NY judge: Donald Trump, children must testify in investigation of business practices

·6 min read

A New York judge ruled Thursday that Donald Trump and two of his children have to testify in a sprawling civil fraud investigation headed by New York Attorney General Letitia James, summarily rejecting the ex-president's request to quash subpoenas.

Trump must turn over documents within 14 days, and he, Donald Trump Jr. and Ivanka Trump must appear for depositions within 21 days, according to a eight-page ruling from state Judge Arthur F. Engoron.

It may not happen that quickly as the Trump lawyers already signaled that they will appeal.

In allowing the subpoenas, Engoron rejected arguments from Trump attorneys that James is politically biased against the former president, and is using a civil law investigation to advance a criminal case against him.

In a blistering postscript, the judge wrote: "In the final analysis, a state attorney general commences investigating a business entity, uncovers copious evidence of possible financial fraud and wants to question, under oath, several of the entities' principals, including its namesake. She has every right to do so."

Both the New York attorney general's office and the Manhattan district attorney are investigating whether Trump inflated the value of his holdings in order to secure loans and deflated values in order to reduce taxes.

Declaring victory over the ruling, James said "justice prevailed" and that "no one will be permitted to stand in the way of the pursuit of justice, no matter how powerful they are."

The Trumps "have been ordered by the court to comply with our lawful investigation into Mr. Trump and the Trump Organization’s financial dealings," she said.

In a written statement, Trump condemned the ruling and said, “I can’t get a fair hearing in New York because of the hatred of me by Judges and the judiciary. It is not possible!”

In a statement before a two-hour hearing that preceded Engoron's decision, James had said "the evidence continues to mount showing that Donald J. Trump and the Trump Organization used fraudulent and misleading financial statements to obtain economic benefit."

Related: Court documents: Mazars, Donald Trump's accounting firm, cuts ties to Trump Organization

Trump lawyers: James' probe political

During the video hearing, Trump's lawyers claimed improper political bias on the part of the prosecutor. Attorney Alina Habba, one of the former president's attorneys, cited a litany of James' comments during her campaign for attorney general, pledging to investigate Trump and his business practices.

"This is political," Habba said. "It has tainted this entire investigation."

At one point in a heated hearing, Habba said James is targeting Trump “probably because he can win again" in the 2024 presidential race.

Donald Trump's lawyers are fighting the release of documents related to the riot Jan. 6 at the Capitol.
Donald Trump's lawyers are fighting the release of documents related to the riot Jan. 6 at the Capitol.

Another Trump attorney, Ronald P. Fischetti, said James is working hand-in-glove with the Manhattan district attorney's office and trying to use civil court rules to compel testimony in a criminal case, depriving the Trumps of their legal rights.

"This is a criminal investigation, and she is acting as a district attorney," he said at one point.

Kevin Wallace, the lawyer for the attorney general's office, said investigators are following the facts.

As for any bias, Wallace quoted former longtime federal prosecutor Robert Morgenthau about a lawyer once under investigation: "A man is not immune from prosecution simply because the U.S. Attorney doesn't like him." The comment concerned the late Roy Cohn, an attorney whose controversial career included work with 1950s red-baiting U.S. Sen. Joe McCarthy – and with Donald Trump.

More: NY attorney general seeks Trump deposition in fraud inquiry targeting Trump Organization

More: Donald Trump sues NY attorney general in a bid to stop probe of his business practices

Judge says Trump, family aren't 'protected,' nor denied rights

During the hearing and in his ruling, Engoron said Trump and his family are not part of a legal "protected class," which normally includes factors like race or religion.

As for claims James is running a biased investigation, Engoron asked the attorneys in the hearing: "How do we know that the motive is Donald Trump’s speech rather than his financial practices?”

In his written ruling, Engoron rejected the Trumps' claim that James improperly sought the Trumps' depositions to gain an improper advantage in the parallel criminal investigation led by the Manhattan district attorney and James' prosecutors. That argument "completely misses the mark," the judge wrote in his decision.

New York Attorney General Letitia James.
New York Attorney General Letitia James.

For one thing, he said, the Trumps' position "overlooks the salient fact that they (the Trumps) have an absolute right to refuse to answer questions that they claim may incriminate them."

Engoron said the attorney general "pursued its civil investigation for more than a year without the slightest hint that it was subterfuge to garner evidence for a criminal investigation in the offing."

In a terse statement following the judge's ruling, a Trump Organization spokesperson said: “The entire system is corrupt.”

Former federal prosecutor Renato Mariotti said Trump is "between a rock and a hard place" with respect to the dual investigations and the prospect of invoking his Fifth Amendment protection against self-incrimination.

"If Trump takes the Fifth, it can be used against him in the civil case being developed by the New York Attorney General," Mariotti said. "If Trump doesn’t take the Fifth, the Manhattan DA can use his words against him."

The judge's ruling also cast aside the Trumps' claim that James was pursuing them as part of a political "vendetta." Engoron said he had privately reviewed thousands of documents filed as part of the attorney general's inquiry and determined that there was a "sufficient basis" for continuing the investigation.

A decision by James not to subpoena Trump "would have been blatant dereliction of duty (and would have broken an oft-repeated campaign promise)," the judge wrote.

Financial ties cut this week

There are signs the investigations of Trump's business practices are moving forward beyond Thursday's decision to force the Trumps' to comply with subpoenas.

A court document filed this week by James said that Trump's accounting firm, Mazars, has cut its ties to the family-run business, the Trump Organization.

In a letter, Mazars told the Trump Organization that the company's statements of its financial condition “should no longer be relied upon," and that it should inform recipients of that determination.

While the Trump lawyers have signaled their intent to appeal Engoron's ruling, the judge did not hold back in disputing the Trumps' claim that the the civil investigation was somehow rendered moot when Mazars accountants disclosed that a decade's worth of Trump Organization financial statements were no longer reliable.

More: Former Trump Interior Secretary Ryan Zinke misused Cabinet position, investigation finds

Such claims, Engoron said were "audacious" and "preposterous."

Engoron also wrote that "the impetus for the investigation was not personal animus, not racial or ethnic or other discrimination, (and) not campaign promises." Instead, it was congressional testimony by former Trump attorney Michael Cohen, who said Trump and his aides were "cooking the books" with their various business enterprises.

Cohen, who served a prison term for campaign finance violations linked to Trump, said in an interview after Thursday's ruling that Trump might have to take the fifth because his testimony would not help his cause.

"He's got a lot of problems," Cohen said. "Let me put it that way."

This article originally appeared on USA TODAY: NY judge: Donald Trump must testify in probe of his business practices

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