Like Hemingway’s Mike Campbell, the Trump Organization is confronting troubles that accumulated gradually and have coalesced suddenly. And once again, friends are at the bottom of it.
A grand-jury indictment of Donald Trump’s business and its chief financial officer, Allen Weisselberg, unsealed this afternoon in New York, alleges tax evasion arising from an attempt to pay Weisselberg and other Trump Organization executives extra money “off the books.” Prosecutors charge that Weisselberg and others received rent payments and other benefits without paying the appropriate taxes on them. Weisselberg and the Trump Organization have said they will plead not guilty.
So far, the danger is to Trump’s friends and his business, not the former president himself. But the danger could spiral, because Trump knew only so many tricks. If Trump’s company was bypassing relatively moderate amounts of tax on the income flows to Trump’s friends, what was it doing with the much larger income flows to Trump and his own family? Even without personal testimony, finances leave a trail. There is always a debit and a credit, and a check issued to the IRS or not.
An early indication that things may end badly for Trump is the statement released today from the Trump Organization. “Allen Weisselberg is a loving and devoted husband, father and grandfather who has worked for the Trump Organization for 48 years. He is now being used by the Manhattan District Attorney as a pawn in a scorched earth attempt to harm the former President. The District Attorney is bringing a case involving employee benefits that neither the IRS nor any other District Attorney would ever think of bringing. This is not justice; this is politics.”
Here is what is missing from that statement: “I’m 100 percent confident that every investigation will always end up in the same conclusion, which is that I follow all rules, procedures, and, most importantly, the law.” That’s the language used by former Trump Interior Secretary Ryan Zinke when he was facing ethics charges in 2018. Likewise, when Virginia Governor Terry McAuliffe was accused of violating campaign-finance laws in 2016, he too was “very confident” that “there was no wrongdoing.” Plug the phrases very confident and no wrongdoing into a search engine and you will pull up statement after statement by politicians and business leaders under fire. For some, their matter worked out favorably; for others, not so much. Either way, everybody expects you to say that you’re confident you didn’t do anything wrong. It’s the thing an innocent person would want to say. So it’s kind of a tell when it goes unsaid.
An earlier statement from Trump himself likewise omitted an affirmative defense of his company and its employees, and instead attacked the professional prosecutors as “radical Left” (not to mention “rude, nasty, and totally biased”). The key line in Trump’s own statement is an anticipation of the possibility that one or another of his friends might flip: “They”—the prosecutors—continue to be “in search of a crime; and will do anything to frighten people into making up the stories or lies that they want.”
One of Trump’s skills as a politician is preparing the battlefield in advance. In the case of his first impeachment, he chose to argue outright innocence—“it was a perfect call”—and no matter how mountainous the evidence of wrongdoing, that was the line he maintained to the end.
This time, though, Trump is not claiming that “all taxes were paid” or that “it was a perfect tax return.” He’s readying his supporters for bad revelations about his company’s taxes and directing them to a fallback line that singling him out as a tax scofflaw is politically unfair.
That line of defense may well rally Trump’s supporters. It will not do him much good in court. It’s impossible for tax collectors to scrutinize every return. Selecting high-profile evaders and holding them to account is how tax laws are enforced. And if a former president numbers among those high-profile evaders, that makes the case for targeting him stronger, not weaker. It sends the message that the tax authorities most want to send: Everybody has to pay, especially powerful politicians. In 1974, former President Richard Nixon faced a review of his taxes that ultimately presented him with a bill equal to half his net worth at the time. Members of Congress have faced indictment for tax evasion, as have high-profile state and local officials.
Trump and his team already appear to expect that the law will be against him. They are counting on that fact not to matter very much—not enough to overcome the political hullabaloo they hope to raise in Trump’s defense.
Trump worked all his life on the theory that law can be subordinated to political favors and political pressures. That theory has carried him this far—and it’s pretty far, all things considered. We are now about to see a mighty test, before the country and the world, of whether that theory will carry him the rest of the way home.