Quick Update on trump's Legal Woes As We Head Into October 2022

The past week has been a little busy for donald trump's lawyers, so let's recap.

You might remember that trump had found a district judge he appointed to throw up roadblocks to the FBI's digging into all the classified materials they caught him with, when Judge Cannon agreed to his demands for a Special Master to delay everything. Well, the Justice Department appealed that, going to the 11th Circuit to allow the feds to continue their work. The judges at the 11th - including two who were appointed by trump - threw a smackdown on Cannon and trump in response (via Emptywheel):

While reserving judgment on the merits question, the opinion was nevertheless fairly scathing about Cannon’s abuse of discretion. Some of this pertained to her jurisdictional analysis... But two important implicit admonishments of Cannon’s actions pertain to the deference on national security that courts give to the Executive.

The opinion calls the scheme that Cannon had set up — allowing the Intelligence Community to continue its intelligence assessment but prohibiting any investigation for criminal purposes — untenable. In support, the opinion notes that there’s a sworn declaration from FBI Assistant Director Alan Kohler (the only one in this docket) debunking Cannon’s distinction between national security review and criminal investigation. It notes, twice, that courts must accord great weight to the Executive, including an affidavit. The opinion notes that “no party had offered anything beyond speculation” to undermine this representation...

In another section, the opinion makes a finding that goes beyond where the dispute before Cannon has gone (but not beyond where the dispute before Special Master Raymond Dearie has). Even former Presidents can only access classified information if they have a Need to Know. (Italics for the appellate decision)

[W]e cannot discern why Plaintiff would have an individual interest in or need for any of the one-hundred documents with classification markings. Classified documents are marked to show they are classified, for instance, with their classification level. Classified National Security Information, Exec. Order No. 13,526, § 1.6, 3 C.F.R. 298, 301 (2009 Comp.), reprinted in 50 U.S.C. § 3161 app. at 290–301. They are “owned by, produced by or for, or . . . under the control of the United States Government.” Id. § 1.1. And they include information the “unauthorized disclosure [of which] could reasonably be expected to cause identifiable or describable damage to the national security.” Id. § 1.4. For this reason, a person may have access to classified information only if, among other requirements, he “has a need-to-know the information.” Id. § 4.1(a)(3). This requirement pertains equally to former Presidents, unless the current administration, in its discretion, chooses to waive that requirement. Id. § 4.4(3).

Plaintiff has not even attempted to show that he has a need to know the information contained in the classified documents. Nor has he established that the current administration has waived that requirement for these documents. And even if he had, that, in and of itself, would not explain why Plaintiff has an individual interest in the classified documents...

In short: trump had no privilege to claim.

And then there was the 11th Circuit ruling about Cannon's authority to intervene in the first place. Back to Emptywheel:

The summary of this case is a really remarkable description of what has already happened (I’m sure it helped the clerks on that front that they had no page limits). Ominously for Trump’s case, the opinion starts the narrative from the time he left the White House and lays out several moments where Trump failed to invoke privilege or declassification. Trump likes to tell the story starting on August 8 when the FBI arrived at his house out of the blue...

This means trump can't stick to his story that he always had the right to possess these documents when he really didn't. I digress, back to good part:

In Trump’s reply to DOJ’s argument that he couldn’t own these documents, the opinion notes, he specifically disclaimed having filed a Rule 41(g), which is where someone moves to demand property unlawfully seized be returned...

Cannon, the opinion notes, claimed to be asserting jurisdiction under equitable jurisdiction even while treating Trump’s request (in which he had not made a Rule 41(g) motion) as a hybrid request...

Half that page of the opinion consists of footnotes, recording that Trump’s claims about Rule 41(g) have been all over the map...

trump and his lawyers are wary of filing actual paperwork - that Rule 41(g) - on ownership because if they do, and the courts rule he had no right to classified materials in his possession, he'll basically be confessing to breaking that particular federal law. Instead, they claim everything and anything just on say-so in the hopes a favorable court will buy that defense. Oh, right. I'm interrupting. Back to Emptywheel.

The opinion doesn’t come to any conclusions about all this nonsense from a jurisdictional position. It doesn’t have to. But it did capture conflicting claims that Trump made and Cannon’s reliance on a “hybrid” claim to avoid pinning Trump down.

The reason the 11th Circuit didn’t have to resolve all this is because, regardless of which basis Cannon claimed to have intervened, Richey governs (which is exactly what Jay Bratt said in the hearing before Cannon, as I laid out here).

And the first prong of Richey — and the most important one — is whether there has been a Fourth Amendment violation. Cannon says there has not. That should be game over...

While this is an appellate ruling, trump can arguably push the matter further up the chain - is SCOTUS next? - but one interesting development from this ruling was how Cannon went back and revised parts of her court ruling to fit the demands of the 11th Circuit... which apparently makes it harder for trump to appeal those parts. Interesting.

Meanwhile, the Thing Cannon Set Up - the Special Master situation involving a court-approved arbitrator over the documents in question - settled on Judge Raymond Dearie to serve in that capacity, and he promptly kicked trump's lawyers in the collective tuckus in ways that showed trump wasn't getting an easy out (the AP News but quoted via the Guardian):

The independent arbiter tasked with inspecting documents seized in an FBI search of Donald Trump’s Florida home said on Tuesday he intends to push briskly through the review process and appeared skeptical of Trump lawyers’ reluctance to say whether they believed the records had been declassified.

“We’re going to proceed with what I call responsible dispatch,” Raymond Dearie, a veteran Brooklyn judge, told lawyers for Trump and the Department of Justice in their first meeting since his appointment last week as a so-called special master...

Though Trump’s lawyers requested the appointment of a special master, they have resisted Dearie’s request for more information about whether the seized records had been previously declassified – as Trump maintains. His lawyers have consistently stopped short of that claim even as they asserted in a separate filing on Tuesday that the department of justice had not proven that the documents were classified. In any event, they say, a president has absolute authority to declassify information...

But Dearie said that if Trump’s lawyers will not actually assert that the records have been declassified, and the department of justice makes an acceptable case that they remain classified, he will be inclined to regard them as classified.

“As far as I’m concerned,” he said, “that’s the end of it.”

In a letter to Dearie on Monday night, the lawyers said the declassification issue might be part of Trump’s defense in the event of an indictment. Trusty said the Trump team should not be forced at this point to disclose details of a possible defense.

He denied that the lawyers were trying to engage in “gamesman-like” behavior but said it was a process that required “baby steps”. He said the right time for the discussion is whenever Trump presses forward with a claim to get property back.

Dearie said he understood the position but observed: “I guess my view of it is, you can’t have your cake and eat it...”

A US district judge, Aileen Cannon, a Trump appointee who granted the request for a special master, had set a 30 November deadline for Dearie’s review and instructed him to prioritize classified records.

Dearie, a Ronald Reagan appointee, made clear during Tuesday’s meeting that he intended to meet the deadline...

Other reports have it that Dearie is looking to wrap up by October, likely because he already sees the reality that there's not much to separate between the classified documents and anything trump claims as privileged. Granted, that's my speculation. No matter what, trump's traditional gaming of the legal system - delay, delay, delay - isn't going to work here.

The other big bombshell from last week was the breaking development in the state of New York's civil case against trump, trump's family, and their corporation. As mentioned earlier when I looked at the big four legal matters dogging trump, AG Letitia James had wrapped up her interviews for the grand jury, and apparently had enough to take it all to court seeking major damages and a long-overdue crippling of trump's crooked financial empire (via John Cassidy at the New Yorker (paywalled)): 

The lawsuit that her office filed in State Supreme Court alleges that, from 2011 to 2021, the Trump Organization’s financial statements systematically exaggerated the value of at least twenty-three of his properties and other assets—from his Fifth Avenue triplex apartment and his daughter’s penthouse on Park Avenue to his estate in Mar-a-Lago, Florida, and his far-flung network of golf courses. “The number of grossly inflated asset values is staggering, affecting most if not all of the real estate holdings in any given year,” the lawsuit states. It also says that Trump’s alleged deceptions reaped him and his co-defendants financial benefits worth up to an estimated $250 million, and asked the court to force him to repay these gains, plus interest.

In addition to Trump, the lawsuit names his children Donald, Jr., Eric, and Ivanka as defendants. In 2014, the complaint says, Ivanka was granted an option to buy a penthouse at Trump Park Avenue for $14.3 million, but the apartment was valued in the Trump Organization’s 2014 “Statement of Financial Condition” at $45 million. According to the lawsuit, Trump’s son Eric was “taking the lead” on Seven Springs estate, a large property in Westchester County, New York—which Trump bought for $7.5 million, in 1995, but between 2011 and 2021 valued at up to $291 million. The complaint also alleges that, in 2016, the Trump Organization misled an outside appraiser that prepared a valuation of the Seven Springs property, which it then submitted to the Internal Revenue Service in support of an application for a conservation easement “that ultimately, and fraudulently, reduced Mr. Trump’s tax liability by more than $3.5 million...”

In short: trump lied about how valuable his properties were when it came time to profit from them, and then lied that the properties were valueless when it came time to pay taxes on them.

Where Trump and his businesses crossed the legal line, the complaint alleges, was in producing false financial statements that grossly inflated his net worth to “induce banks to lend money to the Trump Organization on more favorable terms than would otherwise have been available to the company, to satisfy continuing loan covenants, and to induce insurers to provide insurance coverage for higher limits and at lower premiums.” The complaint identifies numerous loans and insurance policies that it said were granted at least partly on the basis of claims Trump made about his wealth in a “Statement of Financial Condition”—a list of his assets and liabilities that the Trump Organization produced annually...

This is where there's more good news:

James said her office is also referring her case to federal prosecutors in Manhattan and the I.R.S. In the absence of actions by those agencies, the potential sanctions facing the Trumps, if James wins her case, are a big financial penalty, the appointment of an independent monitor to oversee the Trump Organization for at least five years, a prohibition on Trump or the Trump Organization buying any new commercial real estate in New York during the same period, and a ban on any of the Trumps named in the lawsuit serving as an officer or director in any businesses licensed or registered in the state.

Effectively, James is trying to banish Trump and his family from doing business in their longtime home state...

James apparently uncovered criminal acts in all of the fraud trump and his people committed during their shell games with property values. It would be pretty to think that despite the City of New York's failure to bring more criminal charges against trump, the IRS will go after him for tax evasion like they've done to every mob boss since Al Capone. 

It could be argued that even after all this, trump and co. could simply relocate their business efforts to a more favorable state and restart, except that James is looking to keep trump from doing any business with any entity in New York. That covers New York City, and THAT - the financial capital of the world - covers nearly every bank on the planet. Meaning if James wins her case, there will be no way for trump and his adult progeny to do business they way they've done - through sketchy loans to pay off other sketchy loans - for at least five years.

It would kill trump not to run any kind of con job at all. trump has no actual value outside of his scams, he's a clown living on credit. A victory by AG James would be a fate worse than death for trump.

Bring it. Bankrupt the bastard. Send him into financial exile for the rest of his short life. And be rid of trump forever.