Low-level felony, high financial risk

  • Jury selection will begin Monday in the Trump Organization’s tax fraud trial.
  • Trump could be banned from doing business with the federal government if his company is convicted.
  • An injunction could end his “excessive” charges for Secret Service agents protecting him at his resort.

Donald Trump’s real estate and golf resort empire went on trial in Manhattan on Monday in a low-level corporate fraud case involving high financial risk, including millions of dollars in potential fines and tax penalties.

But there is another threatened cost, which government spending watchdogs have been urging for years.

The conviction could prompt the administration to ban the Trump Organization from doing business as a federal contractor, including cutting off Trump’s lucrative tap — critics say it’s too high — for Secret Service agents to stay on while protecting the former president and his family. in his property. .

Regulators say Trump is not an ideal government contractor because he has repeatedly dealt with fraud allegations and took into account federal regulations that require “impeccable standards of conduct.”

The regulations also recommend “disqualification” or blacklisting of any company convicted of “commercially related offences such as falsification, bribery, falsification or destruction of records, making false statements, etc.” [and] tax evasion. “

Steven L. Schooner, who teaches government procurement law at George Washington University School of Law, said a conviction in this payroll tax fraud trial will only increase calls for Trump to be blacklisted.

Over the years, despite two impeachments, an inauguration scandal, questions about his Trump International Hotel in Washington, D.C., and the forced dissolution of Trump University and the Trump Foundation by the same New York attorney , Schooner has been complaining vehemently as the federal government continues to do business with Trump, the general’s office now accuses him of pocketing $250 million through financial fraud.

Additionally, it was recently revealed that the Trump Organization charged the Secret Service more than $1.4 million to stay on Trump properties while the former president was in office.

The Secret Service paid Trump $1,185 a night for a single room at his Washington, D.C. hotel, and signed a $179,000 golf cart rental at his golf resort in Bedminster, NJ contract.

“The rules that apply to a typical government contractor have never applied to the Trump Organization, which is, frankly, the most frustrating and pernicious aspect of this sad saga,” Schooner said.

“It’s unbelievable, it’s heartbreaking,” he said of the administration’s apparent reluctance to stop putting taxpayer money in Trump’s pockets.

his and her mercedes

A jury to be selected in a downtown Manhattan courtroom starting Monday will determine whether the Trump Organization defrauded tax authorities by paying executives part of their off-book payments, in the form of tax-free benefits like free apartments and cars.

Alan Weisselberg, Trump’s former chief financial officer, will be the company’s lead prosecution witness after pleading guilty to a tax evasion scheme in August.

Weisselberg admitted to receiving $1.7 million in tax-free benefits over 15 years, including a Mercedes-Benz limousine for him and his wife, free access to a Trump-branded condo on the Hudson and a payment to his grandson’s private school. tuition fee.

At the Trump Organization headquarters in Trump Tower on Fifth Avenue in Manhattan, cars, apartments and tuition are believed to be part of Weisselberg’s $940,000 annual income, prosecutors said.

The Trump Organization has been accused of knowingly and repeatedly filing inaccurate tax documents to avoid payroll taxes on additional compensation, saving the company and its executives money.

As part of the plea, Weisselberg, who is still on the company’s payroll as a consultant, must pay back $2 million and serve five months in prison.

If the Trump Organization is convicted of the three tax fraud counts and six other counts in the indictment — all of which are low-level felonies, the Trump Organization could face stiff tax penalties and up to $1.6 million, according to Reuters calculations. dollar fine.

Their lawyers countered that the Manhattan district attorney’s office — run by Democrats for decades — is pursuing a fringe benefit case out of political bias against Trump, with the trial judge, state Supreme Court chief Judge Juan Merchan barred the defense. raised from the trial.

“Disqualification” Cases

Recent Secret Service billing disclosures and the trial that began in Manhattan have raised the stakes for those calling for and ending Trump administration contracts.

“The Trump Organization is essentially defrauding the federal government and federal taxpayers,” said Noah Bookbinder, president of Citizens for Responsibility and Ethics in Washington.

“If there were criminal convictions, it’s hard to imagine how the federal government could not have banned them at the time,” he told Insider.

Procurement law professors Bookbinder and Schooner sent a formal letter to the administration asking it to cut ties with the Trump company and its top officials in October 2021.

It was sent to the Federal General Services Administration, which oversees the contract, and government agencies that do business with Trump, including the Department of Homeland Security, which oversees the Secret Service.

“Our position has not changed,” said Sean Maltin, senior policy analyst at the Government Oversight Project, another ethics and accountability watchdog group that signed the letter.

“A conviction on any charges against the group would make disqualification a foregone conclusion,” he told Insider.

Representatives for the Trump Organization and the GSA did not respond to Insider’s requests for comment.

A Secret Service spokesman wouldn’t speculate on a possible disqualification of the Trump Organization, saying only that the agency would respond directly to a congressional inquiry into Trump’s bill.

The Secret Service is a tough target

Regulators acknowledge that Trump’s Secret Service charges are a tough target.

Under federal procurement regulations, agencies can continue to use blacklisted companies as long as they say they have “compelling reasons to justify continued business transactions between the agency and contractors.”

In the case of the Secret Service, that means Trump and his family cannot be effectively protected without staying at any of the resorts he currently lives in — including his favorite winter getaway — Mar-a-Lago in Palm Beach, Florida. family. and his summer favorite, Trump National Golf Club in Bedminster, NJ.

“The agency can simply say they need contractors,” Schooner explained.

Unless a cashless solution is impossible – Trump lets the Secret Service “stay on our property for free,” as Eric Trump once promised, or voluntarily gives up the Secret Service, as Richard Nixon did Protection – Trump’s Secret Service tap will likely remain open, the watchdog admits.

Still, blacklisting Trump would prevent future self-dealing in other types of contracts.

POGO’s Moultin said the Secret Service “may claim they are in a unique situation” and need to be close to the former president.

“But I still remember when Trump had a G-7 meeting at one of his properties, Moultin said.

In 2019, acting White House Chief of Staff Mick Mulvaney announced that the U.S. would host the 2020 G-7 summit at the Trump National Doral golf resort in Miami, but it came after critics accused the then-president of self-dealing and other ethics. An idea was quickly abandoned for violations.

That same year, then-Vice President Mike Pence stayed at one of Trump’s hotels during a trip to Ireland, 180 miles from any of his official events, while Air Force aircrews liked to visit Trump in Scotland. luxury golf resort accommodation.

“If there’s a future Trump administration, or just a future Republican administration, that might come up with the idea of ​​an official event at his property,” Murtin said.

“That’s where I think disqualification will still come into play.”

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