mueller's Special Council team said,
you know what the secret is, You're really squishy. So
I think some of that has probably deserved. When I
started at as a young prosecutor and I was doing
organized crime work here in New York, I think, like
a lot of young prosecutors, probably a bit over the
(03:01):
top and impurious, So I think that that may have helped.
But I think it then just becomes in some ways,
it's kind of a useful thing for defendants to fear you,
because you know, you're trying to get people to cooperate,
and if they think that you're really tenacious and you're
going to find everything out. That's not a bad thing
(03:22):
for defendants and their counsel to think. I do think
it's a bit undeserved, but you know what it is
what it is, and people make their own judgments as
to what they'd like to think.
Speaker 1 (03:32):
I mean, that's very much the way I think about it.
When I think about you. You know, we're not friends,
we're acquaintances. We've done some TV together, we recently chatted
over a couple of glasses of wine at a party
of Manhattan. But interacting with you in these situations and
then watching your professional life, I do see these sort
of dualities. You're a very normal, judicious man personally, and
(03:53):
you take your role very seriously, and you were prosecuting
people like John Gotti, I would mention, and the Enron
folks boy scouts as we all know, but in a
broader way. Tell me how you think about the role
of prosecutors in our society, Like, what is their fundamental
role in terms of ensuring that the rule of law
is a viable and stable thing.
Speaker 2 (04:15):
Well, I think that prosecutors have enormous amount of power
and they also have a lot of discretion where there's
spec to who gets charged and who doesn't. So there's
an ineffable quality that I think you look for when
you're hiring people to be a prosecutor, which is maturity
(04:37):
and judgment. But exactly what that means in any particular
case can vary, and it's also hard to articulate that.
But I think it's really important to understand how weighty
that power is and the dual function of a prosecutor,
which is to do justice, and that means it doesn't
(04:59):
mean just winning the case. It is adherence to the
rule of law, even if it's not going to help
you win. I won't say there's nothing worse, but it
is incredibly upsetting to people who've been in the department
when you see prosecutors who are not scrupulously adhering to
(05:20):
that dual role of what it means to be a prosecutor.
Speaker 1 (05:23):
So let's spend a minute and talk about the Muller
probe and the Attendant Muller Report, which you wrote about
in your book How Law Ends. I read your book
and I found it to be poignant in a way
in that you were surrounded by great people. Robert Muller
an admirable and legendary prosecutor and investigator himself, taking on
(05:43):
a seminal political and national security issue involving Donald Trump's
intersection with Russians, whether they helped them in the election
or did other things to thwart Hillary Clinton. And you
got a lot of results out of that. Paul Mannifort
and Michael Flynn were indicted, thirty four individuals and three companies,
char you got eight guilty. Please. At the end of
the day, Muller decided not to charge Donald Trump with
(06:05):
obstruction of justice, which is one thing I wanted to
talk with you a little bit about. He also chose
not to follow the money trail, which always perplexed me.
And then you know, William Barr, donald Trump's attorney general,
in a four page statement, got to redefine a four
hundred and forty eight page report in the popular imagination.
I think you refer to the report in your book
(06:25):
as mealy mouth, if I'm quoting you correctly, and that
Muller might have been overly confident himself in Barr's own
respect for the rule of law or how he was
operating as a political player. So that's a lot of
preamble from me to kind of ask you about how
you think about that experience, you know, in the Muller probe.
Speaker 2 (06:45):
Well, that was a lot of different aspects. So let
me just go back over a couple things in that
I'll go back to the big picture of your question.
I think that I did in my book describe certain
conclusions in the book as mealy mouth. Particularly the conclusions
of Volume two of the Mellow Report was about the obstruction,
(07:08):
and you know, it had famously the line about if
we could conclude that he did it, we would not
say this. It would have like three double negatives, and
it was just very hard to follow, and I always thought,
who are we kidding? Volume one said essentially that the
proof didn't rise to the level of being able to
(07:29):
say that there was actual coordination as opposed to a
lot of people on both sides who wanted to coordinate,
and there was active assistance from Russia, but we didn't
see enough evidence of actual coordination.
Speaker 1 (07:44):
To prove it criminal conspiracy. There was certainly cooperation, but
not enough evidence to say it.
Speaker 2 (07:50):
We're doing that in volume one, who's going to really
be fooled? In volume two, where we're not saying that
it's like so obvious that we're saying there is it
turns out it turns out I was wrong. It's like
that kind of double negatives had people going, Gee, what
are they saying? So I thought that was merely matt
that I thought we should have just said it. The
other thing that's really important to note is we could
(08:11):
not charge the then president of the United States with
a crime because the DOJ policy was that a sitting
president could not be charged by the Department of Justice.
There were two Office of Legal Counsel opinions on that,
and even though we're in the Special Council's Office, the
Special Council is part of the Department of Justice. We
(08:34):
had to adhere to Department of Justice rules, so we
did not have that authority. So, you know, one of
the things that I talked about in my book is
that I thought of being really great if, like Rob Rosenstein,
when he appointed us, had made it clear to people
what our purview was and what we could and could
(08:54):
not do. You know, we were all very aware that
people in the public were thinking, oh, day, now there
could be an indictment of the sitting president, and we
were like, that's not even remotely on the table. We
cannot do that, we would have rightly been fired. I'm
not saying that the policy is necessarily a good one.
I'm not even sure that the law requires that a
(09:16):
sitting president cannot be charged. I have a whole theory
as to why I actually think a sitting president could
be charged by the federal government. I think the States
raised a very separate issue, but we didn't have that
luxury because we just couldn't make up DOJ policy. We
had to adhere to it or be fired.
Speaker 1 (09:35):
Also, remember it was in the context of Trump having
fired Jim Comey as the head of the FBI after
he was probing some of these issues himself.
Speaker 2 (09:44):
Yeah, well that, and you know, it was just a
very hard investigation to do. I remember feeling very much
the same feeling I had when I worked on the
Enron Task Force, which is, you feel an enormous amount
of pressure that's coming from within you to be thorough,
not make any mistakes, and to work as hard and
(10:07):
as fast as you can because the time clock that
you feel the pressure of that is that you feel
like the public deserves an answer, the political system deserves
an answer, as fast as humanly possible. So that it
was a very intense twenty two months, and a lot.
Speaker 1 (10:28):
Of the dynamics you encountered during that probe are the
ones that still exist around all of the current Trump prosecutions.
He's an unusual person to prosecute or investigate because he
inveighs willy nilly against law enforcement officials, judges. He's threatening. Often,
he calls up his troops. You know that Trump's supporters
across the country to get on his side in these matters.
(10:50):
So you've lived already through what other prosecutors and investigators
are dealing with right now. I want to come back
to one thing. On the Russia part of the probe.
Was always curious to me that money as a reason
for Trump's intersection with Russians beyond just his own interest
in a political victory or defeating Hillary Clinton. But he, obviously,
(11:11):
you know, came into the twenty sixteen race with a
long history of voracious deal making, and if you put
a bag of cash on Donald Trump's desk, he would
bark and bark and bark again. It seemed to me
like a good and useful evidentiary path for Mahler's team
to go down.
Speaker 2 (11:28):
You are, there many things that I totally agreed with
what my boss, Director Miller, was doing and the calls
he made. It Obviously it's his decisions. It wasn't mine
or anyone else who reporting to him. But there's somewhere
I disagreed. This is one where I understood initially why
we did not investigate the financial aspect of the case initially,
(11:53):
but disagreed why we didn't come back to it. And
the reason I say that I wrote about this in
the book, which is if you were remember early on
we were just sort of up and running. In June
of twenty seventeen, Donald Trump had said that sort of
essentially a kids relationship with Deutsche Bank, the financial stuff
was sort of off limits in a red line, And
(12:15):
when we were just starting out, I could see saying, look, well,
there's so much else to do. Let's get a toe hold,
let's get our feet wet and see where these cases
are going, and then be able to figure out how
the financial piece could play into any particular part of
the investigation. I was doing sort of manifort and all
(12:36):
things manifort related, and so my remit did allow for
a financial investigation with respect to them. Remember, we had
to follow Rod Rosstein's parameters with respect to what we
could look at. It was not like being in the
US Attorney's office, where it's like any federal crime. So
I had that luxury. But my colleague Gene Ree, who
(13:00):
headed up Team r which was Team Russia, I was
Team M which is we were not very creative. M
was Manafort, So she didn't have that sort of broad remit.
And I think what the thought was in the beginning,
like why cross a line that we didn't necessarily need
to cross at that point we didn't even understand at
the moment we now learned that Don McGahn had been
(13:23):
approached by the President to fire US, and you know,
there was just a few weeks into the investigation. So
I think that that is a more justifiable time period
to have said there's no reason to do it now.
My issue is I thought that, for instance, as Michael
Cohen came in and talked about the Moscow project, that
(13:46):
gave some more impetus for doing a financial investigation.
Speaker 1 (13:52):
Then, just for our listener's sake, the Moscow project was
a real estate project in Moscow to build a Trump
tower in Moscow. Trump was actively trying to make real
both during the campaign and then the run up to
the campaign, it wasn't a past issue, and it obviously
you don't build anything in Moscow unless Vladimir Putin wants
(14:14):
to let you build something in Moscow. And that always
seemed to me like a very clear evidence of a
presidential candidate who could get played by a foreign power.
Speaker 2 (14:21):
Yeah, and remember, people think of the Michael Cohen case
as one that was solely prosecuted by the Southern District
of New York, and in fact that isn't the case.
We were looking at Michael Cohen saw the Moscow piece
of it, we retained that because it was within our remit.
But when we saw that there were personal crimes and
(14:44):
sort of other crimes unrelated to our remit, those we
spun out to the Southern District of New York. And
obviously there was coordination of that, and he ultimately pleaded
guilty to both sets of charges. So that's why you
sort of have the different pieces, And that's a very
good way of understanding that we had limited jurisdiction because
(15:06):
we had to stay within what Rod Rosenstein said was
something we were allowed to investigate. If we had just
been in the US Attorney's office, we would have done everything.
Speaker 1 (15:16):
So, in other words, none of this was arbitrary. The
reason the money trail wasn't pursued was because the remit
had reasonable and narrow boundaries.
Speaker 2 (15:25):
That's true. But I do want to say I do
think that as our case progressed, there were grounds that
we could have used to do more. And so that
is an area where I do think that we could
have revisited it and could have made the arguments about
doing more on the financial front as our case got
deeper and we had more factual predication for that type
(15:49):
of investigation. So I don't think I can blame the
limited remit entirely for why we didn't do the financial
piece as broadly as you would if you were in
these turn office.
Speaker 1 (16:01):
Since we've talked about the money trail, this brings us
to Leticia James's case, which is all about the money.
I want to before we get into that, take a
quick break so we can hear from one of our sponsors,
and then we get back. I want to dive into
that case with you. I'm back with Andrew Weissman, and
we're discussing the New York Attorney General's prosecution of Donald Trump.
(16:25):
So Letitia James, the New York State Attorney General, begins
investigating Donald Trump in twenty nineteen for financial fraud, as
I noted in the top of the show, and in
twenty twenty two she sues him, his company, his three
eldest children, and two officers of the company, his CFO
and his chief operating officer for financial fraud. Their defense
(16:47):
really is Trump always exaggerates, no one was harmed, fake issue.
This is a political prosecution. That's essentially what their defense
is boiled down to.
Speaker 2 (16:57):
I'm going to complicate that, and you can tell me
what I'm missing. So I think that the parts of
the case that seem very strong from the outside. I
think that the information about Trump Tower and his apartment
and the fact that it was valued at three times
(17:17):
the square footage seems like a rock crusher. I don't
know how you get around that. And it's not just
that because somebody who would do that, you have to ask, well,
if they're going to do that, and it's so blatant,
do you really think that's the only time that they're
willing to do it. And if you don't have the
marl fiber to be saying, that's not what I'm going
to engage in why would you just draw the line
(17:40):
there when the other things are sort of harder to catch.
I also think the valuation at mar Lago seems pretty
not quite as but pretty open and shut, and that
is that he valued it taking away all sorts of
restrictions that he'd agreed to on that property. And a
(18:03):
similar thing happened in other real estates eleven Springs.
Speaker 1 (18:06):
They stayed up exactly where.
Speaker 2 (18:08):
He would, for instance, say well, I'm assuming that this
was not rent regulated, and you know I live in
New York City. The idea that I'm going to value
something is if there weren't rent control departments in the building.
Just to give you an example, I mean, it's obviously
there's a really big difference in terms of valuation if
you have tenants who are rent controlled versus free market.
(18:29):
So I know that Trump's team put on a defense
expert to say that that's legit to do that. That
just seemed really strained to me as accurate.
Speaker 1 (18:39):
Well, but I think I'm sorry to jump in here,
but I think the thing that we got to get
clear about is what was he doing with these valuations?
So you know, we can all say it's bonkers that
Donald Trump valued this triplex at the top of Trump
Tower that looks like it was designed by like Louis
the fourteenth on a drug trip and put on his
own papers, and what he was saying to the press
and everyone that yes, this is three times what it
(19:01):
really should be, and my jet is worth ten times
and it has golden toilets, and you know, I've got
these towers everywhere they're ten x what everyone else is
building is worth. But if he's actually not using that
exaggeration to either secure loans he shouldn't get and banks
are duped in the process, or you know the converse,
(19:21):
which under the top of the shows that he overly
deflated the values of those some of those same assets
when it lowers his tax bill, that there's actually a
consequence of his inflation or deflation, that the act of
inflating is just so what Donald Trump has spent sixty
of his seventy seven years doing this kind of stuff.
Speaker 2 (19:40):
Oh yeah, there's a motive for all of that. The
motive is money. I mean, the motive is either as
you said, to pay less than taxes or to get
greater loans.
Speaker 1 (19:49):
But isn't that the thing, though, Isn't that where the
bar here is for the prosecutors is to show it
isn't the simple act of him treating valuations like a
yo yo, It's that he used yo yo to hurt
someone and to defraud someone.
Speaker 2 (20:03):
Yes, but that's sort of a legal piece, which is
so there's already been one cause of action which the
judge found before the trial started, found liability. And that's
because that first cause of action doesn't require mens rea,
doesn't require intent to defraud, nor did it require materiality
or reliance. So it's a very broad cause of action
(20:27):
under the law. I mean that is New York law.
I think the judge got that right. The other causes
of action that were on trial do require materiality and intent,
and so a lot of the things that we've been
talking about could go to Donald Trump's intent that he
wasn't intending to defraud because there was an expert who
said you could do this, et cetera. And also, remember
(20:50):
the standard here is not proof beyond a reasonable doubt.
It's just a preponderance, which is fifty percent and a
hair anything over fifty percent, this state has establish it's
a case. And this is where I think that they
are parts of the case where I think they seem
stronger than others. And I'm curious as to what you thought, Tim,
(21:11):
because they did have people from Deutsche Bank, one of
the main lenders, saying essentially, hey, we did our own work,
we wanted to do work with him, we did our
own valuations, so essentially like we weren't really relying on
what he wrote down. Now, reliance is not actually an
(21:32):
element of the causes of action, meaning that the state
doesn't have to prove that Deutsche Bank relied. They just
have to show that there was an intent to deceive
Deutsche Bank, and that the kind of information that was
being put forward would be material. In other words, it's
not like what's your favorite color, it's something that would
(21:54):
be relevant, and I think all of this is the
kind of thing that would be relevant. In my argument,
it would be if this isn't material, then why even
have the application? If it really doesn't matter what you
write down and you can make up the numbers, why
even have the application? And I think if you were
to ask the general counsel of Deutsche Bank, they would
have to say, well, of course we want truthful information
and we do care what people write down it would
(22:17):
be pretty unusual for a bank. For the general counsel,
the chief compliance officers say, we don't really care whether
or we're giving to customers who are just defrauding people
all the time. That obviously has to be material. I
just don't know how good a job this state did
in the cross examination and the rebutting of that defense testimony.
Speaker 1 (22:39):
Well, I think they did a really weak job, and
I think they could have come I mean, there's so
many elements of this case, you know, to bring our
listeners back in on some of the directives around it.
You know, New York State prosecutors have a lot of
freedom to go after financial fraud in an unusual way.
There's the Martin Act, which essentially allows prosecutors to pursue
financial crimes without even having They don't have to prove
(22:59):
in as they don't need to in any civil case.
But the Martinat redefines that boundary as well, and they
don't even have to show that someone was damaged necessarily.
They just have to show that someone tried to pull
off a fraud. And those are the tools that Letitia
James was brought to baron Trump. Trump has spent decades
inflating the value of his wealth. He does it because
(23:21):
he's insecure, he does it because it keeps him in
the news, and he does it because it helps him
get loans. He sued me for three pages of a
biography I wrote about him, in which he said I
essentially defamed him because I said he was worth about
thirty times less than he said he was worth. And
during the course of that litigation, we got evidence from
his banks, including Deutsche Bank, And at a time when
(23:41):
Donald Trump was saying he was worth six billion dollars
and my sources were saying he was worth two hundred
and thirty million, we secured an audit from Deutsche Bank
in which their own examination of his finances said he
was worth only seven hundred and eighty million. That was
great for our case because Trump's own bankers knew that
he was at that time. I'm wildly inflating the valuable.
Speaker 2 (24:02):
I don't understand, tim, which is I used to be
head of the fraud section at the Department of Justice.
And my question to a bank, where there know your customer?
Speaker 1 (24:13):
Rules?
Speaker 2 (24:14):
Money laundering regulations require financial institutions to know their customers
and to know like where they're getting their money and
who they're dealing with. What is the chief compliance officer
at that financial institution say in response to if you
knew that a customer was committing fraud, and the fraud,
by the way, is directed at you your institution.
Speaker 1 (24:37):
Why would you approve doing business with that client?
Speaker 2 (24:39):
Yeah, exactly, Well, I think.
Speaker 1 (24:41):
It happens all the time. Compliance officers and banks are
notoriously feckless in a lot of team or they don't
know right, or they don't know and then they know
they're lower on the totem poll in an organization. They
don't really have the authority to kill a deal someone
higher up than them wants to pursue. You know, in
the Deutsche Bank case, they went ahead and did a
deal with Donald Trump, even though he had tried to
stiff them on loans they'd made to him on a
(25:03):
Chicago project. The commercial side of the bank wouldn't do
business with him, They had permanently barred him as a client.
And Rosemary Vraiblick, who testified in the state Attorney General's
case here in New York, was with the private bank
and she decided to go ahead and do business with
him without getting inside her head, because I can't speak
for what her own thoughts are, but I think she
just liked the idea of doing business with the Trumps
(25:23):
because that led her to the Kushners. She was introduced
to Donald by Jared Kushner. So there's all of these
just personal relationships to the average show in Jane don't
have access to when they walk up to a bank teller,
and people who are in the news or who are
celebrities get access to this kind of stuff that others
don't get, and I think the standards drop. So I
(25:44):
guess it doesn't feel mysterious to me that they did
business with him, even if it's reprehensible, which I think
in some cases professionally it was, and certainly in judicious
given his track record. He's a serial bankruptcy artist and
he routinely stiffed banks. I think the issue here is
was he a criminal in doing that? And you know,
(26:04):
as a reporter, I didn't have the subpoena power to
go down that route. I think we kind of stripped
the bark off of him like an old tree in Quartz.
But you know, all we had to prove was I
didn't act with malicious intent that I went about my
job and I tried to get as much information as
I could, and I was fortunately confronted with a guy
who was a bloviator and an exaggerator. And then in
our deposition, you know, we proved that he had lied
(26:26):
more than I think two dozen times on valuing different
assets that he had said were worth more than they were.
It's exactly what's in the attorney general's case right now,
the state attorney general's case. But I think they have
a high bar if they're going to prove he's a criminal.
You know, the idea of relying on Donald Trump's statements
of financial condition, which tiss James's office is as demonstrations
of an attempted to fraud his tricky because he gave
(26:48):
those things to the press as kind of marquee statements
of how Richie was, and they were cartoons basically, they
were like cartoon books, highlights for children. His own accountants
wouldn't sign off on those documents. Said that, I think
under New York law, they don't need to prove that
the banks were harmed. That actually isn't a standard in
this case. I think Trump has latched onto that because
(27:09):
he has a reptilian sensibility about what plays in the
popular imagination, and he can say I'm being prosecuted, but
no one was hurt. Wise, this is happening to me,
when the real issue is you've been doing great inflation
for your entire career, buddy, and someone is holding you
to account for it, and under New York law, that
in itself is enough to prosecute you.
Speaker 2 (27:30):
In their main case. That's the state's main case. They
did have an expert witness who testified about the harm,
even though you don't have to prove it. It goes
to the amount of damages because the state is seeking
essentially disgorgement, which is the amount that Donald Trump unjustly received.
(27:53):
And the theory is that he either wouldn't have gotten
the loan or that the rate that was charged be different,
because I mean, it's kind of common sense, which is
like if you and I go to a bank. Oh,
I don't say you, but if I go to a bank,
they're certainly going to look at my risk profile, and
the riskier I am, they may decide not to loan
(28:15):
me the money at all, or to loan at a
higher rate to account for the risk factors. So they
had an expert talk about that and sort of assess
what it would be. And obviously that's why part of
the battle here is not just on liability, but on
what would the damages be if the rate would have
been different. And that's where the defense case, which is
(28:37):
to say, oh, we were just happy to do business,
is important, because even if it doesn't defeat liability, it
could go to damages. I have to say, I think
one thing, and I don't know how much the state
made of this, having somebody from the private wealth group testifying.
I mean, they had their own interests, and I didn't
assess her credibility on the stand. I didn't see her testify,
(29:00):
but I would be very interested in private wealth management.
As happens a lot of times in large institutions, different
parts of a bank can have very different interests that
don't necessarily align with what the bank overall wants to see.
So a bank, for instance, a well run bank, could
be very concerned about what's happening at the sales level,
(29:20):
are people saying and doing things that would help them
get commissions, but that the bank overall does not want
to see people doing. And so I did have a
sense that at least, I was curious as to whether
that was going on with the spect to private wealth management,
where they would be like, hey, we were kind of
cheerleading this because this was going to be good for us,
(29:43):
even if it wasn't necessarily what the bank overall would
want to do.
Speaker 1 (29:47):
Well. In fact, that's very true about Deutsche Bank. I
think the private Wealth group was cheerleading to get business
at all costs from Donald Trump, even though another major
part of the bank that he's not somebody will do
business with again ever, and then gave the business him
on very favorable terms. But now oral arguments have ended,
testimony has ended, the judge in the case is going
(30:08):
to rule sometime next month, and I think the issue
here is what does he do with all this information.
He's already pulled the business licenses on Trump and some
of the related operating entities. He can, I think, impose
bigger damages potentially than two fifty but I think that
seems to be a cap two hundred and fifty million.
How do you think about where this will land come January?
Speaker 2 (30:29):
I just don't know. I mean, this is the one
thing that we know for sure. There is liability on
the first cause of action. So in some ways it's
already a bit of a game over, and it's really
a question of what are the remedies for that first
cause of action. Yes, there may or may not be
liability of damages for the rest, but in some ways
(30:51):
that may be icing and I don't know how the
judge will come out on those issues. I don't know
how he will assess credibility. One thing that is I
think kind of interesting is the judge is entitled to
make fact finding based on the credibility of the witnesses.
And remember that Don Junior, Eric Vanka, and Donald Trump
(31:17):
himself have all testified. The judges already found Donald Trump
not believable with respec to a gag order issue, where
Trump said that he didn't intend to be referring to
the judges law clerk, and the judge said, I don't
believe it. By the way, just because he said that
doesn't mean he's going to find that he's incredible on everything.
(31:38):
But he's entitled to make those fact findings. And that's
very very hard for any party to get reversed on appeal.
So by testifying those people, I won't say it's there
one shot, but it is very much putting your hands
in the fate of the fact finder. So it'll be
interesting to see what Judge and Gorn says about the
(32:00):
leiaevability of those witnesses in general.
Speaker 1 (32:04):
Andrew, let's take another break and we'll come right back.
I'm back with Andrew Weisman, and we're discussing the New
York Attorney General's prosecution of Donald Trump. Andrew, I wanted
to ask you about, I guess, extra legal issues of
all of this, because Trump is an unusual defendant and
you experienced this during the Muller probe, where you have
(32:27):
an active, serious investigation going on, and he's openly speaking
about people you're investigating, like Paul Manafort, and he's tweeting
about whether or not Paul Manafort is going to sort
of display omerica and not testify against him. He's going
to the press, He's talking about all aspects of the
case without any kind of worry about that having consequences,
(32:50):
and that had all come to play again in this
case in New York. You know, you mentioned in the
earlier segment that the judge in the case had to
put a gag order on him because he was sought
of bounds, and he promptly violated the terms of the
gag order. That's also happened in one of the federal cases,
the January sixth case. I believe we talked in the
top of the show of this long and illustrious parade
(33:12):
of people and entities that you've prosecuted, from John Gotti
to Enron. Where does Donald Trump fit in that spectrum
for you when you watch him as a defendant, and
how his political theater affects the rule of law.
Speaker 2 (33:28):
So it's worth noting a couple of things. One, there
is a recent decision on the gag order from the
DC Circuit that is, the Court of Appeals in Washington,
d C. It's the decision that in large part affirms
Judge Chukins gag order, where the Circuit court said that
(33:50):
some of the statements made by Donald Trump, the former
president of the United States, the former leader of the
free world, posed a significificant and imminent danger with respec
to the integrity of the judicial process. That is a stunning,
just a stunning statement to be said about any elected official,
(34:14):
let alone the leader of the free world.
Speaker 1 (34:17):
So that's in the nation's top law enforcement official.
Speaker 2 (34:20):
Yes, it is worth just going back to that, even
though we're so inured to the fact that Donald Trump
does that, in fact he embraces it, and prosecutors, I
think are aware of that. Whether it's a public corruption
case or an organized crime case. Frankly, any sort of
gang or group case where there is a hierarchy where
(34:43):
power and money or involved. If you're a prosecutor, you
worry about undue influence on witnesses.
Speaker 1 (34:50):
From the top of the food chain. Yep. But as
you've noted, Trump is an unusually powerful defendant. Of course,
what unusual impacts what's happening to the rule of law
in this country right now? When you have someone who's
a defendant in multiple cases that are buttressed by substantive
charges with long trails of evidence behind them, including recordings
(35:12):
of his own voice in the Georgia case asking people
to commit voting fraud for him, or cameras at his
own estate in mar A Lago showing his own employees
trying to hide classified documents from federal investigators. And yet
he keeps pushing forward in the political theater, in the
public theater. What is the ultimate impact of that on
(35:32):
the judicial process and the rule of law?
Speaker 2 (35:34):
Well, I think there's sort of a small picture in
big picture the small pictures. I think that the courts
by and large have done an incredible job at upholding
the rule of law. I do think that the slowness
of the judicial process takes its toll in terms of
being able to have a trial of the form president
(35:55):
before the election, so that the public has the benefit
of that information and the conclusion. But I think that
in spite of all of the attacks, I think that
the judges are in general doing it a really good job,
in the same way that the courts did a really
good job and response to over sixty challenges to the
results of the election, where all of the ones that
(36:18):
went to the merits were denied. So I think that
the courts are going to be under considerable attack in
the same way that prosecutors and the media are attacked
by Donald Trump, because that's what he does when there's
any sort of institution or people within those institutions who
are standing up to an authoritarian personality. I think that
(36:40):
the larger picture, though, is whether the public is going
to give a damn, whether there are enough people who
view that as a fundamental problem, And I think that
was the thing that I found very upsetting about his
being elected the first time. And this has nothing to
do with policy choices. It's not about whether degrees or
(37:00):
disagrees with his view on immigration, or who should be
judges all sorts of policy implications. It's that I was
just so surprised that people could overlook what I viewed
as blatant racism, xenophobia, sexism, the denigration of the rule
(37:22):
of law, that those were so fundamental that I didn't
understand that those weren't deal breakers for a much larger
group of the American public. You know, I'm in the
middle of reading Liz Cheney's book, and as I think
many people said, you know, Liz Cheney and I politically
are probably pretty much polar opposites, but this is one
(37:44):
where there's a fundamental similarity in terms of how those
differences are decided and played out and the discussions you
can have on a policy level within the framework of
a democratic system and a republic that we have. And
so what's sad is that that baseline is so important.
Speaker 1 (38:08):
And because both of you believe that institutions and the
rule of law and the processes that's around the matter.
Even if you disagree philosophically and politically that the bedrock
of civic engagement and communities are respect for those things.
And I think that that is the tissue that Donald
Trump is trying to shred, along with the Constitution and democracy.
Speaker 2 (38:29):
So you know, the title of my book, Where Law Ends,
comes from a John Locke quote, English philosopher who said,
where law ends, tyranny begins. And that quote is on
the Justice Department walls on the outside on the limestone
over the Department of Justice in Washington, d C. Because
(38:51):
it's so fundamental to what the Department of Justice is.
And as Loretta Lynch, the former Attorney General of the
United States, has said that the Department of Justice, unlike
any other department we have in Caninet level official, is
founded on an idea, which is the rule of law.
And to me, that sentiment of where law ends, tyranny
(39:12):
begins is just so fundamentally appropriate to this time that
we are in.
Speaker 1 (39:19):
Andrew, I always like to ask guests at the end
of the show what they've learned, and I wanted to
ask you, sort of starting with the Mueller probe and
up into the president, what have you learned about the
impact of Donald Trump as a president and a former
president being a defendant, and in the process of being
a defendant again undermining some fundamental thoughts and respect we
(39:43):
have for the legal process.
Speaker 2 (39:45):
So when I was a very young man, and I
think I had not yet gone to law school, and
I had been an intern at the ACLU, Roger Baldwin,
who helped found the ACLU, was still alive, and he
(40:05):
used to say that regardless of what is in the
Constitution or in congressional statutes, that what's fundamentally important is
that those values and precepts are in the hearts and
minds of citizens in the United States. And I remember
(40:27):
at the time, thinking, what's he talking about, Like, if
it's in the Constitution, we're done. If Congress has passed
a lot were done. It didn't resonate with me. And
I think what I have learned is things that I
thought were deeply rooted in the United States, and that
(40:47):
I took as a given and for granted. It's like
the roots of a willow tree that are very shallow
and a strong wind can cause it to topple, And
that what Roger Baldwin was saying is so true that
they fight and what it means to be or what
(41:08):
I think it means to be American, is something that
has to be thought for and upheld and taught in
every generation.
Speaker 1 (41:18):
Yeah, to stay with your analogy of trees. When you
were talking about willow trees, I was thinking the happy
opposite of that are aspens, which are all connected at
the roots and draw great strength from that fact. And
as we go into this political year, I think we
have to think like aspens and not like willows.
Speaker 2 (41:33):
I love it.
Speaker 1 (41:35):
We're also out of time. I could have talked to
you for another day or two, and I'm glad you
came on. Thanks for coming on today, Andrew, Oh.
Speaker 2 (41:42):
Thank you so much for inviting me. This was really
really great.
Speaker 1 (41:45):
Andrew Weisman is a professor at the NYU Law School
and a veteran prosecutor. You can find him on Twitter
at a Weisman Underscore. Here at crash Course, we believe
the collisions can be messy, impressive, challenging, surprising, and always instructive.
In today's Crash Course, I was reminded that no matter
(42:06):
how much I go into the weeds on a topic,
particularly the prosecution of Donald Trump, some of the larger
truths always have to be recognized, specifically that Donald Trump
remains a threat to the rule of law and a
threat to democracy. What did you learn? We'd love to
hear from you. You can tweet at the Bloomberg Opinion
handle at Opinion or me at Tim O'Brien using the
(42:27):
hashtag Bloomberg Crash Course. You can also subscribe to our
show wherever you're listening right now and leave us a review.
It helps more people find the show. This episode was
produced by the indispensable and ever law abiding Anna Masarakis
and me. Our supervising producer is Magnus Hendrickson, and we
had editing help from Sage Bauman, Jeff Grocott, Mike Nitze,
(42:49):
and Christine Vanden Bilart. Blake Maples does our sound engineering,
and our original theme song was composed by Luis Gara.
I'm Tim O'Brien. We'll be back next week with another
Crash Course.
Welcome to Crash Course, a podcast about business, political, and
social disruption and what we can learn from it. I'm
Tim O'Brien. Today's Crash Course. Trump versus his first big
fraud verdict. Donald Trump's civil fraud trial in New York
is drawing to a close. Testimony recently ended, and sometime
in early twenty twenty four, a state judge will rule
(00:23):
on the case. It's within the judge's power to impose
a fine of as much as two hundred and fifty
million dollars on Trump and permanently ban him and his
company from ever doing business in New York again, the
state where Trump grew rich, may send him into financial exile.
State prosecutors alleged that Trump arbitrarily inflated the value of
his assets to secure bank loans and deceive insurers, while
(00:46):
deflating the value of those same assets whenever he wanted
to lower his tax bill. Trump, his two eldest sons,
and their lawyers all say they never misled anyone and
nobody suffered any financial damages. They say, no harm, no foul.
The New York case is one of several lodged against
the former president. He also faces criminal fraud charges in
(01:07):
New York state election fraud chargers in Georgia, and two
federal cases involving the January sixth insurrection at the US
Capital and the misappropriation of classified documents. All of this
is landing while Trump appears to be well on his
way to securing the Republican nomination for the presidency next year.
It's serious, it's a mess, and the rule of law
(01:28):
is being severely tested. So I am jazz to discuss
all of this with Andrew Wiseman. Andrew, a professor at
NYU Law School, spent many years as a federal prosecutor
and investigator. He tackled organized crime cases with the US
Attorney's Office and fraud cases at the Department of Justice.
President George W. Bush appointed him as the FBI's lead
(01:49):
investigator in the infamous Enron case. Special Counsel Robert Muller
recruited him to be the lead prosecutor in his probe
of Team Trump's intersection with Russia before and during the
twenty sixteen presidential election. And Andrew, the author of Where
Law Ends, knows a lot. Welcome to Crash course, Andrew.
Speaker 2 (02:08):
So great to be here.
Speaker 1 (02:10):
You know you had this reputation as a pit bull prosecutor.
That's what they said during the Enron prosecution. And I'm
sure that Trump team were freaked out when Robert Muller
recruited you to join in his effort. And I've always
found you to be an absolute sweetie, you know, easy
to talk with, articulate, judicious. I would never call you
a pit bull. But I actually haven't ever been prosecuted
(02:33):
by you either, so.
Speaker 2 (02:36):
I haven't had that pleasure yet.
Speaker 1 (02:37):
I haven't had that pleasure yet. Would you describe yourself
as a pitbull?
Speaker 2 (02:41):
A friend of mine on the Mueller's Special Council team said,
you know what the secret is, You're really squishy. So
I think some of that has probably deserved. When I
started at as a young prosecutor and I was doing
organized crime work here in New York, I think, like
a lot of young prosecutors, probably a bit over the
(03:01):
top and impurious, So I think that that may have helped.
But I think it then just becomes in some ways,
it's kind of a useful thing for defendants to fear you,
because you know, you're trying to get people to cooperate,
and if they think that you're really tenacious and you're
going to find everything out. That's not a bad thing
(03:22):
for defendants and their counsel to think. I do think
it's a bit undeserved, but you know what it is
what it is, and people make their own judgments as
to what they'd like to think.
Speaker 1 (03:32):
I mean, that's very much the way I think about it.
When I think about you. You know, we're not friends,
we're acquaintances. We've done some TV together, we recently chatted
over a couple of glasses of wine at a party
of Manhattan. But interacting with you in these situations and
then watching your professional life, I do see these sort
of dualities. You're a very normal, judicious man personally, and
(03:53):
you take your role very seriously, and you were prosecuting
people like John Gotti, I would mention, and the Enron
folks boy scouts as we all know, but in a
broader way. Tell me how you think about the role
of prosecutors in our society, Like, what is their fundamental
role in terms of ensuring that the rule of law
is a viable and stable thing.
Speaker 2 (04:15):
Well, I think that prosecutors have enormous amount of power
and they also have a lot of discretion where there's
spec to who gets charged and who doesn't. So there's
an ineffable quality that I think you look for when
you're hiring people to be a prosecutor, which is maturity
(04:37):
and judgment. But exactly what that means in any particular
case can vary, and it's also hard to articulate that.
But I think it's really important to understand how weighty
that power is and the dual function of a prosecutor,
which is to do justice, and that means it doesn't
(04:59):
mean just winning the case. It is adherence to the
rule of law, even if it's not going to help
you win. I won't say there's nothing worse, but it
is incredibly upsetting to people who've been in the department
when you see prosecutors who are not scrupulously adhering to
(05:20):
that dual role of what it means to be a prosecutor.
Speaker 1 (05:23):
So let's spend a minute and talk about the Muller
probe and the Attendant Muller Report, which you wrote about
in your book How Law Ends. I read your book
and I found it to be poignant in a way
in that you were surrounded by great people. Robert Muller
an admirable and legendary prosecutor and investigator himself, taking on
(05:43):
a seminal political and national security issue involving Donald Trump's
intersection with Russians, whether they helped them in the election
or did other things to thwart Hillary Clinton. And you
got a lot of results out of that. Paul Mannifort
and Michael Flynn were indicted, thirty four individuals and three companies,
char you got eight guilty. Please. At the end of
the day, Muller decided not to charge Donald Trump with
(06:05):
obstruction of justice, which is one thing I wanted to
talk with you a little bit about. He also chose
not to follow the money trail, which always perplexed me.
And then you know, William Barr, donald Trump's attorney general,
in a four page statement, got to redefine a four
hundred and forty eight page report in the popular imagination.
I think you refer to the report in your book
(06:25):
as mealy mouth, if I'm quoting you correctly, and that
Muller might have been overly confident himself in Barr's own
respect for the rule of law or how he was
operating as a political player. So that's a lot of
preamble from me to kind of ask you about how
you think about that experience, you know, in the Muller probe.
Speaker 2 (06:45):
Well, that was a lot of different aspects. So let
me just go back over a couple things in that
I'll go back to the big picture of your question.
I think that I did in my book describe certain
conclusions in the book as mealy mouth. Particularly the conclusions
of Volume two of the Mellow Report was about the obstruction,
(07:08):
and you know, it had famously the line about if
we could conclude that he did it, we would not
say this. It would have like three double negatives, and
it was just very hard to follow, and I always thought,
who are we kidding? Volume one said essentially that the
proof didn't rise to the level of being able to
(07:29):
say that there was actual coordination as opposed to a
lot of people on both sides who wanted to coordinate,
and there was active assistance from Russia, but we didn't
see enough evidence of actual coordination.
Speaker 1 (07:44):
To prove it criminal conspiracy. There was certainly cooperation, but
not enough evidence to say it.
Speaker 2 (07:50):
We're doing that in volume one, who's going to really
be fooled? In volume two, where we're not saying that
it's like so obvious that we're saying there is it
turns out it turns out I was wrong. It's like
that kind of double negatives had people going, Gee, what
are they saying? So I thought that was merely matt
that I thought we should have just said it. The
other thing that's really important to note is we could
(08:11):
not charge the then president of the United States with
a crime because the DOJ policy was that a sitting
president could not be charged by the Department of Justice.
There were two Office of Legal Counsel opinions on that,
and even though we're in the Special Council's Office, the
Special Council is part of the Department of Justice. We
(08:34):
had to adhere to Department of Justice rules, so we
did not have that authority. So, you know, one of
the things that I talked about in my book is
that I thought of being really great if, like Rob Rosenstein,
when he appointed us, had made it clear to people
what our purview was and what we could and could
(08:54):
not do. You know, we were all very aware that
people in the public were thinking, oh, day, now there
could be an indictment of the sitting president, and we
were like, that's not even remotely on the table. We
cannot do that, we would have rightly been fired. I'm
not saying that the policy is necessarily a good one.
I'm not even sure that the law requires that a
(09:16):
sitting president cannot be charged. I have a whole theory
as to why I actually think a sitting president could
be charged by the federal government. I think the States
raised a very separate issue, but we didn't have that
luxury because we just couldn't make up DOJ policy. We
had to adhere to it or be fired.
Speaker 1 (09:35):
Also, remember it was in the context of Trump having
fired Jim Comey as the head of the FBI after
he was probing some of these issues himself.
Speaker 2 (09:44):
Yeah, well that, and you know, it was just a
very hard investigation to do. I remember feeling very much
the same feeling I had when I worked on the
Enron Task Force, which is, you feel an enormous amount
of pressure that's coming from within you to be thorough,
not make any mistakes, and to work as hard and
(10:07):
as fast as you can because the time clock that
you feel the pressure of that is that you feel
like the public deserves an answer, the political system deserves
an answer, as fast as humanly possible. So that it
was a very intense twenty two months, and a lot.
Speaker 1 (10:28):
Of the dynamics you encountered during that probe are the
ones that still exist around all of the current Trump prosecutions.
He's an unusual person to prosecute or investigate because he
inveighs willy nilly against law enforcement officials, judges. He's threatening. Often,
he calls up his troops. You know that Trump's supporters
across the country to get on his side in these matters.
(10:50):
So you've lived already through what other prosecutors and investigators
are dealing with right now. I want to come back
to one thing. On the Russia part of the probe.
Was always curious to me that money as a reason
for Trump's intersection with Russians beyond just his own interest
in a political victory or defeating Hillary Clinton. But he, obviously,
(11:11):
you know, came into the twenty sixteen race with a
long history of voracious deal making, and if you put
a bag of cash on Donald Trump's desk, he would
bark and bark and bark again. It seemed to me
like a good and useful evidentiary path for Mahler's team
to go down.
Speaker 2 (11:28):
You are, there many things that I totally agreed with
what my boss, Director Miller, was doing and the calls
he made. It Obviously it's his decisions. It wasn't mine
or anyone else who reporting to him. But there's somewhere
I disagreed. This is one where I understood initially why
we did not investigate the financial aspect of the case initially,
(11:53):
but disagreed why we didn't come back to it. And
the reason I say that I wrote about this in
the book, which is if you were remember early on
we were just sort of up and running. In June
of twenty seventeen, Donald Trump had said that sort of
essentially a kids relationship with Deutsche Bank, the financial stuff
was sort of off limits in a red line, And
(12:15):
when we were just starting out, I could see saying, look, well,
there's so much else to do. Let's get a toe hold,
let's get our feet wet and see where these cases
are going, and then be able to figure out how
the financial piece could play into any particular part of
the investigation. I was doing sort of manifort and all
(12:36):
things manifort related, and so my remit did allow for
a financial investigation with respect to them. Remember, we had
to follow Rod Rosstein's parameters with respect to what we
could look at. It was not like being in the
US Attorney's office, where it's like any federal crime. So
I had that luxury. But my colleague Gene Ree, who
(13:00):
headed up Team r which was Team Russia, I was
Team M which is we were not very creative. M
was Manafort, So she didn't have that sort of broad remit.
And I think what the thought was in the beginning,
like why cross a line that we didn't necessarily need
to cross at that point we didn't even understand at
the moment we now learned that Don McGahn had been
(13:23):
approached by the President to fire US, and you know,
there was just a few weeks into the investigation. So
I think that that is a more justifiable time period
to have said there's no reason to do it now.
My issue is I thought that, for instance, as Michael
Cohen came in and talked about the Moscow project, that
(13:46):
gave some more impetus for doing a financial investigation.
Speaker 1 (13:52):
Then, just for our listener's sake, the Moscow project was
a real estate project in Moscow to build a Trump
tower in Moscow. Trump was actively trying to make real
both during the campaign and then the run up to
the campaign, it wasn't a past issue, and it obviously
you don't build anything in Moscow unless Vladimir Putin wants
(14:14):
to let you build something in Moscow. And that always
seemed to me like a very clear evidence of a
presidential candidate who could get played by a foreign power.
Speaker 2 (14:21):
Yeah, and remember, people think of the Michael Cohen case
as one that was solely prosecuted by the Southern District
of New York, and in fact that isn't the case.
We were looking at Michael Cohen saw the Moscow piece
of it, we retained that because it was within our remit.
But when we saw that there were personal crimes and
(14:44):
sort of other crimes unrelated to our remit, those we
spun out to the Southern District of New York. And
obviously there was coordination of that, and he ultimately pleaded
guilty to both sets of charges. So that's why you
sort of have the different pieces, And that's a very
good way of understanding that we had limited jurisdiction because
(15:06):
we had to stay within what Rod Rosenstein said was
something we were allowed to investigate. If we had just
been in the US Attorney's office, we would have done everything.
Speaker 1 (15:16):
So, in other words, none of this was arbitrary. The
reason the money trail wasn't pursued was because the remit
had reasonable and narrow boundaries.
Speaker 2 (15:25):
That's true. But I do want to say I do
think that as our case progressed, there were grounds that
we could have used to do more. And so that
is an area where I do think that we could
have revisited it and could have made the arguments about
doing more on the financial front as our case got
deeper and we had more factual predication for that type
(15:49):
of investigation. So I don't think I can blame the
limited remit entirely for why we didn't do the financial
piece as broadly as you would if you were in
these turn office.
Speaker 1 (16:01):
Since we've talked about the money trail, this brings us
to Leticia James's case, which is all about the money.
I want to before we get into that, take a
quick break so we can hear from one of our sponsors,
and then we get back. I want to dive into
that case with you. I'm back with Andrew Weissman, and
we're discussing the New York Attorney General's prosecution of Donald Trump.
(16:25):
So Letitia James, the New York State Attorney General, begins
investigating Donald Trump in twenty nineteen for financial fraud, as
I noted in the top of the show, and in
twenty twenty two she sues him, his company, his three
eldest children, and two officers of the company, his CFO
and his chief operating officer for financial fraud. Their defense
(16:47):
really is Trump always exaggerates, no one was harmed, fake issue.
This is a political prosecution. That's essentially what their defense
is boiled down to.
Speaker 2 (16:57):
I'm going to complicate that, and you can tell me
what I'm missing. So I think that the parts of
the case that seem very strong from the outside. I
think that the information about Trump Tower and his apartment
and the fact that it was valued at three times
(17:17):
the square footage seems like a rock crusher. I don't
know how you get around that. And it's not just
that because somebody who would do that, you have to ask, well,
if they're going to do that, and it's so blatant,
do you really think that's the only time that they're
willing to do it. And if you don't have the
marl fiber to be saying, that's not what I'm going
to engage in why would you just draw the line
(17:40):
there when the other things are sort of harder to catch.
I also think the valuation at mar Lago seems pretty
not quite as but pretty open and shut, and that
is that he valued it taking away all sorts of
restrictions that he'd agreed to on that property. And a
(18:03):
similar thing happened in other real estates eleven Springs.
Speaker 1 (18:06):
They stayed up exactly where.
Speaker 2 (18:08):
He would, for instance, say well, I'm assuming that this
was not rent regulated, and you know I live in
New York City. The idea that I'm going to value
something is if there weren't rent control departments in the building.
Just to give you an example, I mean, it's obviously
there's a really big difference in terms of valuation if
you have tenants who are rent controlled versus free market.
(18:29):
So I know that Trump's team put on a defense
expert to say that that's legit to do that. That
just seemed really strained to me as accurate.
Speaker 1 (18:39):
Well, but I think I'm sorry to jump in here,
but I think the thing that we got to get
clear about is what was he doing with these valuations?
So you know, we can all say it's bonkers that
Donald Trump valued this triplex at the top of Trump
Tower that looks like it was designed by like Louis
the fourteenth on a drug trip and put on his
own papers, and what he was saying to the press
and everyone that yes, this is three times what it
(19:01):
really should be, and my jet is worth ten times
and it has golden toilets, and you know, I've got
these towers everywhere they're ten x what everyone else is
building is worth. But if he's actually not using that
exaggeration to either secure loans he shouldn't get and banks
are duped in the process, or you know the converse,
(19:21):
which under the top of the shows that he overly
deflated the values of those some of those same assets
when it lowers his tax bill, that there's actually a
consequence of his inflation or deflation, that the act of
inflating is just so what Donald Trump has spent sixty
of his seventy seven years doing this kind of stuff.
Speaker 2 (19:40):
Oh yeah, there's a motive for all of that. The
motive is money. I mean, the motive is either as
you said, to pay less than taxes or to get
greater loans.
Speaker 1 (19:49):
But isn't that the thing, though, Isn't that where the
bar here is for the prosecutors is to show it
isn't the simple act of him treating valuations like a
yo yo, It's that he used yo yo to hurt
someone and to defraud someone.
Speaker 2 (20:03):
Yes, but that's sort of a legal piece, which is
so there's already been one cause of action which the
judge found before the trial started, found liability. And that's
because that first cause of action doesn't require mens rea,
doesn't require intent to defraud, nor did it require materiality
or reliance. So it's a very broad cause of action
(20:27):
under the law. I mean that is New York law.
I think the judge got that right. The other causes
of action that were on trial do require materiality and intent,
and so a lot of the things that we've been
talking about could go to Donald Trump's intent that he
wasn't intending to defraud because there was an expert who
said you could do this, et cetera. And also, remember
(20:50):
the standard here is not proof beyond a reasonable doubt.
It's just a preponderance, which is fifty percent and a
hair anything over fifty percent, this state has establish it's
a case. And this is where I think that they
are parts of the case where I think they seem
stronger than others. And I'm curious as to what you thought, Tim,
(21:11):
because they did have people from Deutsche Bank, one of
the main lenders, saying essentially, hey, we did our own work,
we wanted to do work with him, we did our
own valuations, so essentially like we weren't really relying on
what he wrote down. Now, reliance is not actually an
(21:32):
element of the causes of action, meaning that the state
doesn't have to prove that Deutsche Bank relied. They just
have to show that there was an intent to deceive
Deutsche Bank, and that the kind of information that was
being put forward would be material. In other words, it's
not like what's your favorite color, it's something that would
(21:54):
be relevant, and I think all of this is the
kind of thing that would be relevant. In my argument,
it would be if this isn't material, then why even
have the application? If it really doesn't matter what you
write down and you can make up the numbers, why
even have the application? And I think if you were
to ask the general counsel of Deutsche Bank, they would
have to say, well, of course we want truthful information
and we do care what people write down it would
(22:17):
be pretty unusual for a bank. For the general counsel,
the chief compliance officers say, we don't really care whether
or we're giving to customers who are just defrauding people
all the time. That obviously has to be material. I
just don't know how good a job this state did
in the cross examination and the rebutting of that defense testimony.
Speaker 1 (22:39):
Well, I think they did a really weak job, and
I think they could have come I mean, there's so
many elements of this case, you know, to bring our
listeners back in on some of the directives around it.
You know, New York State prosecutors have a lot of
freedom to go after financial fraud in an unusual way.
There's the Martin Act, which essentially allows prosecutors to pursue
financial crimes without even having They don't have to prove
(22:59):
in as they don't need to in any civil case.
But the Martinat redefines that boundary as well, and they
don't even have to show that someone was damaged necessarily.
They just have to show that someone tried to pull
off a fraud. And those are the tools that Letitia
James was brought to baron Trump. Trump has spent decades
inflating the value of his wealth. He does it because
(23:21):
he's insecure, he does it because it keeps him in
the news, and he does it because it helps him
get loans. He sued me for three pages of a
biography I wrote about him, in which he said I
essentially defamed him because I said he was worth about
thirty times less than he said he was worth. And
during the course of that litigation, we got evidence from
his banks, including Deutsche Bank, And at a time when
(23:41):
Donald Trump was saying he was worth six billion dollars
and my sources were saying he was worth two hundred
and thirty million, we secured an audit from Deutsche Bank
in which their own examination of his finances said he
was worth only seven hundred and eighty million. That was
great for our case because Trump's own bankers knew that
he was at that time. I'm wildly inflating the valuable.
Speaker 2 (24:02):
I don't understand, tim, which is I used to be
head of the fraud section at the Department of Justice.
And my question to a bank, where there know your customer?
Speaker 1 (24:13):
Rules?
Speaker 2 (24:14):
Money laundering regulations require financial institutions to know their customers
and to know like where they're getting their money and
who they're dealing with. What is the chief compliance officer
at that financial institution say in response to if you
knew that a customer was committing fraud, and the fraud,
by the way, is directed at you your institution.
Speaker 1 (24:37):
Why would you approve doing business with that client?
Speaker 2 (24:39):
Yeah, exactly, Well, I think.
Speaker 1 (24:41):
It happens all the time. Compliance officers and banks are
notoriously feckless in a lot of team or they don't
know right, or they don't know and then they know
they're lower on the totem poll in an organization. They
don't really have the authority to kill a deal someone
higher up than them wants to pursue. You know, in
the Deutsche Bank case, they went ahead and did a
deal with Donald Trump, even though he had tried to
stiff them on loans they'd made to him on a
(25:03):
Chicago project. The commercial side of the bank wouldn't do
business with him, They had permanently barred him as a client.
And Rosemary Vraiblick, who testified in the state Attorney General's
case here in New York, was with the private bank
and she decided to go ahead and do business with
him without getting inside her head, because I can't speak
for what her own thoughts are, but I think she
just liked the idea of doing business with the Trumps
(25:23):
because that led her to the Kushners. She was introduced
to Donald by Jared Kushner. So there's all of these
just personal relationships to the average show in Jane don't
have access to when they walk up to a bank teller,
and people who are in the news or who are
celebrities get access to this kind of stuff that others
don't get, and I think the standards drop. So I
(25:44):
guess it doesn't feel mysterious to me that they did
business with him, even if it's reprehensible, which I think
in some cases professionally it was, and certainly in judicious
given his track record. He's a serial bankruptcy artist and
he routinely stiffed banks. I think the issue here is
was he a criminal in doing that? And you know,
(26:04):
as a reporter, I didn't have the subpoena power to
go down that route. I think we kind of stripped
the bark off of him like an old tree in Quartz.
But you know, all we had to prove was I
didn't act with malicious intent that I went about my
job and I tried to get as much information as
I could, and I was fortunately confronted with a guy
who was a bloviator and an exaggerator. And then in
our deposition, you know, we proved that he had lied
(26:26):
more than I think two dozen times on valuing different
assets that he had said were worth more than they were.
It's exactly what's in the attorney general's case right now,
the state attorney general's case. But I think they have
a high bar if they're going to prove he's a criminal.
You know, the idea of relying on Donald Trump's statements
of financial condition, which tiss James's office is as demonstrations
of an attempted to fraud his tricky because he gave
(26:48):
those things to the press as kind of marquee statements
of how Richie was, and they were cartoons basically, they
were like cartoon books, highlights for children. His own accountants
wouldn't sign off on those documents. Said that, I think
under New York law, they don't need to prove that
the banks were harmed. That actually isn't a standard in
this case. I think Trump has latched onto that because
(27:09):
he has a reptilian sensibility about what plays in the
popular imagination, and he can say I'm being prosecuted, but
no one was hurt. Wise, this is happening to me,
when the real issue is you've been doing great inflation
for your entire career, buddy, and someone is holding you
to account for it, and under New York law, that
in itself is enough to prosecute you.
Speaker 2 (27:30):
In their main case. That's the state's main case. They
did have an expert witness who testified about the harm,
even though you don't have to prove it. It goes
to the amount of damages because the state is seeking
essentially disgorgement, which is the amount that Donald Trump unjustly received.
(27:53):
And the theory is that he either wouldn't have gotten
the loan or that the rate that was charged be different,
because I mean, it's kind of common sense, which is
like if you and I go to a bank. Oh,
I don't say you, but if I go to a bank,
they're certainly going to look at my risk profile, and
the riskier I am, they may decide not to loan
(28:15):
me the money at all, or to loan at a
higher rate to account for the risk factors. So they
had an expert talk about that and sort of assess
what it would be. And obviously that's why part of
the battle here is not just on liability, but on
what would the damages be if the rate would have
been different. And that's where the defense case, which is
(28:37):
to say, oh, we were just happy to do business,
is important, because even if it doesn't defeat liability, it
could go to damages. I have to say, I think
one thing, and I don't know how much the state
made of this, having somebody from the private wealth group testifying.
I mean, they had their own interests, and I didn't
assess her credibility on the stand. I didn't see her testify,
(29:00):
but I would be very interested in private wealth management.
As happens a lot of times in large institutions, different
parts of a bank can have very different interests that
don't necessarily align with what the bank overall wants to see.
So a bank, for instance, a well run bank, could
be very concerned about what's happening at the sales level,
(29:20):
are people saying and doing things that would help them
get commissions, but that the bank overall does not want
to see people doing. And so I did have a
sense that at least, I was curious as to whether
that was going on with the spect to private wealth management,
where they would be like, hey, we were kind of
cheerleading this because this was going to be good for us,
(29:43):
even if it wasn't necessarily what the bank overall would
want to do.
Speaker 1 (29:47):
Well. In fact, that's very true about Deutsche Bank. I
think the private Wealth group was cheerleading to get business
at all costs from Donald Trump, even though another major
part of the bank that he's not somebody will do
business with again ever, and then gave the business him
on very favorable terms. But now oral arguments have ended,
testimony has ended, the judge in the case is going
(30:08):
to rule sometime next month, and I think the issue
here is what does he do with all this information.
He's already pulled the business licenses on Trump and some
of the related operating entities. He can, I think, impose
bigger damages potentially than two fifty but I think that
seems to be a cap two hundred and fifty million.
How do you think about where this will land come January?
Speaker 2 (30:29):
I just don't know. I mean, this is the one
thing that we know for sure. There is liability on
the first cause of action. So in some ways it's
already a bit of a game over, and it's really
a question of what are the remedies for that first
cause of action. Yes, there may or may not be
liability of damages for the rest, but in some ways
(30:51):
that may be icing and I don't know how the
judge will come out on those issues. I don't know
how he will assess credibility. One thing that is I
think kind of interesting is the judge is entitled to
make fact finding based on the credibility of the witnesses.
And remember that Don Junior, Eric Vanka, and Donald Trump
(31:17):
himself have all testified. The judges already found Donald Trump
not believable with respec to a gag order issue, where
Trump said that he didn't intend to be referring to
the judges law clerk, and the judge said, I don't
believe it. By the way, just because he said that
doesn't mean he's going to find that he's incredible on everything.
(31:38):
But he's entitled to make those fact findings. And that's
very very hard for any party to get reversed on appeal.
So by testifying those people, I won't say it's there
one shot, but it is very much putting your hands
in the fate of the fact finder. So it'll be
interesting to see what Judge and Gorn says about the
(32:00):
leiaevability of those witnesses in general.
Speaker 1 (32:04):
Andrew, let's take another break and we'll come right back.
I'm back with Andrew Weisman, and we're discussing the New
York Attorney General's prosecution of Donald Trump. Andrew, I wanted
to ask you about, I guess, extra legal issues of
all of this, because Trump is an unusual defendant and
you experienced this during the Muller probe, where you have
(32:27):
an active, serious investigation going on, and he's openly speaking
about people you're investigating, like Paul Manafort, and he's tweeting
about whether or not Paul Manafort is going to sort
of display omerica and not testify against him. He's going
to the press, He's talking about all aspects of the
case without any kind of worry about that having consequences,
(32:50):
and that had all come to play again in this
case in New York. You know, you mentioned in the
earlier segment that the judge in the case had to
put a gag order on him because he was sought
of bounds, and he promptly violated the terms of the
gag order. That's also happened in one of the federal cases,
the January sixth case. I believe we talked in the
top of the show of this long and illustrious parade
(33:12):
of people and entities that you've prosecuted, from John Gotti
to Enron. Where does Donald Trump fit in that spectrum
for you when you watch him as a defendant, and
how his political theater affects the rule of law.
Speaker 2 (33:28):
So it's worth noting a couple of things. One, there
is a recent decision on the gag order from the
DC Circuit that is, the Court of Appeals in Washington,
d C. It's the decision that in large part affirms
Judge Chukins gag order, where the Circuit court said that
(33:50):
some of the statements made by Donald Trump, the former
president of the United States, the former leader of the
free world, posed a significificant and imminent danger with respec
to the integrity of the judicial process. That is a stunning,
just a stunning statement to be said about any elected official,
(34:14):
let alone the leader of the free world.
Speaker 1 (34:17):
So that's in the nation's top law enforcement official.
Speaker 2 (34:20):
Yes, it is worth just going back to that, even
though we're so inured to the fact that Donald Trump
does that, in fact he embraces it, and prosecutors, I
think are aware of that. Whether it's a public corruption
case or an organized crime case. Frankly, any sort of
gang or group case where there is a hierarchy where
(34:43):
power and money or involved. If you're a prosecutor, you
worry about undue influence on witnesses.
Speaker 1 (34:50):
From the top of the food chain. Yep. But as
you've noted, Trump is an unusually powerful defendant. Of course,
what unusual impacts what's happening to the rule of law
in this country right now? When you have someone who's
a defendant in multiple cases that are buttressed by substantive
charges with long trails of evidence behind them, including recordings
(35:12):
of his own voice in the Georgia case asking people
to commit voting fraud for him, or cameras at his
own estate in mar A Lago showing his own employees
trying to hide classified documents from federal investigators. And yet
he keeps pushing forward in the political theater, in the
public theater. What is the ultimate impact of that on
(35:32):
the judicial process and the rule of law?
Speaker 2 (35:34):
Well, I think there's sort of a small picture in
big picture the small pictures. I think that the courts
by and large have done an incredible job at upholding
the rule of law. I do think that the slowness
of the judicial process takes its toll in terms of
being able to have a trial of the form president
(35:55):
before the election, so that the public has the benefit
of that information and the conclusion. But I think that
in spite of all of the attacks, I think that
the judges are in general doing it a really good job,
in the same way that the courts did a really
good job and response to over sixty challenges to the
results of the election, where all of the ones that
(36:18):
went to the merits were denied. So I think that
the courts are going to be under considerable attack in
the same way that prosecutors and the media are attacked
by Donald Trump, because that's what he does when there's
any sort of institution or people within those institutions who
are standing up to an authoritarian personality. I think that
(36:40):
the larger picture, though, is whether the public is going
to give a damn, whether there are enough people who
view that as a fundamental problem, And I think that
was the thing that I found very upsetting about his
being elected the first time. And this has nothing to
do with policy choices. It's not about whether degrees or
(37:00):
disagrees with his view on immigration, or who should be
judges all sorts of policy implications. It's that I was
just so surprised that people could overlook what I viewed
as blatant racism, xenophobia, sexism, the denigration of the rule
(37:22):
of law, that those were so fundamental that I didn't
understand that those weren't deal breakers for a much larger
group of the American public. You know, I'm in the
middle of reading Liz Cheney's book, and as I think
many people said, you know, Liz Cheney and I politically
are probably pretty much polar opposites, but this is one
(37:44):
where there's a fundamental similarity in terms of how those
differences are decided and played out and the discussions you
can have on a policy level within the framework of
a democratic system and a republic that we have. And
so what's sad is that that baseline is so important.
Speaker 1 (38:08):
And because both of you believe that institutions and the
rule of law and the processes that's around the matter.
Even if you disagree philosophically and politically that the bedrock
of civic engagement and communities are respect for those things.
And I think that that is the tissue that Donald
Trump is trying to shred, along with the Constitution and democracy.
Speaker 2 (38:29):
So you know, the title of my book, Where Law Ends,
comes from a John Locke quote, English philosopher who said,
where law ends, tyranny begins. And that quote is on
the Justice Department walls on the outside on the limestone
over the Department of Justice in Washington, d C. Because
(38:51):
it's so fundamental to what the Department of Justice is.
And as Loretta Lynch, the former Attorney General of the
United States, has said that the Department of Justice, unlike
any other department we have in Caninet level official, is
founded on an idea, which is the rule of law.
And to me, that sentiment of where law ends, tyranny
(39:12):
begins is just so fundamentally appropriate to this time that
we are in.
Speaker 1 (39:19):
Andrew, I always like to ask guests at the end
of the show what they've learned, and I wanted to
ask you, sort of starting with the Mueller probe and
up into the president, what have you learned about the
impact of Donald Trump as a president and a former
president being a defendant, and in the process of being
a defendant again undermining some fundamental thoughts and respect we
(39:43):
have for the legal process.
Speaker 2 (39:45):
So when I was a very young man, and I
think I had not yet gone to law school, and
I had been an intern at the ACLU, Roger Baldwin,
who helped found the ACLU, was still alive, and he
(40:05):
used to say that regardless of what is in the
Constitution or in congressional statutes, that what's fundamentally important is
that those values and precepts are in the hearts and
minds of citizens in the United States. And I remember
(40:27):
at the time, thinking, what's he talking about, Like, if
it's in the Constitution, we're done. If Congress has passed
a lot were done. It didn't resonate with me. And
I think what I have learned is things that I
thought were deeply rooted in the United States, and that
(40:47):
I took as a given and for granted. It's like
the roots of a willow tree that are very shallow
and a strong wind can cause it to topple, And
that what Roger Baldwin was saying is so true that
they fight and what it means to be or what
(41:08):
I think it means to be American, is something that
has to be thought for and upheld and taught in
every generation.
Speaker 1 (41:18):
Yeah, to stay with your analogy of trees. When you
were talking about willow trees, I was thinking the happy
opposite of that are aspens, which are all connected at
the roots and draw great strength from that fact. And
as we go into this political year, I think we
have to think like aspens and not like willows.
Speaker 2 (41:33):
I love it.
Speaker 1 (41:35):
We're also out of time. I could have talked to
you for another day or two, and I'm glad you
came on. Thanks for coming on today, Andrew, Oh.
Speaker 2 (41:42):
Thank you so much for inviting me. This was really
really great.
Speaker 1 (41:45):
Andrew Weisman is a professor at the NYU Law School
and a veteran prosecutor. You can find him on Twitter
at a Weisman Underscore. Here at crash Course, we believe
the collisions can be messy, impressive, challenging, surprising, and always instructive.
In today's Crash Course, I was reminded that no matter
(42:06):
how much I go into the weeds on a topic,
particularly the prosecution of Donald Trump, some of the larger
truths always have to be recognized, specifically that Donald Trump
remains a threat to the rule of law and a
threat to democracy. What did you learn? We'd love to
hear from you. You can tweet at the Bloomberg Opinion
handle at Opinion or me at Tim O'Brien using the
(42:27):
hashtag Bloomberg Crash Course. You can also subscribe to our
show wherever you're listening right now and leave us a review.
It helps more people find the show. This episode was
produced by the indispensable and ever law abiding Anna Masarakis
and me. Our supervising producer is Magnus Hendrickson, and we
had editing help from Sage Bauman, Jeff Grocott, Mike Nitze,
(42:49):
and Christine Vanden Bilart. Blake Maples does our sound engineering,
and our original theme song was composed by Luis Gara.
I'm Tim O'Brien. We'll be back next week with another
Crash Course.
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