Trump’s Business Is Being Destroyed. Will New York Destroy Itself Next?

You’ve seen the stories about how Donald Trump and his businesses have been treated in the State of New York. The State Attorney General Letitia James ran for election on a platform of destroying Trump. She said so explicitly in her campaign appearances and TV ads.

She brought what is normally a routine business records case against Trump. The allegation was that Trump had overstated the value of certain properties when making a loan application for financing secured by those properties. Anyone who knows anything about commercial real estate knows that valuations vary widely, many different models are used, and estimates are volatile and can change rapidly.

Trump’s loan application explicitly told the lender not to rely on the Trump valuations and to do their own due diligence. The lending bank did that. They decided to make the loan. The loan was repaid with interest on time and as agreed. There was no fraud in the transaction and no loss. The lender made money. There was no victim.

A case like this (even if the allegations are stretched thin) is typically handled in an administrative setting with a small fine, if that, or maybe just a warning to be more careful in the future. Instead, the radical prosecutor and biased judge railroaded the case into a $350 million award and over $90 million of back interest and collateral fines all payable to the State of New York.

The total judgment comes to $464 million. Over $111,000 per day of interest is being added until it’s paid. Trump can appeal but has to post a $350 million bond and is prohibited from borrowing the bond money from New York banks. He’s also banned from doing business in New York for three years.

This episode is a gross miscarriage of justice, an example of selective prosecution, and almost certainly unconstitutional as a denial of due process. But is it worse than that? This article by noted business reporter Charlie Gasparino says, yes.

Gasparino points out that other investors and entrepreneurs are watching the case closely. In many cases, these investors have a choice of investing in Florida, Texas, and other business-friendly jurisdictions. As they gradually move out of New York or simply decline to invest, the State of New York will suffer lost jobs, lost taxes, and declining business overall.

That will cost New York more than it’s costing Trump. But politicians don’t care about the people or the state. They just care about their own headlines.

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