Guilty of Tax Fraud: A Postscript on Media Coverage

12/8/22

Although I’m neither surprised nor disappointed at the guilty verdict for tax fraud on the part of the Trump organization, I’ve been frustrated by the way the media have reported on this trial. Not having been in the courtroom, I’ve relied on the press to present the arguments in a coherent manner. Obviously, they got the verdict right; but to my mind, the explanation of the underlying issues has been deficient.

To start, we should clearly separate the case against Weisselberg, the Trump organizations CFO, versus the case against the companies, themselves. (Two Trump-owned companies were named in the suit.) The first case appears to have been straightforward. Weisselberg received considerable value in company-supplied perks that he hadn’t declared as income, and thus he under-paid taxes. Weisselberg pleaded guilty, presumably admitting to the charges. Critically, this scheme was no trivial effort, as it involved $1.76 million of unreported income over a 15-year period.

Turning to the case against the Trump organization, as the story was largely reported, criminal liability rested on proving that the company — not the employees — benefited by a scheme to pay in the form of perks as opposed to cash. Despite this orientation, one of the more damning pieces of evidence was a memo signed by Donald…