Feb 21, 2024

The Trump fraud ruling.

Plus, a reader question about a new Florida law.

I’m Isaac Saul, and this is Tangle: an independent, nonpartisan, 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 broke down the Trump civil fraud ruling. Plus, a reader question about a new Florida law.

Have you changed?

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Quick hits.

  1. For the third time, the United States vetoed a resolution from the United Nations calling for an immediate ceasefire in the Gaza strip. The U.S. is circulating a rival resolution that calls for a temporary ceasefire and hostage release. (The vote
  2. A former FBI informant charged with fabricating bribery allegations about President Biden and his son Hunter told federal officials he had ties to high-level Russian agents. (The charges)
  3. In a Fox News town hall, former President Donald Trump revealed his vice president shortlist includes Florida Gov. Ron DeSantis, Sen. Tim Scott (R-SC), entrepreneur Vivek Ramaswamy, South Dakota Gov. Kristi Noem, Rep. Byron Donalds (R-FL), and former Rep. Tulsi Gabbard, a Democrat turned independent. (The list)
  4. The U.S. Supreme Court opted not to review a case challenging the use of socioeconomic status during the admissions criteria at a prestigious high school. Parents had sued over the policy, saying it discriminated against Asian Americans. (The case)
  5. A Russian helicopter pilot who had defected to Spain was shot and killed. (The death) Separately, Russia said it arrested a dual U.S.-Russian citizen who was charged with treason for donating money to the Ukrainian army. The 33-year-old woman is a Los Angeles resident who returned to Russia to attend university. (The arrest)

Today's topic.

The fraud judgment against Trump. On Friday, Manhattan judge Arthur Engoron ordered former President Donald Trump to pay over $354 million and barred him from serving in a top role of any New York company for three years. Engoron's decision concludes the civil fraud suit against Trump for misrepresenting his wealth for financial gain while leading the Trump Organization. Trump is expected to appeal, which could take more than a year and would delay any enforcement of the penalty.

Engoron also barred Donald Trump Jr. and Eric Trump from holding positions at any New York corporation as officers or directors for two years, a move that could shake up the Trump Organization's leadership. Along with Trump and his oldest sons, two former executives were also found civilly liable for issuing false documents and falsifying records, among other related offenses. 

Reminder: Following congressional testimony from Trump's former personal lawyer Michael Cohen that he improperly inflated his wealth, New York Attorney General Letitia James sued Trump, accusing him of systematically inflating and deflating the values of his properties and assets to receive low-interest rate loans and pay lower state taxes. Among other things, James accused Trump executives of tripling the square footage of his Trump Tower triplex penthouse in order to concoct $200 million of value.

The inflated net worth allowed Trump to receive 1.83% interest rates from Deutsche Bank’s private wealth management division. Otherwise, he would have had to use the bank’s commercial real estate division, where he was once offered rates as high as 10%.

Trump's net worth has been estimated at around $2.5 billion. He promised to maintain a net worth of at least $2.5 billion in certain loan agreements, a guarantee that a Deutsche Bank representative testified was “the reason” he received favorable pricing on loans.

Trump testified that he relied on his accounting team to quantify his wealth and properties. His lawyers argued that there was a plausible basis for all the valuations, and that the private lenders involved in the deals all made a profit and never alleged any breach of contract. Deutsche Bank, for instance, assumed in its own analyses Trump's net worth was much lower than he stated, but still acted as his principal lender. Nobody from the bank testified that the loans should have been priced differently, and some bank employees testified Trump's business was in high demand among banks.

Initially, James sought $250 million in penalties, then asked for $370 million, a number she said accounted for all the financial gains Trump accrued through his deceptive tactics. Close to half of the $355 million Engoron ordered Trump to pay was associated with low-interest rate financing, with another $187 million coming from his sale of two properties in New York and Washington, D.C. In a deposition last year, Trump said he has roughly $400 million in cash. He will have to pay the court in cash or with an appeal bond, even as the appeals process goes through, and would be given the money back if he were to win. 

“The frauds found here leap off the page and shock the conscience... Their complete lack of contrition and remorse borders on pathological,” Engoron said in the 92-page decision. “They are accused only of inflating asset values to make more money. The documents prove this over and over again.”

Trump responded on social media, saying "This ‘decision’ is a Complete and Total SHAM. There were No Victims, No Damages, No Complaints."

Trump has already been ordered to pay $83 million in a defamation lawsuit filed by the writer E. Jean Carroll, whom he was found liable for committing sexual abuse against in a civil trial last spring. Separately, Trump is also facing federal indictments for ordering hush money payments, mishandling classified documents and attempting to undermine the 2020 election, as well as state racketeering charges in Georgia for organizing a conspiracy to overturn the election results there.

Today, we're going to take a look at some arguments from the left and right about this ruling, then my take.

What the left is saying.

  • The left mostly welcomes the ruling, suggesting it foreshadows more legal setbacks for Trump. 
  • Some worry that the heavy penalty imposed by Engoron will prompt new political support for Trump. 
  • Others say Trump’s debts make him ripe for exploitation by wealthy interests. 

In MSNBC, Glenn Kirschner wrote “Trump’s loss in N.Y. is a powerful predictor of what’s to come in his criminal trials.”

“Trump fights every battle, large and small, in the court of public opinion. That court has no rules of engagement, no rules of evidence and no rules of procedure… But when his legal disputes move into courts of law, he loses. When the rules of evidence and procedure apply to legal contests, Trump loses,” Kirschner said. “In public, Trump has insisted he never overstated the value of his properties, yet Judge Engoron found that the documentary evidence of fraud was so overwhelming that even before trial, he ruled that Trump, his sons and the Trump Organization’s chief financial officer had fraudulently inflated asset values.”

“This string of civil trial losses augurs poorly for the former president’s coming criminal trials. First, unlike civil trials, defendants are required to attend all trial proceedings in criminal cases… Furthermore, as a general proposition, criminal trials are more exacting affairs than civil cases,” Kirschner wrote. “Once Trump is constrained by the rules of evidence and the rules of criminal procedure — no longer allowed to say what he wants about stolen elections and telepathically declassifying documents — his series of trial losses is very likely to continue.”

In CNN, David Orentlicher cautioned “don’t misread Trump’s loss.”

“While Friday’s ruling seems like a significant setback for Trump, it more likely will end up as a defeat for the legal system. So far, the prosecutions of Trump have been followed by an increase in his support and a decline in public trust in the legal process, at least among Republicans,” Orentlicher said. “Public officials have done more damage to the law than to Trump, pushing too far in their efforts to punish the former president. Instead of leading many voters to distrust Trump, the legal cases are leading voters to distrust the legal system.”

“Engoron has stretched the law in problematic ways. When he concluded that the former president had fraudulently inflated his net worth in financial statements to banks and other lenders, the judge initially ordered that Trump’s New York companies be dissolved. Moreover, his order applied to all of the companies, not just the ones implicated in the wrongful statements,” Orentlicher wrote. “When prosecutors or judges overreach, they play into Trump’s strategy of victimhood, increasing his chances for reelection and compromising the public’s faith in our legal system.”

In Vox, Abdallah Fayyad said “Trump is suddenly in need of a lot of cash. That’s everyone’s problem.”

“Trump isn’t just one of the country’s richest men, with an estimated net worth in the low billions; he’s also running to serve a second term as president of the United States. And for any candidate for public office — let alone the presidency — being cash-strapped while owing such significant amounts of money could be a serious liability,” Fayyad wrote. “You don’t have to look far to find the reasons why. Trump’s first term was riddled with conflicts of interest, and that’s in no small part because of his financial well-being (or lack thereof, depending on how you look at it).” 

“Lawsuits aside, Trump also has plenty of debt on his hands. His financial disclosures filed with the Federal Election Commission last year showed that he has at least $200 million in debt. And according to Forbes, his business owed roughly $1.3 billion in 2021,” Fayyad said. “The problem for Trump isn’t just his inability to self-fund his White House bids. The fact that he is constantly on the lookout for new loans or sources of income gives special interests a vehicle to curry favor with him.”

What the right is saying.

  • The right is outraged by the ruling, calling it another political move to damage Trump’s election chances. 
  • Some say the penalty was excessive but push back on the notion that Trump’s actions were victimless.  
  • Others predict the ruling will scare businesses away from operating in New York. 

In The Federalist, Shawn Fleetwood criticized the decision as “Democrats’ latest gambit to rig the 2024 election.”

“Friday’s ruling was hardly surprising given the level of bias Engoron demonstrated throughout the trial,” Fleetwood wrote. “The civil penalties levied against Trump represent Democrats’ latest attempt to weaponize the legal system against the former president to keep him from getting reelected this fall. Across four different venues, the Biden Justice Department and Democrat prosecutors have levied a collective 91 criminal indictments against Trump, with the goal of imprisoning the likely Republican presidential nominee before the November election.

“And these charges don’t even include the various attempts by Democrat election officials to kick Trump off the ballot in states such as Maine and Colorado. Despite casting themselves as the party of ‘democracy,’ Democrats are utilizing every tool at their disposal to deprive voters of a free and fair electoral process. If they aren’t attempting to throw Trump in prison, they’re trying to strip away his financial assets and ability to sustain a living.”

For The Cato Institute, Walter Olson assessed the “good and bad critiques” of the verdict.

“The power to order equitable disgorgement, as it is called, is one that judges often use sparingly, in part because its consequences can be harsh,” Olson said. “The judge found Trump used faked‐​up statements of financial condition to swing the necessary financing on his Old Post Office hotel project in Washington, DC. As a result, the judge ordered the former president to disgorge the entire $126,828,600 in profits he made over the five years he owned the project. This kind of reasoning leaves fortunes to hang on the web a prosecutor can spin with but‐​for arguments.”

“But some of the defenses offered on behalf of Trump simply don’t hold water, chief among them the claim that Trump’s conduct was somehow victimless and that the counterparties, primarily banks and insurance companies, came out fine,” Olson wrote. “Lying about his net worth and property values also enabled Trump to get markedly lower interest rates from banks. Engoron credited an expert for the state who estimated that Trump saved $168 million in bank interest by posing as a better risk than he was. You can argue about this number, but it’s hard to argue it’s zero.”

In Fox News, Jonathan Turley explored the “unexpected consequences” of the ruling. 

“By making the fine so large, Engoron not only makes an appeal difficult, but could guarantee that Trump will lose tens of millions even if his judgment is dramatically reduced or tossed out,” Turley said. “As New Yorkers cheer this moment, many business leaders are likely wondering if ‘there but for the grace of God go I.’ Undervaluing or overvaluing property is a common practice, particularly in real estate. That is why representations, like the one made by the Trump Corporation, come with a warning that estimates are their own and that the banks need to make their assessments.”

“The line between doing business and a public execution now appears to be at the dubious discretion of the attorney general. That is not the type of assurance that most businesses would accept in risking billions in investment,” Turley wrote. “Creating an ad hoc business code for Trump undermines the city's reputation as a premier jurisdiction for corporate and tax law. If the rate of exit increases, it will impact not just employees working for these companies (like the Trump companies) but the vast network of supporting businesses, including law firms.”

My take.

Reminder: "My take" is a section where I give myself space to share my own personal opinion. If you have feedback, criticism, or compliments, don't unsubscribe. Write in by replying to this email, or leave a comment.

  • I want Trump to have his day in court for election interference, not for civil fraud.
  • This punishment for him defrauding some companies, one of which is testifying in his defense, is complete overkill.
  • Aggressively pursuing these kinds of cases provides political cover for Trump on the ones that really matter.

Yesterday, I described Trump's efforts to pressure election officials to find votes, submit false electors, or otherwise change the 2020 election result to be the most dangerous and despicable acts he took while in office.

This case is on the opposite side of the spectrum.

Yes, there is strong evidence Trump inflated or deflated his net worth to his advantage. And yes, Trump (and plenty of other real estate developers) have been doing that since long before he became a presidential candidate. But the details of this case, and how the law is being used to try to bankrupt Trump, are egregious to the point of being astonishing.

Let me be clear here: The Justice Department's investigation into Trump's mishandling of classified documents is not some political hit campaign. Nor is the investigation into his actions leading up to January 6. Nor is the Georgia investigation into his conduct there. Trump's actions, egregious in their own right, brought those criminal prosecutions to his doorstep. And while he can blame the media and the so-called deep state for some things, he can't blame them for those indictments.

But this? It truly does reek of a political prosecution. Which makes it dangerous not just on the face of it, but because it manifests all the biggest fears so many supporters of the former president have.

What I thought was the most genuinely illuminating piece about this case came from Steven M. Cohen in The Wall Street Journal, and since he explains much of this better than I can I'm going to quote and refer to him heavily.

Cohen explained that James used a little known statute in New York called Executive Law 63(12) that empowers an attorney general to pursue cases involving "repeated fraudulent or illegal acts or... persistent fraud or illegality in the carrying on, conducting or transaction of business.” James can then petition a court to order damages or restitution, prohibit the continuance of those practices, or even cancel incorporation status. Cohen rightly points out that "James obtained all this and more."

Engoron said in court that the conduct being debated only needed to have the "capacity or tendency" to deceive, rather than include a party that was actually deceived. This statute is supposed to protect the public from persistent fraud, but in this case we are mostly looking at Trump's interactions with complex, private business entities who were already presuming he was not being totally honest.

Moving on from that oddity, James doesn’t even prove any party suffered a loss. Again: Nobody is suing Trump. The banks, the lenders, the real estate entities — they've all profited from the business they did with Trump. Deutsche Bank representatives testified on his behalf in court, while the attorney general is simultaneously trying to disband Trump's entire business on the public's behalf because of Trump's conduct in his business dealings with them. Nobody should overlook how bizarre that is.

Cohen, a former assistant U.S. attorney and chief of staff to New York Gov. Andrew Cuomo (D), has a hard time not celebrating the news. "Many of us are delighted to see Mr. Trump get his comeuppance. We believe that his 'art of the deal' is a version of the long con," Cohen said, adding that James "should be credited with a novel use” of an existing statute.

But Cohen also describes why even he finds the result so uncomfortable. 

"It is worth considering whether, in the quest to get Mr. Trump, many of our public officials may be pressing the law in ways that will outlive the cases against the former president... Shouldn’t we consider whether this is the appropriate statute and proper proceeding to prove that case? And shouldn’t we be concerned that the further expansion of this law is something we may regret? The Trump maelstrom continues to contort, if not wreak havoc on, the institutions that seek to tame it."

That’s the heart of the matter for me. In seeking to rein in Trump's behavior, James and Engoron have gone far beyond what seems reasonable. That doesn’t mean Trump should avoid all repercussions for his actions here. Specifically, paying any back taxes he owes or has evaded — money that belongs to the public — would be appropriate. He did lie, he has a history of harmful fraud, and the idea that "nobody got hurt" in this case is not enough to wave it all away (someone who drives drunk without crashing their car should not be exempted from any kind of accountability). But, to steal a line from The Wall Street Journal editorial board, "this remedy is like using a Hellfire missile to annihilate a shoplifter."

What we're left with is the peculiar sense that Trump is both guilty of something real but simultaneously the victim of something more insidious and far-reaching. From a legal perspective, this should be uncomfortable for everyone. It should also raise questions about James, who campaigned for attorney general specifically on a promise to go after Trump, and Engoron, who seemed throughout the trial to have an open animosity for the former president. From a political perspective, it is exactly the kind of outcome Trump seeks to prove he’s a victim — and it’s the kind of proof that is going to continue to insulate him from public accountability for far more harmful offenses.

Disagree? That's okay. My opinion is just one of many. Write in and let us know why, and we'll consider publishing your feedback.

Your questions, answered.

Q: What do you think of the law that the Florida state legislature along with Governor DeSantis passed in May 2023 that allows the death penalty to be imposed (by a jury vote of 8-4, instead of an unanimous vote) on child sex abusers?

— Richard from Fernandina Beach, Florida

Tangle: Before I give you my opinion, let me clarify something: You’re referring to two separate bills. First, in April of 2023, Florida passed a law to allow juries to recommend the death penalty in 8-4 decisions instead of by unanimous vote. That isn’t common — Alabama is the only other state to allow the death penalty from a non-unanimous jury — but it may not be unconstitutional, either. This law only impacts sentencing; a guilty verdict still requires a unanimous decision. However, a similar law was found to be unconstitutional in Louisiana, so it’s very likely that this first law will be challenged in court.

The second law, signed by Florida Gov. Ron DeSantis on May 1 of last year, authorizes the death penalty to be used on criminals convicted of child rape. This past December, that law was used for the first time. So yes, it is possible for a person to be convicted of child rape in Florida and put to death on an 8-4 jury recommendation, but because of two separate laws.

What do I think about them? I’m always open to changing my mind, but this is an area where my opinion has never changed. I don’t support the death penalty, in any case, and I don’t support bills that expand it. For the law passed in April, it’s easy for me to hold that position consistently. For the law passed in May, it feels a little harder because of the absolutely gruesome and heinous nature of the crime. It’s hard to imagine a person committing an act so vile and hurtful. But as unimaginable as it is, those perpetrators are still people.

And the same logic I use in other cases still applies. Ending their lives does not undo the harm they caused. And study after study says the death penalty does not work as a deterrent. 

Not convinced? Consider that, by some estimates, the wrongful conviction rate is 4%. Consider that not every government prosecutor and officer is scrupulous. We wrote a piece in September about how the FBI is still entrapping people, in some cases violating the civil rights of Americans, because the public sees anyone who committed terrorism or child abuse as subhuman. Consider that it’s possible for a person to be accused of attempted child rape just for meeting an adult police officer who is pretending to be a teenager. With all that in mind, do you think it’s a good idea to make it easier for people to be put to death? 

I don’t.

Want to have a question answered in the newsletter? You can reply to this email (it goes straight to my inbox) or fill out this form.

Under the radar.

The Biden administration is quietly easing its proposed requirements to aggressively cut tailpipe emissions and ramp up electric vehicle sales. Automakers have urged Biden to moderate his policy, saying electric vehicle technology is still too costly for most U.S. consumers and more time is needed to build charging infrastructure. In 2023, the Environmental Protection Agency (EPA) proposed a 56% reduction in new vehicle emissions by 2032, which would require automakers to aim for 60% of their new vehicle production to be electric vehicles by 2030. Under the new regulations that are expected to be unveiled next month, EVs will account for less than 60% of total vehicles produced by 2030, though the final number is not yet clear. Reuters has the story, 


  • $443.7 million. The sum of financial penalties and fines imposed on Donald Trump as a result of civil litigation since 2023. 
  • $76.7 million. The amount Trump’s presidential campaign and his other fundraising organizations have spent on legal fees over the last two years, according to an analysis by the Associated Press. 
  • $51.2 million. The amount Trump’s leadership political action committee, Save America, spent on legal fees in 2023 alone. 
  • $36.7 million. The amount raised by Save America over the final six months of 2023. 
  • 4.1%. The highest effective tax rate Trump paid on his income between 2015 and 2020, a bill of $999,466 in 2018.
Note: Not all income brackets are included in this graph, so the total percentage of income tax collected (represented on the Y axis) does not add to 100%. 

The extras.

Yesterday’s poll: “It's not clear if she's violated the letter of the law but perceptions matter and she has lost credibility on that front,” one respondent said about Fulton County District Attorney Fani Willis.

What do you think of Judge Engoron’s ruling in District Attorney Letitia James’s civil fraud suit against Donald Trump? Let us know!

Have a nice day.

Chad McIntyre is a long-haul truck driver from Decatur, Illinois, who travels with his co-pilot —  a spirited 15-pound cat named Tyler. At a truck stop in Nevada, Tyler managed to escape. Somehow, he turned up hundreds of miles away at another truck stop in Wyoming, where he was taken to the local animal shelter and microchipped. The shelter contacted Joan Nickum, a volunteer pet rescue organizer, who coordinated Tyler’s multi-leg cross-country return journey from Wyoming to St. Louis, Missouri. “He’s grounded from going on the truck for a while,” Chad’s wife, Brandi McIntyre, said. “My husband and I just have decided that maybe it’s better if he stays home for at least a while and then maybe down the road he can go again.” Cowboy State Daily has the story.

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