I wouldn’t blame you if you’re confused about what’s going on in Donald Trump’s $250 million New York civil trial. I was too. So I made it my business to discover certain salient details that I will share with you here.
I think you will be both delightfully surprised at how truly bad things are for Donald Trump, economically speaking, and how wrong many of the talking heads are about those details. For instance, a lot of what the mainstream media pundits got wrong was the amount Trump will end up owing. Trump won’t owe “as much as” 250 million dollars to the state of New York, as they keep reporting. That figure is just the starting point. He could wind up owing a hell of a lot more than that.
What civil misdeeds has Trump committed? He has spent his whole life valuing his properties at more than ten times what an already generous appraisal would say they are worth. He did this so he could qualify for loans he didn’t merit.
Okay, you might say, if the loans were paid back what’s the harm? The harm is he’s reduced the amount of money the banks have available for other borrowers. Legitimate bank loans applied for by honest people were turned down because Trump took that money through dishonest means. The lending capacity of banks isn’t infinite, after all.
Conversely, when it came time for Trump to pay his property taxes, he dramatically undervalued the properties he owned. By lying to the IRS he paid less total tax, which meant his tax burden was picked up by you and me and everyone else.
These are not facts in dispute. Trump’s Manhattan civil trial isn’t about any of this. The court has already determined that Trump is guilty of fraud and has already made a summary judgement to that effect. What we are watching now is the court deciding how Trump is going to pay his fine and how much that fine is going to be. Remember, it’s going to be at least $250 million. It will probably be a lot more than that.
Last week the judge cancelled Trump’s business licences. He cannot do any more business in the state of New York. He can’t take any more money out of those businesses to support himself. Once the court determines how much he will owe, all of his businesses will be sold. There are more than 500 Trump organisation enterprises and all of them will have to be divested.
At some point the judge will appoint a receiver. The receiver will put all the Trump businesses and properties owned by the businesses up for sale. Everything will be priced for quick sale. Trump’s creditors and mortgage holders will get paid first. Then the government will get paid its full amount. Remember, that amount will be at least 250 million. Anything left over, if there is anything, will go to Trump. Trump gets paid last.
But that last Trump gets paid could be a negative amount. So he might not just wind up broke, he might wind up seriously in debt, in the hole. He could also lose Mar-a-Lago.
For years Trump has told people that Mar-a-Lago is worth hundreds of millions of dollars. It isn’t. It’s worth about 20 million on a good day, far less than that in a government fire sale. Trump might not even have his “home” left when this is all over, because Mar-a-Lago is a resort and not an actual home, legally speaking. Therefore he can’t shield it from government liquidation.
If Trump had stayed in his penthouse on Trump Tower, he might have shielded it from government liquidation. His penthouse is a legitimate home. But because he decamped to Mar-a-Lago, which is not a legitimate home and therefore not shielded, he could lose both. Isn’t that wonderful?
None of Trump’s kids will be able to take any money out either. So whatever money they have is all they get. For now. Of course, they could get sued later on by the state of New York, too.
Now Trump can appeal all this, but he can’t appeal the finding of fact by the judge. The judge found and decreed by summary judgement that Trump fraudulently misrepresented the value of his holdings in furtherance of fraud, and there is no appeal for that. He can lie about it all he wants to the suckers and losers who believe in him and voted for him, but it won’t do a damn bit if good in a court of law.
Trump has spent his whole life screwing other people and ruining family businesses. He’s about to get a taste of his own medicine. And these are just the economic consequences. He also very likely will spend the remainder of his life in jail.
Donald Trump has gone from “The Art of the Deal” to “Poor Man Walking.” It couldn’t have happened to a nicer guy. And, as ever, ladies and gentlemen, brothers and sisters, comrades and friends, stay safe.
Robert Harrington is an American expat living in Britain. He is a portrait painter.