The Trump Organization gets charged.

What does this mean for Donald Trump?
Isaac Saul Jul 7, 2021
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 — then “my take.” You can read Tangle for free or subscribe for Friday editions, and you can reach me anytime by replying to this email. If someone sent you this email, they’re asking you to sign up. You can do that by clicking here.

Today’s read: 9 minutes.

The Trump Organization indictment. Plus, a new Blindspot Report, some fascinating numbers and a chance to submit a question to Tangle.

Photo: ajay_suresh / Flickr

Quick hits.

  1. Haiti’s President Jovenel Moïse was assassinated in his private residence on Wednesday. The country has become increasingly unstable during Moïse’s rule by decree for more than two years after Haiti failed to hold elections. (Associated Press)
  2. Eric Adams won New York’s Democratic primary race for mayor, positioning him to become mayor of America’s largest city later this year. (The New York Times, subscription)
  3. President Joe Biden announced the potential for “door-to-door” outreach to try and vaccinate as many Americans as possible. (The Washington Post, subscription)
  4. The president of one of the largest teachers’ unions in America has vowed to protect instructors from lawsuits over teaching lessons on racism or critical race theory. (The Washington Post, subscription)
  5. U.S.-backed Syrian fighters and American troops thwarted a rare drone attack on a base in eastern Syria around the same time rockets hit a base housing U.S. troops in neighboring Iraq. (Fox News)

What D.C. is talking about.

The Trump Organization. On Thursday, former President Donald Trump’s company and its longtime finance chief were indicted for a “sweeping and audacious” tax fraud scheme. Allen Weisselberg, the Chief Financial Officer, is accused of overseeing a scheme that collected more than $1.7 million in off-the-books compensation, which included rent, car payments and school tuition, according to the Associated Press.

Former President Trump was not charged, but prosecutors say he allegedly signed checks that were at the center of the allegations. New York authorities, led by New York District Attorney Cy Vance, have been investigating the Trump Organization for two years, and these are the first charges to stem from that investigation, during which Vance and his team subpoenaed millions of documents and years of tax returns from the Trump Organization.

Weisselberg, who is 73, is facing charges of grand larceny, which carry five to 15-year sentences in prison. He alone is being accused of cheating the state out of more than $900,000 in unpaid taxes and refunds. The tax fraud charges against the company could be paid back with a fine of double that amount (or $250,000, whichever is larger after final conviction). Some legal analysts have speculated that Weisselberg’s intimate knowledge of the company is what prosecutors are actually after and that the charges against him are going to be used to pressure him to cooperate.

Weisselberg and the company have pleaded not guilty, and former President Trump called the charges a “political Witch Hunt by the Radical Left Democrats.” Weisselberg had to surrender his passport and was released without bail. Below, we’ll take a look at some reactions to the charges from the right and the left, then my take.


What the right is saying.

The right says the charges are more about politics than justice.

The Wall Street Journal editorial board said years of investigations have come up with a “small tax case.”

“Democrats of all stripes have devoted years to investigating Donald Trump and finding very little,” the board said. “The latest example is Thursday’s indictment of the Trump Organization and its chief financial officer for classifying employee benefits as business expenses rather than compensation. Manhattan D.A. Cyrus Vance Jr. and New York Attorney General Letitia James subpoenaed millions of documents and years of tax returns, and that’s all they’ve come up with. The indictment lists 15 criminal counts, including second degree grand larceny. But the evidence in the indictment boils down to misreporting compensation to the Internal Revenue Service and New York tax authorities.

“If true and willful, this is rotten behavior,” the board said. “But it isn’t Teapot Dome, and disguising compensation as expenses is far from unusual in corporate America. It’s typically handled as a civil matter and settled with the payment of back taxes, interest and fines. It is rarely the basis for a criminal indictment. The prosecutors are throwing the book at Mr. Weisselberg to get him to turn state’s evidence against the former President. The same goes for the highly unusual decision to indict the Trump Organization, which is presumably intended to squeeze its business prospects. Notably, neither Mr. Trump nor his children who run the business were charged.”

The New York Post called the charges a “travesty of justice.”

“The company’s chief financial officer, Allen Weisselberg, walked in on his own — yet the prosecutors made a show of handcuffing him and walking him down a hall crowded with reporters,” The Post editors said. “Vance acquired years of Trump Organization tax records, yet all he’s found is an alleged failure to pay proper taxes on corporate perks like cars, tuition and apartments. Any other company and it’s a civil suit, an audit, perhaps a hefty fine.

“If Vance had any evidence suggesting serious fraud (as press leaks long suggested), he’d have included them already,” the editors added. “MSNBC hosts and blue-checked Twitter are slobbering that the CFO will cut a deal and reveal the real crimes. Why hasn’t he flipped yet, they yell. Maybe because there’s nothing to flip on? … We’ve seen the nation grow ever more partisan in recent decades, with each party starting congressional investigations into the other when it’s in power. But this is a new frontier. Offices like the Attorney General of New York and District Attorney of Manhattan, which should be focused on crime, not politics, have become inquisitions, trying to mete out the revenge Nancy Pelosi couldn’t. It’s appalling — and will only backfire on them.”

In RedState, the blogger Bonchie wrote that the left is “never going to stop.”

“It’s impossible to deny that the charges filed are anti-climatic [sic] in the extreme for a far-left that has moved from one great hope to another pursuing the dream of ‘getting’ Donald Trump,” he wrote. “Unpaid taxes on fringe benefits is hardly the frog march in handcuffs of the former president they were hoping for… Of course, the next thing, in this case, is the idea that Weisselberg will ‘flip.’ How many times do we have to do this?

“Here’s the thing with trying to get someone to flip — they have to have someone to actually flip on,” he concluded. “For years we’ve seen person after person supposedly primed to “flip” on Trump. None of it has amounted to anything, and there’s no reason to think these hopes will amount to anything now. At some point, the logical conclusion is that Trump may not be everyone’s cup of tea politically, but that he’s simply not a criminal. When even the political prosecutors in New York are shooting blanks, it’s probably time to pack it in.”


What the left is saying.

The left says the charges expose Trump and his acquaintances for the fraudsters they are.

“The charges in New York against the Trump Organization and CFO Allen Weisselberg are extensive and serious,” Dana Milibank wrote in The Washington Post. “Scheme to Defraud. Conspiracy. Grand Larceny. Criminal Tax Fraud. Offering a False Instrument. Falsifying of Business Records. There were 15 counts in all, and New York prosecutors left hints that this is but an amuse-bouche compared to what’s coming. There were references to unnamed ‘other executives’ compensated the same way Weisselberg was, ‘others’ who implemented the fraudulent scheme, ‘including unindicted co-conspirator #1.’

“But what’s most remarkable about the indictment is how unremarkable it is,” he wrote. “Fraud? Conspiracy? Falsifying? Anybody who has lived through the past five years knows that this is Trump’s M.O. He ran the country with an endless series of falsifications, conspiracies and frauds. He ran his charity as a personal piggy bank. The surprising thing would be if Trump hadn’t run his business the same way. The frauds and falsehoods of the Trump presidency led hundreds of thousands of Americans needlessly to lose their lives and provoked the worst attack on the U.S. Capitol since the War of 1812. Compared to that, the scheme alleged by prosecutors is small potatoes.”

In a CNN op-ed, Jennifer Rodgers said “this is very bad news for Donald Trump.”

“First, the charges are more serious than prior reporting suggested,” Rodgers said. “Stories in the last few days undersold the case by describing it as one about fringe benefits, of the sort rarely prosecuted. While it is true that this is a case about unreported income and the failure to pay taxes on it, its scope is greater than many expected, for a few reasons. The scheme charged is a 15-year conspiracy to evade taxes, described as involving numerous Trump Organization executives and employees, only one of whom has been charged so far.

“We also know from Thursday's indictment and related proceedings that, as has been previously reported, Weisselberg is not cooperating with the investigation,” she added. “And, given his central role in the charged scheme and other aspects of the Trump Organization's business that are still reportedly under investigation, he almost certainly still has a chance at a cooperation deal -- and many a defendant has changed his tune when the relatively vague notion of a potential criminal case is replaced by the cold, hard, reality of being arrested, handcuffed, fingerprinted and taken to court… While many unknowns persist, there is certainty on one point: as Trump's strong reaction to these developments demonstrates, Thursday's indictment is very bad news for the former president, with potentially much more bad news to come.”

In Slate, Adam Chodorow said the charges were a “master class in tax evasion.”

“Everyone knows they didn’t get Al Capone for all the heinous acts he did as a gangster; they got him on tax evasion. Tax issues may well turn out to be the Achilles’ heel for the Trump Organization and some of its top players. Capone failed to report and pay taxes on his illicitly acquired gains,” he wrote.

“The 45th president’s real estate and licensing company now stands charged with failing to report and pay taxes on a variety of fringe benefits to key employees after an investigation by the New York State attorney general and the Manhattan district attorney,” Chodorow added. “Trump’s lawyers have called the charges petty and contend they are politically motivated. Others view them as designed to put pressure on the organization’s longtime chief financial officer to turn state’s witness. As a tax professor, I see them as a fantastic opportunity to talk about tax policy and the cat-and-mouse games that people play to avoid paying their fair share.”


My take.

The charges against Weisselberg are for the classic kind of sleazy, New York rich guy tax scheme you hear about all the time. That it comes from someone associated with the Trump organization is no surprise: talk to any New York-based reporter who covered the former president before he was the president and they’ll tell you that he was, in no uncertain terms, known for cutting these kinds of corners.

If the charges are true (and let’s remember Weisselberg is the only person being accused at this time), this is what it looks like: Weisselberg allowed his son Barry to live in a Trump apartment where he was charged just $1,000 a month for a Manhattan flat that probably costs five times that. While his son was there, Weisselberg lived in a company-paid apartment in Manhattan while claiming residency in Long Island, allowing him to avoid hundreds of thousands of dollars in taxes. Along the way, he had the company pay for his utility bills, parking, private school tuition for his grandchildren, and new Mercedes Benzes. The perks were listed in duplicate Trump company documents, complete with spreadsheets outlining where the money really went, but not on Weisselberg’s tax returns, nor did the company withhold taxes on their value.

Throughout his tenure at the organization, the company allegedly issued checks at Weisselberg’s request to pay for personal expenses like home remodeling or flat-screen TVs. Essentially, he was getting a bunch of under-the-table cash and benefits that amounted to nearly two million dollars in avoided taxes.

So those are the charges. Even if all of them are true, you’ll have to excuse me if my reaction is… muted. For two years, since Trump’s presidency has been coming to an end, I’ve been hearing about how he was certain to be rotting in a jail cell imminently. It’s always been a farcical fantasy of the left, and it’s more absurd now than it was two weeks ago. Here’s a tweet I blasted out December 3, 2020, shortly after Trump lost the election and these claims were hitting a fever pitch:

Again: this is more true now than it was then. Weisselberg is not going to “flip” because there probably is not anything to flip on. What else could Cy Vance and his team possibly need? The Trump Organization will pay fines. Maybe it will be under financial duress for a few years. Maybe some people will get fired. Maybe they will have trouble getting loans. None of that would be new for Donald Trump’s businesses: that’s been the story of his career. I’d be shocked if it took down the company, and I’ll guarantee you right now you’re never going to see Trump sitting in a prison cell.

The best prosecutors in the world got essentially unfettered access to Trump’s organization and after two years of investigation, millions of documents, tax returns, Weisselberg’s ex-wife cooperating and all the rest, they came up with this. At the most, we’ll see a few other charges for executives in the Trump Organization — but the Chief Financial Officer is probably as high as this is going. And the charges amount to him taking money under the table to pay for his grandkids’ private college, the housing for his son, and buying his wife fancy cars. It’s gross behavior, and as a New York taxpayer who extends himself to pay my fair share every year, it’s not appreciated in the least. But Trump in jail? The Trump Organization collapsing? Al Capone? Please.

We’re not even close to that — we’re further than ever. This is run-of-the-mill stuff, which says just as much about the corruption of corporate America as it does about how Trump handles his business. And yet, as Trump rightly believes, the odds of this story benefitting him in a potential 2024 run (as more evidence of a “witch hunt”) are greater than it hurting him. Much like in 2016 and throughout his presidency, Trump’s political instincts are still better than a lot of the pundits on the left, even if his businesses are rife with corruption and fraud.


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Your blindspot.

Tangle has very few partners because we are very careful about who we work with. And one of them is Ground News, an exceptional app and website that tracks the political bias in news reporting. I occasionally feature parts of Ground News’s “Blindspot Report” in Tangle. The Blindspot Report tells you what you were likely to miss based on your political leanings and the news feed bubble you’ve created for yourself.

If you’re on the left, you probably missed a story about police ambushes being up 91 percent over the last year.

If you’re on the right, you probably missed a story about how 150 people died in shootings across the U.S. over the Fourth of July weekend.

Want to check out Ground News’s bias ratings, blindspot reports or other news sources? Click here.


Reader question.

We’re skipping today’s reader question to make room for the Blindspot Report. But if you want to ask a question to be answered in the newsletter, you can simply reply to this email and write in. It goes straight to my inbox. You can also fill out this form.

A story that matters.

When President Biden signed a stimulus package into law in March, it was intended to stabilize city finances with $350 billion to alleviate the pandemic’s effects. The money came with limited restrictions on how it could be used. Now, the cash is starting to flow, and cities are acting quickly to spread it around. $194 billion has been doled out already, and city officials are devoting funds to “keeping public service workers on the payroll, helping the fishing industry, improving broadband access and aiding the homeless,” The New York Times reports. Now that the money is getting to cities, fights are breaking out over how to spend it — or whether it’s needed at all.


Numbers.

  • 64%. The percentage of Americans who believe Donald Trump committed crimes before he became president, according to a 2019 Quinnipiac poll.
  • 8,400. The number of votes Eric Adams was leading Kathryn Garcia by in the New York City mayoral primary, as of this morning.
  • 51.7%. The percentage of all U.S. cases of Covid-19 that are now the Delta variant.
  • 23,549. The total number of new coronavirus cases reported on July 6.
  • 255,966. The total number of new coronavirus cases reported on January 6.
  • 64%. The percentage of people who got the Pfizer vaccine and were protected from infection by the Delta variant of coronavirus, according to a new study in Israel.
  • 94%. The percentage of people who got the Pfizer vaccine and were protected from serious illness from getting the Delta variant of coronavirus, according to a new study in Israel.
  • 54%. The increase in national alcohol sales between March 14-21, 2020 and March 14-21, 2021, according to new Nielsen data.

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Have a nice day.

In India, energy firms have found a way to kill two birds with one stone: by installing solar panels over rivers and canals. Because India is so densely populated, land is scarce, making giant solar fields difficult to install. But energy firms found a solution by installing the panels over the tops of canals and waterways, which has two major advantages: 1) They cover the canals and prevent water evaporation, which preserves more water and flow. 2) The canals keep the solar panels cooler, which makes them work more efficiently. BBC has a fascinating piece on how the projects are kicking up a multitude of other benefits as well, even if there are some drawbacks. (BBC)

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Isaac Saul

I'm a politics reporter who grew up in Buck County, PA — one of the most politically divisive counties in America. I'm trying to fix the way we consume political news.

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