Trump’s N.Y. criminal trial: Remembering Al Capone

 

Gordon L. Weil

If you recall the movie “The Untouchables,” you may remember that gangster Al Capone, called “America’s Public Enemy No. 1,” was ultimately tried and convicted for income tax evasion.  He was not tried for the far more dramatic gangland killings for which he was widely thought responsible.

Donald Trump now becomes the first American president on trial for alleged crimes. The 34 charges by the New York County District Attorney are not for tampering with the 2000 vote count or causing the attack on the Capitol.  They are simply for falsifying business records in connection with the 2016 election. 

The charges say Trump acted “with intent to defraud and commit another crime and aid and conceal the commission thereof.”

He had made an arrangement with Michael Cohen, who was his lawyer, and the National Enquirer newspaper to “catch and kill” stories that could harm his candidacy for president.  Trump, the lawyer and the rumor-spreading tabloid cooperated on three matters.

The first involved a former doorman at Trump Tower, who claimed that the candidate had fathered a child out of wedlock.  The doorman wanted $30,000.  This was to be paid until the National Enquirer found the claim was false.  But Cohen asked its boss not to dismiss the demand until after the election, so it could be easily forgotten no matter the outcome.

The second involved Woman 1, former Playboy model Karen McDougal, who said that she had a sexual relationship with Trump while he was married.  She was paid $150,000 by the National Enquirer, which would never publish her article about the relationship but promised to give her some free publicity. 

The third involved Woman 2, adult actress Stormy Daniels. Just three days after the release of the “Hollywood Access” video that revealed Trump’s predatory attitude toward women, she contacted him threatening to disclose her affair with him.  He agreed for the National Enquirer to pay her $130,000 for exclusive rights to her story.

Trump hoped to delay the deal until after the election.  As voting day approached, Daniels made clear she was ready to go public.  Trump asked Cohen to make the payment and committed to reimbursing his lawyer.

Cohen drew on his home equity line of credit and placed the funds in a new company he had created for the purpose of the deal.  He then transferred $130,000 to Daniels’ lawyer.  She remained quiet during the campaign.

Trump personally and the Trump organization would repay Cohen.  He would get twice what he had paid to Daniels so as to cover the income taxes on what he received.  He would also get a $60,000 bonus.  The full $420,000 would go to Cohen in $35,000 monthly payments over the course of  2017.

The payments would go onto Trump’s books as amounts due under a retainer agreement with Cohen.  That way Cohen would treat them as taxable income and Trump could treat them as a tax-deductible business expense.  The only problem was that there was no such retainer agreement at any time.

Eventually, the federal government caught up with the arrangements, thanks to Daniels.  Cohen was convicted of tax and campaign law felonies relating to Woman 1 and Woman 2.  Cohen served a prison term for his actions. The National Enquirer openly admitted the scheme and its role in it.  It was not charged.  The evidence from both contributed to Trump’s criminal indictment.

The indictment lists the 34 records that are alleged to be untrue and used to disguise attempts to prevent disclosures unfavorable to Trump and to enable him to deduct the Cohen payments from his taxable income.  The records are in the hands of the prosecution.  Both New York State and New York City have income taxes.

This case is entirely different from the civil case, now on appeal, in which Trump was held responsible for making false statements to banks and others about his assets, a violation of New York law no matter the presence or absence of direct harm to others.

It may prove difficult for Trump to win on the facts, which are decided by a jury.  He may argue that what he did broke no law or that the law does not apply to him for any one of a number of reasons.  He is likely to claim the charges were purely political in intent and should not be allowed to disrupt his political campaign.

The judge will decide on these claims and, in effect, already has.  Trump will certainly appeal an adverse decision through the New York judicial system. This may take time, which could work to his advantage.  He might assert that, because all appeals had not been exhausted, he has not yet been found guilty.

In the end, a major potential campaign violation and tax scheme has boiled down to the seemingly routine matter of falsifying business records. What voters make of these proceedings is not a judicial matter and won’t be decided in court.