Breaking Down the Indictment

Photo of Manhattan District Attorney Alvin Bragg by Seth Wenig/AP

The first in what will likely be several indictments against ex-president Donald Trump was unsealed yesterday, so it’s time to unpack and analyze! A few notes first, though, so we are all on the same page. 

The indictment itself is a very dry document containing what feel like repetitious charges, where just a few numbers and words have been changed from count to count. There are 34 counts of “Falsifying Records in the First Degree”—and we’ll later get to a reminder of what that means. They break down into 11 falsified invoices, 12 false general ledger entries and 11 false checks.

The indictment is not what they call a “speaking” indictment, in that it does not get into details about what underlies each count. The “meat” of the indictment is actually in a separate document laying out the facts behind the indictment.

Then there was the public statement of Manhattan DA Alvin Bragg, which helped set the story up in broad terms, giving us a sense of the overarching narrative. That is important for shaping public discourse on the charges.

Okay. Armed with all three of these, we can make some general assessments now of the case Bragg and his office have built and the issues that the indictment raises. Let’s review three of the biggies.

This case is about an illegal scheme to influence the 2016 election

In the lead up to yesterday, the media, Trump, his allies and even many legal observers had assumed the story was confined to a hush money payment to Stormy Daniels, making the whole matter sound a bit tawdry and silly. The GOP seized upon this narrative and ran with it before any of the facts within the indictment were known.

But on Tuesday, Bragg made clear that the Stormy Daniels bit was just a piece of a much broader case, and he tied it in thematically to something much more important: Trump’s long efforts to cheat at, influence and even overturn elections.

Cast in this light, this isn’t a story about a hush money payment to a porn star. As commentator Asha Angappa noted, this indictment forms the first chapter in what amounts to Trump’s serial efforts to undermine democracy, lie to voters and taint the electoral process, starting back in the 2016 election and continuing through today.

Bragg made this clear in his public statement: “The People of the State of New York allege that Donald J. Trump repeatedly and fraudulently falsified New York business records to conceal crimes that hid damaging information from the voting public during the 2016 presidential election.” 

He continued, “According to court documents and statements made on the record in court, from August 2015 to December 2017, TRUMP orchestrated his ‘catch and kill’ scheme through a series of payments that he then concealed through months of false business entries.”

We’re going to hear a great deal about “catch and kill” in the coming months. The scheme involved Trump’s media allies, particularly David Pecker of American Media, Inc. (“AMI”) acting on Trump’s behalf and with his agreement, to get out ahead of a story by buying the exclusive rights to any damaging ones and then declining to publish them. 

For now, it’s important to recognize at least three main things about this scheme:

1) The District Attorney has strong evidence of an agreed-upon “catch and kill” plot to bury stories that were considered harmful to Trump leading up to the 2016 election. That sure sounds like a conspiracy, which matters for reasons I’ll explain later.

2) The schemers included not just Michael Cohen and Trump but also David Pecker, who figures very prominently in the Statement of Facts and is a key, corroborating witness. That is a big relief to those who were worried Cohen alone would be too unreliable and tainted as a witness.

3) The “catch and kill” stories included three separate ones. Beyond Stormy Daniels, there was an out-of-wedlock child alleged by Trump’s doorman, and there was another marital infidelity alleged by Karen McDougal. This is important because juries understand patterns of behavior far better than single instances.

This case is about violating election laws

In keeping with his broader theme that this case is about election integrity, and in order to bump the crime of “falsifying business records” from a misdemeanor to a felony, Bragg has to show that Trump intended to commit, aid or conceal a second crime, such as election law.

One candidate is federal campaign finance law, which limits how much one individual can donate to a campaign. Michael Cohen pled guilty to violating this because his hush money payment to Daniels directly benefited the Trump Campaign while exceeding the personal, permitted amount. 

Bragg could argue that because both Cohen and AMI have admitted to violating federal campaign finance law, with AMI copping to it as a part of a non-prosecution agreement, and then together scheming with Trump to hide the crime by falsifying business records, Trump should be found guilty of a felony for each act of falsification.

But some legal experts are uncomfortable with this approach. 

For starters, it isn’t really clear that Bragg can use a violation of a federal law as the aggravating crime for a state-level, false business records charge. After all, Bragg lacks jurisdiction to charge that federal crime himself, and it isn’t clear that New York laws should be policing federal elections.

And while the false business records law does not expressly say that the second intended crime must be a state-law offense, alleging federal law as the aggravating crime here would still be a novel approach—meaning it would be vulnerable on appeal. Imagine going through the whole trial with Trump and then getting the conviction reversed on appeal. Ugh.

Enter New York State election law. As legal commentator Lisa Rubin has argued, Trump may have also violated a general New York law prohibiting any “conspiracy to promote…an election by unlawful means.” Bragg echoed that language at his press conference, meaning it’s very likely a part of his plans. 

That law is contained in Penal Code Section 17-152, which states,

Any two or more persons who conspire to promote or prevent the election of any person to a public office by unlawful means and which conspiracy is acted upon by one or more of the parties thereto, shall be guilty of a misdemeanor.

Pay attention in particular to the words “unlawful means,” because you’re going to have to go on a small mind-bend with me. So, apologies in advance.

While citing New York State election law gets us out from under thorny questions about federal campaign finance law and Bragg’s lack of jurisdiction to charge federal law that as an aggravating crime, it presents its own set of novel questions.  

For example, what were the “unlawful means” that Trump and his co-conspirators deployed? It’s important to note that “catch and kill” isn’t by itself unlawful. It only became so when the schemers, including Trump, falsified the business records to hide the fact that it was happening. 

And yet, if the hiding of the business records is the “unlawful” element of this election crime, we’re left with an unusual, circular argument. Bragg wants to prove that the charges should be bumped up to felonies because Trump used false business records with intent to commit, aid or conceal the promotion of his election by “unlawful means.” I’m okay with that so far.

But then, those “unlawful means” are themselves the falsifying of business records, which of course is already the underlying offense. So that’s like saying, “This lesser crime is actually a bigger crime because, well, you committed the lesser crime.”

The minute I see a legal theory that sounds contorted, I grow concerned. Eventually, Bragg is going to have to lay out how it all fits within specific criminal statutes. Currently, the indictment is intentionally vague about the specifics of the charges, probably so as not to tip off Trump’s lawyers on how to attack the indictment.

The defense will almost certainly move to clarify the charges. It’s at that time that I hope there is greater clarity around how state election laws were violated. And I hope it’s not something that sounds so circular.

If you’re with me so far, great. Because there’s still another broad stroke we need to discuss which may fix this mess.

This case is also about tax fraud

In the second paragraph of the Statement of Facts, prosecutors laid out the thrust of their case:

From August 2015 to December 2017, the Defendant orchestrated a scheme with others to influence the 2016 presidential election by identifying and purchasing negative information about him to suppress its publication and benefit the Defendant’s electoral prospects. In order to execute the unlawful scheme, the participants violated election laws and made and caused false entries in the business records of various entities in New York. The participants also took steps that mischaracterized, for tax purposes, the true nature of the payments made in furtherance of the scheme.

Read that last, emphasized sentence again. It says “mischaracterized, for tax purposes”—and that sure sounds like a separate crime.

Earlier, I wrote a piece exploring whether Trump might have committed tax evasion by turning a private debt that was owed to Cohen (for having paid off Daniels on Trump’s behalf) into “legal fees” paid to Cohen. We didn’t know, until the indictment was made public, what the prosecutors had found out about how the money got from Trump to Cohen, but now we know a little bit more.

There are some facts suggesting that tax-related, crimey behavior occurred. As we already knew, Trump paid Cohen more than what Cohen paid in hush money to Daniels in order to cover the income taxes Cohen would later incur. That helped hide the true nature of the payments.

It is unclear at this time, however, whether Trump took any of those payments as a write-off. If he did, that could constitute tax fraud by Trump. After all, paying off a mistress is not a valid business expense, and if you intentionally claim it as one by mislabeling it a legal expense, you have committed fraud. The Statement of Facts doesn’t get into whether Trump took improper deductions or not, for reasons that aren’t yet known.

I also expect that Trump’s lawyers will assert, as an initial matter, that none of these were “business records” within the meaning of the statute. The Trump Organization was acting as the go-between on these payments to Cohen, invoicing and recording things falsely as the payments went out. So I’m not sure how strong this argument will be, but they’ll likely try to make it.

And there’s another wrinkle. As Charlie Savage of The New York Times notes, it is a felony to knowingly submit false information to the government, including on your tax filings. If we feed that into our legal equation, by combining the “false business records felony kicker” statute with the “lying to the government” statute, it looks something like this beautiful and simple charge:

Trump is guilty of a felony for falsifying business records because he intended to commit, aid or conceal the submission of false information to the government.

And that is something I’d take to a jury.

Personally, I feel that Bragg knows that his election-related claims have some legal complexities to them that will be vulnerable on appeal, but that a straightforward, tax-related false statements case is more bullet-proof. 

Zooming out a bit, Bragg apparently didn’t want to prosecute the more complicated case of whether Trump committed fraud with his financial disclosures to big banks and other institutions, which involves head-spinning property valuations. He also currently lacks the cooperation of Trump’s CFO, who is currently serving time in Rikers rather than talk. Why charge all that, when he already has Trump dead to rights on the crime of creating false business records to submit false statements to the government? This case feels far cleaner and easier to prove beyond a reasonable doubt: The paper trail is clear, there are multiple witnesses, and he even has a taped recording of a conversation between Cohen and Trump!

I keep coming back to how Al Capone went down, and how Trump is also a mob boss whose Achilles heel is his finances, stinginess, and instinctive hatred of taxes. Trump could have simply reimbursed Cohen directly out of his own pocket, and this never would have been a crime. But he simply couldn’t help himself. He had to try and hide the fact that they were out catching and killing stories. And out of sheer habit, he just had to submit false documents to the government as part of that scheme.

And now, Bragg has caught him in the act of doing just that.