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For decades, Donald Trump excelled at navigating New York’s institutions. This week, he was legally outmanoeuvred in the city that knows him best.
On Thursday, a Manhattan judge dismissed allegations of election interference from Trump’s defence team, setting a criminal trial in the “hush money” case in the middle of primary season on March 25 — the first time in US history that a former president will be in the dock.
A day later, a court across the street ordered Trump and his businesses to pay at least $355mn for committing persistent fraud by vastly overstating the value of his real estate empire, tearing apart the former president’s carefully curated image as a savvy businessman in the process.
The twin decisions have shifted the momentum against Trump, who had been basking in the glow of shortlived legal victories last week, as the US Supreme Court appeared poised to throw out an attempt to keep him off the ballot in November, and a special counsel issued a politically damaging report about the mental acuity of his 81-year-old opponent Joe Biden.
Financially and politically they will pile pressure on the former president as he gears up for a fiercely fought and expensive general election. They also demonstrate the limits of Trump’s go-to legal strategy of attempting to delay proceedings by any means possible, including the lodging of appeals at every stage and the playing of various pending cases off each other, to complicate the scheduling of any potential trials.
By choosing to file civil fraud charges against Trump in 2022, rather than pursue a criminal case over the alleged falsification of financial statements, New York state attorney-general Letitia James was also able to try the former president and his businesses in front of a single judge, rather than a jury, and had a lower burden of proof than prosecutors in criminal matters.
Across the street, Manhattan district attorney Alvin Bragg was able to move along his criminal indictment of Trump over the alleged payments made to buy the silence of porn actress Stormy Daniels in the run-up to the 2016 election after the former president lost in his attempt to get the case moved to federal court — New York state law offers comparatively few opportunities for defendants to appeal before a verdict is issued.
As a result, of the four criminal cases pending against Trump, it is Bragg’s that will be first to proceed, forcing the 77-year-old off the campaign trail and into a dingy Manhattan courtroom four days a week.
Yet the 92-page civil decision, which he has vowed to appeal, is in “many ways more devastating to Trump than a criminal conviction”, said Catherine Christian, a former Manhattan prosecutor who supervised numerous financial fraud investigations.
As well as the financial penalties, the judge ordered Trump be barred from running a New York business for three years, meaning he can hold no management role at the Trump Organization, and banned him or his companies from taking out loans with financial institutions registered with the state regulator, which includes almost all major banks.
“It is potentially crippling for him in two ways — it is choking his access to capital, but also his ability, and his kids’ ability, to run his business,” said Joshua Naftalis, a former federal prosecutor in Manhattan. The Trump Organization, the family business through which Trump owns and runs his hotels, office buildings and golf courses, and that has always borrowed to expand, “is going to have trouble” getting further loans, he added.
Trump escaped the very worst outcome in the civil fraud case, the “corporate death penalty” of an order for his existing businesses to be dissolved, which could have forced a fire sale of prized assets such as the Trump Tower skyscraper in Midtown Manhattan.
But even for a billionaire, the damages are adding up. If, as expected, Trump loses on appeal, “one of his crown jewels will have to be sold” to satisfy the judgment, Naftalis predicted, especially given that the former president is already on the hook to pay a total of $88mn to E Jean Carroll, after two separate Manhattan juries found he had defamed her by denying he had sexually assaulted her in the 1990s.
While Trump continues to fight legal battles on his home turf, his other criminal cases — including those related to alleged election interference and mishandling of classified documents — are proceeding at a slower pace in Washington and Miami, respectively.
Those cases, however, concern his conduct in office, the assessment of which often divides along partisan lines in a polarised America. The two in New York “are really indictments of how [Trump] lived his life before he was president”, Naftalis said, when “he could lie in business and buy silence”.
Soon after the judgment on Friday, Trump spoke to reporters from the ornate steps of his Mar-a-Lago estate in Florida, where he moved in 2019. There, he railed against “a crooked New York state judge just ruled that I have to pay a fine . . . for having built a perfect company”. If he was not successful on appeal, he warned, “New York state is gone”.
