New York’s Attorney General Leticia James just opened a sweeping investigation into the fraud and misdealings of the Trump Organization that its former executive vice-president revealed in his Congressional testimony last month.
Michael Cohen was an executive in the Trump Organization for a decade, starting in 2006 before resigning to become the President’s personal lawyer, and his testimony to the House Oversight Committee last month revealed numerous threads of criminal behavior at his former employer’s business that prompted the new investigation.
Unlike the other seventeen investigations into Donald Trump, the NY AG’s new probe is focused squarely on a soft target, the President’s family real estate business. New York’s new probe could result in the state equivalent of the death penalty for the Trump Organization. The Times reports:
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The New York attorney general’s office late on Monday issued subpoenas to Deutsche Bank and Investors Bank for records relating to the financing of four major Trump Organization projects and a failed effort to buy the Buffalo Bills of the National Football League in 2014, according to a person briefed on the subpoenas.
The inquiry by Ms. James’s office is a civil investigation, not a criminal one, although its focus and scope were unclear.
Dissolution for a corporation is analogous to the death penalty, and only applies to the most serious cases, as Fordham Law Professor Jed Sugarman explained in the Times’ Opinion section earlier today:
New York’s highest court has described this remedy of civil dissolution as a “judgment of corporate death,” and for the state to invoke such a corporate death penalty, the corporation’s “transgressions” must not be merely incidental, but “material and serious; and such as to harm or menace the public welfare.”
If a state civil investigation turned up more evidence of criminal fraud, state and federal prosecutors could use these findings to indict the Trump Organization and its officials, including Mr. Weisselberg.
Crucially, Trump cannot use his pardon powers to interfere with NY AG James’ investigation, and the right to sue a president in civil court for his pre-office behavior is a firmly established precedent.
President Trump’s fraudulent “charity” organization, the Trump Foundation, is still fighting a similar lawsuit from the previous New York AG Barbara Underwood, who obtained a judicial order to dissolve the non-profit corporation.
Now, Trump is feeling more heat than ever as state authorities are using his former fixer’s Congressional testimony as a factual basis to open new inquiries into the kinds of financial crimes that inevitably sprout from business fraud — and all it took was just one Congressional hearing for Michael Cohen to rip the lid off of Pandora’s box at the Trump Organization.
No wonder New York AG Tish James said on the campaign trail that, “the president of the United States has to worry about three things; Mueller, Cohen, and Tish James.”