An indictment has finally been handed down with the name Trump in the caption. But the biggest news is that the Trump is not former President Donald TrumpDonald TrumpUN meeting with US, France canceled over scheduling issue Trump sues NYT, Mary Trump over story on tax history McConnell, Shelby offer government funding bill without debt ceiling MORE. Despite years of investigation and the successful subpoena of Trump’s tax records, the Office of Manhattan District Attorney Cyrus R. Vance Jr., only charged the Trump Organization and its Chief Financial Officer, Allen WeisselbergAllen Howard WeisselbergJudge aims to hold trial for ex-Trump Org CFO next summer Lawyer says ex-Trump Organization CFO is expecting more indictments Prosecutors considered charging Trump Organization CFO with perjury: report MORE, who allegedly committed tax fraud, grand larceny and falsification of records.
Some in the media are predicting that the indictment could “cripple” the Trump Organization, while others foresee “potentially massive consequences” for American politics. But obituaries for Donald Trump were written during the Mueller investigation, during the impeachments and when Trump attorney and fixer Michael CohenMichael Dean CohenEric Trump lawyer in New York attorney general's fraud case quits Andrew Cuomo and the death of shame Prosecutors considered charging Trump Organization CFO with perjury: report MORE turned on his client, so perhaps some caution is needed. The doomsday scenarios are plausible, but so is the following, much less game changing outcome.
Tax indictments can be devastating prosecutorial tools especially when charges based on the underlying substantive crimes are not available. A famous example was Al Capone, the notorious 1930s mobster, whom the federal government convicted of evading taxes on income from criminal activities that were outside of federal jurisdiction. But that’s not what happened here.
The Trump Organization indictment appears to concern a stand-alone, tax fraud “tip” that, in contrast to Capone, lacks an underlying criminal iceberg. The gravamen of the charges is that Weisselberg arranged to have the Trump Organization pay his apartment lease, family members’ private school tuition, two Mercedes Benz leases and other benefits. The indictment alleges that the payments were a disguised part of Weisselberg’s annual compensation and that he failed to report and pay income taxes on the payments. Over 16 years Weisselberg received $1.76 million in indirect employee compensation.
The risk for the Trump Organization is that banks and lenders frequently refuse to do business with a company under indictment. At the same time, companies are resilient creatures. Publicly traded companies, for example, routinely plead guilty or acknowledge criminal or regulatory wrongdoing and still thrive.
As a private family business whose figurehead has been notorious for many years, the Trump Organization may be vaccinated against scandal. If Donald Trump’s incitement of an insurrection against the United States government hasn’t scared away banks and lenders from the Trump Organization by now it’s unclear why this garden variety, fringe benefits-based tax indictment will be fatal. As to the political impact on Trump, suffice it to say that it’s also unlikely that such a conviction, after his years of depredations, would change any Trump voter’s mind about him.
The wild card in any scenario is Allen Weisselberg, whom the Manhattan District Attorney’s Office obviously would like to turn into a cooperating witness against his former boss. But this could turn out to be only an anticlimactic sequel to the anticlimactic Michael Cohen, who amid much fanfare and raised expectations in some quarters (think Democrats), pled guilty to criminal charges and cooperated with investigators. But despite his insider’s knowledge, Cohen’s co-operation has yet to produce any charges against Donald Trump, for example, concerning alleged hush-money payments to a porn star.
Will Weisselberg likewise cave to the threat of prison, where he faces years in prison but might get probation as a first offender if convicted, and begin cooperating in exchange for leniency? So far, he has stayed loyal to Trump, for whom he has worked for decades. If he cooperates, could Weisselberg, unlike Cohen so far, provide courtroom quality, incriminating evidence against Trump? No one, other than Weisselberg, likely knows.
My bet? The Manhattan District Attorney’s Office went big game hunting but only bagged a mouse.
Gregory J. Wallance is a writer in New York City and a federal prosecutor during the Carter and Reagan administrations, where he was a member of the ABSCAM prosecution team that convicted a U.S. senator and six congressmen of bribery. He is the author of “America’s Soul in the Balance: The Holocaust, FDR’s State Department, and The Moral Disgrace of an American Aristocracy.” Follow him on Twitter @gregorywallance.