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‘A Horrible Precedent’: Experts Say Trump Civil Fraud Case Endangers Businesses, Rule of Law

April 1, 2024

In the wake of a highly controversial and unprecedented civil fraud case brought against former President and presumptive Republican presidential nominee Donald Trump, a leading economist is saying the case is an example of a “two-tiered justice system in America,” and experts say it will likely have a chilling effect on economic investment in New York.

In February, a New York judge ruled that Trump was liable for a staggering $355 million in penalties for inflating his wealth in financial statements and threatened to have his real estate business dissolved. But an Associated Press analysis subsequently found that in the past 70 years, Trump’s case was “the only big business … that was threatened with a shutdown without a showing of obvious victims and major losses.” Bank officials who offered the former president lower interest rates who were called to testify in the case “couldn’t say for sure if Trump’s personal statement of worth had any impact on the rates.”

“Who suffered here?” William Thomas, a law professor at the University of Michigan, asked in comments to the AP. “We haven’t seen a long list of victims.”

Adam Leitman Bailey, a New York real estate lawyer who had previously filed a successful lawsuit against Trump for misrepresenting condo sales to entice buyers, commented that the civil fraud ruling “sets a horrible precedent.”

“This is a basically a death penalty for a business,” added Eric Talley, a law professor at Columbia University. “Is he getting his just desserts because of the fraud, or because people don’t like him?”

Stephen Moore, a distinguished fellow in Economics at The Heritage Foundation, joined “Washington Watch with Tony Perkins” last week to shed light on how the decision will impact businesses in New York.

“This is a clearly victimless crime,” he observed. “… [It's] clearly an example of how we have a two-tiered justice system in America. [I]f they can do this to Donald Trump, they can do it to anybody. And that’s why it’s having a chilling effect. … Other businessmen and women look at that and say, ‘Hell no, I’m not going to invest in New York because they’re going to steal my business from me.’ … [T]his is a real danger to the business environment, which is already lousy in New York.”

Moore went on to argue that the array of lawsuits that are currently ongoing against the presumptive Republican presidential nominee are only fueling public support for him.

“I think there is such an anti-Trump Derangement Syndrome out there that these people can’t even see that when they want to put him in jail for 500 years, when they want to take away everything that he has, when they want to have these juries that are not impartial, it only makes him stronger,” he contended. “Every time they come after him, if you notice, his opinion polling goes up because Americans have … an innate sense of fairness. And anybody who looks at these trials knows that they’re unfair. We need a justice system that weighs both sides, and that’s not happening.”

Moore, who also serves as a principal at the Committee to Unleash Prosperity and previously served as an economic advisor for Donald Trump, further admitted his own fear of being unjustly prosecuted.

“I worked as an economist for Donald Trump, and — honest to God truth — I wake up sometimes in the middle of the night with a cold sweat, and I fear that there’s going to be a banging on my front door, and I’m going to go to the front door, and there’s going to be three FBI agents with machine guns to take me away. And what is my crime? I worked for Donald Trump. Now, you may say that’s an exaggerated fear, but some of my colleagues, that’s exactly what happened.”

Moore concluded, “This is the kind of justice … that happens in third world countries that don’t believe in the idea that we live by laws. It’s a scary situation for the United States right now. Donald Trump will be on the ballot in six, seven months. And my feeling is let the American people be the jury here.”

Dan Hart is senior editor at The Washington Stand.