Isaac Laquedem

What will New York's indictment of Donald Trump look like? The attorney general has released a draft

Amidst the news of the past week is the news that Letitia James, the attorney general of the State of New York, filed in state court a 115-page document with the unassuming name "Supplemental Verified Petition."  The case in which she filed it, however, is entitled "State of New York v. The Trump Organization, Inc." and includes as defendants three companies controlled by the Trump family, the law firm Morgan, Lewis & Bockius and one of its partners, his accounting firm, his New York land use lawyer, his children Donald Jr. and Ivanka, and the former president himself.

Some months ago it was reported that Mr. Trump was being investigated for inflating the value of his assets for tax purposes that the stories only vaguely described.  I read the initial report as being in insignificant sort of flexible valuation where a property owner might claim one value of the property when refinancing and a lower value when appealing its property tax assessment.

Ms. James didn't spend the 115 pages of her petition to talk about property taxes.  Rather, she laid out in painful detail (painful, if you're one of the defendants) the changes in value that Mr. Trump's organization indulged in, not to save a few dollars its property tax bills but to mislead banks into financing his enterprises.  She asks the court to compel Donald Trump, Donald Trump, Jr., and Ivanka Trump to testify under oath before the office of the state attorney general, and in the case of the elder Mr. Trump, to produce documents and certify that he has produced all the responsive documents, subject, as Ms. James demurely notes on page 112 of her petition, to their right "to invoke the Fifth Amendment Privilege on the record in response to any specific question." 

Ms. James laid out her reasons to compel the Trump family to testify in much the same form as the government does in an indictment.  For example, she notes on page 37 that in 2011 Ivanka Trump rented a penthouse apartment in Trump Park Avenue and was given the option to buy the unit for $8,500,000.  In financial statements from 2011 and 2012, however, the Trump Organization valued the apartment at $20,820,000 and did not disclose that it had granted Ms. Trump the right to buy it for $8,500,000.  In 2013 the Trump Organization upped the unit's value to $25,000,000.

On the same page, the state asserts that in October 2015 Ivanka Trump acquired an option to buy a different Trump Park Avenue unit for $14,264,000 - a unit whose value the Trump Organization had reported as $45,000,000 the year before.  The petition cites to documents that New York obtained from Mr. Trump's accountants.

Why is it important that the Trump Organization made these allegedly false statements to banks with the intent to borrow money?  It's because of 18 USC §1344, the provision of federal law that makes it a crime to "knowingly execute a scheme or artifice to defraud a financial institution" or to obtain credit from a financial institution "by means of false or fraudulent pretenses, representations, or promises."  The penalty is a fine of up to $1 million, or up to 30 years at Club Fed, or both.  The statute of limitations on federal bank fraud is 10 years.

The New York attorney general isn't in charge of enforcing federal statutes.  She can, however, prosecute violation of §175.45 of the New York penal code, under which a person who "knowingly makes or utters a written instrument which purports to describe the financial condition or ability to pay of some person and which is inaccurate in some material respect" commits a class A misdemeanor.  Class A misdemeanors are punishable by up to 364 days in prison and a fine of up to $1000.  The attorney general also has the authority to bring a civil action, such as this one, against persons who "engage in repeated fraudulent or illegal acts or otherwise demonstrate persistent fraud or illegality in the carrying on, conduction, or transaction of business."  (Pages 5-6, citing New York Executive Law §63(12).

A New York Class A misdemeanor is small potatoes compared to the federal punishment, but New York's laws don't stop with §175.45.  Section 190.65 of the New York penal code defines the crime of "scheme to defraud in the first degree" to include "a scheme constituting a systematic ongoing course of conduct with intent to defraud more than one person or to obtain property from more than one person [think 'from more than one lender'] by false or fraudulent pretenses, representations or promises," if the defendant obtains property worth more than $1,000 from the victims.  Committing a scheme to defraud in the first degree is a Class E felony, punishable by up to 4 years in prison and by a fine of up to the greater of $5,000 and "double the amount of the defendant's gain from the commission of the crime."  The petition helpfully describes or identifies the "more than one person" at whom the Trump Organization directed its misrepresentations: "counterparties, including financial institutions, other lenders, and insurers" (page 8); Capital One, a lender (pages 41-42); Deutsche Bank (pages 46-49); and Zurich North American, an insurance company (pages 51-53).

The attorney general's petition is not an indictment, but it does read as if it's fairly close to being one.  If I were any of the persons it names, other than Donald Trump himself, I'd be talking with my lawyers about getting a plea bargain and some immunity in exchange for testifying.

The failed promise of Donald Trump

            Even before Willis Carrier invented the electric air conditioner in 1902 and made it possible for the government to sit in the District of Columbia through the summer, our nation’s capital fostered ideal conditions for political inbreeding.  Bright young people took posts staffing Congressional offices and committees, got to know one another, and then either went to work for federal agencies on their way to becoming lobbyists, or moved back home to enter elective politics for themselves, keeping the insular system in action for another generation.

            Much like a refrigerator, every now and then the system needs a deep cleaning.  About every 30 to 40 years America’s voters bring out the Electrolux and point it at the capital.  I'd buy American and say that they bring out the Hoover, but for what happened in 1928.

            The Carter Administration (1977-1981) was the voting public’s most recent attempt at invigoration, when the president brought in a large team of Washington outsiders to leaven the Potomac party.  Earlier housecleanings occurred, not so extensively, under Dwight Eisenhower (1953-1961), Theodore Roosevelt (1901-1909), James Garfield (1881), and Andrew Jackson (1829-1837).    

            The first revolutionary president was Andrew Jackson, a frontiersman who followed the six aristocrats who had started the country off, and who espoused the interests of the common man (women did not then vote) against those of the ruling classes.  He viewed the Second Bank of the United States, a federally-chartered creation directed by Philadelphia aristocrat Nicholas Biddle, as the political plaything of the powerful, and in 1832 he vetoed a measure to extend its charter.  He stated in his veto message that the bank was “unauthorized by the Constitution, subversive to the rights of States, and dangerous to the liberties of the people.”  (I’m going to need a separate post to unpack everything in Jackson's message.)

            James Garfield, the second of our reformers, did not even want the job – he went to the Republican convention to nominate John Sherman, and in the middle of his speech someone shouted out, “We want Garfield!”  He was nominated on the 36^th ballot, defeating among others the war hero and past president Ulysses Grant.

            President Garfield chose three graduates of Harvard or Yale for his cabinet of seven.  Unusually for his time, he also picked three men who came from humble circumstances.  One was an autodidact, and another ceased his schooling at 15.  He opened the top ranks of government to people outside the usual American ruling classes, and would likely have been even more reforming had he not been assassinated in 1881.

            Theodore Roosevelt was not elected as a reformer.  The New York political machine got him chosen as William McKinley’s vice president for the 1900 election to get him out of his position as the governor of New York.  When McKinley was assassinated in 1901, Roosevelt owed his presidency to no one.  He quickly set about breaking up large business combinations and promoting the rights of labor.

            Let’s look at the 40 years since the Carter Administration ended.  Our ballots included George H.W. Bush or his son George W. Bush in 1980, 1984, 1988, 1992, 2000, and 2004.  Our ballots included Bill Clinton or his wife Hillary Clinton in 1992, 1996, and 2016.  Our ballots might reasonably have included Hillary Clinton or Jeb Bush in 2008 and 2016.  The election of 2020 was only the second since 1976 that had neither a Clinton nor a Bush on a primary or general ballot.  It’s hard to say that the system changed much during a period when two families supplied the candidates for forty years of elections.

            Across First Street NE from the Capitol, the Supreme Court has been busy defending the sinecures of the inside-the-Beltway establishment, most notably in its 2010 decision in the Citizens United dark money case.  The court held that the government could not limit the amounts that corporations, labor unions, and independent political groups could spend on political speech, regardless of the ultimate source of the money, on the basis that corporations and labor unions were “people” entitled to the protection of the free speech clause of the First Amendment.  Funds from shadowy sources have come to play a large part in national politics ever since.

            Returning to 2016: among the 17 serious Republican candidates were three who had never held any government position, either elective or appointive: Carly Fiorina, Ben Carson, and Donald Trump.  Each portrayed his or her inexperience in government as a virtue, Mr. Trump most successfully.  In his campaign speech of August 18, 2016 in Charlotte, North Carolina, after listing some specific campaign promises, he said:

As you know, I am not a politician. I have worked in business, creating jobs and rebuilding neighborhoods my entire adult life.  I’ve never wanted to use the language of the insiders, and I’ve never been politically correct – it takes far too much time, and can often make more difficult.

Sometimes, in the heat of debate and speaking on a multitude of issues, you don’t choose the right words or you say the wrong thing. I have done that, and I regret it, particularly where it may have caused personal pain. Too much is at stake for us to be consumed with these issues.

But one thing I can promise you is this: I will always tell you the truth.

I speak the truth for all of you, and for everyone in this country who doesn’t have a voice.

I speak the truth on behalf of the factory worker who lost his or her job.

I speak the truth on behalf of the veteran who has been denied the medical care they need – and so many are not making it. They are dying.

I speak the truth on behalf of the family living near the border that deserves to be safe in their own country but is instead living with no security at all.

Our campaign is about representing the great majority of Americans – Republicans, Democrats, Independents, conservatives and liberals – who read the newspaper, or turn on the TV, and don’t hear anyone speaking for them. All they hear are insiders fighting for insiders.

These are the forgotten men and women in our society, and they are angry at so much on so many levels.  The poverty, the unemployment, the failing schools, the jobs moving to other countries.

I am fighting for these forgotten Americans.

            His specific campaign promises, which I did not quote here, are unremarkable.  President Trump failed at some and broke others, as is the wont of politicians.  His peroration, however, recalled the language of Andrew Jackson, of Theodore Roosevelt, of Franklin Roosevelt.  He cast his appeal to Americans in the heartland (if you live there) or the flyover states (if you don’t) who believed, with some reason, that the elites of both parties sought their votes but not their welfare.  And it is that aspect of his presidency that I describe as his failed promise, not “promise” in the sense of his commitment to his voters, but “promise” in the sense of the hope that they thought he was offering.  In the end Mr. Trump turned out to be a purveyor of both failed promise and broken promises, rather as if Andrew Jackson had committed to the public that he would close down the Second Bank of the United States to protect farmers and small businesses from its rapacity, and then upon being elected had bought bank stock and put his son-in-law on the board of directors.

Rep. Marjorie Taylor Greene stamped out

Twitter shut down the personal account of Rep. Marjorie Taylor Greene, stating or implying that its system of artificial intelligence had detected a "fifth strike" in her tweets that in the AI's (and hence Twitter's) view are misleading enough about Covid to cause harm.  MSN's article on her partial expulsion from the Twitterverse (she can still use her official House account) demurely contrasts one of her tweets with an observed fact about Covid deaths: 

Shortly before her weeklong suspension from Twitter, she claimed in a tweet that the virus was “not dangerous for non-obese people and those under 65”. According to the Centers for Disease Control and Prevention (CDC), people under 65 account for nearly 250,000 of US deaths involving Covid-19.

It's pleasing to see Twitter acknowledge that it's more than just a passive publisher of misinformation, similarly to its action in January last when it expelled Donald Trump.  Am I perhaps too cynical in noting that it didn't expel Mr. Trump until after January 6 when it became clear that the coup attempt had failed?  Twitter's management, like the Supreme Court, may align with Finley Peter Dunne's famous line, "No matther whether th' Constitution follows th' flag or not, th' Supreme Coort follows th' election returns."

The Laquedem Plan to make the Senate the envy of its peers

Elie Mystal, writing in the November 29 issue of The Nation, argues that it's time to abolish the United States Senate, describing the Senate as "the place where the popular will goes to die.  The Senate's primary function is to do nothing, then congratulate itself for its restraint."  Mr. Mystal views the Senate, possibly correctly, as continuing to serve its antebellum role "of propping up white power today," and he notes that the Black population of New York City is larger than the entire population of North Dakota and South Dakota combined, yet the residents of the Dakotas get four senators and the Blacks of New York City get perhaps a 10% say in selecting two senators.

The Senate originated in a reasonable idea, which is that one of the two houses of Congress should be insulated from the passions of the moment, both by having six-year terms and by being only indirectly selected by the people.  (State legislators picked senators until the election of 1914, after the Seventeenth Amendment was ratified.)  The Senate may have been "the world's greatest deliberative body" when Henry Clay and Daniel Webster debated on its floor, and possibly still, more than a century later, when Ernest Gruening of Alaska and Wayne Morse of Oregon gave up their Senatorial careers to vote against the Gulf of Tonkin Resolution in 1964.  Today the quality of Senatorial discussion only rarely approaches that of a good college debate contest, and consistently falls short of that of the Oxford Union.

What, then, is to be done with the Senate?  Mr. Mystal says that we should abolish it altogether, and replace it with "a democratic institution of government," in essence, a smaller version of the House of Representatives, allocated among the states by population, and perhaps still chosen with longer terms.  I'd like to suggest that we do the opposite.  Put plainly, I propose that we return the Senate to its historical roots as a chamber of stable and stately privilege, in the hope that it will return to its intended function of serving as a proper deliberative body that can moderate, but not stop altogether, the will of the people.

The United States designed its bicameral Congress on the model of Parliament, in which the House of Commons comprised a multitude elected, more or less directly, by constituencies across the nation.  The members of the House of Lords were hereditary members of the peerage, the Archbishops of Canterbury and York, and an assortment of other high clerics of the Church of England.  Various reforms have set the number of church officials at 24, limited the number of hereditary peers to 92, and allowed the monarch to create life peers with the right to sit and vote in the House of Lords, without the right descending to their children.  Quite a bit of pomp still attends the House of Lords, even if most of the 750 or so hereditary peers of the United Kingdom no longer have the right to attend and vote, sharing only the right to choose the 92 peers who will sit in the House of Lords.

That leaves about 660 hereditary peers who don't have anything to keep them occupied from the end of the fall grouse season until Royal Ascot the following June.  Here, then, is the Laquedem Plan to improve the United States senate.  Each state may elect two of the underemployed peers to be its representatives in the New and Improved United States Senate.  The lucky peers will receive a reasonable salary, a travel allowance, and a wardrobe allowance. 

Think of the improvements!  With its members dressed in fur-trimmed capes and robes, the Senate will be more telegenic than ever.  The State of the Union will truly be a television spectacle.  Unhappy witnesses before Congressional committees can truthfully say that they don't understand the legislators' questions, if only because of the thick accents that our new Senators will bring with them.  And as our Senators will never need to run for re-election, once elected they will be beyond the influence of the campaign contributions of lobbyists.

The catch?  Once elected, our imported peers will have a lifetime job, terminable only by death, impeachment, or resignation.  Choose well, voters of the Dakotas, for you're going to be living with your four choices for decades.  As for Oregon?  We could do no better than to elect as our new Senator the actor Tim Bentinck, who beyond his many notable acting roles also holds a fitting hereditary title: he is the 12th Earl of Portland.

Congressional Republicans: the Marxists of our time

The Republican party, and in particular its leadership in Congress, has turned into a collection of Marxists - not adherents of Karl Marx, but of Groucho Marx, most notably his line from Horse Feathers, “Whatever it is, I’m against it.” It must save a lot of intellectual energy to be able to oppose something without having to go to the bother of reading it first.

Isaac suggests a refrain for infrastructure dedication speeches

Now that a portion of President Biden's infrastructure package has made the passage between the Scylla of Mitch McConnell and the Charybdis of Senators Sinema and Manchin, it's time to look ahead to the eventual dedication ceremonies for some of the projects that the bill will fund, particularly those in Republican states.  Let's imagine ourselves at one of those ceremonies, in a Congressional district with a Republican representative, located in a state with a Republican senator.  It would please me if one of the politicians at the dedication should say something like this:

I am honored to be part of the dedication ceremony for this fine project.  As you know, your Senator A and your Representative B voted against the bill that funded this project and the Z jobs that it created.

Enterprising Democratic candidates running against that Senator or that Representative could then modify the same line when raising money for their races, particularly from contractors who had contributed to their opponents in earlier races.  I have in mind mailers and social media advertising with a message something like this one:

The top brass of XYZ Construction gave $X to Senator A and Representative B in their last elections, who both voted against the bill that paid for XYZ to build the ___ project and created Z jobs for our community.  Ask XYZ why it supports unemployment.

People more skilled than I am at crafting political messages can improve on this concept.  The important thing is for the messaging to use the same words consistently, getting more pointed as the election approaches, maybe finishing with:

Representative X votes NO on jobs for the 8th District.  Replace X now.

 

California recall effort fails

Elder buried.

Isaac to Congress: Back the Blue

The Laquedem Plan to measure and index the minimum wage

In real-dollar terms, the minimum wage of $7.25/hour is at its lowest point since shortly after its creation in 1938.  It has been $7.25/hour since 2009.  One of our major political parties, fearful of directing money to people who might actually need to spend it, has obstructed efforts to raise the wage to $15.

Isaac has devised a plan to satisfy the Republicans' philosophical objections and honor the memory of St. Ronald Reagan, all in one package.  Let's begin by directing our thoughts to the Reagan administration, the Laffer curve, and the large tax cuts of that era.  The theory of the Reagan tax cuts, honored in two later Republican administrations, is that by reducing income taxes on large corporations the tax savings would become free cash that would trickle down to the people who were actually doing the work. 

That didn't happen.

I'd like to suggest a new metric for measuring the minimum wage, which is to measure it not in dollars but in how many hours of work at the minimum wage equals one year of a Congressional salary.

The base Congressional salary (leaders get more) is $174,000/year.  The minimum wage is $7.25/hour.  One year in Congress carries remuneration equal to 24,000 hours at the minimum wage.

Now go back to the first year of the Reagan era.  Congresspeople received $60,662.50/year.  The minimum wage was $3.35.  One year in Congress in 1981 equaled 18,108 hours at the minimum wage.

The facile interpretation is that our Congresspeople are 33% more productive than they were in 1981, because they now earn 33% more than their predecessors did in 1981, in terms of the minimum wage.  We have only to look at the Senate of the last few years to reject an explanation based on productivity.  So let's go back to trickle-down economics.

If trickle-down economics had worked as Reagan and Laffer had predicted, then there would be few - maybe no - minimum-wage jobs remaining, because the price of labor would be higher in real-dollar terms than it was in 1981.  The plutocrats would have taken the dollars showered upon them by the appreciative Solons and spent them pursuing labor, driving up wages.  That wages did not keep up is a strong mark against the Reagan-Laffer theory.

But let us assume, as Mitch McConnell and his merry band of naysayers must, that the tax cuts in fact trickled down.  In that case there would be no harm in raising the minimum wage to a level that assumes that the tax cuts did in fact trickle down.  That level, I suggest, is the 1981 ratio, when the minimum wage was 1/18,108 of a Congressional salary.  Today that's $9.61/hour. 

If Senator McConnell is willing to adopt standard Republican economic theory, then he should be all in favor of raising the minimum wage to $9.61/hour, and to index it to equal at least 1/18,108 of a Congressional salary.  If he continues to oppose raising the wage to keep up with costs, then we should insist that Congress adopt another Republican principle and tie Congressional salaries to productivity.  One refinement would be to provide that if a session of Congress is less productive than the historical average, its leaders should get not more, but less, than the base salary.  It seems unjust to call Senator McConnell a legislator when he's working as hard as he can not to legislate.

Ted Cruz would eat his words, if he had electricity to cook them with

Except now it's Texas that can't perform even basic functions of civilization as millions of Texans are without power because the state elected to go it alone with its electric grid.  Ted Cruz took off for a vacation in Cancun, where the state government is able to provide power and water.