Letitia James vs. the Trump Family
New York’s AG found her defendants first, then looked for evidence to charge them with something.
By The Editorial Board
Sept. 22, 2022 6:43 pm ET
Common wisdom says that on a good day state attorneys general do 70% politics and 30% law. That’s on a good day. On Wednesday New York Attorney General Letitia James lived up to that reputation by filing a civil lawsuit against Donald Trump
. The suit alleges that the former President and three of his children inflated the asset values and net worth of their properties to get better terms from banks on loans and better deals from insurers.
Ms. James ran for office promising to indict Mr. Trump, which is the opposite of the way justice should be done. You’re supposed to find a crime and then identify the perpetrator. Ms. James declared Mr. Trump could “be indicted for criminal offenses” and has hunted ever since for a crime to charge him with.
Her civil lawsuit requires a mere preponderance of evidence standard to prove guilt, not proof beyond a reasonable doubt. She has referred the case to the Internal Revenue Service and federal prosecutors in Manhattan, though the Manhattan district attorney didn’t file charges after examining the same issues.
This isn’t to dismiss the financial fraud charges. The lawsuit says Mr. Trump used “objectively false numbers to calculate property values,” including counting his Trump Tower apartment at 30,000 sq. ft. when it was 10,996 sq. ft. so that it could be improperly valued at $327 million. His golf course in Scotland was valued at $327 million on the calculation that 2,500 homes could be developed (worth $267 million) when he had zoning approval for only 1,500 homes and apartments.
“All told, Mr. Trump, the Trump Organization, and the other Defendants, as part of a repeated pattern and common scheme, derived more than 200 false and misleading valuations of assets,” the lawsuit says.
No one who has ever listened to Mr. Trump will be surprised if he hyped the value of his holdings in dealing with bankers. But then no one in New York finance would ever trust only what Mr. Trump claims before signing a document or lending him money.
As far as we’ve seen, the lenders don’t seem to consider themselves victims. They made money on the loans, which didn’t default. The transactions were presumably scoured by auditors and bank due-diligence officers. There is enormous variability in real-estate valuations. The question Ms. James will have to prove is whether Mr. Trump’s claims amounted to intentional fraud.
The scent of politics can be detected in the sanctions Ms. James is seeking. She wrapped the three adult Trump children into the suit and is seeking to bar them for life from being officers of any business in New York. Mr. Trump would be barred from entering into any commercial real-estate acquisitions in New York state for five years and also barred from applying for loans from “any financial institution chartered by or registered with the New York Department of Financial Services” for five years.
She is also seeking $250 million in restitution, which probably exceeds the interest earned on the difference in interest rates that banks might have charged Mr. Trump if his assets were worth less than advertised.
Ms. James’s decision to drop this lawsuit only a few weeks before the midterm election also smacks of political motivation. Mr. Trump isn’t on any ballot. But she knows Mr. Trump drives Democrats to vote, and keeping him at the center of the news is a Democratic priority.
Mr. Trump has made a business and political career of getting away with whatever he can, and it’s easy to imagine he crossed a line. But the Democrats pursuing him have become Captain Ahabs bent on taking him down by any means necessary. Ms. James is a partisan prosecutor, and her charges and evidence need to be examined in that context.