What happens when he has to come up with real money?
The $83.3 million defamation judgment that writer E. Jean
Carroll won Friday against Donald Trump will soon reveal the depth of his
finances, long shrouded in smoke and mirrors, disclaimers that his financial
statements are not to be trusted, and outright fabrications about his income
and wealth.
By Pia Guerra
The secret: does Trump have the money to pay Carroll?
Trump says he’ll appeal. He has few grounds to challenge
the federal court judgment. But if Trump does appeal, it will open the curtain on
his murky finances, where inflated valuations and concealed obligations are
common.
Trump testified almost a year ago that he was sitting on
$400 million of cash. Be skeptical. Don’t discount the prospect that Donald
conflated his personal money with cash from his MAGA fundraising operations,
which by law cannot be used to pay Carroll.
Appealing will require Trump to either deposit the entire
judgment amount with the court or obtain a bond covering 20% of the judgment,
close to $17 million.
If you were in the financial business, would you loan any
money to Trump? What if he offered to pay a fat fee upfront? A high-interest
rate? What real estate would you take as collateral to back the bond, knowing
that if the appeal fails, Trump will fight to keep you from collecting?
As early as this week, Trump expects a Manhattan judge to impose a fine of more than $300 million for persistent financial fraud.
Naked Claim
Even if Trump had $400 million cash a year ago, an
unverified claim, he has faced enormous legal and other bills since then. At
the same time, his golf courses in Ireland and Scotland continued losing money,
public records in London show.
The Carroll case and the expected New York State civil
judgment for persistent fraud would consume 96% of the cash he claimed without
proof.
Suppose Trump can’t financially qualify to pursue an
appeal. In that case, Carroll can enforce judgment, seizing cash in bank
accounts and pitting liens on properties such as the portion of Trump Tower
that Trump still owns and Mar-a-Lago in Florida. That would take time and cost
Trump a small fortune in legal fees—he has a history of stiffing his lawyers—to
delay paying Carroll. Meanwhile, interest costs will add to the $83.3 million
obligation.
Trump hopes that an appeals court will find the damages award excessive. Death cases, after all, are often settled for a few million dollars, sometimes a few hundred thousand.
He is unlikely to prevail because the jury awarded
$18.3 million in compensatory damages and $65 million in punitive damages. As a
rule, courts respect punitive awards of less than six times actual damages.
This punitive award was about 3.6 times the compensatory damages.
The punitive damages are intended, as Carroll lawyer
Roberta Kaplan told the federal court jury, to get Trump to stop lying about
Carroll. After an earlier trial Trump was judged to have raped Carroll in a
Bergdorf-Goodman department store dressing room and to have lied about it in
repeated attacks on Carroll. More than two dozen other women have accused Trump
of rape or sexual assault.
Trump insists he never met Carroll and “she’s not my
type.” During a pretrial deposition he was shown a photo of himself and his
first wife facing E. Jean Carroll and her then husband. Trump
misidentified Carroll as his second wife, Marla Maples. When his lawyer
interrupted to repair the damage, Trump asserted that the sharply focused image
was
Knowing Trump, I doubt he will stop attacking Carroll.
His emotional state and views about women, frozen in puberty, and his declining
mental health and cognitive capacity will not facilitate a proper change in
conduct.
Fantasy Finances
Trump’s finances have always been exercises in fantasy.
For example, in 1985, he bought Mar-a-Lago for $10 million. He claimed it was a
cash purchase with no mortgage. I have in my home a Chase bank executive’s
letter to Trump promising never to file the Mar-a-Lago mortgage at a
courthouse, as banking laws require.
One reality is that Trump borrowed 125% of the purchase
price, taking $2 million for himself while claiming he paid from his supposed
rich cash deposits. A second is that bankers who declare their illegal conduct
rarely get prosecuted or even disciplined, so weak is government regulation of
finance in America.
The same year he bought Mar-a-Lago with the hidden
mortgage, Trump also acquired the nearly finished Hilton Casino in Atlantic
City. He paid with a $325 million loan, from which he shaved off a $5 million
fee for himself.
Eventually, he owned three Atlantic City casinos, yet he never invested a dime in that New Jersey resort town. It was all
borrowed money. Because he took fees for himself from the loan proceeds, his
investment was less than zero, just as with Mar-a-Lago.
Only a foolhardy or corrupt banker would issue Trump a
bond enabling his appeal of the $83.3 million award to E. Jean Carroll. If
Trump fails to meet the financial qualifications for an appeal, there’s one
thing we’ll know for sure: the man who ran for president claiming he was worth
more than $10 billion is so financially weak that when an 80-year-old woman
grabbed him by the wallet, he couldn’t perform.
David Cay Johnston co-founded
DCReport. He is a best-selling author and investigative journalist who for 13
years reported for The New York Times. Johnston is a specialist in economics
and tax issues. He won a 2001 Pulitzer Prize. He teaches at Syracuse University
College of Law.