“Zero impact”: Expert shoots down Trump demand that $485M penalty disappear because he won election

Since last month, President-elect Donald Trump has carried his electoral victory into his legal battles, wiping out pending federal prosecutions and pausing sentencing. But experts say his efforts to do the same with his civil fraud judgment stands no chance. 

In a letter publicly released Tuesday, the New York attorney general’s office told Trump’s lawyer that the Constitution doesn’t mandate she ask a court to dismiss the $485 million judgment of Trump’s civil fraud case in the wake of his winning the election.

The letter came in response to Trump attorney and solicitor general appointee John Sauer’s late November communication to New York Attorney General Letitia James urging her to voluntarily drop the case, in which Trump was found liable for fraud. He argued a provision of the Constitution privileging federal law over state law “prevents state prosecutors from proceeding against the sitting President in any way.”

Legal experts told Salon, however, that Trump becoming president should have “zero impact” on this or any other civil judgment he has.

Former Assistant New York Attorney General Adam Pollock likened the judgment to regular expenses the Trump Organization must pay to maintain its building, asserting that they don’t “evaporate just because you become president.”

“They don’t vanish the moment that you become president, whether they’re the debt to the people of the state of New York in this $450 million judgment, this debt in the defamation case of almost $100 million or the debt to the electric company every month on the property fields,” Pollock, now a managing partner of Pollock Cohen LLP in New York, told Salon in a phone interview.

Trump is appealing a New York judge’s February decision that he owed the state $454 million for inflating his asset value and net worth on financial statements to obtain better loan terms over several years. That judgment, which accrues interest, is now valued at more than $485 million, according to USA Today.

Most of the president-elect’s other high-profile legal battles have been impacted by his electoral victory last month, which Sauer noted in his letter to James. Special counsel Jack Smith, who indicted Trump in two federal cases last year over his efforts to subvert the 2020 election and his retention of classified documents post-presidency, dropped the former and withdrew his appeal of the latter’s dismissal in late November.

In New York, the judge overseeing Trump’s hush-money case, in which he was found guilty of 34 felony counts of falsifying business records in May, also indefinitely postponed his sentencing at the request of the Manhattan district attorney last month.

Meanwhile, the fate of Trump’s Georgia prosecution over an alleged racketeering scheme to overturn the state’s 2020 election results — slowed to a near halt for most of the year as an appeals court weighed whether to disqualify Fulton County District Attorney Fani Willis over her hiring a romantic partner to lead the case — remains uncertain. The state appeals court canceled a hearing over Willis’ status earlier this month without explanation in the wake of Trump’s win. The president-elect’s lawyers also filed a motion last week requesting the case be dismissed because his impending presidency will make him immune from prosecution. 

Trump denies any wrongdoing in his criminal cases and has repeatedly characterized them as politically motivated “witch hunts.”

But in the A.G. office’s response, New York Deputy Solicitor General Judith Vale argued that the appeals process for Trump’s civil fraud judgment should continue as it would if Trump hadn’t won the presidency. She pointed to a unanimous 1997 Supreme Court decision against Bill Clinton that tanked his efforts to block a civil sexual harassment lawsuit that was brought against him by Paula Jones, a former Arkansas state employee. The court ruled that a federal civil lawsuit over a sitting president’s unofficial conduct could proceed during the presidency. 

The president-elect’s “appeals will be handled primarily by Mr. Trump’s appellate lawyers, and any consultations Mr. Trump may have with those attorneys about appeals will not plausibly impose an unconstitutional burden,” Vale wrote.

The “ordinary burdens of civil litigation do not impede the President’s official duties in a way that violates the U.S. Constitution,” she added. 

In a statement to USA Today, Trump spokesperson Steven Cheung described Vale’s letter as “sad and weak.” He also lauded Sauer’s correspondence as a “powerhouse submission.”

“AG James should heed President Trump’s call for national unity and drop this baseless, discredited witch hunt,” he told the outlet. 

But Pollock argued that Vale’s response was “spot on.”

“This case is at its finish line. There’s a judgment, there’s an appeal. The appeal has been fully briefed and argued,” Pollock said. “At some point, the First Department is going to issue a decision, and at that point, either party can appeal further” with permission from the New York Court of Appeals.

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The same premise would apply to Trump’s other massive financial judgment — the $88.3 million in damages he owes writer E. Jean Carroll after a jury found him liable for sexually abusing her and defaming her twice in his public statements about her allegation — Pollock said. Trump has denied Carroll’s claims and is appealing both judgments in her suits against him. 

Trump could drop his appeal in the civil fraud suit and pay the penalty, but he has signaled no interest in doing so. Much like in his other cases, the president-elect has denied any wrongdoing In his civil fraud case and is awaiting an appellate court ruling about whether the judgment can stand. His lawyers have argued, among other points of contention, that because Trump’s asset valuations did not hurt his lenders, the attorney general’s lawsuit went too far.  

While Syracuse University College of Law professor Gregory Germain agreed that Trump’s winning the presidency should have no bearing on the New York attorney general’s pursuit of the judgment against him, he thinks the arguments in Trump’s appeal have merit.  

One issue he identified was that the attorney general did not have to prove that the companies Trump and his co-defendants were said to have defrauded relied on Trump’s inflated values. As Trump’s lawyers noted, the companies themselves did not complain that Trump defrauded them. Some witness testimony also suggested the insurers and lenders thought the values were inflated but were unsure by how much, Germain noted.

Because the attorney general didn’t prove their reliance on the financial statements “to the extent necessary” under fraud law, she had “no business bringing an action to get disgorgement,” he argued.  

Germain also raised concerns about how the judge calculated the damages Trump owed to the state of New York. He argued that the only way the court could have settled on “such a huge amount” for the judgment is by looking at how much Trump gained financially from using the statement.

But that financial gain Trump received from selling property he purchased with a loan, obtained by using his inflated financial statements, is not “proximately caused by the statement” but other factors like property value increase over time, he said. Because of that, the “causal connection” between Trump’s enrichment from using the statement and the judgment value is “lacking.”

The case had “lots” of “substantive problems with the decision” and “the calculation of the remedy,” he concluded. “Those are all issues on the merits, but they really have nothing to do with whether you won the election or lost the election.”