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The Banana Republic of America
Posted at: Mar/26/2024 : Posted by: Mel
Related Category: The Law, Watching America,
The deadline is rapidly approaching for Donald Trump, the presumptive 2024 GOP Presidential candidate to present the State of New York with a $454 million dollar bond. Whether you like or hate Trump, this comes off as a malicious and vindictive prosecution. Similar too many countries, from Russia to small Latin American countries. In these countries the courts are used as a weapon to eliminate the competition. We have sent political observers over the globe and repeatedly point to this behavior as being contrary to the democratic process that we believe we do best. Now this same tool has been used in America leading to only one conclusion. I now live in the Banana Republic of America and this is very disappointing. History lesson part-1 In 1956 New York States attorney general Javits asked and got from the state legislature a new law that would equip him to go after businesses and powerful interests that defraud the public. The key wording in Section 63(12) of New York’s executive Law is the wording to bring action against businesses that engage in “repeated fraudulent or illegal acts or otherwise demonstrate persistent fraud or illegality in the carrying on, conducting or transaction of business.” This is obviously a broadly worded statute that was intended in the spirit of consumer protection. This law was written to not require a victim since the target was fraud against the general public. History lesson part-2 Letitia James campaigned for the office of New York State Attorney General on a platform of …I’m gonna get Donald Trump…. She did not campaign to enforce the laws of New York. She did not campaign on a generic issue plaguing many, such and high rent. She pledged to get one individual; is that even legal? Since Trump has no filter, it is definitely easy to hate him. Nevertheless, it would have been nice if her campaign platform had a more broadly serving and altruistic agenda as part of being the States Attorney General. Wow Once in office, Ms. James leveraged a loose interpretation of this obscure consumer protection law to argue that Trump in his real estate dealings had committed fraud. In general, a “fraud” case has to have someone or some entity who through false representation ended out losing money. Strangely, all the players made money. Specifically, for one of his development projects where an initial loan was needed he listed some of his existing properties including Mar-a-Lago in Palm Beach Florida as collateral. Ms. James office argued that Trump's stated value for his collateral was false and that it was actually worth a great deal less. Just as in a consumer loan, the bank involved had every opportunity to visit and appraise the property if they believed or were concerned about the suggested value. As in most aspects of financial transactions, the rules for BIG deals are not quite the same as for smaller ones. The bank was clearly delighted to be first in line to make a huge development loan to Donald Trump, a proven successful real estate developer. Mr. Trump repaid the bank its principal and interest ahead of schedule and everyone appeared happy. There is the argument that if the money had not been loaned to the Trump organization it would have been available to other developers, but this is fuzzy at best. Clearly, there were no losers so it would be difficult to believe there was any FRAUD based on the conventional definition. If an outside observer wants to argue that the collateral was not worth as much as initially represented, that’s really a “get over it moment.” Banks want to loan to developers, organizations and projects with a proven record and taking out large loans and paying in full. So Trump was found guilty of Fraud where no one was defrauded. But wait, there’s more The judge in this civil action not only found Trump and his organization guilty but levied a fine of $363 million which with penalties is now at $454 million. The logical next step would be an appeal, but even that is being hindered by the judiciary. Normally a bond of 10% of a civil verdict is required before and appeal will be granted. In this case a 100% bond is being required before being allowed to go to the next booth and ask for an appeal. Bonds in general are a tool of the court system to ensure that the defendant has a vesting interest in showing up, and there is clearly no reason for Trump to not appear. There is no doubt that Donald Trump is a multi-billionaire, but most of his financial assets are tied up in real estate and corporate holdings. Regardless of what you think of the man, he is smart enough to put money to work and does not have half a billion sitting around ready to write a check against. If the state is trying to force him to sell some of his property on short notice it would be at fire sale prices. If on appeal he wins, it is doubtful the court would recoup his “perceived” losses, though they are clearly fixated on the notion that he got a “perceived” discount on his loan. Fortunately, not all courts in New York are focused on convicting people of crimes that don’t exist. On appeal, his bond was reduced to $173 million. The ramifications A couple of real estate development firms have already told their staff they will not be underwriting any new projects in the state of New York. They see the risk to their investors as too great. If you negotiate a good deal, but someone sees it as “too good,” you could end out with crippling penalties. The international money markets have for a long time viewed the United States as the best place to put your money, but there is now hesitation. The rule of law has been set aside in favor of vindictive prosecution. If this entire prosecution was a tactic by Letitia James to curry favor with the Democratic Party leadership, it appears to be backfiring. Clearly, Mr. Trump is a billionaire, so he is not on the surface “one of us,” Regardless, the never ending stream of attacks and persecution by apparently power hungry government functionaries makes him easy to relate to. We are a country born out of a revolution against the global superpower of its day. We have an almost blind love for the “underdog,” and in this fight that is what Trump appears to be. It seems as though every time they throw a new charge at him he gets a 2% bump in the poles. It clearly doesn’t help the Democratic cause that every time we turn around the Biden administration is telling us to throw away something and replace it with a greener version at twice the cost. What about the law? Our American revolution was born out of an effort to escape an oppressive British monarchy. With this fear of a central government weighing heavy in the minds of our founding fathers then wrote a constitution that severely restricted government power over an individual, their speech, their religion and their property. The first eleven amendments of the Constitution (aka: The Bill of Rights) specifically limit federal powers. Traditionally, our judicial system has been focused on responding to crime. Once a crime has been identified, then the police and the prosecutors work backwards to identify who is responsible for the crime and hold them accountable. Growing up on Perry Mason (Erle Stanley Gardner) and westerns, this seemed how it works. I have read a lot of American western history and lore. I cannot recall a single case where the judge hung someone, then looked for a crime to accuse and convict them of. Letitia James, to her credit, followed through on a campaign promise and completely flipped this process, leveraging the most obscure law she could find. In a more contemporary vein we call this “lawfare”; where legal action is used as a weapon of hostility. Normally, lawfare is used by those in power to suppress or eliminate those vying for power. We should all be concerned There is a saying attributed Lavrentiy Beria, the longest serving secret police chief under Soviet Russia’s Joseph Stalin. Beria boasted that he could find criminal conduct on anyone, even the innocent. He famously boasted “Show me the man and I’ll show you the crime.” Letitia James has clearly followed through on Beria’s words, and we should all be concerned. If the justice system can be used to financially punish certain people because of the political affiliation, none of us are safe from our government. Trying to take nearly half a billion dollars from someone where the supposed crime is obscure, and no one lost anything is scary. Does that mean that everyone with a pension or a 401K could lose all that on the whim of the government and puppet courts? Fortunately, some of this has already been tested in court. In Timbs v. Indiana, Ruth Bader Ginsburg said, "For good reason, the protection against excessive fines has been a constant shield throughout Anglo-American history: Exorbitant tolls undermine other constitutional liberties." Her reference was to the Eighth Amendment of the Constitution which specifically says: "Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted." Timbs was arrested and found guilty of a possession of a controlled substance. Indiana law allowed for the forfeiture of his car since the substance was found there. The maximum penalty for the crime was $10,000 but his car was worth over $42,000. The court found that forfeiture of the car would be grossly disproportionate to the gravity of Timbs’ offense and thus unconstitutional under the Eighth Amendment’s Excessive Fines Clause. Ginsburg went on to say. “Protection against excessive fines has been a constant shield throughout Anglo-American history for good reason: Such fines undermine other liberties. They can be used, e.g., to retaliate against or chill the speech of political enemies.” I am sure that Justice Ginsburg would be troubled by the notion that her words might be used to defend Donald Trump, but such is the nature of the law. If the guilty verdict is allowed to stand, the Supreme Court is still likely to find the penalty of $454 million excessive under the 8th Amendment, but that doesn’t undo the vindictive prosecution. If Letitia James is not as an attorney sanctioned, if not disbarred by her peers, there will be more like her. Campaigning to use her office for purely vindictive purposes is a dangerous precedent. For a country that prides itself on the constitutional roots of our founding fathers, there is a need to punish and not reward this abuse of office. There can't just be no accountability for the people who perpetrated this and at the very least, one level of accountability could be disbarment. For everyday Americans and business people and entrepreneurs, this may seem a long ways away, but it is not. Whether you approve of Donald Trump, or not, the notion that the judicial system can be weaponized and an attempt can be made to seize your assets because those in power don’t agree with you is seismic. The world watches America. We are a Democratic Republic, and yes…democracy is messy. But if democracy after 250 years fails here, it will successively fail elsewhere across the globe. Are we really better than just another banana republic?
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