Trump’s CFO Allen Weisselberg Was Just Indicted. Big Deal, or Big Meh?

Photo: Carlo Allegri / Reuters

The first indictments from the grand jury in Manhattan against Trump and his circle came down last night, and this morning the CFO of the Trump Organization, Allen Weisselberg, turned himself into prosecutors. Given that many people close to Trump have been indicted and even served time without any apparent consequence to Donald Trump himself, is this a huge development or just more shooting at the edges without hitting the bullseye?

Skeptics point to the charges levied against Weisselberg and the Trump Organization and argue they appear to overreach. They are baldly seeking something—anything—to add pressure and get Weisselberg to flip on his boss. While the specific charges have not yet been revealed, Weisselberg is likely to be charged with evading taxes because he and his family members received apartments, cars and tuition payments from the Trump Organization without paying taxes on them. For its part, the Trump Organization is likely to be charged with avoiding payroll taxes on these benefits. On the surface, that doesn’t seem like much leverage. The amounts at issue are a pittance on the ledgers of the company. Further, Weisselberg (being a clever accountant) may have some arguments that these in-kind payments fell inside legal exceptions to the tax rules. And as many legal experts have pointed out, undisclosed and untaxed fringe benefits rarely ever serve as grounds for stiff jail sentences.

Optimists argue that this is a fairly open and shut case of tax evasion, buttressed by the cooperating testimony of a former daughter-in-law, Jennifer Weisselberg, who will tie all these fringe benefits to a pattern of keeping people close to the top loyal and unable to leave. The cars, apartments and tuition were highly valuable to the Weisselberg family and don’t fall within any recognized exceptions to the IRS Rules (which require things like rent on apartments to be required conditions of employment in order not be taxable benefits, or for cars to be identifiable company vehicles used primarily for business). Tax fraud carries with it a sentencing average of three to five years in prison, but Weisselberg could avoid that altogether simply by cooperating with prosecutors. Plus, it wouldn’t be the first time that a high-profile tax cheat was found guilty and sentenced to prison: It happened before with Leona Helmsley, who was famous for being a tax scofflaw.

So what do prosecutors really want from Weisselberg? As I wrote about back in March, the overarching goal is to nail Trump for having intentionally manipulated and misrepresented the value of big real estate properties (such as the Seven Springs estate in upstate New York or his tower in Chicago) for the purpose of evading taxes or defrauding lenders. It’s a common defense for the signatories on such documents to claim that they weren’t aware that the values represented were in any way false, and that they were only doing what their accountants told them to do. This is almost certainly Trump’s line of defense, and to get past this prosecutors will want Weisselberg to testify that Trump was in on the scheme and aware of what he was doing all along.

It’s entirely possible that a jury could conclude beyond a reasonable doubt that no person could have made the representations that Trump made without knowing they were false, and therefore the DA doesn’t need Weisselberg to prove Trump’s culpable intent. But that doesn’t mean prosecutors shouldn’t try to elicit Weisselberg’s cooperation, and it doesn’t mean they shouldn’t find out everything they can from Weisselberg and the Trump Organization before making their case for indicting Donald Trump.

The indictments also put a lot more pressure on the day-to-day functioning of Trump’s businesses, which rely on partnerships and lenders to continue to do business with them. The cloud of an indictment may freeze many of those relationships, squeezing the company at the very time Trump needs it to continue to operate profitably due to mounting legal bills and falling demand from the public. The charges are also going to occupy the former president’s thoughts and attention just as he was preparing to relaunch himself politically and exert influence over the upcoming GOP primaries.

None of this is good news for Donald Trump, but if Weisselberg holds fast and refuses to cooperate (which is my guess), the former president might chalk it up as a win. While Trump was still in office, he purportedly considered pardoning Weisselberg for crimes as yet uncharged but ultimately decided against it, perhaps realizing that any New York state law charges would not go away. Still, the fact that Weisselberg was supposedly on the short list for pardons gives a glimpse into how concerned Trump was that he might be prosecuted and might flip on him.

After all, if anyone besides Donald Trump himself knows where the bodies are buried at the Trump Organization, it’s Weisselberg.