The Grand Jury Now Gets To See Trump’s Taxes. But Is That a Big Deal, and What Comes Next?

It’s been almost one and a half years since Manhattan District Attorney Cy Vance’s Grand Jury issued a subpoena for eight years’ worth of Trump’s tax returns. They will finally get to see what has long eluded investigators: the complete financial records of Donald Trump, as maintained by the lawyers of his accountants at Mazars USA. After a second trip all the way up to the Supreme Court, the justices finally settled the matter against Trump on Monday in an unsigned, single sentence order. Mazars’ attorneys have said they will comply.

Cy Vance (left). Photo from the NY Daily News

This sounds like very big news, but what does it mean, exactly? Don’t we already know a lot based on reporting by the New York Times? We already know, for example, that Trump barely paid any income tax for two years due to huge write-offs from years past that carried over. We also know that Trump is not nearly as wealthy as he had claimed to be, and that he lost more money in one year than anyone else in America. So what’s the big deal about these financial records?

For starters, Cy Vance hopes they will prove a number of financial-type crimes, the same types of charges that brought down mob families in the past. These include insurance, tax, and banking fraud, to name a few. Vance would like to tie Trump, key Trump Organization employees, and Trump family members to these crimes. So how might these records prove any of that?

Trump’s one-time personal lawyer, Michael Cohen, under questioning from Rep. Alexandria Ocasio-Cortez, testified that one of the ways in which Trump played loose with his finances was to inflate the value of his properties in order to secure higher loan amounts from the banks, but then low-ball the value of those same properties when it came time to pay taxes on them. To prove one part of this, Vance has already subpoenaed records from the Trump Organization’s bankers, including its primary lender Deutsche Bank. If the values that Trump stated for the properties to his banks were much higher than what he submitted to tax authorities, then he’s possibly facing a double whammy of bank and tax fraud.

In addition, in writing down some of his taxable income, Trump apparently paid large “consultant” fees on real estate deals to companies that were owned and managed by people like his daughter, Ivanka Trump. While such fees are common in deal-making, if they were simply intended to hide actual income and keep it all in the family, and Ivanka Trump did nothing to actually earn those fees, this sounds very much like fraud and racketeering within a corrupt organization.

To help prove his case, and to signal how serious he is, Vance has brought in a high-powered and expensive legal expert, Michael Pomeranz, who has both prosecuted and defended high-profile, white-collar criminals. Pomeranz and his team will now be able to pore through the terabytes of data being turned over by Mazars and put it together into a compelling story for the Grand Jury.

If they find what they are looking for, expect indictments to follow. While the information currently is limited to Vance’s team and the Grand Jury only, under a sharing agreement his office might also provide some of what they find to the New York Attorney General or to federal authorities. That could lead to further investigations and charges.

While it’s possible this could turn out to be a big nothing burger, that outcome is unlikely in my view. If Trump had nothing to hide in those financial records, he wouldn’t have spent four years doing everything to keep them out of prosecutors’ hands. The chance that everything in Trump’s finances is squeaky clean is, frankly, next to zero. It’s now up to the DA to put a clear case together from that. 

A final note: Vance’s past behavior understandably gives many pause. Last decade, Vance accepted a $25K donation from Trump’s attorney then closed an ongoing criminal investigation of Donald Trump Jr. and Ivanka Trump over alleged fraudulent real estate dealings at Trump Tower Soho. But that case was not nearly as high profile or important as this one, the Trumps were not in the White House but merely celebrity types, and the legal posture was quite different. In that case, the civil plaintiffs had already settled with the Trump children and had agreed as part of that deal to state that no crime had been committed. Vance decided that he couldn’t pursue a criminal case where the civil case had settled out with such a condition. So while the donation was very fishy and stupidly timed (Vance returned the amount after howls of protest) the case itself was weak.

It is my hope—one that I pray is not naive—that Vance is seeking to redeem himself after the negative publicity from that case and finally nail the Trump family for their crimes. Vance is facing reelection, but he has not yet launched a campaign and is barely fundraising. If he decides to run, indictments against the Trump family would be a big boost to his chances. If he doesn’t run, they will be a strong finish to an inconsistent career. He may in fact be waiting to see what fruits these records yield before announcing his decision on reelection.

Either way, we can anticipate big headlines and a press frenzy in the coming weeks should indictments roll out. Stay tuned.