The bizarre ruling by a leftist New York State judge last week that the hard-right Donald Trump must pay almost half a billion dollars in fines and interest over some subjective real estate valuations he offered to banks on loan applications is proof positive that the political weaponization of our legal system has reached dangerous critical mass.
In recent months we have railed against the targeting of Mr. Trump in several liberal Democratic jurisdictions in both criminal and civil contexts through the dredging up and creative interpretations of some obscure and typically ignored statutes. We have been particularly concerned because in our current toxic partisan culture, the open-ended availability of this technique to political enemies of elected officials provides them with convenient means to intimidate and restrain elected officials.
But the decision in the case brought against Trump by New York State Attorney General Letitia James is in a class by itself. It’s not only that the legal papers exploited every ambiguity in the law to his detriment but it also represented an unprecedented application of the consumer protection law under which the case was brought.
Consumer protection laws are typically designed to protect against unscrupulous and predatory merchants who illegally prey on unwary, ordinary people. They are not geared to the protection of commercial lenders from loan applicants who may inflate the value of their collateral. Indeed, according to Jonathan Turley, the New York Times researched the question and was not able to find a single instance where the statute in the Trump case was used against an individual or a company that did not also commit a criminal offense, go bankrupt or financially victimize anyone.
In this Trump case the valuations he offered were just that, offers, and made in the context of industry-wide practice that lenders always do their own due diligence in verification of what they understand to be subjective presentations. Indeed, the lenders in the case testified that they did not suffer any financial loss, and were also not misled into giving Trump more beneficial financial terms.
The fallout from this case is just beginning We hope the appellate courts will sort all of this out sooner rather than later.
