The ‘fantasy world’ in which Donald Trump built his business empire is collapsing in court. Does this damage to his image also undermine his election campaign?
What did the judge decide?
The civil case targeting Donald Trump’s business empire in New York will only start on Monday, but in an interim ruling the judge already confirmed the core of the case this week: the former president is said to have systematically inflated the value of real estate assets to make it easier to obtain bank loans and obtain insurance policies.
According to prosecutor Letitia James, who has been investigating possible fraud within the Trump Organization since 2019, Trump’s fortune was increased by at least $2.2 billion in the period 2011-2021. A penthouse in the Trump Tower, among others, had three times as many square meters on paper. The value of his Mar-a-Lago estate in Florida was reported to be 23 times higher than an independent valuation.
The Trump Organization was previously fined for tax fraud, without targeting Trump as an individual. Now that is happening, Trump, together with his sons Donald Jr. and Eric, is considered liable. According to Judge Arthur Engoron, Trump operated from a “fantasy world.” It now appears to be collapsing.
The exact penalty must be determined from Monday. An attempted delay – summary proceedings to challenge Engoron – was rejected on Thursday. The trial, which would normally take place until December 22, appears to be heading for a shortened duration due to the sharp verdict. It is not a jury that judges, but the judge. And it has now ruled that there is no doubt about the fraud.
What damage is Trump’s empire suffering?
A civil case cannot lead to a prison sentence. The prosecutor is demanding a fine of 250 million euros and a ban on the Trump Organization from controlling New York assets in the future. That organization is a tangle of real estate holding companies that are active in New York state, among other places.
While awaiting trial, Engoron already revoked the business licenses of “any entity controlled or owned” by Trump. In addition, the judge went even further than the prosecutor’s demands by also canceling the licenses linked to his sons.
If the judge’s decision stands, two options appear possible. Or it means the dismantling of the Trump Organization, and the sale of a dozen New York real estate assets. Or it heralds a period during which those same assets are under the control of an administrator appointed by the court. Ownership will not be at risk, but Trump and his sons are no longer at the wheel.
Legal experts set The New York Times that the latter route is the most likely. It is certainly not the death knell for the empire, which extends beyond New York. A blow to Trump’s image as a successful businessman and his portfolio. The requested fine is one-tenth of his total assets, which Forbes estimates at $2.5 billion. Future deals are also at risk.
Does this have consequences for other legal cases?
Trump’s legal agenda is filling up nicely. In 2024, at least three criminal cases will commence in different states, surrounding the hush money paid to porn star Stormy Daniels, the retention of confidential documents from his presidency, and Trump’s alleged role in the Capitol storming. A criminal case surrounding his attempt to change the outcome in swing state Georgia in 2020 has yet to be scheduled.
In that sense, this civil case can mainly be seen as one of the many legal waters that Trump has to navigate in the run-up to the elections. The evidence collected regarding fraud does not appear to impact the other pending cases in any way.
Will this undermine his election campaign?
The defeats in court are piling up. Trump was found guilty of sexual abuse of writer E. Jean Carroll this spring and is now again accused of fraud. A few years ago, Trump had to pay compensation of 25 million euros to students who were misled by the defunct Trump University.
Trump is doing everything he can to drag this fraud case into the political bath. On his social platform Truth Social, he frames the accusations – not for the first time – as a politically motivated witch hunt, noting that the judge and prosecutor are Democrats. In a post after the interim verdict, he called Engoron “disturbed” in the bargain.
According to the latest poll from NBC News, Trump is the first choice for 59 percent of Republican voters to run for president. Ron DeSantis follows close behind with 16 percent. Trump doesn’t even get involved in the TV debates. He sent his cat for a second time this week, preferring to go to the swing state of Michigan to address auto workers.
According to RealClear Politics, which calculates a weighted average of all national polls, Trump has also been slightly ahead of Biden for several weeks. In the impeachment investigation into President Biden, the witnesses called by the Republicans indicated this week: there is (yet) no evidence of corruption.
This shows: from the same fantasy world on which Trump built his real estate empire, he is now trying to claim a new presidency.
