--:-- Sean Rameswaram: Welcome to Today Explained. I'm here with reporter Andrea Bernstein, who was sitting in the same courtroom as the former president for a civil fraud trial in New York.
--:-- Andrea Bernstein: Thanks for having me on the show.
--:-- Sean Rameswaram: I mean, it was excruciatingly boring. And one of the things that was so interesting to me is Trump came 10 times to this business fraud trial. That meant that he was sitting every day in the courtroom from 10 until about 1 and 2.15 until about 4.30, watching as lawyers from the attorney general's office said things like, let me direct your attention to cell number 168 on sheet G of this spreadsheet.
--:-- Andrea Bernstein: Oh, yeah, absolutely. That was a pro tip. So there was a lot of that. And because there was no jury in this case, sometimes it was really confusing to figure out, like, what was it they wanted to get out of this witness? What was it they wanted to learn?
--:-- Sean Rameswaram: But, you know, they put in this torrent of documents. And we'll take one witness, say, for example, the former president's daughter, Ivanka Trump. Ivanka Trump was not a defendant in this case. And a lot of the sort of reviews of her testimony is, oh, she was so disciplined. She kept her cool, all of which was true. But while she was testifying, the attorney general's office kept saying to her, do you recognize this document? Is that your email?
--:-- Andrea Bernstein: And she would say yes. And these emails were central to the case because she arranged these very, very low interest rate loans from Deutsche Bank. There was all the documentation. The regular banks wanted to charge her family maybe in the low double digits of interest. The interest rate they got was 2-3%. So there's a huge difference there.
--:-- Sean Rameswaram: That is a lot of what the money that the Trumps have to pay back to New York is, is the difference in the interest rates.
--:-- Andrea Bernstein: There in Ivanka Trump's emails, it's all laid out how she went to the commercial real estate division. She tried to get the loan. They didn't like the number. So they went to this other division and got this way lower rate that no one else could get. And to get it, they had to attest to Donald Trump's statements of values that we now know were completely fraudulent.
--:-- Sean Rameswaram: So a lot of granular detail from the attorney general in New York. How does the former president's defense team defend him?
--:-- Andrea Bernstein: So one of their big defenses is no one was hurt here. Deutsche Bank wanted us as a customer. They were willing to give us these incredibly low rates because it was good for them. They benefited. There was no victim. That was one. Another one was our accountants figured it out. Our employees figured out. We left it to them. We trusted them. And then there was like nobody really relied on these statements and also it didn't make a difference.
--:-- Sean Rameswaram: Okay, so Trump's legal defense team essentially says, show us a victim. Everyone got paid. This was good for everyone. But the judge ultimately decides that's not the case.
--:-- Andrea Bernstein: Well, the law decides it, right? I mean, it's this law, 6312, was a very powerful law in New York. And it was written in the middle of the last century with the idea that if you have a fraudulent marketplace, you corrupt the business market in New York. And it is the attorney general's job to defend against that and to make sure that people don't do this as a course of business, no matter who the victims are. Because the idea is that hurts all business in New York.
--:-- Sean Rameswaram: Today, the court once again ruled in our favor and in favor of every hardworking American who plays by the rules. Donald Trump and the other defendants were ordered to pay $463.9 million. That represents million in disgorgement plus million in interests which will continue to increase every single day until it is paid
--:-- Andrea Bernstein: Where does that number come from Andrea? It's big.
--:-- Sean Rameswaram: Okay, so let me introduce a concept, which I know Today Explained listeners can handle, which is called disgorgement. Right? It's not actually a fine. Oh. What the law says is if you have these ill-gotten gains based on the fact that you lied over and over and over again, you have to pay it back.
--:-- Andrea Bernstein: Donald Trump may have authored the art of the deal, but he perfected the art of the steal. So a very big portion of the money that Trump has to pay comes from the cash that he kept by keeping his interest rates so low.
--:-- Sean Rameswaram: So, you know, if you have to pay 12 percent interest versus 3 percent interest, hypothetically, those are not the actual numbers. But, for example, you save a lot of money. In this case, the difference in the interest was about $170 million. So that is considered an ill-gotten gain. Got to pay it back.
--:-- Andrea Bernstein: Then the judge said, well, because they had all this extra cash that they weren't entitled to, they were able to pour money into a number of properties, two in particular, the Trump International Hotel in Washington, D.C., and the Ferry Point Golf Course, which is in Bronx, New York.
--:-- Sean Rameswaram: They were able to pour so much money because they had all this extra cash and then sell it and make even more money. So all of that comes back, too. So that's how they get to the 355.
--:-- Andrea Bernstein: Okay. Okay. And this is on top of the $83.3 million he already has to pay E. Jean Carroll. Right. Totally separate case. Correct.
--:-- Sean Rameswaram: In the E. Jean Carroll case, the jury awarded her something like $60 million more than her lawyers were asking for. In this latest case, because of disgorgement, the fine is $355 million. Big numbers.
--:-- Andrea Bernstein: Do you think he might be getting hit harder in either case than, say, a less famous former president New York City civilian would?
--:-- Sean Rameswaram: So let's take E.G. Carroll. So one of the things that was so interesting in the E.G. Carroll case is right before the plaintiffs wrapped up their case, they played a video deposition of Trump from the business fraud trial.
--:-- Andrea Bernstein: And in the business fraud trial, Trump says, I have $400 million in cash. That is very unusual for developers. Developers don't usually have that much cash. Mar-a-Lago is worth $1.5 billion. Doral Golf Course is worth $2.5 billion. If you take Doral, I think Doral could be worth $2.5 billion by itself.
--:-- Sean Rameswaram: Now, of course, those valuations have been found to be fraudulent by Judge and Goran. But the jury didn't know that. Right. So the jury is watching this and E. Jean Carroll's lawyers say to the jury, Trump says he has a lot of money. Please have him pay a penalty that will get him to stop. You determine how much that amount is.
--:-- Andrea Bernstein: So in that case, they asked the jury for an amount of money and damages to rehabilitate her reputation. But then they said, give us some punitive damages. You figure out. This guy says he has billions of dollars. You use an amount that will make him stop.
--:-- Sean Rameswaram: Does Trump have to hand over this nearly half a billion dollars, like, tomorrow? When does he actually have to pay?
--:-- Andrea Bernstein: The $355 million doesn't include the pre-judgment interest. And the attorney general's office has said it will be upwards of $450 million when you put that all in.
--:-- Sean Rameswaram: Now, Trump is appealing. They say the verdict is wrong. If past is prologue, they will take every opportunity to appeal this case.
--:-- Andrea Bernstein: It can be appealed first to the first level of New York appeals court, which is called the first department, then to the highest court, which is called the court of appeals. And in most cases, that would be the final word.
--:-- Sean Rameswaram: However, Trump being Trump, they may argue that there's a federal issue involved. So it could theoretically go to the U.S. Supreme Court.
--:-- Andrea Bernstein: So all of that has to happen before the money is finally transferred to New York State. But there is talk about putting up a bond, putting the money in escrow. He can't just go off and say, well, I'm not going to pay it until we're done. That isn't the way the law works.
--:-- Sean Rameswaram: Maybe the half a billion dollar question is, will he still have to pay if he wins the election later this year? Assuming he loses all his legal appeals, the answer is yes.
--:-- Andrea Bernstein: I wouldn't be surprised if the case is not resolved. And were he to win the election to hear his lawyers make an argument that even to address this issue is too distracting for the president.
--:-- Sean Rameswaram: Now, there is, you know, Supreme Court law in Bill Clinton and Paula Jones that, you know, certain aspects of a civil suit can continue. And this is a civil suit. So, I mean, you know, I hate to say this because it's so overused in this context, but it's uncharted waters.
--:-- Andrea Bernstein: In theory, yes, in theory, the judgment has been made. If Trump loses all his appeals, he has to pay the money. He has to find the money now to guarantee that he will be able to pay it in the event he loses all his appeals.
--:-- Sean Rameswaram: But what would happen? Would he try to argue that if passed his prologue? It's not out of the question.
--:-- Sean Rameswaram: Andrea Bernstein, she's the host of a podcast called We Don't Talk About Leonard, about the American judiciary's shift rightward. Find it wherever you listen. She's also the author of American Oligarchs, about the Trumps and the Kushners. Find it wherever you read.
--:-- Sean Rameswaram: Donald Trump owes about half a billion dollars after two unfavorable rulings. Sounds like a Donald Trump problem, right? When we're back in Today Explained, Vox's policy correspondent, Abdullah Fayyad, says it's actually everybody's problem.
--:-- Sean Rameswaram: Welcome back to Today Explained. I'm here with Vox's Abdullah Fayyad.
--:-- Abdullah Fayyad: Thanks for having me on the show.
--:-- Sean Rameswaram: So, Abdullah, you say this is everyone's problem. But it's worth remembering here that Trump's base doesn't really think all of this is a problem. They're super stoked to vote for this guy.
--:-- Abdullah Fayyad: And it looks like all of his legal troubles actually help him with the Republican base.
--:-- Sean Rameswaram: What should we make of that problem? I mean, that's one of his gifts as a campaigner and as a politician is how he's able to galvanize support and make people look the other way when he has all of these ethical problems.
--:-- Abdullah Fayyad: And that's certainly true for his supporters. And you see how willing they are to help him through this, actually donating to his campaign every time he uses one of these legal cases against him and drumming up support from his base by getting small dollar donations by saying that this is a witch hunt, that they're coming after him because they want to come after his supporters.
--:-- Sean Rameswaram: And you have people paying, essentially, to protect a billionaire who can more than afford to pay for himself.
--:-- Abdullah Fayyad: So this is just part of the cult of Trump. It's just kind of hard to overcome.
--:-- Sean Rameswaram: But, you know, the reality is that he has a lot of supporters, people who vote for him, who do see flaws in him, who, you know, eventually can be swayed.
--:-- Abdullah Fayyad: They might be the minority of his voters. They're certainly not the base. But people who turn out in elections, there are people who make up their mind right at the end.
--:-- Sean Rameswaram: And at some point, you know, and this is all speculation, but there can be enough baggage on somebody that makes somebody feel a little too queasy when they go into the voting booth.
--:-- Abdullah Fayyad: So I think overall, you see this in polls that people do think Trump should be held accountable for crimes he committed. But obviously, it's a very partisan thing going into the general election.
--:-- Sean Rameswaram: And I think that's the danger here. You know, he's able to use that kind of support to undermine the validity of these cases against him. By saying that they're a witch hunt, he's undermining kind of, you know, his actual accountability, that it's, you know, undeserved that he thinks that he's making people believe that these really are just witch hunts, when in reality, Trump has evaded accountability his entire life.
--:-- Abdullah Fayyad: And this is really just the first time, he's actually been held accountable on a deserved scale for kind of the fraud that he's engaged in throughout his business career.
--:-- Sean Rameswaram: Abdullah Fayyad, he's written about Trump's financial troubles at Vox. You can read his piece at vox.com/todayexplained.
--:-- Sean Rameswaram: Today's episode was produced by Amanda Lewellyn and Avishay Artsy, edited by Matt Collette, fact-checked by Laura Bullard, engineered by David Herman, and hosted by Sean Rameswaram.
