Checks & Imbalances: Trump Organization Fined, Biden Investigated

Share to FacebookShare to TwitterShare to Linkedin

Today we look at the legal woes of the last two presidents, Mike Pence’s self-dealing and the latest allegations against George Santos.

This is the web edition of the free Checks & Imbalances newsletter, usually sent to inboxes on Fridays. You can subscribe here. Please support this work, if you can, by subscribing to Forbes.

Trump Organization Ordered To Pay $1.6 Million For Tax Fraud

“The Trump Organization must pay $1.6 million in fines after being found guilty of tax fraud, a judge ordered Friday, after former President Donald Trump’s family business was found to have evaded taxes for years by paying executives through off-the-books gifts,” reports Alison Durkee.

The sentence marks the maximum penalty that the Trump Organization could have been fined based on the charges against it. The Trump Corporation and Trump Payroll Corp., which are part of the Trump Organization, were found guilty in December on nine counts of criminal tax fraud, scheme to defraud, conspiracy and falsifying business records, with a jury finding the company guilty of every charge it faced. The charges were based on a scheme over the course of over a decade in which the Trump Organization paid some executives through personal expenses that weren’t taxed, including apartments, car leases and private school tuition.

Manhattan District Attorney Alvin Bragg arrives at the New York Supreme Court for the sentencing hearing of the Trump Organization on Jan. 13, 2023 in New York City.

Getty Images

Tip Me

Any tips or suggestions? Email me at zeverson@forbes.com or call/SMS/Signal 202.804.2744. Follow me on Mastodon at @z_everson@journa.host. Thanks!

Special Counsel Appointed To Investigate Biden’s Handling Of Classified Material

“Attorney General Merrick Garland appointed an independent special counsel Thursday to investigate classified documents that were found in President Joe Biden’s office and home, escalating the controversy over the recovered documents even as the administration immediately returned the materials to the National Archives,” reports Alison Durkee.

Garland appointed former U.S. Attorney Robert Hur as special counsel to oversee the investigation, the attorney general said Thursday, arguing that it was in the “public interest” to do so. Special counsels—who are often appointed due to conflicts of interest—get more autonomy than most DOJ staff, as the attorney general doesn’t supervise their investigations on a day-to-day basis and must notify Congress after overriding their decisions. Two sets of classified documents from the Obama-Biden Administration have so far been found in Biden’s private possession, with the first batch found in an office at the Penn Biden Center in Washington and subsequent documents found at Biden’s home in Delaware. Those materials were not stored in locations authorized to secure classified documents, Garland said Thursday.

Related reads

At least 27 senior officials in the Biden administration worked for the president’s nonprofit organizations, including the Penn Biden Center, Forbes reported in December 2021. “There are key differences between the Biden case and former President Donald Trump’s alleged mishandling of documents kept at Mar-a-Lago,” reports Sara Dorn. “Who is Robert Hur, the special counsel investigating Biden’s classified documents?” Alison Durkee finds out.

Attorney General Merrick Garland names an independent special counsel to probe President Joe Biden’s alleged mishandling of classified documents. (Photo by OLIVIER DOULIERY/AFP via Getty Images)

AFP via Getty Images

Mike Pence’s PAC Spent $91,000 On His Book. It Became A Bestseller.

Mike Pence’s political action committee bought $91,000 of the former vice president’s memoir.

On Nov. 9, the Great America Committee paid Books on Call NYC $91,000 for what the PAC described as “collateral materials,” according to a report the PAC filed in December with the Federal Election Commission. Pence’s “So Help Me God” came out six days later. A spokesperson for Pence confirmed that the money went towards buying the memoir.

“So Help Me God” debuted at No. 2 on the New York Times’ best-seller list for hardcover nonfiction and remained on the rankings for six weeks. Although the list typically notes when retailers report bulk orders of a book, no such marking accompanied Pence’s memoir.

Since Pence is not a current candidate for federal office, he could legally use his PAC to funnel donor funds into his personal pocket, according to Brett Kappel, an attorney specializing in campaign finance at Harmon, Curran, Spielberg & Eisenberg. But a spokesperson for Pence, Devin O’Malley, said that the former vice president took steps to avoid that from happening, following guidance from the FEC on how to ensure he could use PAC money without personally receiving compensation from it.

Even if officials don’t profit directly when their political committees buy their book, it can benefit them. Purchases from retailers can help a book reach the best-seller list, which helps to further market the book. And politicians’ ability to tap into donor funds for purchases might make publishers more likely to strike deals with them in the first place.

After leaving office, Pence signed a two-book agreement with Simon & Schuster worth $3 million to $4 million, CNN reported in 2021. Spokespeople for the publisher did not immediately respond to requests for comment.

A spokesperson for the New York Times confirmed that purchases of a book before its publication date are counted toward its week-one sales on the best-seller list.

News of the Great America Committee’s purchase was first published by Raw Story.

Watch

Your correspondent joined Brittany Lewis in Forbes Newsroom to discuss Pence’s purchase.

Continuing Irresolutions

Updates on Checks & Imbalances’ previous reporting

Rep. Cathy McMorris Rodgers (R-Wash.) was named chair of the House Energy & Commerce Committee on Tuesday. As of April, she had received more political donations from Big Oil, $134,000, than anyone else who served on that panel in the last Congress.

*****

On Thursday, a bipartisan group of representatives introduced a bill that would bar members of Congress and their families from trading individual stocks, after the last Congress could not pass a similar bill. During that session, 78 lawmakers failed to properly report their securities trades, according to a tally maintained by Insider that relies on media reports, including from Forbes.

*****

Last week, conservative activist Ginni Thomas signed an open letter calling on Republican congresspeople to elect a speaker not named Kevin McCarthy (R-Calif.). It’s hardly the first time the wife of Supreme Court Justice Clarence Thomas got involved in an election. She has contributed at least $17,000 to political campaigns.

*****

Biden signed the Electoral Count Act into law in late December. Among other provisions, the bill “provide[s] clear guidelines” for the head of the General Services Administration’s role in presidential transitions. The clarification comes after Trump’s GSA Administrator Emily Murphy refused to authorize the Biden transition team and denied it access to government resources until three weeks after the 2020 presidential election was called. After Trump left office, Murphy landed positions at George Mason University and an executive-coaching firm, as well as on boards of advisers for two government contractors.

*****

In October, the Federal Election Commission accepted Ron Watkins’ request to terminate his congressional campaign. Watkins, who is widely suspected of being behind the QAnon nonsense, had asked to shutter his committee after finishing last out of seven candidates in a GOP primary for Congress in Arizona.

George Santos: Watchdog Files Legal Complaint Alleging Rep. Violated Campaign Finance Laws

“A campaign finance watchdog is asking the Federal Election Commission to investigate and possibly sanction Rep. George Santos (R-N.Y.) for violating campaign-finance laws, accusing him of illegally funneling money into his campaign and using funds on personal expenses, after Santos’ apparent lies about much of his background sparked new skepticism of his finances,” reports Alison Durkee.

The Campaign Legal Center (CLC) filed a complaint Monday…alleging there’s evidence that Santos illegally funneled money into his campaign and concealed who it was from, arguing there’s “ample evidence” the $705,000 Santos loaned to his campaign was actually given by outside unknown persons, given that Santos only reported earning $55,000 as of 2020 with no assets before suddenly gaining million-dollar assets by the time he filed disclosures in 2022. The watchdog accused Santos’ company Devolder LLC of not being a “bona fide business,” noting that it was incorporated three weeks after he declared his 2022 candidacy, and suggested the company was being used to funnel money to Santos and into his campaign by either foreign nationals or corporations who are barred from contributing to federal candidates.

Rep. George Santos (R-N.Y.) waits for the start of a session in the House chamber in Washington on January 6.

Copyright 2023 The Associated Press. All rights reserved.

Tracking Trump

“Donald Trump’s tax returns show he extended sweetheart loans to his three eldest children—Don Jr., Ivanka and Eric—saving them a small fortune while adding to the intrigue surrounding the former president’s tax maneuvers, reports Dan Alexander.

Congressional investigators flagged the loans last month in a report, questioning whether they constituted “disguised gifts” and suggesting they deserved further investigation. Shortly thereafter, the House Committee on Ways and Means released Trump’s tax returns. That allowed Forbes to analyze the documents alongside Donald Trump’s personal balance sheets and figure out the interest rates of the loans, revealing how generous they were and why investigators may have taken an interest in them. The younger Trumps owed their father a collective $4.55 million and paid him roughly $50,000 in annual interest from 2015 to 2020, according to the documents. That figure suggests the heirs paid an overall interest rate of about 1.1%. Such a low rate could raise concerns for those familiar with the intricacies of the tax code, since the Internal Revenue Service polices the rates that parents can offer their heirs, as a way of preventing people from transferring piles of money via sham loans.

*****

In June, Rep. Dina Titus (D-Nev.) introduced a bill intended to prevent a president from leasing government property, as Donald Trump did with his D.C. hotel. While some government experts thought the bill might fall short of achieving Titus’ goals, the issue became moot. The bill didn’t even make it out of committee before expiring when the last Congress ended.

*****

“After a historic and painstaking 15 rounds of voting, Rep. Kevin McCarthy (R-Calif.) thanked former President Donald Trump for helping him ‘get those final votes’ to win his bid for House speaker, after a group of hard-right GOP dissenters refused to support the California Republican and had largely rebuffed Trump’s requests throughout the long process,” reports Brian Bushard.

*****

In a fundraising email sent on Tuesday, one of Trump’s political committees continued to offer copies of his coffee-table book, “Our Journey Together,” in exchange for donations of $75 or more. In May, the Trump Save America Joint Fundraising Committee bought $48,000 worth of that book from its publisher, a company co-founded by Donald Trump Jr.

*****

A Park Avenue condo Donald Trump once owned was taken off the market in December. In July, the businessman who paid Trump $14 million for the unit during the 2016 campaign, was trying to sell it for a $2.55 million loss.

*****

Former member of the European parliament and Brexit booster Nigel Farage posed at Trump’s D.C. hotel with social-media personality Andrew Tate, according to a photo posted to Twitter in 2019. Tate made headlines last month when he tried to start a beef on Twitter with climate activist Greta Thunberg and, separately, days later he was arrested in Romania on charges of human trafficking, organized crime and rape.

.

Twitter/OfWudan

*****

The Conservative Political Action Conference held a black-tie gala at Mar-a-Lago last weekend, according to posts on Instagram. Notable attendees included Trump’s former Secretary of Health and Human Services Ben Carson, the election-denying losing GOP candidate for governor in Arizona Kari Lake and CPAC organizer Matt Schlapp and his wife, former Trump White House staffer Mercedes. The former president addressed his customers.

Instagram/Max Silverhand

.

Instagram/Max Silverhand

.

Instagram/Max Silverhand

*****

Spotted recently at the West Palm Beach golf club of former President Trump, who is a candidate for the Oval Office again in 2024:

Steve Wynn, a casino mogul who resigned from his company after accusations of sexual misconduct (he denied the accusations). In October, a federal judged tossed the Department of Justice’s lawsuit against Wynn to force him to register as a foreign agent, working on behalf of China. Martha Boneta Fain, a Virginia farmer who posted a lot of photos with D.C. power brokers in the lobby of Trump’s hotel, became a senior advisor for a pro-Trump dark money group and later was hired by a law firm to lobby on behalf of a Kuwaiti company. Denny McClain, the last MLB pitcher to win 30 games in a season. He served two stints in prison, totaling almost nine years, after first being convicted of racketeering, extortion and possession of cocaine and then being found guilty of embezzlement, mail fraud and conspiracy, according to the New York Times. Donald Trump

Oh yeah, Kid Rock was there too.

.

Instagram/Martha Boneta Fain

.

Instagram/Martha Boneta Fain

.

Instagram/Martha Boneta Fain

Across Forbes

“The Looming Debt Ceiling Crisis” “The House GOP’s Vote To Cut IRS Funding Was Just The First Skirmish In A Long War” “JP Morgan Says Startup Founder Used Millions Of Fake Customers To Dupe It Into An Acquisition” “Binance Is Bleeding Assets, $12 Billion Gone In Less Than 60 Days” “Inside The Secretive World Of Shark Tank Deals: Who The Real Winners Are” “Meet The 11-Year-Old Painter Who Made $1.3 Million At Art Miami”

In Closing

“I found out I was guilty

But I won’t be around for the sentencing”

— Bright Eyes, “Going For The Gold”