June 15, 2024

A court decision on Monday grants Donald Trump’s property empire another opportunity for fraudulence. The judgment determines that the former president isn’t obligated to pay the full $464 million legal verdict against him while he challenges a civil fraud lawsuit.

Nevertheless, the staggering sum has ignited a debate, feeding into the perception that the authorities are coming down too hard on Trump. The criticism usually revolves around two points: first, that Trump’s white-collar lawsuits are “victimless” and therefore, do not warrant enforcement. Secondly, that every legal action against him reinforces his narrative of victimization, ultimately bolstering his presidential candidacy.

Both claims are misguided, at least in a culture that upholds the rule of law.

Addressing Each Argument Individually

Firstly, many commentators, including some analysts who have previously expressed criticism towards Trump, argue that his fraud does not have any actual victims. Trump intentionally overstated the worth of his real estate assets to acquire better loan and insurance terms. This doesn’t harm anyone, they argue, as the cutthroat world of New York real estate often involves deception. Even though he may have lied, the banks appear unscathed and a retired Deutsche Bank executive has even testified in his favor.

Others, such as “Shark Tank” host Kevin O’Leary maintain that the colossal verdict against Trump threatens to transform our country into environments unfavorable for business, like “Venezuela” or “Cuba.”

However, it merits mentioning that just because bank executives chose to ignore Trump’s fraud, it does not automatically mean there were no victims. By providing Trump with financial resources he did not rightfully qualify for, it reduced resources available for other reputable borrowers. At least, any loan applicant who adhered to the rules—accurately disclosing their assets, liabilities, and income—could not have received the favorable terms that were afforded to Trump. Imagine the possibilities for a viable borrower, utilizing the millions of dollars in loans Trump acquired at discounted rates.

Moreover, it could be argued that bank executives were ready to close an eye to Trump’s fraudulent activities to lure in their big “catch” and secure a hefty bonus. But it’s doubtful that these companies’ shareholders approved of offering minimal interest rates or premiums to a high-risk client under false pretenses.

Marketplace Integrity and Fraud Laws

In a capitalist society, laws against fraud serve the purpose of safeguarding not just direct victims of fraudulent practices but also the overall integrity of the marketplace.

We criminalize fraud and other unethical practices to foster trust in business transactions. When entering into a contractual agreement to exchange currency for a service, I should have the assurance that the service promised will be delivered, or that there will be lawful consequences if it is not — irrespective of the other party’s celebrity, affluence, or political affiliations.

This level of trust, fortified by the law, is the reason companies generally prefer to invest in the United States over countries like “Venezuela” or “Cuba.” The rule of law facilitates business, rather than complicates it. The only individuals who gain from the liberty to engage in fraud are the fraudsters themselves.

Should Prosecutors Back Off?

And what about the second contention, suggesting that prosecutors should step aside because they’re only augmenting Trump’s power?

The political repercussions of these cases are uncertain. Being held accountable for infractions and criminal activity might appeal to Trump’s ardent followers by reinforcing their belief in his persecution narrative. However, it simultaneously undermines his credibility with independent voters who are the ones likely to decide the outcome of close elections.

It’s possible that Trump’s popularity among specific voters might increase, while dwindling among others, due to this litigation. When all is said and done, the overall impact might be quite neutral.

Nevertheless, any potential influence should play no role in the decision-making process of the prosecution.

Prosecutors operate with finite resources. Thus, it’s impossible to tackle every civil or criminal law violation. They are granted discretion to utilize their resources where they can best serve the public interest. However, such discretion should not be exercised based on how a trial might impact a potential defendant’s political ambitions. Ironically, this is the kind of action Trump himself has insinuated he might resort to.

Here’s a reminder: the rule of law is a key pillar in countries that uphold it.

In fact, a valid complaint regarding these cases might be that New York Attorney General Letitia James (D), during her campaign, ostensibly committed to taking action against Trump. However, that doesn’t discredit her case against Trump.

Despite the absence of a concrete smoking gun in this fraud case, there was an entire smoking artillery of supporting evidence available. Documentation, employees, and a multitude of witnesses provided confirmation of the fraud. Not to mention that prior to the trial, news outlets frequently highlighted Trump’s proclivity for misstating his financials in business dealings.

Trump is allowed to have his own beliefs but cannot create his own accounting standards. When law violations become so prevalent and evident, it’s challenging for law enforcement to viably ignore them (though they have managed to do so in the past). Open violations of the law, particularly by influential politicians, jeopardise the rule of law and spur further illicit activities.

The secret to upholding the rule of law isn’t solely about legislating sound laws. It’s equally about enforcing them.