For those expecting or hoping to see Donald Trump wind up in prison, a great deal depends on whether this week’s charges are the opening salvo from the Manhattan district attorney’s office, the beginning of the end of the investigation, or something in between. Based on what we know right now, it is best to think of the future as a range of these possibilities.
On Thursday, Cyrus Vance’s years-long investigation into the Trump Organization produced an indictment charging Allen Weisselberg, the chief financial officer, with a variety of crimes for not reporting income he received from the company. Weisselberg allegedly avoided paying income taxes and received tax refunds to which he was not entitled as a result of an alleged scheme that netted him approximately $1 million. That’s not unusual, but the indictment also charges the Trump Organization itself and a subsidiary that processes payroll for the company. As others have noted, corporations aren’t typically charged simply for failing to pay taxes on employee benefits. These sorts of corporate cases can be handled through tax authorities or civil actions, with a penalty that might include the payment of back taxes along with a fine. In fact, if this were any other company, it is likely that this conduct would not have resulted in criminal charges against the corporation itself.
So is this just a taste of what’s to come? It is certainly possible. Investigators are reportedly still looking into allegations that Trump illegally inflated his net worth and the value of his assets to defraud lenders, insurers, and tax authorities. The Wall Street Journal noted that the probes by the offices of Vance and New York attorney general Letitia James “remain open,” that Vance’s office “is expected to continue pursuing the broader investigation” and that “it is fairly common for prosecutors to bring additional charges and either supersede or join indictments.” According to Trump’s lawyers, Vance’s office also told them that the investigation is ongoing. It is common to keep an investigation like this open even after charges have been filed, but it is far from clear that anything more serious will unfold in the investigation unless something significant changes.
Many people have suggested there is more, because the indictment may simply comprise a first round of charges in order to try to induce Weisselberg to cooperate against Trump. Some observers have argued that Weisselberg’s cooperation against Trump would be critical if there is any chance that Trump himself might be prosecuted. The best way to induce a non-cooperative target is to charge them as aggressively and comprehensively as possible. It would be odd to parcel out criminal charges over time; this strategy could actually reduce prosecutors’ leverage by suggesting that they have less confidence in the other charges.
While these charges may increase pressure on Weisselberg by exposing him to the prospect of prison time, a great deal depends on how significantly he and his lawyers themselves perceive this risk. We don’t know how strong Weisselberg’s defense is — or, more to the point, how strong he and his lawyers believe that it is. (In the past, he has argued that he relied on the Trump Organization’s lawyers to ensure compliance with the law, which is a common and sometimes effective defense in financial crime prosecutions.) Even if Weisselberg is convicted on some or all of these charges, it is far from clear that he would be sentenced to prison time. Weisselberg will be 74 in August and he has no criminal history. Assuming that there is a conviction, it is possible that Weisselberg could serve some time in prison given the dollar amounts at issue, but a sentence of probation is also a very real possibility — something that would factor heavily into any defendant’s assessment of whether and to what extent he should plead guilty and cooperate against others.
Prosecutors do not take lightly the initial filing of criminal charges in any complex, high-profile case — to say nothing of a case involving a former president — as they can reveal how effective and exhaustive their investigation has been. What’s more, the charging of corporations tends to happen at or near the end of criminal investigations, because prosecutors want to have the strongest and most comprehensive case possible to maximize their chances of winning if a case goes all the way to trial. If Vance’s office had more evidence that they believed was likely to result in a conviction at trial, they almost certainly would have charged it this week.
Short of charging Trump himself, a great deal has also been made in recent days about whether the mere filing of these charges against the Trump Organization will devastate the business. This is far from certain. To understand why, we have to look at what appears to be a strange set of meetings over the last week between Vance’s office and the company’s lawyers.
First, meetings like this are routine in corporate criminal investigations. I attended them myself both when I worked in the private sector and when I worked for the Justice Department, where I settled a criminal case involving Bank of America and Merrill Lynch, and developed the legal theory that eventually allowed the department to obtain a settlement from J.P. Morgan. These sorts of meetings are not useful only for the defendants: Prosecutors can gain helpful insights into possible defenses at trial that they can use to sharpen and even improve their cases.
Second, generally speaking, a corporation is liable for the criminal conduct of an employee if that conduct was within the scope of the employee’s job responsibilities and was undertaken (at least in part) for the benefit of the company. You can imagine how much havoc this could create in the economy if prosecutors regularly invoked this rule, so a complex set of conventions has developed over time. (The modern-day cautionary tale is the 2002 conviction of the Enron accounting firm Arthur Anderson, which went out of business after a criminal conviction that was overturned several years later by the Supreme Court.) At the federal level, those policies instruct prosecutors to consider, among other things, “collateral consequences” to innocent third parties, like shareholders or employees. Vance’s office adopted similar guidelines in 2010.
According to news reports, Trump Organization lawyers argued that the collateral consequences of an indictment of the company would be out of proportion to the misconduct at issue. This is a very common point of discussion between prosecutors and defense lawyers in corporate criminal cases — one that often results in different forms of corporate settlements that provide the government and the company with greater control over the resolution and its fallout. Clearly the company’s lawyers were not able to persuade Vance’s office to back down.
For public financial instructions, a criminal conviction without any pre-negotiated protections from the government can be very bad, because it can prevent the company from managing certain types of assets or obtaining government contracts, and it can seriously tarnish the company’s brand and reputation. But the Trump Organization is a relatively small, privately held company with a highly polarizing brand that has already been publicly tarnished by the fact that Trump is a terrible person and was a disastrous president. Some of the most serious problems for a business like the Trump Organization may not meaningfully come into play unless and until there is a conviction, and this proceeding could easily take years before it is resolved one way or the other.
All of this — the build-up, the frenzied coverage, the prognosticating — feels rather familiar, and not in a particularly good way. Vance’s investigation has received coverage that has been structurally similar to the coverage of the Mueller investigation: Persistent, speculative, and inflected with drama, right down to echoing headlines, driving toward a conclusion that sees Trump finally punished. Perhaps there will be more significant developments, but given what we have already seen of Vance’s investigation, the possibility that there will be charges brought against Trump himself appears increasingly unlikely.
