It has been a busy couple of weeks with a lot of things happening.
Let’s start in Georgia. On the eve of jury selection for the first set of Trump codefendants, three of his codefendants (including the two who were set to go to trial this month) entered guilty pleas. While the attorneys for these folks are trying to spin their pleas as not being bad news for the remaining sixteen codefendants, that spin is not credible. A competent prosecutor does not give a favorable plea deal with a cooperation condition if they do not think that the defendant has useful information. And it is pretty clear that the folks running this prosecution are very competent.
Now, some folks have asked what these plea deals mean about potential federal charges against these individuals. The technical answer is that it has no direct impact on the federal case. However, the potential is there for indirect impacts.
On the direct side, this plea is just to state charges. The Supreme Court has been clear that a state prosecution (regardless of the results) does not bar a later federal prosecution. For that reason, a competent defense attorney, knowing that their client was facing a federal investigation, would try to reach an agreement with both the state and federal prosecutor. But it is possible (either because defense counsel was incompetent or because no deal could be reached with the federal prosecutor) that there is no agreement about the possible federal case.
On the indirect side, however, there are several impacts. First, in most states (and from what I have read Georgia follows this rule), a judge, before accepting a guilty plea must determine that there is a factual basis for the plea. In a traditional plea, the defendant must admit to the truth of the facts supporting their plea. Those statements in the plea would be admissions that could potentially be used against these defendants in any subsequent federal charge.
Second, while I have not seen the exact probation conditions, it is possible that these conditions require cooperation with all investigators including the federal investigators. That is not a usual condition, and it would be highly problematic for the state defense attorneys to agree to that condition without having reached some type of agreement with federal prosecutors. Waiving your client’s Fifth Amendment rights in a pending investigation without an agreement on the outcome of that investigation is at the top of the list of bad things that you should never ever do.
Third, even if the admissions in the guilty plea are not admissible in the prosecution case in a federal prosecution, they would still be potential prior inconsistent statements if these individuals testified in a federal case (either their own case or the case against one of their codefendants). Additionally, even without the actual admissions from the guilty plea, a prior finding of guilt can typically be used to attack the credibility of a witness (on the theory that committing a crime of any type reflects poorly on a person’s honesty which is not always true but that is the legal basis of the rule).
Moving north, the civil fraud trial against the Trump Organization continues. The basic facts of the case — which the court has already found — is that the financial statements prepared by the Trump Organization were fictional with property values grossly inflated. President Trump has tried to present a public defense based on the theory that nobody was defrauded because the banks that lent him money were repaid. This theory is both legally and factually wrong. On the legal side, the fraud occurs when the loan is made not when the lendee defaults on the loan. On the factual side, the terms of the loan are based on the financial statement. If the banks had thought that the loan was riskier, they could have asked for higher interest on those loans. The banks might have made money on the loans, but they made less money than they might have made if they had known the exact risk (or, alternatively, have avoided the risk of losing money if they had known the exact risk).
While a judge finding that Trump is a liar always warms the heart, the significance of the case is the potential impact on the Trump Organization. The thing to remember is that the Trump Organization is a corporation. As the U.S. Supreme Court periodically reminds us, a corporation is a legal person with a separate existence from its owner. More importantly, every business organization is a creature of some states. (For most major corporations, that state is Delaware for a variety of reasons, but, apparently, the Trump Organization is still incorporated in New York.) The same state that grants legal existence to a corporation can also terminate that legal existence. It appears that one option that this judge has is to dissolve the Trump Organization. If that were to happen, the judge would appoint a receiver to sell the assets of the Trump Organization and to pay its debts. It is unclear the Trump Organization actually has sufficient assets to pay its debts. While President Trump and his family would receive any money made from these sales after all debts have been paid, he would lose all of his properties. (My understanding is that all of his properties including his current home are actually owned by the Trump Organization.) It is possible that Trump could try to form a new corporation to purchase some of these properties. He would, however, need to get financial support for those efforts and he would probably not be able to purchase all of his properties at the price that he would like. Further, in many states, corporations need to be licensed to do business in the state. It seems like New York is one of those states. Thus, even if not fully dissolved, the Trump Organization could be forced to sell some of its New York properties including Trump Tower.
Turning more directly to politics, there is the continued car wreck known as the House Republican Party. As some members of the House Republican Caucus have admitted, the divisions among Republicans are so extensive that these “good Christians” could not reach 217 votes for a speaker candidate if Jesus were that candidate. Now the simple solution would be a return to a “constitutional” speaker. The Constitution only requires that there be a speaker (just like it requires that there be a president pro tempore of the Senate.) But the president pro tempore of the Senate is a mere presiding officer with the business of the Senate actually controlled by the majority leader. (In other words, Senator Chuck Schumer has more power than Senator Patty Murry.) In the early years of the House, the powers of the speaker was mostly similar to the powers now exercised by the president pro tempore of the Senate or by the speaker of the British House of Commons — the clear model for the office. If the power shifted from the speaker (elected by the entire house) to the majority leader (elected solely by the party caucus), intra-party divisions would no longer block the ability to get things to the floor. There might be a problem with passing bills due to a lack of support for the bills, but, at least, the House could do business. Instead, we are stuck waiting for Republicans to work out their chaos as there does not seem to be any Republican interest in a coalition agreement with Democrats. (I also doubt Democrats would support such a rules change. There is just too much of a history of a powerful speaker to adjust to a regime in which party leader is the main position and speaker is just an honorary office given to a senior member.)
Lastly, there was an election in Poland. Several of the countries in Central Europe have recently elected conservative authoritarians with little commitment to Democratic norms. The previous governing party in Poland fit within this trend trying to control the media and the courts. But, while the governing party won the most seats of any party, it did not win a majority of the seats. Instead, it looks like a more centrist party which finished second will be able to form a coalition with more liberal parties. While there are still issues that Poland will have to face, and other central European countries are still struggling to firmly commit to a democratic future (despite having joined NATO and the European Union), this election is still a hopeful sign.
