The Rule of Law:

Intro:

There is a concerning trend currently in the political realm, one that uses our judicial system for anything but justice. This is not necessarily a novel idea, rival powers in both the political arena and the business world have used the courts as a tool for centuries. However, in the information age that we now live, it is increasingly blatant to the point where it is hardly undeniable that the use of certain accusations are less so of justice than to bury an opponent in legal cases and bad publicity. No such example is as blatant as the example of Donald Trump.

It has been a staple in the media now for several years, Donald Trump in general, but also the litany of accusations and legal charges brought against him and his businesses. From the Mueller report, Stormy Daniels, and fraud, since experiencing success in the political realm the activity hasn’t ceased.

Specifically, the fraud case that was recently ruled upon is an excellent case to study. The judge of the case recently ordered Trump to pay upwards of $400 million dollars. Despite the initial ruling, Trump plans to appeal the case. In the meantime, exploration of the will help understand a concerning trend in weaponized courts between dueling political factions.

In order to fully understand the issue, an understanding of the case is needed.

Pryderi is increasingly concerned about this issue and will use this example as a first step to fully explore our concerns over the challenge to the rule of law in America.

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Background on the Case:

The case against Donald Trump was brought about by the New York Attorney General’s Office with them seeking $250 million dollars in relief for the fraud. The Attorney General alleged that the Trump Organization serially falsified valuations of their properties in order to secure more favorable terms on loans to grow their business.

An important note on this was that the fraud was not on any part of the loan except the initial alleged fraud that the Trump Organization did to secure the loan. In his decision, the judge on the case notes that the successful payment back of the loan did not have any sway on the initial action to secure the loan and the alleged fraudulent nature of it.

This then brings up the relief sought by the prosecution, being that the Trump Organization and those affiliated with it are barred from doing business in New York or having significant office in any company that does business in New York.

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The Alleged Fraud

The fraud in this case revolves around loans the Trump Organization received in order to grow their business. Trump is accused of overvaluing his properties and then leveraging the properties and their inflated valuation for loans of more favorable conditions. What is meant by favorable is that the loans had lower interest rates, meaning the amount Trump had to pay back was less than it would have been if he hadn’t overvalued his properties. In addition, the alleged fraud and acquired loans allowed Trump to catapult his business into the heights that he would never have achieved if he had not gotten such favorable loans.

From there the prosecution argued that Trump avoided what would be higher interest payments and thus the $400 million that is usually the headline on articles about this topic.

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The Banks

This then brings up an interesting question of the damage. Such deals on overvaluation were done with certain banks and individuals who were defrauded. Why is the New York Attorney General’s office bringing this up? More importantly, what has it taken this long?  

When it comes to valuations, there is probably none better than banks. In fact, there is probably no better institution in miserly evaluating property and assets than a bank. Daily a bank must evaluate individuals and their holding to determine loans, and whether they can make a return. If the valuations were as out of line as the prosecution and the judge argued, then how did the banks not make the same conclusion? In fact, one must have gone back through Trump's business dealings looking for issues to dredge in order to even make this an issue in the first place.

In terms of damage the main damage would have been on the banks themselves because they are the only ones who could be directly damaged by fraud such as this. Yet the banks and any sort of outrage or protestations are nowhere to be seen.

The who case hinged on whether the judge deemed Trump’s valuations of his properties too out of line, rather than the other individuals he was making deals with, then those who were directly impacted from the valuations.

Not only is there an incredible amount of subjectivity applied in this case, but also an incredible amount of misappropriated damage.

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Moving Forward

As Trump appeals this case and deals with the current penalties levied against him there are several concerns following this case. The first and foremost concern is the relative subjectivity in determining that the valuations were fraudulent. There was no valuation range that deemed the difference in valuations fraudulent, it was entirely up to the judge. In the decision Judge Engoron describes that the valuations Trump offered were so high that it was obviously used in a fraudulent way. Sure there are extremes to where an answer seems obvious but it leaves an extreme level of power to determine fraud at a subjective level, and in that sense the level of perceived damage. Without that level of subjectivity there can be no clear case. For other individuals valuing their property and taking out loans it could open them up to scrutiny, just because their valuations and reporting isn’t what others might decide that it is.

The second concerning issue is the final resting place of the funds asked for by the prosecution. If such loans were taken out at such favorable rates, would it not be the banks who were damaged the most from lost interest? Yet the attorney general’s office is asking for funds and as of yet no suits from the banks have been filed about the loans. If anyone was specialized in understanding valuations of property for the purpose of a loan, would it not be a bank? Would they not fully understand the amount lost in interest? Furthermore, would they not be entitled to the money because of the case? Since the case is not fully resolved yet, there may be time until full information about the funds is available, but this point especially seems strange. Less so about the money and more so a financial blow to a political figure.

Such issues seem to continue for Trump if he remains a threat in the political realm and maybe after even. Yet, on a larger view it is concerning that the arsenal of political weapons could so clearly be endless court cases. Throwing the kitchen sink at an opponent and see what sticks is an old trick, but one that seems to be commonly accepted as long as it is against an opponent who isn’t currently societally popular. ‘

There is a danger there, because it becomes less about the veracity of one’s political points, and more so a steering of power. All it could take is an accusation with any amount of subjectivity to achieve validation from the court and to utterly defeat an opponent.

Not only does a trend like this put a bigger price tag on real political aspirations, but also real threats. That, a false step wouldn’t just lose an election, but also result in legal action that even if untrue could tarnish one’s reputation enough to render an individual obsolete.

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