By Richard Porter
Real Clear Wire

The news broke in quick succession: New York�s district attorney, a
Democrat, will attempt to jail Donald Trump in a trial starting next
month; a Democratic Party judge ordered Trump and his affiliates to
�disgorge� $450 million in a novel civil case brought by New York�s
Democratic attorney general � and Russian opposition leader Alexei Navalny
died in a Siberian prison.

Democrats want to strip Trump of his assets and send him to jail to die
like Navalny; that�s how ruthless they have become. Why? Donald Trump
represents a democratic threat to Democrats � their power, their
narratives, their culture, and their coalition. So, Democrats decided to
wage war in the friendly confines of their home courts to destroy their
nemesis and short-circuit democracy.

Justice Arthur F. Engoron�s opinion in the civil action brought by
Attorney General Letitia James is premised on the idea that Trump
fraudulently obtained lower rates on money he borrowed by offering lenders
recourse to more of his assets, some of which he overstated.

Engoron glosses over the most salient fact of this case � there was no
victim � and he does so in a decidedly schoolmarmish preface: �Timely and
total repayment of loans does not extinguish the harm that false
statements inflict on the marketplace,� the judge wrote in his order.
Without bothering to do much explaining regarding this expansive theory,
the judge added, �Here, despite the false financial statements, it is
undisputed that defendants have made all required payments on time.�

So, then, a $450 million fine for inflating the size of Donald Trump�s
portfolio. It makes one wonder what the judge would have ordered if Trump
had defaulted. Summary execution?

Deutsche Bank offered Trump two credit options: nonrecourse and full
recourse. When Trump borrowed to renovate the Old Post Office in D.C., the
Doral in Miami, and to build the iconic Trump Tower in Chicago, Deutsche
offered Trump a credit facility that would be secured only by that
project. A nonrecourse loan is riskier for the lenders, safer for Trump,
and therefore carried a much higher interest rate.

Deutsche Bank also offered Trump a full recourse credit facility for each
project, backed by a personal guarantee from Donald Trump and his various
entities. This is a safer loan for lenders because it is backed by more
assets, riskier for Trump (because he put the whole empire on the line for
each of these projects), and so carried a much lower interest rate.

Trump chose to put all of his assets at risk in exchange for the lower
interest rate. Therefore, the bank wanted more information, and had
covenants in the loan, about his other assets too.

The judge held that Trump and his affiliates overstated the value of
certain of his assets, and therefore suggests (without corroborating
testimony in his 92-page opinion) that Deutsche would not have offered the
full recourse loans but for the overstatement of these particular assets.

It�s not disputed that Trump had other assets or that his net worth on a
conservative basis runs into the billions. However, the value of Trump�s
assets, almost all of which are privately held and for which there is not
a ready market, is a matter of judgment. Not surprisingly, promoters
ascribe higher values to their own assets and ideas � and Trump is a
promoter.

Deutsche Bank�s witnesses testified that the bank assumed the value of the
assets and liabilities were �broadly accurate,� then assumed Trump�s
aggregate asset portfolio was worth one half of its stated value (and one
asset, which the judge also held was significantly overvalued, was only
worth 25% of its stated value) before agreeing to proceed with the full
recourse loan.

The judge held that the New York AG (who campaigned on going after Trump)
was not required to show either that the overstatement of particular
assets was material to the lender or to the overall value of his assets,
or that the lenders actually relied on the statements. On the other hand,
the judge asserts that �the frauds found here leap off the page and shock
the conscience� � his conscience, but not the banks�.

Remember: No one in these deals alleged fraud; the loans were paid off and
everyone in the deal made money; Trump still had billions in assets
backing his guaranty after writing down asset values that were misstated;
and the bank assumed the value was half what he said anyway.

It shocks millions of Americans that a Democrat who ran for attorney
general promising to go after a Republican president of the United States
is allowed to use the power of the state to go after political opponents,
and then take nearly half a billion dollars without proving any financial
harm from the misstatements.

The judge arrived at the high �disgorgement� amount by holding both that
the bank would not have made a full recourse loan, but would have only
made the higher risk, higher cost, nonrecourse loan, and that the deals
would not have happened at all but for the fraud � ordering as
disgorgement both what interest would have been at the higher rates and
all the profits Trump earned on the sale of two of the successful
projects.

Further, the judge enjoined Trump and others from serving as officers or
directors of any New York corporation or any legal entity in New York for
three years � and prohibits Trump and his companies from applying for any
loans for three years, which forces the Trump Organization to sell to
cover the extraordinary damages found in this case.

And just like that, the N.Y. Democrats have taken a step toward stripping
him of his wealth. But, there�s more to come.

Next up in just over a month, another Democrat prosecutor will try to take
away his freedom and put him in jail in a �home court� venue, with two
more Democrats standing by in �home court� venues hoping for their shot at
putting Trump in the gulag.

All of these cases involve novel theories that break new ground � and that
also cause tens of millions of Americans to question the good faith of
Trump�s opponents generally, the neutrality of courts, and the rule of law
itself.

Navalny died a martyr for democracy; his death stains Putin. Democrats
enamored with using the law for partisan purposes should beware: Trump�s a
promoter, his opponents are venomous, and their tactics are perniciously
undemocratic; and the American people are watching.

Richard Porter is a lawyer in Chicago and National Committeeman to the RNC
from Illinois.

https://highlandcountypress.com/opinions/democrats-destroying-democracy-
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