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E. Jean Carrol

E. Jean Carroll Has Trump By The Wallet (But Is There Anything In It?)

The $83.3 million defamation judgment that writer E. Jean Carroll won Friday against Donald Trump will soon reveal the depth of his finances, long shrouded in smoke and mirrors, disclaimers that his financial statements are not to be trusted, and outright fabrications about his income and wealth.

The secret: does Trump have the money to pay Carroll?

Trump says he’ll appeal. He has few grounds to challenge the federal court judgment. But if Trump does appeal, it will open the curtain on his murky finances, where inflated valuations and concealed obligations are common.

Trump testified almost a year ago that he was sitting on $400 million of cash. Be skeptical. Don’t discount the prospect that Donald conflated his personal money with cash from his MAGA fundraising operations, which by law cannot be used to pay Carroll.

Appealing will require Trump to either deposit the entire judgment amount with the court or obtain a bond covering 20 percent of the judgment, close to $17 million.

If you were in the financial business, would you loan any money to Trump? What if he offered to pay a fat fee upfront? A high-interest rate? What real estate would you take as collateral to back the bond, knowing that if the appeal fails, Trump will fight to keep you from collecting?

As early as this week, Trump expects a Manhattan judge to impose a fine of more than $300 million for persistent financial fraud.

Naked Claim

Even if Trump had $400 million cash a year ago, an unverified claim, he has faced enormous legal and other bills since then. At the same time, his golf courses in Ireland and Scotland continued losing money, public records in London show.

The Carroll case and the expected New York State civil judgment for persistent fraud would consume 96 percent of the cash he claimed without proof.

Suppose Trump can’t financially qualify to pursue an appeal. In that case, Carroll can enforce judgment, seizing cash in bank accounts and putting liens on properties such as the portion of Trump Tower that Trump still owns and Mar-a-Lago in Florida. That would take time and cost Trump a small fortune in legal fees—he has a history of stiffing his lawyers—to delay paying Carroll. Meanwhile, interest costs will add to the $83.3 million obligation.

Trump hopes that an appeals court will find the damages award excessive. Death cases, after all, are often settled for a few million dollars, sometimes a few hundred thousand.

He is unlikely to prevail because the jury awarded $18.3 million in compensatory damages and $65 million in punitive damages. As a rule, courts respect punitive awards of less than six times actual damages. This punitive award was about 3.6 times the compensatory damages.

The punitive damages are intended, as Carroll lawyer Roberta Kaplan told the federal court jury, to get Trump to stop lying about Carroll. After an earlier trial Trump was judged to have raped Carroll in a Bergdorf-Goodman department store dressing room and to have lied about it in repeated attacks on Carroll. More than two dozen other women have accused Trump of rape or sexual assault.

Trump insists he never met Carroll and “she’s not my type.” During a pretrial deposition he was shown a photo of himself and his first wife facing E. Jean Carroll and her then husband. Trump misidentified Carroll as his second wife, Marla Maples. When his lawyer interrupted to repair the damage Trump asserted that the sharply focused image was blurry.

Knowing Trump, I doubt he will stop attacking Carroll. His emotional state and views about women, frozen in puberty, and his declining mental health and cognitive capacity will not facilitate a proper change in conduct.

Fantasy Finances

Trump’s finances have always been exercises in fantasy. For example, in 1985, he bought Mar-a-Lago for $10 million. He claimed it was a cash purchase with no mortgage. I have in my home a Chase bank executive’s letter to Trump promising never to file the Mar-a-Lago mortgage at a courthouse, as banking laws require.

One reality is that Trump borrowed 125 percent of the purchase price, taking $2 million for himself while claiming he paid from his supposed rich cash deposits. A second is that bankers who declare their illegal conduct rarely get prosecuted or even disciplined, so weak is government regulation of finance in America.

The same year he bought Mar-a-Lago with the hidden mortgage, Trump also acquired the nearly finished Hilton Casino in Atlantic City. He paid with a $325 million loan, from which he shaved off a $5 million fee for himself.

Eventually, he owned three Atlantic City casinos, yet he never invested a dime in that New Jersey resort town. It was all borrowed money. Because he took fees for himself from the loan proceeds, his investment was less than zero, just as with Mar-a-Lago.

Only a foolhardy or corrupt banker would issue Trump a bond enabling his appeal of the $83.3 million award to E. Jean Carroll. If Trump fails to meet the financial qualifications for an appeal, there’s one thing we’ll know for sure: the man who ran for president claiming he was worth more than $10 billion is so financially weak that when an 80-year-old woman grabbed him by the wallet, he couldn’t perform.

Reprinted with permission from DC Report.

Search For South Korean Official’s Secret Funds Leads To Orange County

Search For South Korean Official’s Secret Funds Leads To Orange County

By Victoria Kim, Los Angeles Times

LOS ANGELES—The South Korean public got a first glimpse of former President Chun Doo-hwan’s ill-gotten gains in 1996 — 25 apple boxes neatly packed with crisp bills.

The bills, the equivalent of several million dollars, were only a fraction of the more than $200 million Chun was ultimately found to have amassed in bribes extracted from corporations like Samsung, Hyundai and LG during his eight years as president.

When Chun was convicted on mutiny, treason and bribery charges, the South Korean courts also ordered him to pay $229 million in criminal restitution — a bulk of which Chun has long maintained he can’t afford, saying that he had less than $300 to his name.

On Thursday, the nearly two-decade hunt for Chun’s secret funds — a closely watched accounting for a figure who remains one of the most reviled in South Korea — found its way to Southern California. Prosecutors with the U.S. Department of Justice announced that they had located $721,951.45 — the value of a white clapboard home in Newport Beach that was owned until recently by Chun’s son and daughter-in-law.

The U.S. government filed a forfeiture action in Los Angeles on Thursday, moving to seize the proceeds from the home’s sale in February.

The story of how the fruits of corruption half a world away wound up in coastal Orange County is a painstakingly orchestrated, convoluted path that prosecutors here will have to retrace to claim the money.

Now 83, Chun came to power in a 1979 military coup after the assassination of a long-ruling strongman, and amid his ascension to power, he ordered troops to open fire at masses of students and citizens protesting in the city of Gwangju, causing hundreds of deaths. He declared martial law, ordered the Constitution rewritten and held a presidential election as the sole candidate. He eventually stepped down in the face of widespread protests.

Chun was initially given the death penalty after his 1996 conviction, but that was later reduced to life in prison and — ultimately — he was freed after his punishment was commuted. Even so, the restitution order remained in effect, according to the forfeiture complaint filed in Los Angeles. After paying a fraction of the amount, Chun has refused to pay more, saying that his assets totaled $290.

Chun’s denial has launched an international hunt for his secret funds, suspected of having been laundered through a wide network of shell corporations and nominee accounts. The effort to track down the money was increased last year because the statute of limitations was due to expire. Prosecutors in South Korea have already seized real estate, artwork, stocks and jewelry that they determined were derived from corruption proceeds.

As of August 2013, Chun still owned $167 million, according to the complaint.

According to U.S. prosecutors, the funds that ended up in Newport Beach were initially handed over from Chun to his father-in-law, Gen. Lee Kyu-dong. Chun admitted to South Korean prosecutors that he gave Lee the money in 1996 because he “feared that there may be a misunderstanding and that the money may be seized later, if (he) had a lot of money while (he) was being investigated,” according to the complaint.

The money was transferred in the form of housing bonds from Lee to Chun’s second son, J.Y. Chun, who allegedly spread the money into dozens of accounts in other people’s names.

After initially denying that the money came from his father, the son eventually admitted to South Korean prosecutors: “I always thought of the (funds) unconditionally as my father’s money. It is true that I did as such. I am very sorry about that now,” according to the forfeiture complaint.

A business partner and friend, Ryu Chang-hee, told South Korean prosecutors in 2013 that the younger Chun asked him to buy real estate in the name of Ryu’s father to “dodge suspicion” because he didn’t have the income to justify such a purchase, according to the complaint.

Over the years, J.Y. Chun has funneled hundreds of thousands of dollars into the U.S. financial system, prosecutors alleged in court papers. In 2003, he and his wife purchased a home outside Atlanta with suspected corruption proceeds. In 2005, they sold that home and purchased the Newport Beach property for $2.24 million, with a nearly $1-million down payment.

Neither J.Y. Chun nor his wife had an income that could prove the money for the home was legitimate, prosecutors alleged. The younger Chun reported annual income of $20,000 to $50,000

His wife, former starlet Park Sang Ah, is also suspected of having lied on the mortgage application for the home — she allegedly told immigration authorities that she hadn’t worked since 2003, yet claimed on the application that she was president of a company and made nearly $500,000 a year.

Representatives for the Chuns could not immediately be reached for comment Thursday.

Photo by StacyA/Flickr

Secret Justice Department Memo Justifies Assassination of Anwar al-Awlaki

A secret memo, written by Justice Department lawyers David Barron and Martin Lederman, provides a legal rationale for the assassination of Al-Qaeda propagandist Anwar al-Awlaki, according to the New York Times.

Al-Awlaki was killed in Yemen last month in an attack carried out by an unmanned CIA drone. His death was controversial, since unlike other suspected terrorists killed in Afghanistan, Pakistan, and Yemen, al-Awlaki was an American citizen born in New Mexico. Republican presidential candidate Ron Paul seemed particularly upset that the government was, in his words, “assassinating American citizens without charges.”

In fact, there are many laws and regulations that suggest al-Awlaki’s assassination would be illegal if he were not considered an Al-Qaeda operative fighting a war against the United States. These include Executive Order 12333 (which bans assassinations), 18 U.S.C. 1119 (which prohibits Americans from killing other Americans abroad), international rules of war, and the Fourth and Fifth Amendments to the Constitution. According to the Times, the memo considers all of these legal constraints, and finds that the assassination of al-Awlaki does not violate any of them.

That [executive] order, the lawyers found, blocked unlawful killings of political leaders outside of war, but not the killing of a lawful target in an armed conflict.

A federal statute that prohibits Americans from murdering other Americans abroad, the lawyers wrote, did not apply either, because it is not “murder” to kill a wartime enemy in compliance with the laws of war.

But that raised another pressing question: would it comply with the laws of war if the drone operator who fired the missile was a Central Intelligence Agency official, who, unlike a soldier, wore no uniform? The memorandum concluded that such a case would not be a war crime, although the operator might be in theoretical jeopardy of being prosecuted in a Yemeni court for violating Yemen’s domestic laws against murder, a highly unlikely possibility.

Then there was the Bill of Rights: the Fourth Amendment’s guarantee that a “person” cannot be seized by the government unreasonably, and the Fifth Amendment’s guarantee that the government may not deprive a person of life “without due process of law.”

The memo concluded that what was reasonable, and the process that was due, was different for Mr. Awlaki than for an ordinary criminal.

CIA Operates Secret Training Facility And Prison In Somalia

The convoluted relationship between the U.S. and Somalia — which has quietly become a central front in the ever-expanding military campaign against Al Qaeda — just got even messier. According to a report by Jeremy Scahill in The Nation, U.S. intelligence forces have built a training facility and a secret prison in the capital of Mogadishu. Former prisoners, some of whom spent more than a year in the underground prison facility, reported deplorable, unsanitary conditions and interrogations by Somali, American and French intelligence agents. Because U.S. officials have directly hired and paid the Somali operatives who run the site, it is what one prisoner’s lawyer calls “a decentralized, out-sourced Guantanamo Bay in central Mogadishu.”

Scahill writes that the prison is “buried in the basement of Somalia’s National Security Agency (NSA) headquarters, where prisoners suspected of being Shabab [an Islamic militant group with close ties to Al Qaeda] members or of having links to the group are held. Some of the prisoners have been snatched off the streets of Kenya and rendered by plane to Mogadishu.”