Indicting the Trump Organization

Democrats of all stripes have devoted years to investigating Donald Trump and finding very little. The latest example is Thursday’s indictment of the Trump Organization and its chief financial officer for classifying employee benefits as business expenses rather than compensation.

Manhattan D.A. Cyrus Vance Jr. and New York Attorney General Letitia James subpoenaed millions of documents and years of tax returns, and that’s all they’ve come up with. The indictment lists 15 criminal counts, including second degree grand larceny. But the evidence in the indictment boils down to misreporting compensation to the Internal Revenue Service and New York tax authorities.

Prosecutors allege that Allen Weisselberg, the 73-year-old accountant and CFO, received as much as $1.76 million in compensation over a 16-year-period—for cars, an apartment rental, and tuition for Mr. Weisselberg’s grandchildren at a private school—in a way that kept them off the books for tax purposes. The indictment says he avoided paying $901,112 he owed in taxes and collected federal and state tax refunds of $133,124 he wasn’t entitled to.

If true and willful, this is rotten behavior. But it isn’t Teapot Dome, and disguising compensation as expenses is far from unusual in corporate America. It’s typically handled as a civil matter and settled with the payment of back taxes, interest and fines. It is rarely the basis for a criminal indictment.

The prosecutors are throwing the book at Mr. Weisselberg to get him to turn state’s evidence against the former President. The same goes for the highly unusual decision to indict the Trump Organization, which is presumably intended to squeeze its business prospects. Notably, neither Mr. Trump nor his children who run the business were charged.

The political motives at work are transparent. Mr. Vance has pursued Mr. Trump and his tax records for years, even as street and violent crime proliferates in New York City. Ms. James campaigned on a promise to shine “a bright light into every dark corner of his real estate dealings, and every dealing, demanding truthfulness at every turn.” She all but promised a selective prosecution—that is, pick a target, then search for a crime to allege.

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The expectation among Democrats is that the charges will finally diminish Mr. Trump’s political appeal, but will they? Like impeachments one and two, the case gives Mr. Trump another chance to portray himself as the populist knight taking on the corrupt powers that be. If the charges fail in court, and prosecutors have nothing else, Mr. Trump will claim blanket vindication.

Source: Indicting the Trump Organization

This week is why. Mr. Trump, who is not the fool some imagine, knew winning the presidency was a dangerous mishap from a personal legal standpoint. Mr. Trump, until then, mainly tussled with sharpies who wanted only some of his money, not his destruction. He also knew that in our overgrown regulatory state, prosecutors can find something on anybody, even those who conduct their affairs with a scrupulousness foreign to Mr. Trump.

It’s “political,” Mr. Trump says of this week’s charges. Yes, inevitably and partly. That’s why people with Mr. Trump’s deep pockets and checkered history are unwise to go into politics, however much it might benefit the nation to have a broadly welcoming presidential talent pool.

The charges brought by Manhattan District Attorney Cyrus Vance Jr. and New York Attorney General Letitia James are over the top for what amount to tax violations related to employee compensation. Larceny? Who stole what from whom? Mr. Trump’s company and its major-domo, Chief Financial Officer Allen Weisselberg —though not Mr. Trump himself so far—are accused of doling out perks as normal business expenses, thereby avoiding personal income and payroll taxes.

Mr. Trump’s lawyer said, probably accurately, that such complaints usually are settled as a civil matter with the Internal Revenue Service for the reasons alluded to above. The IRS cares mainly about getting maximum money at least cost for its enforcement efforts. Not so elected officials such as Mr. Vance and Ms. James. If the prosecution is a giant net loser financially for the state of New York, that’s fine with them.

If the charges are right, among the expenses Mr. Trump picked up for his employees to maximize the bang for his compensation buck were school tuition, a company Mercedes, and free apartments for employees and their family members.

The Trump Organization’s Political Prosecution