- Testimony may be finalized Monday in the Trump Organization’s criminal tax fraud trial.
- The defense is asking Manhattan jurors to view Donald Trump as a forgiving, generous boss.
- In summary, prosecutors can call the “Trump is just being generous” defense a total turkey.
It’s the time of year when we give thanks to those in our lives who embody our most cherished virtues. Selflessness. generosity. Forgiveness.
Donald J. Trump does That virtuous fellow. At least that’s what lawyers defending his company against a 15-count tax fraud charge hope a Manhattan jury will believe once deliberations begin Tuesday.
For five weeks, jurors have heard defense stories about “Trump the Very Good Boss”: legends of a benevolent, if distant, corporate executive who, though not criminally charged, is always present at the trial.
See! On the witness stand: Two Trump Organization insiders describing how each year Trump would hoist his big black permanent marker and sign stacks of million-dollar Christmas bonus checks.
See! On the overhead projectors: Trump’s scribbled initial “D” for Donald, his sign of approval on the invoices and memos behind year-round free cars, rent, home furnishings, and other executive handouts.
Prosecutors in Manhattan have told jurors that because no one has paid payroll taxes on these expensive plums, they are all part of a tax evasion. Trump’s zigzagging Sharpie signatures are indelible scribbles of shame, proving his complicity in this scheme, prosecutors will argue.
But Trump’s lawyers have launched a bipartisan defense against the prosecution’s idea that Trump, and the company itself, are criminally liable.
Defense point one: Trump was in the dark. Even two company executives, the prosecution’s own key witnesses, say so.
Defense point two: Trump’s signatures on numerous checks, memos, and invoices now in evidence? All they prove is that Trump is a generous boss.
Let’s see how prosecutors can break those two defenses apart next week.
The tuition fee scheme
Take the total $359,000 in tuition checks that Trump or his son, Eric Trump, signed for ex-CFO Allen Weisselberg’s grandchildren.
These checks paid for the private school education of the two toddlers in Manhattan for five years; they are perhaps the most extreme example of a perk that can’t even remotely be explained away as exempt from payroll taxes, not in the same way as other perks such as a company car or a company apartment.
Instead, the checks, written from Trump’s personal account, are explained away under the “generous Trump” defense as not a suspicious, tax-evading benefit at all, but a “gift.”
“I was in Trump’s office that day discussing a number of matters,” Weisselberg told jurors in 2012, testifying on November 17 under direct questioning by Susan Hoffinger, the Manhattan district attorney’s chief of investigations and a chief prosecutor in the process.
“And when I left his office, Don Jr. came in with, I think, some bills for his kids, for their school fees,” Weisselberg testified at Columbia Grammar and Preparatory School. All the Trump kids, including Trump’s son, Barron, went there.
Trump “jokingly” said, “I might as well pay your grandchild’s too,” Weisselberg told jurors of the light-hearted, totally non-tax fraudulent moment on the 26th floor of Trump Tower on Manhattan’s Fifth Avenue.
“I listened to him and kind of chuckled,” Weisselberg recalled.
But Weisselberg also told jurors that after Trump cut him off that first five years worth of college bills, “I turned around and said, don’t forget, I’m going to pay you back for this.”
However, Weisselberg’s story about “tuition” has a flaw.
The CFO withheld the value of these and other benefits from his salary for years, in a scheme he testified was only his idea. (Under the scheme, prosecutors say, Weisselberg and others could enjoy their benefits tax-free while the company saved on salary and payroll taxes.)
But as state Supreme Court Justice Juan Merchan put it last week — and the prosecution is likely to argue — “You don’t repay a gift.”
Those Christmas bonuses
So according to the defense theory, Trump handed out a fortune in bonus checks each year like an absent-minded Santa Claus, in complete ignorance that the checks were part of payroll tax fraud.
“Will Mr. Trump hand those out?” Hoffinger, the lead prosecutor, asked Weisselberg about the Christmas bonuses last week.
“Or do they go with the Christmas cards he wrote to the employees?”
“Right,” Weisselberg told her.
But here’s a sticking point. Call it the round numbers problem.
For Trump’s top executives, there were often several Trump-signed checks in every Trump-signed Christmas card.
That’s because as part of the alleged business plan, executives got their bonuses piecemeal, in separate checks from multiple Trump Organization subsidiaries.
The subsidiaries — including Mar-a-Lago, Trump’s golf resort in Palm Beach and even Trump’s production company for “The Apprentice” — wrote off these expenses as if they were paying contractors, prosecutors said.
Meanwhile, the executives pocketed the money as if they were being paid as contractors, an arrangement that Weisselberg said allowed them to claim it as freelance income, part of which they could then deposit into tax-free savings accounts available only to the self-employed. .
“Were there round numbers on those checks? Forty-five thousand? Fifty thousand? Or a hundred thousand?’ Hoffinger, the district attorney, asked the ex-CFO in what could be seen as a “gotcha” moment.
“Right,” Weisselberg replied.
Prosecutors will likely tell jurors during closing arguments that because of the round numbers on the stacks of checks he signed each year, it must have been obvious to Trump that no wage withholding had been taken from this fee, as required by law.
Trump also needed to know, prosecutors may argue, that these checks were essentially paying his top Manhattan executives for no-show work for his Florida resort and golf club, his Central Park skating rink, and his television show.
“Were they always round numbers?” Hoffinger asked the ex-CFO.
“They were round numbers,” Weisselberg agreed.
Trump the forgiving
Another hurdle the defense hoped to overcome is explaining to jurors why Trump has continued to pay six- or even seven-figure salaries to Weisselberg and other executives involved in payroll.
Weisselberg, in particular, will earn $1.14 million in salary and bonus this year, essentially money for nothing as he is currently on paid leave. This, despite such an insidious “betrayal” of the company, brought him to near tears to describe.
There may also be some belated holiday cheer for Weisselberg on top of that $1.14 million. In January, about a month after the trial ends, Weisselberg will hear whether Eric Trump has increased his $500,000 bonus again.
Did Weisselberg have 500,000 reasons to tell jurors, as he did for three days on the witness stand, that Trump was kept in the dark about a rampant, 15-year, C-suite-wide payroll tax scheme?
Here, the defense can be expected to tell jurors that Trump is not only a generous boss, but a forgiving one.
Trump Organization attorneys have been working to make that impression on jurors since they opened their depositions five weeks ago.
One attorney, Michael van der Veen, went so far as to call Weisselberg a “prodigal son” who hurt his family – the Trump family, who have employed him since 1973 – but who, apparently, had few hard feelings and the welcome gifts from a Trump-paid legal team and a tidy pile of cash.
It remains to be seen whether the jurors will believe that a few years after he pardoned Weisselberg for his last Thanksgiving turkey as president, Trump forgave Weisselberg for a “secret” salary scheme that could quickly tarnish his company’s profits and reputation — or whether this “Trump is being generous” idea will turn out to be just a defensive turkey.