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Testimony could end Monday in the Trump Organization criminal tax fraud trial.
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Manhattan jury asked by defense to see Donald Trump as forgiving, generous boss
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In summary, prosecutors can call the “Trump is just generous” defense a total turkey.
It’s that time of year when we give thanks to those in our lives who embody our most treasured virtues. Selflessness. Generosity. Forgiveness.
Donald J. Trump is the virtuous guy. At least, lawyers defending his company against a 15-count tax fraud charge are hoping a Manhattan jury will believe it once deliberations begin Tuesday.
For five weeks, the jury has heard defense stories about “Trump the Very Good Boss”: legends of a benevolent if distant corporate leader who, while not criminally charged, is always present at the trial.
Catch sight of! On the witness stand: Two Trump Organization insiders describe how Trump would pull up his big black permanent marker and sign million-dollar stacks of Christmas bonus checks every year.
Please refer! On the overhead projectors: There’s Trump’s scrawled initial “D” for Donald, his seal of approval on the bills and memos behind a year-round plethora of free cars, rents, furnishings, and other executive handouts.
Manhattan prosecutors have told jurors they are all part of a tax evasion scheme because no one paid payroll taxes on those expensive plums. Trump’s zigzagging Sharpie signatures are indelible scribbles of shame that prove his complicity in the plan, prosecutors will argue.
But Trump’s lawyers have advanced a two-pronged defense against prosecutors’ notion that Trump and the company itself are criminally responsible.
Defense pillar one: Trump groped in the dark. Even two company bosses, the key witnesses for the public prosecutor’s office, say so.
Defense Pillar Two: Trump’s Signatures on Dozens of Checks, Memos and Bills Now in Evidence? All they prove is that Trump is a generous boss.
Let’s go through how prosecutors can be expected to dissect these two defenses next week.
The study regulations
Take the total of $359,000 in tuition that Trump or his son Eric Trump underwrote for ex-CFO Allen Weisselberg’s grandchildren.
These checks paid for the two tots’ five-year education at a private school in Manhattan; They are arguably the most extreme example of a perk that can’t remotely be declared exempt from income tax in the same way that other perks like a company car or apartment can be.
Instead, in defense of “generous Trump,” the checks written from Trump’s personal account are explained as not a suspected tax evasion benefit at all, but a “gift.”
“I was in Trump’s office that day and discussed some matters,” Weisselberg told the jury in 2012, saying on March 17.
“And when I left his office, Don Jr. came in with, I guess, some bills for his kids, for their tuition,” Weisselberg testified at Columbia Grammar and Preparatory School. All the Trump children, including Trump’s son Barron, went there.
Trump “jokingly” said, “I might as well pay your grandson’s,” Weisselberg told jurors of the light-hearted, totally non-tax-cheating moment on the 26th floor of Trump Tower on Fifth Avenue in Manhattan.
“I listened to him and kind of giggled,” Weisselberg recalled.
But Weisselberg also told the jury that after Trump cut him the first of five years of tuition, “I turned around and said, don’t forget, I’ll pay you back.”
However, Weisselberg’s “teaching gift” story has a flaw.
The CFO deducted the value of these and other perks from his salary for many years, in an arrangement he testified was his own brainchild. (Under the program, prosecutors say, Weisselberg and others were able to enjoy their perks tax-free while the company saved on salary and payroll tax withholding.)
But as state Supreme Court Justice Juan Merchan put it last week — and prosecutors are likely to argue — “you don’t repay a gift.”
These Christmas bonuses
So, according to the defense theory, Trump handed out a fortune in bonus checks every year like an absent-minded Santa, unaware that the checks were part of the payroll tax fraud.
“Mr. Trump wants to distribute them?” Hoffinger, the lead prosecutor, asked Weisselberg about the Christmas bonus last week.
“Or do they go to the staff along with the Christmas cards he wrote?”
“Right,” Weisselberg said to her.
But here’s a sticking point. Call it the round number problem.
For Trump’s top executives, multiple checks signed by Trump were often stuffed into each Trump-signed vacation card.
That’s because executives under the purported corporate plan received their bonuses piecemeal in separate checks from multiple Trump Organization affiliates.
The subsidiaries — including Mar-a-Lago, Trump’s Palm Beach golf resort, even Trump’s production company for “The Apprentice” — wrote off those expenses as if they were paying contractors, prosecutors said.
Executives, on the other hand, pocketed the money as if they were being paid as contractors, an arrangement Weisselberg explained allowed them to claim it as freelance income, some of which they could then invest in tax-free savings accounts available only to the self-employed were available.
“Were those checks round numbers? forty-five thousand? Fifty thousand? Or a hundred thousand?” Hoffinger, the prosecutor, asked the ex-CFO in what could well be described as a “got” moment.
“Right,” Weisselberg replied.
Prosecutors will likely tell the jury during closing arguments that it must have been obvious to Trump from the round numbers on the stacks of checks he signed each year that no payslips were deducted from that compensation, as required by law .
Trump also needed to know, prosecutors may argue, that those checks essentially paid his top Manhattan executives for no-show work on his Florida resort and golf club, his Central Park ice rink, and his television show.
“Were those always round numbers?” Hoffinger asked the ex-CFO.
“Those were round numbers,” agreed Weisselberg.
Trump the Forgiving
Another hurdle the defense hoped to clear is trying to explain to the jury why Trump continues to pay six-, even seven-figure salaries to Weisselberg and other executives involved in the payroll system.
Weisselberg, most notably, is making $1.14 million in salary and bonus combined this year, essentially money for nothing as he is currently on paid leave. This was despite a “betrayal” by the company so insidious it brought him to tears to describe it.
In addition to the $1.14 million, there could also be some late-holiday cheer for Weisselberg. In January, about a month after the trial ends, Weisselberg will learn if Eric Trump has increased his $500,000 bonus.
Did Weisselberg have 500,000 reasons to tell the jury, as he did on the witness stand for three days, that Trump was being kept in the dark about a 15-year, C-Suite-wide payroll tax system?
This is where the defense can be expected to tell the jury that Trump is not only a generous but also a forgiving boss.
Lawyers for the Trump Organization have been working to make that impression on the jury since opening the statements five weeks ago.
One defense attorney, Michael van der Veen, went so far as to call Weisselberg a “prodigal son” who has hurt his family — the Trump family who have employed him since 1973 — but has apparently been welcomed back into the fold with few toughs Feelings and the welcome gifts of a Trump-paid legal team and a healthy chunk of cash.
It remains to be seen whether the jury will believe that a few years after Trump pardoned his last Thanksgiving turkey as President, Weisselberg awarded a “secret” pay scheme that could soon hurt his company’s bottom line and reputation — or if this “Trump is generous” idea will prove to be a turkey of the defense.
Read the original article on Business Insider
