Seth Wenig/AP Photo
Former President Donald Trump sits at the defense table with his defense team in a Manhattan courtroom, April 4, 2023, in New York.
It’s darkly comic that, in the middle of the statement of facts related to the prosecution of Donald Trump, there’s a reference to a non-prosecution agreement (NPA). In 2018, American Media, Inc., publishers of the National Enquirer and other tabloids, admitted to buying the life rights to a story by Karen McDougal, another porn actress who had an extramarital affair with the former president, to prevent it from ever being published. It is illegal for corporations to coordinate with a candidate to influence an election, or to fail to disclose campaign expenditures to the Federal Election Commission.
But in exchange for cooperating with the U.S. attorney’s office in the Southern District of New York (SDNY), American Media was relieved from prosecution. The company also agreed to distribute to senior management a guide to federal election laws, conduct annual training, and employ an election legal adviser to consult with on such matters.
Now at one level, you could say that the NPA worked: Information from American Media was used in the jailing of Trump lawyer Michael Cohen, which occurred in tandem with the NPA. At another level, it was the usual kid-gloves treatment for corporations in this country: A company commits a crime, admits to that crime, and nobody at the company faces any punishment; they just get enhanced monitoring, maybe a fine (not even that in this case), and a warning not to do it again.
Plus, the entire purpose of flipping American Media wasn’t really to get to Cohen—or at least, it shouldn’t have been. The guy who clearly engineered and dictated the scheme, right down to repaying Cohen for other costs incurred in covering up various peccadillos, was Donald Trump. But SDNY never charged Trump with a campaign finance violation, just as the Justice Department has declined to charge Trump—thus far—on incitement, insurrection, or seditious conspiracy over the Capitol Riot on January 6, 2021, or the taking of classified documents, or obstruction of justice surrounding all of these situations.
Incidentally, the deputy at SDNY who handled the Cohen case (because U.S. Attorney Geoffrey Berman recused himself) was Robert Khuzami. During the housing bubble, Khuzami was in-house counsel at Deutsche Bank, a leading trustee bank for mortgage-backed securities that was heavily implicated in the mass document fabrication and securitization fraud of that period. In the Obama administration, Khuzami became chief of enforcement at the Securities and Exchange Commission, where he was criticized for … settling with corporations on financial crimes without prosecution.
When in a congressional hearing it was revealed that the Residential Mortgage-Backed Securities (RMBS) task force Khuzami served on, which among other things was supposed to look into the crimes of his former bank, had no offices, no phones, and no staff, he conceded that “most of the investigative work … is not really being done by a staff that belongs to the task force, it’s being done by the individual investigative groups that make up the task force.” In other words, the entity established to look into the biggest fraud of the century was really a press release factory to hype existing investigations. You’ll be unsurprised to know that the task force didn’t lead to any criminal indictments or even a single criminal subpoena.
THIS IS THE MILIEU in which Donald Trump was arraigned in Manhattan this week by a local district attorney, not the panoply of enforcement agencies in the federal government. I was happy to have a conversation about this yesterday on The Problem with Jon Stewart podcast, with Jon and Dr. Phillip Atiba Goff of Yale University. (It’s available at YouTube, Apple Podcasts, and all other podcast services.)
We got into a lot of details, and I won’t encapsulate them all here. But it helped me articulate some of why this is such an alternately hopeful and dispiriting moment for those of us who have pinpointed our two-tiered system of justice—one for the rich and one for the rest—as a central problem for our society.
I am amused by the disquiet among legal observers, pundits, and Never Trump critics that the prosecution fashioned by Manhattan DA Alvin Bragg over falsification of business records in connection with those hush-money payments is “unimpressive.” Nothing has been more unimpressive than the record of federal law enforcement over the past 20 years, whose main work product has been to institutionalize the lack of accountability for systemic corporate crime, with the only possible sanction being to cut the Justice Department in on the fraud with what amounts to a kickback payment. And those systemic crimes harm people in a far more widespread way than the petty thefts and substance abuse that make up so much of our current population of incarcerated people.
On the surface, Bragg’s case may lack the pizzazz of tax evasion, embezzlement of charitable funds, fraud against students at a fake university, or any number of other machinations Trump’s network of companies enacted, leading to no-fault legal settlements and fines. But those deeply unsatisfying outcomes existed in the world the modern legal system is incredibly comfortable with: the world of “immaculate criminality,” where crimes are committed but no human being actually committed them.
Bragg may fail to substantiate that this crime had a human face. To extend the statute of limitations and bump up a misdemeanor to a felony, he alleged that Trump’s marking of the hush money as “legal expenses” to Michael Cohen was meant to conceal a larger crime, be that federal campaign finance violations—which may not be enforceable at the state level, though state election law could also prohibit this—or tax evasion, because the legal expenses were subsequently deducted from personal and business taxes. (It would be quite poetic if what ultimately brings down Trump is the fact that he wanted to save a few bucks in taxes on his mistress payoffs.)
It’s true, of course, that the 50 years of Trump operations could and should yield a wealth of illegal misconduct. The man was a real estate developer and casino operator in the New York/New Jersey area, for Pete’s sake. A more suspicious profile is hard to imagine. But Alvin Bragg wasn’t the one who passed up all those opportunities in the past half-century. That honor goes to a system of corporate crime enforcement that is timid, weak, endlessly obliging to the culprits, and more interested in a simulacrum of accountability—something you can put in a press release and say in a news conference—than the real thing. To the extent that Bragg is taking a risk, it’s a damn sight better than his forebears, or his contemporaries.
THAT’S NOT TO GIVE BRAGG undue praise. Donald Trump is a sentient crime scene who has practically placed a “Please Prosecute Me” tattoo on his forehead, begging to be clapped in irons. This is a textbook “peacock prosecution,” where the charging authority makes an example of the most obvious fraud while ignoring the systemic behavior underneath. In addition, Bragg had two options to go after Trump: this hush-money case, or the Trump Organization tax fraud case, which led to the jailing of its CFO, Allen Weisselberg. He opted for the one less replicable by other business fraudsters—most CEOs don’t run for president and attempt to finance the concealment of their sexual escapades.
The likely rationale for that is that Bragg had more evidence for this case, like the participation of Cohen and American Media’s David Pecker. Weisselberg has refused to cooperate, even though he signed a plea deal and received a relatively light 100-day sentence. That itself is an indictment of sorts of the way justice usually rolls in America when it comes to corporate crime. We are an incredibly punitive country unless you wear a suit and work in an office tower.
Bragg, incidentally, also worked on the Trump University case while serving in the New York attorney general’s office. That led to a $25 million fine and no admission of guilt; Trump University made more than $25 million during its life span. The attorney general at the time was the now-disgraced Eric Schneiderman, who was chair of the aforementioned RMBS task force, the failed mother of all investigatory bodies into the financial crisis that caused the Great Recession. Woven into this indictment and its leaders are the ghosts of elite impunity’s past.
It wasn’t always this way. As Jesse Eisinger explained in his book The Chickenshit Club, we never had a Golden Age of corporate crime enforcement, but we’ve had several Silver Ages. Over a thousand bankers went to prison for the savings and loan scandal of the late 1980s. CEOs of major companies were convicted of accounting fraud at WorldCom, Tyco, and Enron in the early 2000s. Enron’s accounting firm Arthur Andersen was prosecuted into bankruptcy for obstruction of justice after employees shredded thousands of documents. These cases found low-level offenders and went up the ladder until they caught those responsible at the top.
We have lost that muscle memory, that will, over the past 20 years. White-collar law enforcement is now dominated by a community of prosecutors and corporate defense lawyers who go to the same schools, live in the same communities, and, like Khuzami, revolve between high-powered private-sector jobs and law enforcement posts overseeing the places they used to work. They all have the mindset that corporate titans are not bad people, just misguided in the search for profit, and can be rehabilitated to serve society once again with minimal supervision. Who you are matters more than what you did in America.
The question I have with the Trump indictment—the only question that matters in my estimation—is whether we’ve reached the end of that terrible trend. Because we have to remember that elite impunity created Trump. As a businessman who for decades didn’t just cross legal and ethical lines but obliterated them, his political prominence is owed to that inability to send white-collar criminals to jail. And as a political candidate in the era of no accountability, he capitalized on the frustration and anger people feel in a rigged system—the kind that makes them turn to demagogues who promise to fight for them, to end the rip-offs, to right the wrongs.
Our democracy in a real way depends on reversing the circumstances where the rich and powerful are untouchable. Only going after the most obvious cases, from Martin Shkreli to Donald Trump, doesn’t accomplish that. We need federal law enforcers willing to take risks, to pursue cases, to protect the public, and to exemplify the notion of equal justice under law. Still, better this than nothing. Talking down the rare instance where one of these people has to see the inside of a courtroom, let alone a jail cell, gets us nowhere either.
