The indictments of Donald Trump have begun to come down. New York will be first, but Special Counsel Jack Smart in Washington and the district attorney in Fulton County, Georgia, (Fani Willis) could follow shortly.
Lest there be any doubt, this post is written by someone who believes that the rule of law requires that Donald Trump face prosecution. But that does not imply that the prosecution will be a slam dunk or that Trump does not have defenses on which prosecutors have not yet fully focused. In particular, much may depend on how prosecutors frame their charges. This post will consider only the New York district attorney’s likely charges and those that the special counsel might assert in federal court. In both cases, some obstacles may exist to which the Supreme Court is very sensitive (possibly unduly so).
I. The New York Indictment
We all know this as the “hush money case” in which Donald Trump allegedly directed $130,000 to Stormy Daniels, a porn star, to keep her quiet on the eve of the 2016 election. Paying hush money, however, is not generally a crime. Instead, the crime that will likely be charged in this case is “Falsifying business records in the second degree” (Article 175 of the New York Penal Law). Section 175.05 thereof says, in part:
A person is guilty of falsifying business records in the second degree when, with intent to defraud, he:
(1) Makes or causes a false entry in the business records of an enterprise;…
(3) Omits to make a true entry in the business records of an enterprise in violation of a duty to do so which he knows to be imposed upon him by law or by the nature of his position.
Section 175.05 is only a misdemeanor, punishable by up to a year in jail, but it can become a felony under Section 175.10, “when his intent to defraud includes an intent to commit another crime or to aid or conceal the commission thereof.” In this event, the crime becomes a class E felony, punishable by a sentence of up to four years.
Here, the facts seem clear cut, but the applicable law is less so. By all accounts, Michael Cohen paid $130,000 out of his own funds to Stormy Daniels to keep her quiet. He then received monthly reimbursements from the Trump Organization, which described them on its records as “legal expenses” and referred to a “retainer agreement” pursuant to which they were made. Apparently, the retainer agreement never existed, but a retainer agreement (if it had existed) would have made the monthly payments appear more innocuous.
What was the crime thereby concealed or aided? Again, we will have to wait for the indictment, but the likelihood is that prosecutors will say that the “legal expenses” characterization disguised an unlawful political contribution by the Trump Organization to the Trump campaign, because the purpose of the payments was to protect and benefit Trump’s campaign. Defendants may plausibly reply that the purpose was only to protect Trump’s reputation (dubious as it already was). Given the statutory need to show an “intent to defraud” under both sections 175.05 and 175.10, there are close questions here. First, although ignorance of the law is generally not an excuse, and Trump thus need not be aware that he was violating election law, it is at least arguable that his intent was only to hide the affair. Remember that the defendant’s conduct must be intentional under Section 175.05.
Ironically, this need to show an intent to make a political contribution implies that any trial involving this provision will be a credibility contest between Michael Cohen and Donald Trump. Cohen is the critical witness who can testify what the payments were for. Neither gentleman is an exemplar of candor or honesty (with Cohen having already been convicted of lying about these payments). N.Y. District Attorney Alvin Bragg had previously cited Cohen’s impaired credibility as a reason for not bringing the case against Trump that his predecessor Cyrus Vance and his deputy, Mark Pomerantz, had wanted to bring (which involved a fraud on banks by overstating Trump’s net worth). Now, we have come full circle to the point where Cohen will be the critical witness for Bragg if an indictment is brought. Alan Weisselberg, Trump’s chief financial officer who is now serving time at Rikers Island after a conviction in an earlier related prosecution this year of the Trump Organization, could also be pressured to explain the legal expenses characterization.
Second, two problems make this theory of a concealed election law offense problematic – unless the prosecution pleads it so as to show a property loss. First, presidential elections are regulated by federal law, and it is not clear that Section 175.10 covers an attempt to conceal a crime under federal law, which New York State cannot enforce. To be sure, it can be argued that New York is merely adding to the penalty for falsifying the records of a New York business enterprise when the conduct appears more egregious, and thus it should not matter under whose law the concealed crime arises. But there is a risk here.
A second problem with placing an election law violation at center stage is that it involves no clear attempt by the defendant to gain money or property. Section 175.05 requires that the defendant have an “intent to defraud.” Probably, the New York legislature in using these words meant only an intent to deceive or cheat some victim. But in a series of decisions, culminating in Kelly v. United States[1] in 2020, the Supreme Court has insisted that an “intent to defraud” requires an intent to obtain money or property. In Kelly, which was a rare unanimous decision, the staff of New Jersey Governor Christie concocted a scheme to restrict access to the George Washington Bridge for residents of Fort Lee, New Jersey, as retaliation for the failure of its mayor to endorse Governor Christie’s re-election campaign. All the justices agreed that this was a deceptive scheme, but because it did not involve any element of money or property, it thus lacked any “intent to defraud.” Similarly, Trump in hiding his involvement in a “hush money” scheme (also in connection with an election contest) was not seeking to profit but to avoid adverse publicity. Not a prospective payee, but a payor, he does not fit easily within the Supreme Court’s new concept of “defraud.”
To be sure, cases can always be distinguished, but the Court in Kelly rejected a variety of claims of property loss that had been upheld by the Third Circuit. Of course, prosecutors can attempt to tell the Court that Section 175.05 and the federal wire fraud statute have different legislative histories and statutory purposes. But one can hear a skeptical justice responding:
But it’s the same word, counsel, and the New York Legislature and Congress speak the same language and rely on the same dictionaries.
This question may be answerable, but it would be wiser to reframe the indictment to duck it.
So what should be done? It is certainly possible to plead a property loss if prosecutors focus on the problem. If Donald Trump had personally paid $130,000 to Stormy Daniels, this would look more like a personal expense than a business expense (and would presumptively not be deductible). But having the Trump Organization pay it pursuant to a non-existent retainer agreement made it appear deductible (or at least more so). In reality, the $130,000 paid by the Trump Organization through Michael Cohen to Stormy Daniels should have been viewed as additional compensation paid to Donald Trump (on which income he should have been taxed). Thus, the concealment involves tax evasion and not simply Donald Trump’s privacy. Put even more simply, the IRS was cheated out of taxes. Other theories are also possible: For example, if there were no corporate purpose to the Trump Organization making the $130,000 payment, then Trump would have misappropriated the $130,000 from the Trump Organization. There is no need to drop the election law theory but a strong need to supplement it.
The ambiguity around the meaning of “intent to defraud” cannot be safely ignored, because the message underlying Kelly is that the Supreme Court does not want claims of political favoritism or retaliation to trigger criminal prosecutions. Favoritism, bias, and retaliation are woven into the heart of American politics, and the Court does not want the net of criminal liability to be stretched that broadly.
II. Federal Prosecutions
The New York prosecution is essentially a sideshow, while the special counsel’s possible prosecution relating to the alleged attempt to disrupt Congress and prevent the certification of the presidential election on January 6, 2021, is the main event. History will not care about whether Donald had sex with Stormy, but it will care about January 6. Only the latter has historical and political significance and challenged the future of American democracy. And it may also be a much closer case.
A. January 6
Let’s begin with the three statutes recommended by the U.S. House Select Committee on the January 6 Attack. The first of these is 18 U.S.C. Section 2383 (“Rebellion or insurrection”), which states:
Whoever incites, sets on foot, assists or engages in any rebellion or insurrection against the authority of the United States or the laws thereof, or gives aid or comfort thereto, shall be fined under this title or imprisoned not more than ten years, or both; and shall be incapable of holding any office under the United States.
That seems a showstopper, particularly in its bar on holding office, but can the prosecution prove beyond a reasonable doubt that Trump truly engaged in an “insurrection”? In his speech to the crowd that marched to the Capitol, Trump did tell his audience to “peacefully and patriotically make your voices heard.” This sounds like some lawyer on his staff was able to add one protective sentence to Trump’s talk. Of course, Trump also told them that “if you don’t fight like hell, you’re not going to have a country anymore.” Still, defense counsel can describe that as simply rhetoric. The issue gets even more nuanced, as Trump aide, Cassidy Hutchinson, testified that Trump knew before the rally that some in the crowd were armed. She added that he indicated that he was not worried because, “They’re not here to hurt me.” But, if so, who were they seeking to hurt? The factual evidence thus goes both ways.
Next, what is an “insurrection”? Those defending Trump will predictably argue that a protest, even if violent, is not an “insurrection,” which usually means an attempt to overthrow the government. In the defense’s view, the protestors were demanding honest elections because they sincerely believed that a fraud had taken place. The prosecution will disagree, but they must prove beyond a reasonable doubt that there was an “insurrection” under Section 2383. This can result in an unwieldly “circus trial.”[2]
Conversely, those who want Section 2383 to be used can argue that its language does not require Trump to have incited or organized an insurrection, but only that he supplied “aid or comfort thereto.” In their view, even if most protestors did not want to overthrow the government, some – such as the Proud Boys and the Oath Keepers – did (and some of them have already been convicted of “seditious conspiracy”).
Many of the problems associated with the use of Section 2383 are avoided if prosecutors instead rely on 18 U.S.C. Section 1512(c) (as they have to date). It criminalizes conduct by anyone who “corruptly…obstructs, influences, or impedes any official proceeding, or attempts to do so.” The maximum sentence here is “not more than 20 years,” and there is no need to prove the inherently vague term “insurrection.”
Section 1512(c) was adopted in 2002 as part of the Sarbanes-Oxley Act, in part to address the conduct of Arthur Anderson, a major accounting firm, which destroyed some financial records for a client. This section’s scope has not been the subject of much judicial interpretation, but the term “official proceeding” would seemingly include a scheduled congressional vote to certify electors, which is a constitutionally mandated task. The term “corruptly” in Section 1512 has been read by the Supreme Court to require “consciousness of wrongdoing,”[3] but that would likely be satisfied if the jury believed there was an intent to overturn the election. The “fake electors” claim here seems critical. A prosecution under Section 1512(c) could logically include not only those who marched on the Capitol on January 6, but also those who assembled slates of “fake electors.” These might include John Eastman, Rudy Giuliani, and other lawyers.
To date, some 200 persons have been prosecuted under Section 1512 for marching into the Capitol and engaging in physical confrontations with Capitol police (or sitting at the speaker’s desk in her office). Most have pled guilty. The government should continue to avoid Section 2383.
A last possibility is 18 U.S.C. Section 371, which broadly prohibits any conspiracy “to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose.” The language about defrauding “the United States, or any agency thereof” reaches any attempt to obstruct the functioning of a federal agency, including Congress. Almost uniquely, Section 371 does not require any attempt to obtain money or property.
Proving that this statute was violated by at least some on January 6 seems easy, but proving that Trump had the intent to frustrate the certification of electors will require testimony of a cooperating witness – for example, Michael Pence or Mark Meadows, Trump’s chief of staff. Trump has objected to subpoenas directed to them, citing executive privilege, and Pence has cited the “Speech or Debate” clause of the Constitution. Others – mainly the lawyers — have cited the attorney-client privilege. So far, the prosecutors have won on these issues, and that should continue, but this takes time.
Timing may indeed be the most critical issue. If Pence or Meadows were to take their claims to the Supreme Court (and if the Court were to grant cert.), the delay might be a year or more. This could force the special counsel to decide to proceed without their testimony – at some loss to the needed evidence.
B. Retention of Classified Information
Legally, this may be the easiest case to make for prosecutors, but it comes with the problem that its prosecution may suggest selective enforcement to many, given President Biden’s similar (but much less culpable) retention of documents.
In addition to specialized statutes (such as the Espionage Act), the criminal statutes most likely be used here are the obstruction of justice statutes, including Section 371 (which covers conduct intended to frustrate a federal agency).
Again, there is a need to link the unlawful retention of the documents to Trump, and this may explain the special counsel’s pursuit of Evan Corcoran, a lawyer who acted for Trump last year on the records issues. Corcoran asserted the attorney-client privilege, but the special counsel won a significant victory in Washington, where the chief U.S. district court judge found that the “crime-fraud exception” to that privilege applied. Corcoran faces a hard choice: testify against Trump or face jail. Just like Weisselberg in New York, he likely needs to strike a plea bargain that will require his cooperation.
III. Conclusions
None of these comments are intended to suggest that Trump should escape prosecution. They are intended to suggest that prosecutors must be sensitive to the traps and pitfalls before them. If they rely on sections 750.05 and 750.10, they must allege a property loss, not simply deception and unfairness. Federal prosecutors also take a risk if they use Section 2383 in having to prove an “insurrection.” It is probably simpler to rely on sections 1512(c) and 371, because they do not require the same complicated proof.
Prosecutors need to expect and prepare for the likelihood that any conviction of Donald Trump will eventually find its way to the Supreme Court. In a nation of 50 states and thousands of counties, the district attorneys of New York and Fulton County are setting precedents that other district attorneys (potentially a thousand or more) may someday follow. Federalism has not faced this problem before, and that could prove to be of concern to the Supreme Court. Thus, prosecutors need to cut square corners. Unfortunately, prosecutors are creatures of habit and often just mark up the last indictment charging a similar crime. This is too important a case for them to simply follow their standard playbook.
ENDNOTES
[1] 140 S. Ct. 1565 (2020).
[2] In the prosecution of the Proud Boys for seditious conspiracy, over two months and 20 witnesses were called by the prosecution to establish an insurrection. See Alan Fener & Zach Montague, “Prosecution Complete Testimony in Proud Boys Jan. 6 Sedition Trial,” The New York Times, March 18, 2023 at p.13.
[3] See Arthur Andersen LLP v. United States, 544 U.S. 696 (2005).
This post comes to us from John C. Coffee, Jr., the Adolf A. Berle Professor of Law at Columbia University Law School and Director of its Center on Corporate Governance.