N.Y. Attorney General Can Question Trump and 2 Children, Judge Rules

Nelita Collins

The New York attorney general can question Donald J. Trump and two of his adult children under oath as part of a civil inquiry into his business practices, a judge ruled on Thursday — the latest in a string of legal defeats Mr. Trump has suffered since leaving office.

The ruling came just three days after a court filing by the attorney general, Letitia James, in the same matter revealed that Mr. Trump’s longtime accounting firm had cut ties with him and had essentially retracted a decade’s worth of his financial statements.

Ms. James’s inquiry, and a parallel criminal investigation by the Manhattan district attorney, are both examining whether Mr. Trump used those statements to improperly inflate the value of his assets so he could receive favorable loans.

Lawyers for the Trump family had sought to prohibit Ms. James, a Democrat, from interviewing Mr. Trump, Donald Trump Jr. and Ivanka Trump. They had argued that Ms. James was politically biased against Mr. Trump and was inappropriately using her civil inquiry to aid the district attorney’s criminal investigation, which she is also participating in.

But in a written ruling, the judge, Arthur F. Engoron, dismissed that point, saying it “completely misses the mark.” After dismantling several other arguments, he concluded that Ms. James had uncovered “copious evidence of possible financial fraud” — evidence that entitled her to question the Trump family.

“She has the clear right to do so,” he wrote, ordering that Mr. Trump and his son and daughter face questioning in the next three weeks.

Thursday’s ruling was the latest in a notable legal losing streak for Mr. Trump, which has included several rebukes from the United States Supreme Court. Since he left office, Mr. Trump has lost the battle to withhold his financial records from the Manhattan district attorney, to block a congressional committee from inspecting his White House records as part of an investigation into the Jan. 6 attack on the Capitol and to appeal the results of the 2020 presidential election.

For Mr. Trump, the fallout from some of these decisions could be significant, exposing him to civil and criminal liability as he has come under investigation from at least three prosecutors, in addition to Ms. James. Not only are the authorities in New York scrutinizing Mr. Trump; the district attorney in Atlanta has convened a grand jury as part of an investigation into the former president’s attempts to overturn the 2020 election results in Georgia.

“Today, justice prevailed,” Ms. James said in a statement, adding, “No one is above the law.”

In a rambling statement released on Thursday evening, Mr. Trump blasted the decision and attacked Ms. James, Hillary Clinton and the media. “It is a continuation of the greatest Witch Hunt in history,” he said, adding: “I can’t get a fair hearing in New York because of the hatred of me by Judges and the judiciary.” He has previously denied all wrongdoing.

“The entire system is corrupt,” a spokeswoman for the Trump Organization said.

The ruling does not mean that Ms. James will automatically receive the answers she is seeking. Mr. Trump and his children can invoke their constitutional right not to incriminate themselves, as Mr. Trump’s other adult son, Eric Trump, did when questioned by the attorney general’s office in October 2020. The Trump family also intends to appeal the decision, according to the spokeswoman.

The judge’s decision followed a fiery virtual hearing in State Supreme Court in Manhattan on Thursday, during which lawyers for Mr. Trump and the attorney general made their cases. Several times, Mr. Trump’s lawyers became so heated that Justice Engoron and his law clerk had to call for a timeout — raising their hands in the shape of a T, a gesture more often seen at a sporting event than in a courtroom.

Although Ms. James signaled in court papers that she had amassed significant evidence against Mr. Trump’s family business — she has accused the Trump Organization of engaging in “fraudulent or misleading” practices — she has said that she needs to question Mr. Trump and his children before determining her next move.

Mr. Trump and his children sought to block the questioning, and Ms. James responded in a court filing last month, arguing that there was “heightened need” for testimony from the three family members. She said that by questioning them, she would be able to determine who was responsible for the misstatements and omissions that the company made in its financial documents.

Because Ms. James’s inquiry is civil, she cannot bring criminal charges. If she finds evidence of wrongdoing, she can file a lawsuit against Mr. Trump, his company or others involved in the business. In last month’s filing, Ms. James said that her lawyers had not yet reached a final decision on a lawsuit but argued that “the grounds for conducting the investigation are beyond reproach.”

On Monday, Ms. James released a letter in which Mr. Trump’s accounting firm, Mazars USA, declared that Mr. Trump’s financial statements from 2011-20 were not reliable. Mr. Trump provided those financial statements, which include various disclaimers noting that they are unaudited, to his lenders and at least one insurance company. They are central to both the civil and criminal inquiries into Mr. Trump.

Mazars said in the letter that it had not “as a whole” found material discrepancies between the information the Trump Organization provided and the actual value of Mr. Trump’s assets, something that Mr. Trump’s lawyers asserted had effectively rendered the civil and criminal investigations “moot.”

But Justice Engoron scoffed at that argument, likening it to the dystopian slogans like “War Is Peace” in George Orwell’s “1984”; to Lewis Carroll’s inverse meanings in “Through the Looking Glass”; and to the former senior Trump adviser Kellyanne Conway’s “alternative facts.”

Suggesting that the “Mazars red-flag warning” about the financial statements made the investigations moot, the judge wrote, “is as audacious as it is preposterous.”

The criminal investigation, which is similarly focused on whether Mr. Trump used those statements to mislead his lenders about the value of his hotels, golf clubs and other properties, is being led by Alvin Bragg, the Manhattan district attorney who inherited it when he took office in January.

Last year, under Mr. Bragg’s predecessor, Cyrus R. Vance Jr., Manhattan prosecutors separately indicted the Trump Organization and its longtime chief financial officer, Allen H. Weisselberg, accusing them of conducting a yearslong scheme to evade taxes by compensating employees with special off-the-books benefits such as apartment rentals and luxury cars.

Mr. Trump’s lawyers said that the criminal inquiry, which also involves investigators from Ms. James’s office, would improperly benefit if the attorney general’s office questioned Mr. Trump and his children in the civil inquiry.

They argued that Ms. James would be able to obtain information that would be valuable to the criminal investigation without having to provide the family members the immunity that they would receive were they to testify in front of a criminal grand jury. (Under New York law, witnesses who appear before the grand jury receive immunity from prosecution on the subject of their testimony.)

After maintaining a neutral posture during the hearing, Justice Engoron was blunt in his ruling, which also directed the former president to provide the attorney general with documents she sought in her subpoena.

Addressing the argument that Ms. James was improperly using the civil investigation to bolster the criminal inquiry, he noted that the Trumps had not been asked to appear before a grand jury.

He was also unconvinced by the argument that Ms. James was politically biased, which Mr. Trump’s lawyers advanced by citing statements that the attorney general had made while campaigning, including her promise to “use every area of the law to investigate” Mr. Trump, who was then still in office.

Justice Engoron said that Ms. James had the right to say whatever she liked about Mr. Trump while running for office and that there was a clear basis for her investigation.

Next Post

Fashion Law Certificate Course by Legal Desire and Fashion Law Journal

The business of Fashion & Luxury necessitates a thorough understanding of the legal framework that governs the firms’ key internal activities, as well as their relationships with clients and other third parties. The “Fashion Law” courses by Legal Desire and Fashion Law Journal give an overview of fashion law which is an […]