In less than three weeks Donald Trump should leave the White House. It’s still hard to tell whether Donald Trump will attempt another coup or throwing a tantrum.
Crying voter fraud, his administration has refused like no other US administration ever before to begin the presidential transition despite his decisive electoral defeat. Some Republicans have floated the idea of getting legislatures in states that Joe Biden won to disregard vote totals last year and instead appoint pro-Trump electors to the Electoral College. An alarming threat to the US democracy. Parallel, the president has decapitated the Pentagon, putting fanatical loyalists in some of its highest ranks. Anthony Tata, who called Barack Obama a “terrorist leader” and tweeted a lurid fantasy about the execution of the former C.I.A. director John Brennan, is now the Pentagon’s policy chief. This is all supremely alarming.
But there’s cause for comfort, of a sort, in signs that the president is preparing for life outside the White House in exactly the way one would expect – by initiating new grifts.
Trump has been sending out frantic fund-raising requests to “defend the election,” last year, but most of the money is actually going to a PAC, Save America, that “will be used to underwrite Mr. Trump’s post-presidential activities”. Money, he urgently needs. Axios reports that Trump is considering starting a digital media company to undermine Fox News, which he now regards as disloyal.
These moves in my opinion suggest that while Trump may be still willing to torch American democracy to salve his wounded ego, at least part of him is getting ready to leave office. When he finally does, some political observers and Republican professionals assume he’ll remain a political king-maker, and will be a favorite for the party’s nomination in 2024. I personally highly doubt that and will now explain in detail why:
First I have to admit, that there’s no doubt about that Trump has a cult-like hold on his millions of worshipers, and a unique ability to command public attention. But there are reasons to think that when he is finally ejected from the White House, he will in my opinion become a significantly diminished figure.
Once Trump is no longer president, he is likely to be highly consumed by lawsuits and criminal investigations. Hundreds of millions of dollars in debt personally guaranteed by Trump will come due. Lobbyists and foreign dignitaries won’t have much of a reason to patronize Mar-a-Lago or his Washington hotel. Fox News Owner Rupert Murdoch could complete the transition from Trump’s enabler to his enemy. And, after four years of cartoonish self-abasement, Republicans with presidential aspirations will have an incentive to help take him down.
But for Donald Trump 2021 will not be a massive life changer as he has been his entire life involved in a bunch of litigation. But post-presidency we can assume that, given the amount of civil litigation and potential criminal exposure, it’s even for him going to be at a completely new dimension. He will be busier than ever before.
Attorney Kaplan for example is pursing three high-profile lawsuits against Trump, including the writer E. Jean Carroll’s defamation case. Carroll, you might remember, accused Trump of raping her in a department store dressing room during 1990s.
Trump called her a liar, and she’s suing him for damaging her reputation.
Under Attorney General Bill Barr, the Department of Justice (D.O.J.) has tried to shut down the suit, arguing that Trump was acting in his official capacity when he said Carroll had made up the story to sell books. In October last year a judge rejected the department’s theory, but had Trump been re-elected, Kaplan would have expected an appeal.
Once Biden is sworn in as president this month, it’s hard for me to imagine that the D.O.J. won’t change its position. Therefore the case is likely to proceed. Kaplan expects it to go into discovery shortly. She anticipates deposing Trump and collecting his DNA to compare with male DNA found on the dress Carroll was wearing at the time of the alleged attack. If Kaplan and Caroll prevail at trial, it would be a high-profile legal validation of Carroll’s claims. Her suit has not, at least so far, been a major news story – there’s too much else going on. But a verdict in her favor could in my opinion be the # MeToo version of the civil judgement against O.J. Simpson – not justice, exactly, but a powerful rejection of impunity and could possibly lead to a separation between Melania and Donald Trump.
Carroll’s suit is not the only one that could force Trump to answer for his predatory history with woman. The former “Apprentice” contestant Summer Zervos, who says Trump groped and kissed her against her will, is like Carroll suing for defamation because Trump called her a liar. Her lawyer is Beth Wilkinson – what a small world we’re living in -, who defended Trump’s nominee Brett Kavanaugh when he was accused of sexual assault during his Supreme Court confirmation fight.
In addition to Carroll, Kaplan is representing Mary Trump, the president’s niece, who is suing Trump, his sister and his late brother Robert’s estate for fraud and civil conspiracy, claiming they cheated her out of an inheritance. And she’s representing a group of people who are suing Trump and his three oldest children for enticing them to invest in an alleged pyramid scheme, run by a telecommunications company called ACN, which sold clunky videophones. The plaintiffs are poor and working class, including a hospice caregiver who paid thousands of dollars to ACN because she trusted Trump’s fulsome endorsements, having no idea that ACN was paying Trump millions. As with the other suits, there is obviously no guarantee of success. But Trump’s alleged involvement in a multilevel marketing scheme that trade on a false image will in my opinion be a minor subplot over the next few years.
Besides, the threats to Trump are not only to his reputation.
President Trump has so far abused the pardon power like none of his predecessors. He will most likely pardon himself, friends, family members and Trump business entities and employees for any crime they might have committed before or during his presidency.
Mr. Trump’s pardons to date, and those likely to come during the transition, reveal the problems with the supposed “absoluteness” of the pardon power – and in my opinion should prompt legal reform to clarify limits on its abuse.
The pardon power that the Constitution confers on the president has just two stated limitations: A president cannot pardon for impeachment, and a presidential pardon can excuse or mitigate punishment only for federal offenses. There is little that can be done at this point to stave off a potential wave of pardons in the lame duck period, but the federal crime limitation means that Mr. Trump cannot stop state criminal investigations. But for federal crimes, the president can – with the stroke of a pen – erase a criminal conviction or criminal exposure for basically whomever he wants and for almost any reason. Unsurprisingly, Mr. Trump’s pardons and commutations have so far largely served his personal interests.
Notorious examples include the pardon for Joe Arpaio, the former Arizona sheriff who was convicted of defying a federal court order against profiling Hispanics; the pardons for the president’s political supporters Conrad Black and Pat Nolan; and the sentence commutation for Mr. Trump’s friend Roger Stone, who was convicted of obstruction of justice and related crimes and who many believe refused to implicate Mr. Trump in the hope of presidential relief from punishment.
Such self-serving pardons are not without precedent. Bill Clinton pardoned his half brother, a friend who refused to cooperate with the independent counsel investigating the president and two notorious fugitives from justice who were suspected of obtaining favorable consideration through an aggressive lobbying campaign and the support of politically influential allies. George H. W. Bush pardoned the former defense secretary Caspar Weinberger and several national security officials who had been convicted or indicated on a charge of perjury and obstruction of justice in connection with the Iran-Contra scandal, in which Mr. Bush himself was suspected of criminal involvement. But even against this background, Mr. Trump’s pardons have been unusual.
First, of the 91 people who already received pardons or commutations (or both from Mr. Trump, 69 (or about 75%) have a personal or political connection to the president. They advanced an aspect of Mr. Trump’s political agenda, knew the president personally (or had a connection to someone close to him), were someone he learned about on television (usually on Fox) or a celebrity he admired. By contrast, only five of Mr. Trump’s pardons lacked a personal or political connection and appeared to be vetted through the traditional justice Department clearing process. No president before has come close to using the pardon power in such persistently self-serving ways.
Second, Mr. Trump issued almost all of these controversial and self-serving pardons well before the end of his first term. Most presidents have waited to issue most such pardons in the weeks before they left office. Mr. Trump’s pardons and commutations have been far more brazen. Now that he has lost the election, it’s plausible to assume he will go all in on self-serving pardons.
Still, there are limits to a pardon spree. As attorney General William Barr testified during his confirmation process, a pardon granted in order to corrupt a judicial proceeding can amount to a criminal obstruction of justice. Mr. Trump’s pardons therefore in my opinion will be closely scrutinized for any purpose to thwart an investigation or pending prosecution threatening to him, a family member or close associate.
Mr. Trump has already proclaimed “the absolute right to pardon myself.” While neither the Constitution nor judicial precedents overtly speak to the issue, the Justice Department declared in 1974 a self-pardon would “seem” to be disallowed “under the fundamental rule that no one may be a judge in his own case.” Scholars are torn on the matter. The issue, which would arise if after Mr. Trump leaves office the new administration indicts him for a crime for which he pardoned himself, can be settled only by the Supreme Court. Therefore, Trump’s game plan is obvious and clear.
Andrew Weissmann, Mueller’s former deputy, expects Trump to pardon himself for any federal crimes he might have committed. That would mean that even if a Biden Department of Justice wanted to take the extraordinary step of prosecuting a former president it would also have to litigate the constitutionality of self-pardons, a complicated, time-consuming process.
But he might face state charges that he can’t pardon his way out of. The New York state attorney general, Letitia James, has a civil investigation into possible financial chicanery by the trump Organization. Trump himself is under criminal investigation by Manhattan’s district attorney, Cyrus Vance.
The two-year inquiry, the only known active criminal investigation of Mr. Trump, has been stalled since last fall, when the president sued to block a subpoena for this tax returns and other records, a bitter dispute that for the second time is before the U.S. Supreme Court. A ruling is expected soon. (Same game plan, same field, different set) Mr. Trump has contended that the investigation by the district attorney Vance, a Democrat based in New York City, is a politically motivated fishing expedition. But if the Supreme Court (now dominated by Republicans) rules that Mr. Vance is entitled to the records, and he uncovers possible crimes, Mr. Trump could face a reckoning with law enforcement – further inflaming political tensions and raising the startling specter of a criminal conviction, or even prison, for a former president. In my opinion, he’ll never have more protection from Mr. Vance than he has right now – until 20th January.
Mr. Vance’s inquiry could take on outsize importance if the incoming Biden administration, in seeking to unity the country and avoid the appearance of retaliation against Mr. Trump, skies away from new federal investigations.
Such a move would not bind the district attorney, an independent elected state official. Mr. Vance’s lawyers acknowledged during the court fight over subpoena that the Constitution bars them from prosecuting a president while in office, but the district attorney has said nothing about what might happen, once Mr. Trump leaves the White House.
Mr. Vance’s actions in the coming months are likely to put him under increasing political scrutiny. Mr. Trump will leave the White house amid calls for him to face criminal charges and a drumbeat of strident criticism from the left that he has evaded any legal consequences for his conduct over the years. On the one hand, Mr. Vance in my opinion could face pressure to forsake any charges to allow the country to move forward after a contentious election. But on the other, the district attorney was sharply criticized for his 2012 decision not to seek an indictment against Mr. Trump’s children, Ivanka Trump and Donald J. Trump Jr., after they were accused of misleading investors in a condo-hotel project. Mr. Vance has said that after a two-year investigation, his office could not prove that a crime had been committed.
Some legal experts said it would send the wrong message if Mr. Vance had evidence to justify charges but decided to walk away from a prosecution of Mr. Trump. Mr. Trump instead has -as so often- repeatedly complained that the investigation was part of a broad partisan witch hunt, any decision to end it once the president left office could be seen as a tacit acknowledgement that such criticism was justified.
Few facts have been publicly disclosed so far about the course of the district attorney’s investigation or the people or potential crimes being examined because the inquiry is shielded by grand jury secrecy. But office’s filing suggest Mr. Vance could be looking at tax fraud insurance fraud and falsification of business records. During the legal battle over Mr. Vance’s subpoena, which sought eight years of Mr. Trump’s personal and corporate tax returns and other records from his accounting firm, prosecutors already suggested in court papers that they were investigating a range of potential financial crimes, including federal bank fraud charges. And prosecutors argued in court that the documents they had demanded from the accounting firm, Mazars USA, represented “central evidence” for their investigation.
Mr. Trump, before and during his presidency, declined to publicly release his tax returns, breaking with 40 years of White House tradition, and he vigorously fought attempts by Congress and state lawmakers to obtain them.
The district attorney’s inquiry, which began in the summer of 2018, was first thought to focus on hush money payments made on behalf of Mr. Trump just days before the 2016 presidential election to an adult film star who had claimed she had an affair with him.
But the subpoena for Mr. Trump’s tax returns underscores an apparent greater focus on potential tax crimes, which tax experts, former prosecutors and defense lawyers agree can be among the toughest cases for the government to win trial.
However, the Manhattan D.A.’s office is a really good office, and they’ve done a lot of white-collar cases in the past. If they were to prove – this is now of course hypothetical – but if they were to prove tens of millions of dollars in tax fraud or bank fraud, people including probably Mr. Trump go to jail for that.
Let’s say Trump, ever the escape artist, avoids prison, setting himself up as the warlord of MAGA-world at Mar-a-Lago. His post-presidency still won’t be easy. As the Times has reported, he’s personally on the hook for 421 million US-Dollar in debt, most of it coming due in the next four years. And if a long fight with the I.R.S. goes against him – which looks likely to happen -, he could owe at least 100 million US-Dollar more.
Yes, Mr. Trump still has assets to sell, but these are tough times in the real estate market. The Covid-19 crisis has hit asset values, particularly commercial real estate in cities such as New York hard. Investors holding debt with upcoming maturities are preparing for tricky negotiations with their debtors. The negotiations will most probably be far trickier if the debtor is the ex-president of the United States.
Virtually all of Donald Trump’s debt – there is at least 1.1 billion US-Dollar of it,according to his government financial disclosures and other documents – is backed by real estate, mostly linked to a small number of buildings and golf courses that from the core of the Trump empire. About 900 million US-Dollar of that debt will come due over the next four years.
On paper, Mr. Trump is not particularly levered – his net worth before the epidemic of Covid-19 has been estimated at 2.5 billion US-Dollar by Forbes.
Citing the president’s tax filings, the Times said that much of his income as well as assets were invested in golf courses that are money losers. So while the president might still be asset – rich, it is unclear how much liquidity (cash) he has access to. The president owes 447 million dollar as part of his partnership with Vornado Realty Trust on towers in New York and San Francisco. He owns 30% of 1290 Avenue of the Americas in New York City and 555 California Street in San Francisco, giving him a pro-rata share of the 1.5 billion dollar debt (450 million dollar) on the two buildings, which comes due over the next two years.
The debt is owed by the partnership, not Mr. Trump himself, but changes to the value of the debt, or any default, would effect his equity value in the buildings. The loan on 1290 was made by Deutsche Bank, UBS, Goldman Sachs and the state-owned Bank of China but they sold it years ago – and it is not clear who owns the loan on California Street Loans to the value of 257 million dollar taken against several of the most famous Trump properties have been packaged into commercial mortgage -backed securities (CMBS).
The banks that originated these mortgages sold them to a CMBS trust, bundling them with other loans and transforming them into tradable debt securities. A servicer is responsible for collecting payments from borrowers. Should borrowers fail to make a payment, a special servicer steps in to get the borrower paying again or foreclose. It is these debt collectors that could be crucial should Mr. Trump’s properties fall into arrears. One loan – a 6.5 million dollar mortgage on the Trump International Hotel at 1 Central Park West, New York – has already been flagged as being at risk after income on the property fell dramatically. Mr. Trump owes up to 340 million dollar to Deutsche Bank. His biggest bank lender has financed hotels in Chicago and Washington, and his Miami golf resort.
According to Mr. Trump’s tax returns, disclosed by The New York Times, both National Doral in Miami and the International Hotel in Washington have generated big losses. The Doral suffered 162 million dollar in losses between 2012 and 2018, and the Washington hotel lost 55.5 million dollar between 2016 when it opened and 2018. These operations were already cash burning before Covid-19.
Another 50 million dollar debt to Chicago Unit Acquisition Trust is secured against the Trump International Hotel and Tower in Chicago. This debt is mysterious. The trust is a corporation owned by DJT Holdings LLC – that is, Donald J. Trump. Mr. Trump appears to owe the money to himself.
Asked about this unusual arrangement by The New York Times in 2016, Mr. Trump said: “I have the mortgage. That is all there is. Very simple. I am the bank. “But he is the debtor, too, and it is not a typical mortgage; it is a “springing loan”, meaning it only comes due under specific conditions – typically a credit event such as a decline in credit rating. It has been suggested that this arrangement could be part of a tax avoidance strategy investigated by Mr. Vance’s prosecutors.
Trump in my opinion is in for years of scandals and humiliations. We will doubtlessly find out more about official misdeeds he tried to keep secret as president. Republicans who hope to succeed him will have reason to start painting him as a loser instead of a savior. He’ll have to devote much of his energy to trying to stay out of prison.
It’s too much to expect any sudden exposure of Trump. There will be no cathartic moment when everyone realizes that the emperor was always naked. But the question isn’t whether Trump’s support will evaporate. It’s whether it will erode, especially once he loses the ability to make Republican dreams come true.
After all that, could he be back in 2024? of course. Trump is, if nothing else relentless. But this election was just the latest reminder that he is far from invincible.
When he is no longer in office, there will be many more.