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To be clear, that bank executives might have turned a blind eye to Trump’s fraud does not necessarily mean there were no victims. Giving Trump financial products he should not have qualified for ultimately reduced resources available for other, honest borrowers. At the very least, any loan applicant who played by the rules — who reported their assets, liabilities and income accurately — could not have acquired such favorable terms as Trump did. Consider what a productive borrower could have done with the millions of dollars in loans Trump got on the cheap.
Moreover, maybe bank executives were willing to overlook Trump’s fraud, perhaps to reel in their “whale” and get a fat bonus. But these companies’ shareholders presumably did not sign off on charging ultralow interest rates or premiums to a risky customer under false pretenses.
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Most important: In a capitalist society, laws against fraud exist to protect not only the direct victims of fraud but also the overall integrity of the marketplace.
The reason we outlaw fraud, among other misbehavior, is to facilitate trust in business transactions. If I sign a contract to pay money in exchange for some service, I want to be confident that the promised service will be delivered. Or that if it isn’t, there will be legal consequences — regardless of the other party’s fame, wealth or political connections.
This level of trust, bolstered by the law, is why companies generally prefer to invest in the United States rather than a “Venezuela” or “Cuba.” The rule of law makes it easier to do business, not harder. The only people who benefit from the freedom to commit fraud are those who commit fraud.
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So what about objection No. 2, that prosecutors should stand down because they’re only making Trump stronger?
The political fallout of these cases is ambiguous. Being held accountable for crimes and civil infractions might make Trump more popular with some voters and less popular with others. The net effect could well be a wash.
But whatever the effect is, it should have zero bearing on prosecutors’ decisions to bring such cases.
Prosecutors have limited resources. They don’t, and can’t, go after every infraction of civil and criminal law. They have discretion to allocate resources wherever they can best serve the public interest. But that discretion is not supposed to be deployed based on whether a trial will hurt or help a potential defendant’s political campaign. That’s the kind of thing Trump himself has threatened to do.
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And once again: It’s not how countries that value rule of law behave.
Indeed, if there’s any legitimate grievance about these cases, it’s that New York Attorney General Letitia James (D) ran for office on an implicit promise to go after Trump. But that doesn’t mean her case against Trump was baseless.
This fraud case did not include a smoking gun; it had a smoking arsenal. Documents, employees and dozens of witnesses corroborated the fraud. Plus even before the trial, news media widely reported Trump’s tendency to misrepresent his finances in business transactions.
Trump is entitled to his own opinions, but not to his own accounting principles. At some point, when lawbreaking becomes this large-scale and conspicuous, it’s hard for law enforcement to plausibly ignore it. (Although heaven knows that’s happened before.) Flagrant lawbreaking, including and especially by high-powered and well-connected politicians, undermines rule of law and encourages yet more lawbreaking.
The trick to maintaining rule of law isn’t only to pass good laws. It’s to enforce them.
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Donald Trump’s real estate empire shall live to grift another day. So declared a court Monday in ruling that the former president does not have to put up the full $464 million legal judgment against him while he appeals a civil fraud case.
Even so, that eye-popping sum has fueled criticism that prosecutors are pursuing Trump too zealously. The objections usually boil down to two arguments: First, that Trump’s white-collar cases are “victimless” and therefore not worth enforcement. And second, that every lawsuit and charge against him plays into his persecution narrative, thereby strengthening him as a presidential candidate.
Both criticisms are off-base, at least in a society that values rule of law.
Let’s take each objection separately. First, lots of commentators, including some pundits who have otherwise been critical of Trump, have argued that no one was really hurt by Trump’s fraud. He deliberately inflated the value of his real estate assets to get better terms on loans and insurance. So what? New York real estate is a rough-and-tumble world, the argument goes; sometimes people lie. The banks apparently came out unscathed in the end, and a now-retired Deutsche Bank executive even testified on his behalf.
Some, such as “Shark Tank” co-host Kevin O’Leary, have further asserted that the massive judgment against Trump threatens to turn our country into “Venezuela” or “Cuba,” i.e., terrible business environments.
To be clear, that bank executives might have turned a blind eye to Trump’s fraud does not necessarily mean there were no victims. Giving Trump financial products he should not have qualified for ultimately reduced resources available for other, honest borrowers. At the very least, any loan applicant who played by the rules — who reported their assets, liabilities and income accurately — could not have acquired such favorable terms as Trump did. Consider what a productive borrower could have done with the millions of dollars in loans Trump got on the cheap.
Moreover, maybe bank executives were willing to overlook Trump’s fraud, perhaps to reel in their “whale” and get a fat bonus. But these companies’ shareholders presumably did not sign off on charging ultralow interest rates or premiums to a risky customer under false pretenses.
Most important: In a capitalist society, laws against fraud exist to protect not only the direct victims of fraud but also the overall integrity of the marketplace.
The reason we outlaw fraud, among other misbehavior, is to facilitate trust in business transactions. If I sign a contract to pay money in exchange for some service, I want to be confident that the promised service will be delivered. Or that if it isn’t, there will be legal consequences — regardless of the other party’s fame, wealth or political connections.
This level of trust, bolstered by the law, is why companies generally prefer to invest in the United States rather than a “Venezuela” or “Cuba.” The rule of law makes it easier to do business, not harder. The only people who benefit from the freedom to commit fraud are those who commit fraud.
So what about objection No. 2, that prosecutors should stand down because they’re only making Trump stronger?
The political fallout of these cases is ambiguous. Being held accountable for crimes and civil infractions might make Trump more popular with some voters and less popular with others. The net effect could well be a wash.
But whatever the effect is, it should have zero bearing on prosecutors’ decisions to bring such cases.
Prosecutors have limited resources. They don’t, and can’t, go after every infraction of civil and criminal law. They have discretion to allocate resources wherever they can best serve the public interest. But that discretion is not supposed to be deployed based on whether a trial will hurt or help a potential defendant’s political campaign. That’s the kind of thing Trump himself has threatened to do.
And once again: It’s not how countries that value rule of law behave.
Indeed, if there’s any legitimate grievance about these cases, it’s that New York Attorney General Letitia James (D) ran for office on an implicit promise to go after Trump. But that doesn’t mean her case against Trump was baseless.
This fraud case did not include a smoking gun; it had a smoking arsenal. Documents, employees and dozens of witnesses corroborated the fraud. Plus even before the trial, news media widely reported Trump’s tendency to misrepresent his finances in business transactions.
Trump is entitled to his own opinions, but not to his own accounting principles. At some point, when lawbreaking becomes this large-scale and conspicuous, it’s hard for law enforcement to plausibly ignore it. (Although heaven knows that’s happened before.) Flagrant lawbreaking, including and especially by high-powered and well-connected politicians, undermines rule of law and encourages yet more lawbreaking.
The trick to maintaining rule of law isn’t only to pass good laws. It’s to enforce them.
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