Sep 26, 2022

The fraud lawsuit against Trump.

Plus, a question about food prices.

I’m Isaac Saul, and this is Tangle: an independent, ad-free, subscriber-supported politics newsletter that summarizes the best arguments from across the political spectrum on the news of the day — then “my take.”

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Today's read: 13 minutes.

We're covering the New York attorney general's lawsuit into Trump. Plus, a question about food prices.

File:Council Member Letitia James.jpg
NY Attorney General Letitia James. Author: Freelancers Union

AllSides rating.

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Shana Tova.

Last night marked the beginning of the Jewish New Year. I'll be celebrating tonight with some family and friends, and wanted to wish all my Jewish brethren a sweet, happy new year. No matter your religious affiliation, holidays like this are a great time to take stock, check in with friends and family, and think about the months ahead. I wish all my readers a wonderful year.

Quick hits.

  1. Israeli Prime Minister Yair Lapid called for a two-state solution with Palestine at the United Nations on Thursday, the first time an Israeli prime minister has supported such a proposal in years. (The proposal)
  2. Syrian authorities said they found 77 migrants who drowned when a boat from Lebanon sank off the country's coast. 20 survivors were being treated. (The tragedy)
  3. Italy elected a nationalist-populist coalition of leaders led by Giorgia Meloni as their new government. Meloni could become the nation's first female parliamentary leader. (The victory)
  4. Florida Gov. Ron DeSantis (R) declared a state of emergency over the weekend as Hurricane Ian approaches the coast. (The emergency)
  5. An Arizona judge ruled the state can impose a near-total ban on abortions after it lifted a block on a law that was passed before Roe v. Wade. (The ban)

Our 'Quick Hits' section is created in partnership with Ground News, a website and app that rates the bias of news coverage and news outlets.

Today's topic.

The new Trump lawsuit. On Wednesday, New York attorney general Letitia James filed a civil fraud lawsuit against former President Donald Trump, three of his adult children (Donald Jr., Eric and Ivanka), and his company in a Manhattan court. James, a Democrat and outspoken Trump critic, alleged that the family engaged in a decade-long scheme to falsely value their assets and mislead banks that helped them generate as much as $250 million in "ill-gotten" gains, as the Wall Street Journal put it.

Reminder: There are a lot of Trump investigations happening. To be clear, here is the current list:

There was also a separate investigation by the Manhattan District Attorney over financial fraud at the Trump Organization, though two top prosecutors resigned from that investigation, putting its future in doubt. Last month, the former Trump Organization chief financial officer Allen Weisselberg pleaded guilty to a 15-count indictment and admitted to a multi-year tax evasion scheme in a Manhattan district case; he will serve five months in prison and pay $1.9 million in back taxes.

However, all of these investigations are separate from this case. The new civil filing relates to a three-year investigation by James, who questioned Trump under oath in early August (Trump reportedly pleaded the fifth hundreds of times in the interview). James alleges in the filing that Trump's financial statements included 200 false and misleading valuations across 23 properties and assets between 2011 and 2021. The investigation was prompted by the congressional testimony of Michael Cohen, Trump's former personal attorney, who told lawmakers in 2019 that Trump frequently misrepresented his wealth for financial gain.

“The complaint demonstrates that Donald Trump falsely inflated his net worth by billions of dollars to unjustly enrich himself and cheat the system,” James said at a press conference.

Trump responded on social media by calling the lawsuit a witch hunt, and a spokesperson for the Trump organization said it was the “the culmination of nearly three years of persistent, targeted, unethical political harassment.” The former president and his legal team have tried to delay the investigation, or halt it entirely, over the last three years. In April, Trump was held in contempt for refusing to comply with a subpoena.

This is a civil case, meaning that in a worst-case scenario for Trump or his family, they would not end up in prison but would instead face financial repercussions. James is seeking $250 million in financial penalties and an independent monitor for the Trump organization. She also aims to revoke the right of Trump or his children to serve as officers of any company in New York state and to prohibit the Trump organization from making any commercial real estate acquisitions for five years.

Today, we’ll take a look at some reactions to the lawsuit from the left and right, then my take.

What the left is saying.

  • The left generally believes the alleged crimes took place, and hopes James can impose a strong penalty against Trump.
  • Some say Trump's years of fraudulent claims and exaggerations are finally catching up with him.
  • Others say James has a strong hand to land a civil conviction against Trump.

In Slate, Ben Mathis-Lilley summarized some of the alleged crimes.

"1) Playing games with estimates of the value of Trump-owned land in New York state and at Mar-a-Lago that he promised not to develop in exchange for a 'conservation easement' tax break," he wrote. "In the former case, Trump is accused of receiving tax credits that would have been much smaller if the land had been valued accurately; in the latter, he’s accused of promising the government that he wouldn’t develop certain land—and then estimating, in personal statements given to financial institutions, what it’d be worth if he did develop it... Understating the value of Trump International Hotel and Tower in Las Vegas in order to pay less in property taxes.

"Exaggerating the value (and potential value) of various Trump properties so that Deutsche Bank’s 'personal wealth' division would give him favorable deals on loans secured by his net worth and 'personal guaranty.' ... Flat-out lying to a company that provided Trump organizations with surety bonds and another company that insured the organizations against litigation risks about whether Trump’s financial statements had been prepared by third parties (they hadn’t been) and whether he and his businesses were the subject of any ongoing governmental litigation that could lead to investigations (they were)... the best guess of legal experts about whether her office can obtain a verdict against him at trial seems to be 'maybe, but maybe not!'"

In Bloomberg, Timothy O'Brien said Trump and his "spurious" business face a reckoning.

"Trump, a wildly insecure man, has spent most of his 76 years inflating his wealth, achievements and abilities, but James’s civil lawsuit, more than 280 pages long, is the first time his carnivalesque business practices have exposed him to existential legal consequences. James’s suit won’t land the Trumps in prison — only criminal convictions could do that — but it seeks to bar the Trumps from running a business in New York State and may unravel the Trump Organization," he wrote. "Now — for the second time in his career — he has put the family’s business legacy on the precipice. Trash-canning the New York remnants of what his father started about a century ago will weigh on Trump, regardless of whatever he says about it.

"The Trumps have characterized James’s investigation as a political vendetta. An appellate court judge already disagreed with that assessment last spring and allowed the attorney general’s prosecution to proceed," O'Brien said. "A civil case holds advantages for James. She won’t have to prove to a jury that Trump intended to break the law — the high bar prosecutors must overcome in a criminal case. Trump and his son Eric also refused to answer questions posed by James’s prosecutors during depositions. The Trumps chose to invoke the Fifth Amendment’s protection against self-incrimination hundreds of times, which can be used against them in a civil jury trial (something James couldn’t do in a criminal case)."

In Politico, Renato Mariotti said James "has a winning hand."

"James’ lawsuit is full of seemingly damning evidence, outlining a wide-ranging scheme to defraud lenders by vastly inflating the value of Trump’s assets," Mariotti said. "This is a pretty common fraud scheme. Fraud is when you lie to someone to get their money, and a common way to defraud lenders is to lie about the value of the assets used as collateral — or in this case, the assets of the person who personally guaranteed the loan — to make the loan less risky than it seemed to be. James alleges that Trump and his kids did this approximately 200 times between 2011 and 2021, sometimes inflating the value of properties by as much as tenfold, to secure more generous loans and insurance coverage as well as tax benefits.

"When I was federal prosecutor, I frequently prosecuted bank fraud that looked similar to what Trump and his company allegedly did," he wrote. "I even put away a rich real estate mogul who defrauded his lender. It’s not an unusual fact pattern to see. What is impressive is the sheer size of the scheme. Trump allegedly obtained $250 million via fraud over a 10-year period, and the various machinations he used to inflate the value of his holdings was extensive. James alleges that Trump exaggerated the square footage of his triplex apartment in Trump Tower, claiming it was 30,000 square feet rather than its actual size of 11,000 square feet, and therefore should be valued at $327 million rather than $80 million. It’s a price, James noted, that no apartment in New York city has ever commanded."

What the right is saying.

  • The right says the lawsuit is politically motivated, and questions whether it will result in a conviction.
  • Some say it should be thrown out because of James' obvious political partisanship.
  • Others contend James lacks both evidence and a victim.

The New York Post editorial said the James allegations are just political theater.

"The details are jaw-dropping yet no surprise to anyone who has listened to Trump boast about how he is the richest, smartest, most talented man to ever walk the earth," the board wrote. “He values his own apartment at more than $300 million, three times the most expensive sale at the time. Trump overvalued to convince banks to give him money, at the lowest interest rates possible. Whether for lack of due diligence, or because they didn’t care, they gave him the money. So James is rushing to the rescue of . . . big banks?" they asked. "What James appears not to have proven, that which blue-check Twitter has spent years salivating about, is tax fraud. She’s referring her case to the IRS but provides little proof of Trump undervaluing assets to pay less tax.

"Trump haters have to be disappointed. After years of screaming that Trump was a 'crook,' all that James could even allege, in a civil case, is a real-estate developer lied to bankers — think his voters will care one whit?" the board asked. "It’s pretty clear now why Manhattan District Attorney Alvin Bragg didn’t pursue an indictment. This announcement by James, who has a history of performative lawsuits as public advocate, is nakedly political. She ran for office promising to go after Trump, and has been grandstanding during the entire investigation. Not that Trump is wholly untroubled. This adds to his menagerie of legal problems, will dog any political run in 2024, and could ban him from being the head of any business headquartered in the state. Yet with Trump’s luck, he’ll sell his gold-plated tower for a profit and set up his business in Florida, where he already lives anyway."

In The Daily Caller, William Jacobson said it is a baseless lawsuit that represents "full-on Trump derangement syndrome."

"The latest salvo was a major announcement earlier this week of civil, not criminal, charges against Trump, various Trump businesses, and [three] of the former president’s children, based on alleged fraud dating back over a decade in connection with real estate valuations provided to lenders," Jacobson said. "James seeks to shut down the businesses and bar Trump and his family from doing business in New York. Yet no lender is alleged to have lost money, and even The New York Times had to admit that James will have a hard time proving the case: 'Property valuations are often subjective, and … all his loans are either current or were paid off, some before they were due.'

"The lawsuit also comes as polls show James in an unexpectedly tight race, possibly even trailing her Republican opponent," Jacobson added. "The announcement of civil charges against Trump on the eve of the election has the clear appearance of political motivation to boost James. Tish James campaigned on and conducted her office for the purpose of investigating a political opponent and those around him trying to find a crime. That is Soviet-level prosecutorial abuse where individuals are targeted not to prosecute a crime, but to sift through their lives in the hope of finding a crime. And lacking a prosecutable crime, trying to bring them down and purge them from the economic world through a civil lawsuit. James’ conduct is a disgrace to the Office of Attorney General."

In Fox News, Gregg Jarrett said the lawsuit should be dismissed as politically punitive.

"The attorney general alleges that Trump committed fraud by inflating or overstating the value of his real estate holdings, businesses, and personal assets to secure loans from banks," Jarrett wrote. "But such valuations are notoriously subjective. In appraising his holdings, seeking loans, and filing tax statements, Trump has always relied scrupulously on the judgment and advice of real estate experts, lawyers, and tax accountants. Proving that he defrauded lenders by following the counsel of experienced professionals is a high burden that James will struggle to meet. Try as she may, the attorney general could never find any evidence of criminal wrongdoing. Instead, she resorted to a civil action claiming financial fraud. But in such cases the plaintiff must necessarily prove that a victim was harmed in some economic or non-economic manner.

"Here, there are no known victims who were injured," he said. "Indeed, just the opposite occurred. The banks who loaned Trump money profited handsomely from the transactions when they were repaid with substantial interest. They never sued because they were never harmed. Civil fraud is not a victimless offense. As I wrote in a Fox News Opinion column more than a year ago, the behavior of Attorney General James is an affront to justice," he wrote. "Never mind that she was not privy to any evidence or documents showing that he had violated a single state law.  Bereft of facts did not deter her from accusing Trump of 'defrauding Americans.' She publicly denounced him as an ‘illegitimate president' and constantly repeated her campaign pledge to take him down."

My take.

Reminder: "My take" is a section where I give myself space to share my own personal opinion. It is meant to be one perspective amid many others. If you have feedback, criticism, or compliments, you can reply to this email and write in. If you're a paying subscriber, you can also leave a comment.

  • I don't think this lawsuit has much teeth, politically or legally.
  • That doesn't mean Trump won't pay some kind of financial price.
  • It is a reminder of just how much trouble is coming Trump's way from how many angles.

Of all the pending litigation regarding Trump, this one may be the least interesting. What I'm less clear on is how worried Trump should be.

Legally, there are two ways to look at it: On the one hand, James appears to have a strong case. Few people doubt Trump exaggerated his real estate holdings or inflated his own wealth, something he has been documented doing since long before he was president. That James has "the receipts" seems perfectly likely: The alleged claims are specific, absurd, and Trumpian throughout. She also doesn't have to prove any criminal intent in a civil case. Trump and his family's decision to plead the fifth can actually be used against them in a civil jury trial, as evidence they had reason to worry they'd incriminate themselves. James says she found other crimes in the course of her investigation that she has referred to the IRS and U.S. Attorney's Office in Manhattan, but those details are still forthcoming. To be able to punish Trump, she just has to convince a jury he did something that even his allies struggle to refute.

On the other hand, it's not hard for those allies to reframe this as a giant nothingburger. First, in a worst-case scenario for his business, Trump could pay a couple hundred million dollars and give up some of his business interests in New York for five years. But he also may fight and win, as his team just has to convince a few members of a jury that this is just a politically vindictive attorney general making a mountain out of molehill by prosecuting a former president for something that happens all the time in big money real estate. In the end, James will have to find her victim. Right now it appears the victim is supposed to be the banks that made loads of money off of Trump. I'm skeptical of that approach.

Politically, it's perhaps even less important. I've openly praised and criticized Trump in these pages for a range of things, but I think it's increasingly obvious he is guilty of mishandling classified documents and interfering in election results, two crimes that are far more serious with much harsher penalties (politically and criminally) than overstating or understating your real estate holdings to avoid taxes and get loans.

On top of that, James' campaign for AG in New York regularly made me squirm. She was openly partisan, promising to prosecute someone before a case was even opened, and her hunt — which it was — for crimes has led to this: An accusation that Trump inflated his wealth to dupe investors who ultimately made lots of money off him anyway. It's not exactly earth-shattering stuff. And it's not coming from a person anyone views as an impartial authority, which is ridiculous given she is the attorney general.

Trump's biggest issue in this case was that he had to plead the fifth in the first place. If this were the only investigation he was facing, he probably could have been deposed and navigated it with help from attorneys. But since he risked incriminating himself in one of the half dozen other investigations he is involved in, he had no other choice. Of course, if he were to lose this case, owe $250 million in damages and lose the right to buy and sell real estate in New York, that would be a devastating personal blow (on top of financial) to a man who cares so much about his family business and their legacy in real estate. But it wouldn't be a death knell, politically or financially, despite some opinions to that effect.

So, where does this land us? It's totally believable that Trump inflated or deflated his net worth and real estate holdings to skirt taxes and acquire loans. Not just because Trump is Trump, but because it is such a common crime. James's filing doesn't contain any smoking gun emails, texts, or documents, so it is tough to clearly understand how strong her case is. Nevertheless, Trump was unwilling to testify because he is in such grave legal danger in so many other places, which is a big story in and of itself. It's impossible to predict how the trial will go, but it seems likely that this will have very little impact politically — especially given James' reputation.

The upshot, though, is that Trump is in trouble. Both legally and politically. From multiple angles. I'm not sure I'd put this lawsuit among the worst of his problems, but it also doesn’t look like it’s going away anytime soon.

Your questions, answered.

Q: Why are food prices higher? I understand how big demand for a limited supply of other items has caused inflation, but demand for food is what it is. I am not eating more. Are we growing less food? Gas prices are lower, so why aren't food prices getting lower?

— Jean, Palm Harbor, Florida

Tangle: It's a great question. Some people, including me, had speculated that energy costs going down would eventually ease the price of food, an effect we may still see but haven't yet. Bread is 16.2% more expensive than it was a year ago, eggs are up 39.8% and food generally is up 11.4% (from August 2021 to August 2022).

The reasons for food price increase are in many ways tied to inflation broadly: The pandemic, the war in Ukraine, and fertilizer. The pandemic disrupted supply chains from production to retail, and we are still dealing with the fallout from that. Labor shortages have driven up the cost of food production, since it's more expensive to hire inspectors. Energy prices going up means transportation of food becomes more expensive, which means the cost of food goes up. And while it’s true fuel prices are down, they’re still much higher than they were a year ago.

Then there’s the war: Russia and Ukraine are the largest producers of wheat in the world. When the war began, many analysts speculated it would affect food supply and prices. They were right. The two sides are working out ways to keep wheat flowing, but Ukraine is still unable to fulfill its role completely. Meanwhile, some fertilizer prices have shot up 300% as a result of the war, too. Both Ukraine and Russia are major suppliers.

Then there are more tangential but still important factors: drought in Brazil. A deadly avian flu. Rising demand for groceries. Floods and droughts in the U.S. that damage crops. All of this is straining a system that, pre-pandemic, global entities were warning was at risk.

Want to ask a question? You can reply to this email and write in (it goes straight to my inbox) or fill out this form.

Under the radar.

The United Nations food chief David Beasley warned of widespread famine, citing a perfect storm on top of a perfect storm globally. He urged Gulf nation donors and billionaires to give up a few days of profits to avoid a food fertilizer crisis and prevent widespread shortages next year. When Beasley took over his post five years ago, he said 80 million people globally did not know where their next meal was coming from. That number went up to 135 million in 2020, which he blamed on climate change's impact on food supply. Now, after the pandemic and war in Ukraine, that number has doubled to 276 million. “Within that are 50 million people in 45 countries knocking on famine’s door,” Beasley said. “If we don’t reach these people, you will have famine, starvation, destabilization of nations unlike anything we saw in 2007-2008 and 2011, and you will have mass migration.” Associated Press has the story.


  • 83. The number of federal court judges President Biden has confirmed so far in his term.
  • 69.  The number of federal court judges President Trump had confirmed at this point in his term.
  • 231. The total number of judges Trump confirmed while in office.
  • 17. The percentage point lead Republicans have over Democrats on handling the economy, according to a recent Washington Post poll.
  • 18. The percentage point lead Republicans have over Democrats on handling inflation, according to a recent Washington Post poll.
  • 17. The percentage point lead Democrats have over Republicans on addressing abortion, according to a recent Washington Post poll.

Have a nice day.

A 12-year-old girl has made over 200 blankets for homeless people — and she is making them out of recycled chip bags. Alyssa, who lives in Wales, said she has made 200 blankets using almost 10,000 thrown away chip bags in the last year. Each one takes about an hour to make, and she uses an iron to fuse them together into a single sheet. The blankets then go to organizations that support homeless people. Alyssa got the idea from a woman named Pen Hutson, who started a company called the Crisps Packet Project to make blankets and thermal survival bags out of recycled chip bags. BBC News has the story.

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