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Nancy Pelosi is resisting calls from Democrats like Elizabeth Warren and a growing bloc of House Democrats to begin impeachment proceedings against President Trump, preferring to push her party’s kitchen table economic message.
But whether or not impeachment is the right political course, the reality is that many of Trump’s many scandals are pocketbook issues.
Consider unsealed testimony delivered by Michael Cohen to the House Intelligence Committee. It included the revelation that in his role as Trump’s fixer, one of Cohen’s jobs was to refuse to pay people the money they were owed.
“Some of the things that I did was reach out to individuals,” Cohen told the counsel for House Democrats, “whether it’s law firms or small businesses, and renegotiate contracts after the job was already done, or basically tell them that we just weren’t paying at all, or make them offers of, say, 20 cents on the dollar. “
If you ate dinner at an expensive restaurant and then skipped out without paying the bill, only to later offer 20 percent of what you owed, you’d be called a thief. And yet not only is there sworn testimony of Trump doing this, but that testimony barely made a dent in the news cycle.
Pelosi has a decent case to make. Public opinion polling consistently gives Trump weak approval ratings in the low 40s and impeachment even weaker ratings in the high 30s. And Democrats swept to a House majority last fall by largely taking anti-Trump zeal for granted and focusing their overt messaging on health care.
But to dismiss Trump scandals as unrelated to the problems in the lives of ordinary voters misinterprets how money shapes American life. Obstruction of justice is about Trump using his power to get away with things that normal people couldn’t do. And throughout his life, Trump has broken the rules and ripped off customers, workers, and investors because he can hire expensive lawyers and wait out paying his bills. He can just pay government fines. He’s got a leg up over most everyone else. He’s figured out that the system is set up to let rich and powerful elites like him get away with acting with impunity.
How Trump stole money
The basic Trump method, established as far back as his Atlantic City casino days, goes like this:
- First, Trump contracts with someone to do some work for him.
- Second, the work gets done.
- Third, Trump does not pay for the work.
- Fourth, the people Trump owes money threaten to sue him.
- Fifth, Trump offers to pay a small fraction of the sum they originally agreed on.
The person Trump owes money to is now faced with an unattractive choice. He can accept 20 or 30 percent of what he is owed right now. Alternatively, he can hire a lawyer and fight out a lawsuit that might take months or years. Since Trump is rich and has lawyers on his staff, it’s nothing to the contractor to fight an extended legal battle. And since Trump is the one not paying the bill, delay is inherently in his favor. The business owner, by contrast, could really use some money now rather than later. And he’d rather not have a bunch of legal bills and waste a ton of his own time in court.
The particular outcomes varied over time, but even the people who fought Trump most successfully ended up with unsatisfactory outcomes.
USA Today, for example, reported in 2016 that at one point, Trump owed a total of $69 million to 253 separate subcontractors on the Taj Mahal casino. One of those subcontractors was Marty Rosenberg of Atlantic Plate Glass Co., to whom Trump was $1.5 million in debt. That bill was so high that Rosenberg took on an informal role as a leader of a big group of contractors who sued Trump.
Rosenberg’s mission: with Trump offering as little as 30 cents on the dollar to some of the contractors, Rosenberg wanted to get as much as he could for the small businesses, most staffed by younger tradesmen with modest incomes and often families to support.
“Yes, there were a lot of other companies,” he said of those Trump left waiting to get paid. “Yes, some did not survive.”
Rosenberg said his company was among the lucky ones. He had to delay paying his own suppliers to the project. The negotiations led to him eventually getting about 70 cents on the dollar for his work, and he was able to pay all of his suppliers in full.
The basic picture that emerges from this is that not only has Trump engaged in shady practices, but he actually did so pretty cleverly. He’s hit upon a strategy of bilking people that works. If you’d described this to me in the abstract a few years ago, I’d have told you that it wouldn’t work — that nobody would do business with someone who acted this way. But evidently Trump is smarter than I am, because he figured out that you really can keep running the scam over and over again as long as you switch businesses and locations enough.
And Trump is quite creative in the sheer range of scams he’s pulled.
Donald Trump, career scammer
Trump got his start as a junior partner in his father’s real estate business, operating in the outer boroughs of New York City. He got his start as a celebrity with a New York Times article detailing federal housing discrimination charges brought against him and his father. The charges were, ultimately, settled without admission of fault — something that would be a pattern for Trump over the years.
That his first foray into the real estate business involved alleged criminal acts didn’t stop him from continuing in that business. When he later branched out into casinos, he got caught accepting an illegal loan from his father to stay afloat; he got off with a slap on the wrist and was allowed to continue in that business as well.
From his empty-box tax scam to money laundering at his casinos to racial discrimination in his apartments to Federal Trade Commission violations for his stock purchases to Securities and Exchange Commission violations for his financial reporting, Trump has spent his entire career breaking various laws, getting caught, and then essentially plowing ahead unharmed.
When he was caught engaging in illegal racial discrimination to please a mob boss, he paid a fine. There was no sense that this was a repeated pattern of violating racial discrimination law, and certainly no desire to take a closer look at his various personal and professional connections to the Mafia.
Even as late as the post-election transition period, Trump was allowed to settle a lawsuit about defrauding customers of his fake university (interestingly, the fact that the university was fake was not, itself, actionable fraud at all) rather than truly face the music.
One of Trump’s real insights in life was to see this bug in the system. When it comes to these kinds of crimes, it’s typically in government officials’ interest to agree to a settlement that gives them positive headlines and raises some cash while letting them move on to the next investigation.
But while these decisions can make sense individually, they let serial offenders repeat their crimes over and over again — defrauding both individuals and the federal government. And while Trump is in some ways an extreme case, he’s in other ways a typical one. The nature of America’s adversarial legal system is that your ability to prevail in court is closely linked to your ability to hire expensive lawyers, meaning that in both civil conflicts with middle-class people and criminal conflicts with the federal government, the rich have a huge leg up.
Elite impunity is a pocketbook issue
Trump, as president, is acting in line with his own predilection for alleged corporate criminals.
- While Obama’s Environmental Protection Agency sought a $4.8 million fine from Syngenta Seeds for poisoning workers with pesticides, Trump’s EPA settled for $150,000.
- Trump’s Consumer Financial Protection Bureau fined a man $1 for allegedly swindling veterans out of their pensions — also extracting from him a promise not to do it again.
- In February 2018, the Commodity Futures Trading Commission settled with three major banks that had engaged in illegal market manipulation — charging them a financial penalty but requiring no admission of wrongdoing and waiving “bad actor” penalties that would have impaired their ability to do business in the future.
The specific dynamics of each agency and each industry are, of course, unique.
But the basic pattern is the same — under lax enforcement, crime basically pays. You might not get caught, and even if you do get caught, the monetary penalties will not create a meaningful deterrent to future misconduct. Sen. Elizabeth Warren and Rep. Pramila Jayapal teamed up to create a “Rigged Justice” report detailing many specific instances of Trump-era rollbacks of white-collar criminal enforcement, building on what was already inadequate enforcement in the Obama era.
The overall problem, in other words, is much larger in scope than Trump. But Trump is part of the problem. Not only is he emblematic, as a business leader, of the cost of inadequate enforcement, but he’s also someone who clearly favors inadequate enforcement as a matter of principle and appoints regulators who make the problem worse.
Beyond that, his proclivity in Justice Department business to shield himself and his friends from Russia-related scrutiny speaks to broader questions about enforcement. If the FBI director can be fired for declining to drop a case into Michael Flynn, then what does that say to hundreds of front-line prosecutors and regulators all around the country who may be asked to look into misconduct by Trump’s sprawling network of business partners and campaign donors?
Commitment to going soft on corporate criminals is such a touchstone for Trump that he even makes an exception for his hardline immigration proclivities — he opposes enforcing penalties on companies that hire people who don’t have permission to work in the United States.
The instinct to want to focus on policy issues that impact people in their everyday lives and not just the constant din of Trump scandals is sound. But the line between Trump scandals and systematic policy failure is a blurry one because Trump’s entire career has been a scandal-soaked policy failure.
