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Verdict: Trump’s Company Guilty of Fraud, Financial Crimes

The legal contortions by the lawyers for the Trump Organization didn’t do them much good.
December 7, 2022
Verdict: Trump’s Company Guilty of Fraud, Financial Crimes
(The Bulwark / Midjourney)

The Trump Organization’s website features a 4,000-plus-word tribute to its eponymous founder. This tedious, nearly unreadable paean to the wonder that is Donald J. Trump adoringly trumpets legion acquisitions and projects undertaken over a span of decades, but one word is conspicuous by its almost complete absence in this portrait: “Organization.”

Instead, almost every overhyped accomplishment is presented as the work of the man himself. “Donald J. Trump,” not the Trump Organization, set “the standards of excellence while expanding his interests in real estate, sports, and entertainment.” “Mr. Trump,” not the Trump Organization, “was also the developer of the largest parcel of land in New York City.” “Mr. Trump,” not the Trump Organization, built 610 Park Avenue, built the Trump Hotel in Chicago, purchased the Delmonico Hotel, built a “portfolio of holdings” that includes Trump National Golf Club in Westchester, rebuilt the Wollman Skating Rink, and acquired the rights to the Miss Universe, Miss USA, and Miss Teen USA pageants.

You get the picture: The Trump Organization is Donald J. Trump.

So it seems a bit odd that anybody would question whether Trump was personally implicated in a Manhattan jury’s verdict on Tuesday finding the Trump Organization guilty on 17 counts of tax fraud, falsifying company records, and other financial crimes.

That the crimes had been committed was never in doubt. The company’s chief financial officer, Allen Weisselberg, Trump’s financial protector and enabler, had already pleaded guilty and admitted that he committed the fraud. The crux of it was that over a period of years, part of Weisselberg’s compensation was paid in the form of lavish perks (payments for private school tuition and a lease for a Manhattan apartment, among other things) that were concealed from taxing authorities in order to avoid paying taxes.

During the trial nobody, not even the defense attorneys for the Trump Organization, argued that what Weisselberg had done (with the assistance of others—more on that later) was not criminal misconduct.

The only question was who, in addition to Weisselberg, would be held accountable.

Competing answers to that question were at the center of the trial and the closing arguments of the attorneys on both sides. Trump himself was not charged. Instead, two of the Trump Organization companies, the Trump Corporation and the Trump Payroll Corporation, were charged.

The Trump Organization’s defense was to throw Weisselberg under the bus. It was centered on the claim that Weisselberg acted alone, exclusively for his own benefit, not the benefit of the Trump Organization: “Weisselberg did it for Weisselberg,” one of the Trump Organization’s attorneys reportedly told the jury in closing argument. “The purpose of Mr. Weisselberg’s crimes was to benefit Mr. Weisselberg. . . . He admitted under oath these crimes were a result of his own greed.”

The evidence introduced at trial, however, did not support the defense’s absolutist view of who was responsible for and benefited from the scheme. While Weisselberg may have been the primary actor, the company’s senior vice president and controller, Jeffrey McConney, reportedly confirmed that Weisselberg had received much of his compensation in off-the-books perks that the company did not report to federal or state taxing authorities, corroborating the tax fraud case against the organization. (Weisselberg requested that the value of the perks be subtracted from his compensation package; the company obliged, apparently without wondering about the reason he purportedly offered for the arrangement: to express gratitude to former President Trump for “making these payments on his behalf.”) McConney also answered “Yes” to the question, “By doing it this way, the Trump Corporation allowed Allen Weisselberg essentially to pay his rent with pretax dollars?”

In the end, the argument over whether Weisselberg’s acts could be imputed to the Trump Organization came down to a semantic debate over whether they could be characterized as having been conducted “in behalf of” the company. That’s “in” behalf of, not “on” behalf of; the two phrases apparently don’t mean quite the same thing. “In behalf of” is generally understood to mean for the benefit of, whereas “on behalf of” is usually understood to refer to acting as an agent. Or something like that. The upshot of these abstruse reflections is that the defense attorneys believed that everything was riding on a single letter, an “i” instead of an “o.” Who says attorneys aren’t fun?

Hovering over all of this was the ghost of Donald Trump. Although Trump was not a named defendant, the attorneys on both sides seemed to fear that Trump’s role in Weisselberg’s scheme, if any, could have a significant impact on the jury. As is always the case with Trump, his fingerprints could not be found on a single document implicating him in the scheme. Trump doesn’t write, except for occasional notes in Sharpie that he later flushes down the toilet, so the key to understanding his personal involvement would have to come from witness testimony.

The key witnesses, Weisselberg and McConney, were both reportedly protective of Trump. But the jury also apparently heard testimony that Trump personally agreed to pay some of the unreported perks, signed Christmas bonus checks, and initialed a memo reducing the salary of another top executive in an amount suspiciously similar to the undeclared perks received by the employee, suggesting possible complicity in the tax-avoidance scheme. And the prosecution told the jury in closing arguments that Trump “explicitly sanctioned” tax fraud: “The whole narrative that Donald Trump is blissfully ignorant is just not true.”

Since he wasn’t charged in this case, the “verdict” on Donald Trump’s involvement in the Trump Organization’s fraudulent conduct will have to come in the political arena, not a courtroom.

And if Trump is ultimately indicted for his attempt to overturn a presidential election, or for inciting an insurrection on January 6th, or for enabling fraudulent electors to submit phony election certifications, or for paying hush money to a porn star, or for stealing highly classified documents, or for trying to corrupt the Georgia vote count, or for witness tampering, or for obstructing justice, or for whatever, the Weisselberg trial will be the least of his worries.

And then there’s that website, which might need to be revised.

Philip Rotner

Philip Rotner is a columnist whose articles appear in national publications and on his website, Philip is an attorney who has practiced for over 40 years, both in private practice and as the general counsel of a global professional services firm.  Philip’s views are his own, and do not reflect the views of any organization with which he has been associated.