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--:-- Sean Rameswaram: Andrew Prokop, senior correspondent at Vox. Big news for the former president's company today. What happened?
--:-- Andrew Prokop: The Trump Organization and its chief financial officer, Allen Weisselberg, were indicted by Manhattan District Attorney Cyrus Vance Jr. and were arraigned in court in New York today.
--:-- Andrew Prokop: All right. You're looking at pictures right now of Allen Weisselberg, the CFO of the Trump organization, being brought into the Manhattan courthouse. You see there he is handcuffed, escorted by law enforcement.
--:-- Andrew Prokop: These were the first charges brought in what is reportedly a much broader investigation by Vance of the former president's company.
--:-- Andrew Prokop: And so they are relatively limited right now, but they may get bigger down the road or they may not.
--:-- Andrew Prokop: These charges include 15 felony counts, including a scheme to defraud, conspiracy, grand larceny and falsifying tax records.
--:-- Andrew Prokop: So as everyone might recall, when the former president ran for president in 2016, he sort of did so on the basis of his great success in business, specifically in the Trump organization.
--:-- Andrew Prokop: Could you just remind people who may have totally blacked out what that organization was? What was the Trump organization?
--:-- Andrew Prokop: Well, what is the Trump organization? It still exists. It's still around.
--:-- Andrew Prokop: And basically, it is Donald Trump's company.
--:-- Andrew Prokop: And within it are various smaller entities that are basically everything that we associate with a Trump business.
--:-- Andrew Prokop: Hotels, real estate properties, and all of the licensing stuff that he would kind of license his brand name to from, you know, Trump Steaks to Trump Vodka.
--:-- Andrew Prokop: But, you know, the big ticket items are various real estate properties he owns or has lent his name to, as well as his golf courses.
--:-- Andrew Prokop: And of course, when he entered the White House, he supposedly handed off all of his business stuff.
--:-- Andrew Prokop: So when Trump assumed the presidency, he handed over control of the Trump organization to a three-person committee.
--:-- Andrew Prokop: His son, Donald Trump Jr. Colin, we'd be running the Trump organization even if Donald Trump wasn't our father.
--:-- Andrew Prokop: Yeah, I don't know about that.
--:-- Andrew Prokop: His son, Eric Trump.
--:-- Andrew Prokop: Nippleteism. No.
--:-- Andrew Prokop: It's nepotism, bud. It's not nippleteism.
--:-- Andrew Prokop: the chief financial officer, Alan Weisselberg.
--:-- Andrew Prokop: And I guess we're all familiar with Eric and Don Jr.
--:-- Andrew Prokop: Who's Alan again?
--:-- Andrew Prokop: So Weisselberg hasn't been as prominent a media figure as the Trump family members, but close viewers of The Apprentice may recall that he did make an appearance there.
--:-- Andrew Prokop: Alan?
--:-- Andrew Prokop: Well, I think Apex had a very good plan. They would diversify not just in location, but also in services.
--:-- Andrew Prokop: He's really been a central key part to the Trump operation for a long time, decades, in fact.
--:-- Andrew Prokop: It was in the early 1970s when Weisselberg started out as an accountant for Donald Trump's father, Fred.
--:-- Andrew Prokop: And he's risen through the ranks now in the Trump organization and eventually rose to become the chief financial officer.
--:-- Andrew Prokop: And he was basically viewed as Trump's money man.
--:-- Andrew Prokop: He knew all the finances of the company like the back of his hand.
--:-- Andrew Prokop: And a Trump biographer, Tim O'Brien, said that Weisselberg knows where all the financial bodies are buried.
--:-- Sean Rameswaram: So what is this guy, Alan Weisselberg, who knows where all the financial bodies are buried in trouble for now?
--:-- Andrew Prokop: So as the CFO of the Trump organization, Weisselberg received an official salary.
--:-- Andrew Prokop: But on top of that, he received various other extra lucrative perks, which are known as fringe benefits.
--:-- Andrew Prokop: This is like how Vox's offices, when we had an office, used to have like peanut M&Ms for us.
--:-- Andrew Prokop: And free avocados, yes.
--:-- Andrew Prokop: I wasn't going to mention that because it sounds too luxurious.
--:-- Andrew Prokop: Yeah, well, it might not be the Trump organization level but we did have some luxuries.
--:-- Sean Rameswaram: Too bad we've been working from home for so long
--:-- Andrew Prokop: What do they have at Trump Org?
--:-- Andrew Prokop: So for the CFO at least private school tuition for Weisselberg grandchildren was paid with checks signed by Trump himself or by Weisselberg and was allegedly understood to be part of Weisselberg's compensation package.
--:-- Andrew Prokop: That was to the tune of several hundred thousand dollars.
--:-- Andrew Prokop: Way fancier than free avocados.
--:-- Andrew Prokop: A little fancier, yeah.
--:-- Andrew Prokop: Wesselberg was also provided a rent-free apartment on Manhattan's Upper West Side, as well as leased Mercedes-Benz cars for him and his wife.
--:-- Andrew Prokop: Did you buy a company car for everyone in the family except me?
--:-- Andrew Prokop: Well, according to the books, I gave you four.
--:-- Sean Rameswaram: And so with fringe benefits like these, they're not technically part of the employee's salary, but they do have monetary value.
--:-- Sean Rameswaram: And under the law, they should be considered taxable income that's paid out by an employer to an employee.
--:-- Andrew Prokop: So prosecutors allege that both the Trump Organization and Weisselberg avoided paying taxes on these perks and therefore committed tax fraud.
--:-- Andrew Prokop: They argue that the Trump Organization should have paid payroll taxes and that Weisselberg should have paid state income taxes.
--:-- Sean Rameswaram: So essentially what they're saying here is that the Trump organization and Allen Weisselberg were all cheating on their taxes.
--:-- Andrew Prokop: Basically, yes.
--:-- Andrew Prokop: And and specifically in this area of fringe benefits.
--:-- Sean Rameswaram: Trump has fired back that this is actually quite normal.
--:-- Sean Rameswaram: He's said in a statement that he was being investigated for practices that are, quote, standard practice throughout the U.S. business community and in no way a crime.
--:-- Andrew Prokop: And there are some indications that it is pretty unusual for a company to face indictment solely over this issue of fringe benefits.
--:-- Andrew Prokop: It's been hard for reporters and experts who have been looking at this to come up with any similar example.
--:-- Sean Rameswaram: It does seem a bit unusual.
--:-- Andrew Prokop: But the reason for that is because this is part of a broader investigation into Trump's company that New York prosecutors are undertaking.
--:-- Sean Rameswaram: I guess there's probably no way of knowing, but is this just an attempt to get the guy who knows where all the financial bodies are buried to flip a la, say, Michael Cohen?
--:-- Andrew Prokop: Yes, that is very clearly what this is.
--:-- Andrew Prokop: Word has gotten out that New York prosecutors have been urging Weisselberg to flip to make a plea deal and to agree to cooperate in the larger case that they're trying to build.
--:-- Andrew Prokop: because the thing about making a case for corporate financial crimes, which seems to be what prosecutors are getting at, a broader case against the Trump organization, for it to actually get Trump himself, they may think that they need Weisselberg's cooperation.
--:-- Sean Rameswaram: So they have clearly been pressuring him, leaning on him, but it has not worked so far.
--:-- Andrew Prokop: Weisselberg pleaded not guilty today.
--:-- Sean Rameswaram: And so we will see whether that changes in the weeks and months to come.
--:-- Sean Rameswaram: What this means for the former president in a minute on Today Explained.
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--:-- Sean Rameswaram: Andrew, there have been countless investigations into the former president.
--:-- Sean Rameswaram: We've covered countless ones with you alone.
--:-- Sean Rameswaram: The Mueller investigation, of course, hearings and impeachments in Congress, of course.
--:-- Sean Rameswaram: But these charges are coming from the Manhattan District Attorney Office.
--:-- Sean Rameswaram: Remind us why.
--:-- Andrew Prokop: So these charges are about violating New York state law not federal law.
--:-- Andrew Prokop: And basically all of the previous investigations into Trump for violating federal law have kind of fizzled out or gone nowhere.
--:-- Andrew Prokop: Obviously, the Mueller investigation ended up charging many people.
--:-- Andrew Prokop: And Rudy Giuliani is potentially facing indictment in another case that's going forward.
--:-- Andrew Prokop: But as far as Trump himself, there doesn't seem to be any federal investigation that poses him any real imminent danger at this point.
--:-- Andrew Prokop: Manhattan District Attorney Cy Vance opened this investigation, and he did so because federal prosecutors in New York announced that they weren't going to pursue further charges in the matter of the hush money payments for women who had had affairs with Trump.
--:-- Sean Rameswaram: So, of course, you will remember friend of the show, Michael Cohen.
--:-- Sean Rameswaram: Been hearing rumors about this Michael Cohen cat.
--:-- Sean Rameswaram: Something about a phone company, a Russian oligarch, Fabergé eggs.
--:-- Andrew Prokop: Fabergé eggs?
--:-- Andrew Prokop: Yeah, that's right.
--:-- Andrew Prokop: See, I'm scrambling for answers here.
--:-- Andrew Prokop: Huh.
--:-- Sean Rameswaram: This sounds like a job for pro cop.
--:-- Andrew Prokop: Cop?
--:-- Andrew Prokop: I thought you were a PI.
--:-- Andrew Prokop: No, no, I'm Andrew Prokop, politics reporter over at Vox.
--:-- Sean Rameswaram: Trump's longtime lawyer and fixer, who during the 2016 campaign helped arrange payments worth several hundred thousand dollars to Stormy Daniels and Karen McDougal.
--:-- Andrew Prokop: This is not a jumbo trek for some sort of charity auction.
--:-- Andrew Prokop: This is Donald Trump's personal bank account.
--:-- Andrew Prokop: Now, this is what proves to the public that Cohen was telling the truth, at least about this and how he wanted to cover up alleged contact with women in 2016.
--:-- Andrew Prokop: Cohen pleaded guilty to violating federal campaign finance law over those payments.
--:-- Andrew Prokop: But there was a question of whether other people were on the hook for charges as well.
--:-- Andrew Prokop: And one of the other people that might have been on the hook was Allen Weisselberg, who was the CFO of the Trump Organization and who played a role in arranging these payments and making sure they would happen.
--:-- Andrew Prokop: But in 2019, the feds announced that they were not going to pursue further charges in this case.
--:-- Andrew Prokop: So Manhattan District Attorney Cy Vance said that he was going to look into the matter.
--:-- Andrew Prokop: He was going to, now that the feds were done with it, he was going to open up his own investigation to see if state laws were violated in the matter of the hush money payments.
--:-- Andrew Prokop: And from there, Vance's investigation broadened.
--:-- Andrew Prokop: Cohen has spoken with him about the Trump organization's business practices in general.
--:-- Andrew Prokop: And what's really at the heart of Vance's investigation, according to reports, is something bigger than just this matter of taxes on fringe benefits.
--:-- Andrew Prokop: What is it?
--:-- Andrew Prokop: So this gets back to another allegation that Michael Cohen has made about Trump that really gets to the heart of the Trump organization's overall business practices.
--:-- Andrew Prokop: It involves the overvaluing or undervaluing of real estate.
--:-- Andrew Prokop: According to Cohen, when Trump wanted to value properties because he was taking out a loan on them or because he wanted to inflate his overall wealth for insurance purposes, he would tend to lean towards valuing the properties he owned very high.
--:-- Andrew Prokop: But then he would turn around when it came to valuing them for property taxes, because if your property value is very high, then you have to pay a lot of property taxes.
--:-- Andrew Prokop: So the question here is whether there's a systematic pattern of bank fraud, insurance fraud or tax fraud from the company related to these very valuable properties they own.
--:-- Andrew Prokop: But they haven't brought any charges to that end yet.
--:-- Andrew Prokop: No, they haven't.
--:-- Andrew Prokop: And it's been widely speculated that this would be a difficult case for prosecutors to make unless they get cooperation from Weisselberg, from someone who knew Trump's state of mind and who can say that, yes, Trump knew what he was doing was wrong or illegal.
--:-- Andrew Prokop: The defense that Trump could have in a case like this is saying, oh, hey, my CFO, he's the guy who is the money man.
--:-- Andrew Prokop: And he told me that this was this was all legal and it was fine.
--:-- Andrew Prokop: So if Weisselberg were to testify that, no, actually, he knew that this was against the law, but we did it anyway, that would be huge for the prosecutors.
--:-- Andrew Prokop: So they seem to be bringing this fringe benefits tax case against Weisselberg in part to pressure him to flip to help them make this broader case against Trump.
--:-- Andrew Prokop: That's the plan.
--:-- Andrew Prokop: But we don't know if it will work or if they have a case if Weisselberg holds strong and does not flip.
--:-- Andrew Prokop: And what's the endgame here? Is it to put the former president behind bars? Is that something that anyone actually thinks could happen here?
--:-- Andrew Prokop: Well obviously there are massive implications to all this for American politics and for the 2024 presidential race in particular.
--:-- Andrew Prokop: Trump may run again. He's been hinting lately that he will run again.
--:-- Andrew Prokop: Have you made up your mind?
--:-- Andrew Prokop: Yes.
--:-- Sean Rameswaram: And so what are the implications of this for the 2024 presidential election?
--:-- Andrew Prokop: We don't know for sure until we see it.
--:-- Andrew Prokop: But, you know, a lot of people are very nervous about Trump and about especially about his conduct in the wake of the 2020 election.
--:-- Andrew Prokop: They view him as like a fundamental danger to American democracy.
--:-- Sean Rameswaram: Is this part of what is motivating prosecutors?
--:-- Andrew Prokop: It's impossible to say.
--:-- Andrew Prokop: It would arguably be improper if they were motivated by that.
--:-- Andrew Prokop: Trump has called this investigation, like he calls all investigations into him, a politicized witch hunt.
--:-- Andrew Prokop: But I believe the political forces driving today's events are just that.
--:-- Andrew Prokop: Cyrus Vance Jr. is an elected Democrat.
--:-- Andrew Prokop: And, you know, it's probably impossible to fully separate out partisan politics and the implications for the future of the country from a case like this.
--:-- Andrew Prokop: It's a little worrying if this really is on the minds of prosecutors.
--:-- Andrew Prokop: I'm sure they would say that it's not and that they're following the evidence and the facts where they lead.
--:-- Andrew Prokop: But it's hard to say for sure.
--:-- Andrew Prokop: And it's hard to say, especially without knowing the full picture of what Vance has found.
--:-- Andrew Prokop: Maybe he really does have strong evidence of criminality and he's part of the way toward building a bigger case that we just haven't seen yet.
--:-- Andrew Prokop: Or maybe this really is the best he's got and he's kind of like grasping at straws.
--:-- Sean Rameswaram: Yeah, and this is the best he's got.
--:-- Sean Rameswaram: It sort of feels like this epic letdown.
--:-- Sean Rameswaram: I mean, we've seen the transcripts of the so-called perfect call to the president of Ukraine.
--:-- Sean Rameswaram: I mean, we've heard the phone call to the election managers in Georgia.
--:-- Sean Rameswaram: We know the former president is a shady dude who did a lot of shady shit.
--:-- Sean Rameswaram: And surely that extended to his business practices.
--:-- Sean Rameswaram: And yet the best thing the Manhattan DA can come up with, at least as far as we know at this point, is that Allen Weisselberg's grandkids went to private school on the Trump organization's payroll.
--:-- Sean Rameswaram: Like, it just feels like there's always this this big promise of corruption and malfeasance.
--:-- Sean Rameswaram: And what we end up with is some tax scheme that's kind of wonky and maybe widely practiced across the country.
--:-- Andrew Prokop: Well, firstly, not paying your taxes is bad and you should pay your taxes.
--:-- Andrew Prokop: All listeners of Today Explained should pay their taxes.
--:-- Sean Rameswaram: Is this an infomercial?
--:-- Andrew Prokop: The comparison that's going around right now is when the feds were trying to get Al Capone, who they knew was a bad guy, who they knew was a criminal, who had done a lot of bad things.
--:-- Andrew Prokop: And what they ended up actually having the case for and the evidence for was tax evasion.
--:-- Andrew Prokop: And, you know, that's a little underwhelming, maybe, considering all the far more impressive or horrifying stuff Al Capone was involved with.
--:-- Andrew Prokop: But it's the case that they were able to make.
--:-- Andrew Prokop: And I think there's also something to be said here for, you know, even if even if we all think we know that Trump is a really bad person who's breaking laws left and right in our system.
--:-- Andrew Prokop: You actually need to find the evidence to prove that in a way that you think will hold up in a court of law and that won't be thrown out on appeal.
--:-- Andrew Prokop: And so that is what District Attorney Vance is trying to do at this point.
--:-- Andrew Prokop: And whether he will succeed remains to be seen.
--:-- Sean Rameswaram: Andrew Prokop, he's the senior correspondent of That Which Remains To Be Seen at Vox.com.
--:-- Sean Rameswaram: I'm Sean Ramasperum.
--:-- Sean Rameswaram: This is Today Explained.
--:-- Sean Rameswaram: We're a part of the Vox Media Podcast Network.
--:-- Sean Rameswaram: The team is comprised of Will Reed, Victoria Chamberlain, Halima Shah, Emily Sen, and Miles Bryan.
--:-- Sean Rameswaram: Our editor is Matthew Collette.
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--:-- Sean Rameswaram: Music is made by Breakmaster Cylinder.
--:-- Sean Rameswaram: Facts are checked by Laura Bullard.
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--:-- Sean Rameswaram: Thank you.
