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Conspiracy theorist Alex Jones did it two years ago. Rudolph Giuliani did it just before Christmas. Now there’s a very good chance that before March 12, Donald Trump will join them in filing personal bankruptcy.
Trump would do so for the same reason as Jones and Giuliani — to delay paying court-ordered awards for defamation.
Trump has never filed personal bankruptcy, as I will show below. Doing so now might seem at first blush to ruin his brand, his polished image as a multi-billionaire, a modern Midas who turns to gold all that he touches.
But spinning a bankruptcy filing to his advantage would be easy. Trump will tell his cultish believers that he is as rich as ever, but he was forced to seek refuge in Bankruptcy Court by the Marxist-Fascist-Corrupt-Deep State-Liberal-Radical cabal he blames for his legal woes.
Appeal Deadline Looms
Monday, March 12, matters because that is the deadline for Trump to appeal the $83.3 million a jury awarded to advice columnist E. Jean Carroll for defaming her after a federal court jury awarded $5 million for earlier defamation. Court rules require that, as a condition of appealing, Trump, like all such litigants, must show that he has the money to pay the jury’s award.
- Pay the Carroll award, which I believe, knowing the man well, isn’t going to happen.
- Post $83.3 million in cash with the federal court so he can appeal.
- Obtain a bond guaranteeing payment of the award, which assumes that Trump can find a lender foolish enough to extend him credit.
In a previous DCReport piece, I questioned whether Trump has the capacity to either deposit that much money with the court or obtain a bond that will cover the entire amount should Trump prove unable to do so. After all, how many actual billionaires hawk $399 gold sneakers and $99 perfume, a human invention to hide stink?
But the Carroll award is not his only problem. On Friday, Trump was ordered to disgorge ill-gotten gains from persistent business fraud. With interest, he owes more than $450 million, a level of cash no one who critically follows Trump believes he has.
Stopping The Clock
Filing for personal bankruptcy stops the clock on both awards. That means he won’t need to deposit cash or get bonds to appeal the Carroll and New York State civil fraud awards. The automatic stay to these and other civil proceedings would benefit Trump by getting past what he sees as the finish line: the November 5 presidential election.
In the end, a bankruptcy filing won’t save Trump from paying, according to Professor Gregory L. Germain, who teaches bankruptcy law at Syracuse University College of Law.
Germain, my law school colleague for many years, says that while Trump can achieve is delays, surely enough to get past Election Day.
That strategy worked for conspiracy theorist Alex Jones. Two years after his bankruptcy filing Jones has yet to pay any of the $1.5 billion jury award for defaming the parents and relatives of the 2012 Sandy Hook massacre. That more than two years have passed suggests Trump should have no trouble getting past the election through this delaying tactic.
If you’re not familiar with Jones and his Info Wars internet program, he promotes not just baseless conspiracy theories but far-out tin foil hat nonsense like his assertions that “interdimensional beings” have taken over the bodies of many humans, especially political leaders. Among the guests Jones has fawned over: Donald Trump.
Jones repeatedly charged that the 2012 Sandy Hook Elementary School massacre was a hoax, and the grieving parents and other relatives were paid actors. The survivors filed a defamation case. A decade later a jury awarded the survivors $1.5 billion. Jones quickly sought refuge in federal Bankruptcy Court.
In October, a Texas judge ruled that Jones cannot use bankruptcy to avoid paying the $1.5 billion award. Jones has yet to pay anything.
Similarly, Giuliani repeatedly insisted that two Georgia election workers, a mother, and daughter, passed around a USB stick that altered the 2020 Georgia vote count, despite clear evidence that this was untrue. After a jury awarded $148 million to the victims, who were harassed in their homes and repeatedly threatened with death, Giuliani walked onto the sidewalk outside the courthouse and declared he had spoken the truth about the two women and had done nothing wrong. One of Giuliani’s lawyers says that the once-wealthy mayor of New York City is close to broke.
Giuliani is also under criminal indictment in Georgia over the same efforts by Trump and his confederates to steal the 2020 Georgia election.
Delaying legal proceedings has always been Trump’s first strategy, taught to him more than a half-century ago by the notorious Roy Cohn, a corrupt lawyer, and political fixer.
Trump’s second strategy, also taught by Cohn, is to attack anyone who comes after you: federal prosecutors, housing or gambling regulators, journalists or political opponents are all corrupt and illegitimate, Cohn taught Trump to shout.
Trump’s third strategy — is never to admit even the slightest wrong or mistake, no matter how powerful the evidence against you.
Trump has little chance of prevailing on appeal in the Carroll and New York State fraud cases, though he might get modest modifications of the damage awards. Delaying payment will likely make him even worse off, assuming he actually is worth as much as he claims, a figure that changes from day to hour to minute depending, he has testified, on his mood.
Professor Germain notes that Trump could put his company, the Trump Organization, into bankruptcy. However, that would not help because he is personally liable as the sole owner for the judgments in all three cases.
“It wouldn’t do him any good to get his corporations discharged from bankruptcy because the debts are against Trump personally,” German said.
Maximum Value Principle
In bankruptcy proceedings, the responsibility of the trustee and the bankruptcy judge supervising the case is to extract maximum value from the businesses, bank accounts, and other assets, known as the estate. The creditors, now primarily Carroll and the State of New York, would have to agree to any combination of asset sales and other actions to satisfy the debts, or press to liquidate the trump organization. But that could be years off.
Also, there are more civil cases pending against Trump, including those brought by Capitol police officers who were injured when Trump sent a mob to the Capitol on January 6, 2021.
Now for Trump’s bankruptcy history, which is the subject of many factually wrong articles and claims.
In 1990 his lawyers engineered a private equivalent of bankruptcy made possible because New Jersey casino regulators — in violation of their legal duty — took Trump’s side against bankers he owed $3 billion. At the time, Trump boasted that he was worth billions, but the public record showed he was underwater to the tune of almost $300 million. As I wrote in my 1992 casino expose´ Temples of Chance, you were probably worth more than Donald Trump in 1990.
Later, his publicly traded casino company filed bankruptcy four times while Trump was its president, even as he collected at least $83 million in compensation and benefits.
After Trump was, in effect, paid to go away, the casino company went bankrupt two more times before going out of business.
Trump has managed to trick tens of millions of Americans into believing he is a business genius rather than a wealth-destroying con artist. People who believe he is worth billions will believe him when he says he only filed personal bankruptcy because they made him do it.
David Cay Johnston, a former columnist for The National Memo, co-founded DCReport. He is a best-selling author, investigative journalist and former reporter for The New York Times, where he won a Pulitzer Prize in 2001. He teaches at Syracuse University College of Law.
Guess what: A Russian spy has been spreading lies about the Democratic candidate for president through his connections with senior Republican officials. Oh, my goodness, can that be true? Where did I put my fainting couch?
This time the Russian spy is Alexander Smirnov, a serial liar and fabricator who has been making up stories on behalf of Russian intelligence about Democrats, chiefly Joe Biden and his son Hunter, and feeding them to senior Republican Party government officials. Last week, he was charged with just that – lying to the FBI that Joe Biden and his son Hunter each sought $5 million bribes from the Ukrainian energy company Burisma to fix an investigation into the company by Ukraine’s corrupt prosecutor general.
Let’s leave aside for the moment the fact that this tired lie about the Bidens and Burisma and bribes was shopped around way back in 2018 and 2019 in the run-up to the 2020 election. Those were the days when the likes of Rudy Giuliani and Konstantin Kilimnik and Dmytro Firtash were running around trying to get “dirt” on the Bidens, and the infamous “perfect phone call” was made to Volodymyr Zelenskyy when Donald Trump, then the President of the United States, tried to extort the Ukrainian president into opening an investigation into the very thing that Smirnov is charged with lying about these five or six years later.
Oh goodness, I’m barely three paragraphs into this piece about what happened with Russian spies just yesterday and already I’m spinning down a rabbit hole we’ve been going down ever since a certain New York real estate magnate decided he would run for president as a Republican in 2015.
Here’s a handy-dandy flashback with a few of the players we’ve met along the way:
Remember Marina Butina? She was the Russian FSG bombshell who infiltrated the National Rifle Association on behalf of Russian intelligence and spread money around and had a wild affair with a Republican political operative named Paul Erikson and took a bunch of NRA officials and Republican politicians to Moscow to meet with her phony “gun rights” organization called “Right to Bear Arms” that she established in a country where there is no right to bear arms.
Remember George Papadopoulos? He was the Trump campaign “foreign policy adviser” who was running around London in 2016 meeting with a Russian intelligence agent named Joseph Mifsud, who was setting him up with meetings with another Russian intelligence agent, Leonid Reshetnikov, who ran some kind of Russian intelligence front called the Russian Institute for Strategic Studies. Mifsud, who disappeared and has never been seen or heard from again, was the guy that Papadopoulos met in Rome, or somewhere, who out of the blue told him that Russian intelligence had “dirt” on Hilary Clinton, including “thousands of emails” that belonged to her.
The name Konstantin Kilimnik ring a bell? I know it gets confusing, because I already mentioned him about the whole Burisma thing, but Konstantin was the Russian intelligence guy who had worked with Paul Manafort in Ukraine when Manafort was running campaigns for Ukraine’s pro-Russia president, Viktor Yanukovych, who after being deposed by the 2014 Ukrainian revolution fled back to – you guessed it – Russia. Anyway, Konstantin was the guy connected to a Russian oligarch, Oleg Deripaska, to whom Manafort owed something like $14 million. The minute Manafort was appointed manager of Trump’s campaign, he emailed his pal Konstantin asking him how they could use the Trump campaign to “get whole” with Deripaska. So, Manafort ends up meeting with Konstantin in New York City while he was running Trump’s campaign and shared campaign information and polling data with him. Why Manafort was giving this highly secret political information to a Russian intelligence agent, well, that was never explained, but it does kind of bring up what “get whole” could have meant. Manafort went on to be indicted for various financial crimes, for which Trump pardoned him. Konstantin was indicted for obstruction of justice, and hell, even little honey-pot Marina Butina was indicted and spent a year behind bars in the U.S. before she was deported back to Russia and greeted as a returning hero by Russian intelligence.
That’s just a smattering of Russian intelligence agents with connections to prominent Republicans over the last eight to ten years, and what do you know? Here comes Alexander Smirnov peddling tired old lies about the Bidens and Burisma, and this time who’s listening to him? Oh, nobody but the two House Republican goofs in charge of the so-called impeachment investigation of President Biden, James Comer and Jim Jordan. And what are they investigating Biden for? Oh, let’s see…taking bribes from Burisma!
Now, having read all that history about the other Russian spies Republicans were listening to, involved with, giving information to, getting information from, and committing financial crimes with, what kind of a guy is Smirnov? Let’s just let the DOJ motion tell us in their explanation to the court in Nevada about why Smirnov needs to be in pretrial detention:
“First, he claims to have contacts with multiple foreign intelligence agencies and had plans to leave the United States two days after he was arrested last week for a months-long, multi-country foreign trip. During this trip, the defendant claimed to be meeting with foreign intelligence contacts. Those foreign intelligence agencies could resettle Smirnov outside the United States if he were released.”
Oh, by the way, Smirnov was arrested as he got off the flight from his multi-country trip “meeting with foreign intelligence contacts.”
But it gets better. Smirnov has lived in Las Vegas but has no business there. “Instead, he claims to have a ‘security business,’ that is registered in California,” according to the DOJ memo. He lives with a girlfriend “who does not appear to even know what he does.” What does he do for money? His bank records do not “reflect that he is in the ‘security business,’ as he claims.” Instead, his bank records “show large wire transfers from what appear to be venture capital firms and individuals.”
That gives him enough money to escape the country any time he wants to, according to the DOJ. How much money, you may ask? Oh, not too much. Smirnov “has access to more than $2.9 million, and his wife/girlfriend (he refers to her both ways) (hereafter 'DL') has access to more than $3.8 million.” According to the DOJ, those “funds are available to him because most of the money in DL’s account originated with Smirnov and she pays his personal expenses out of her account.”
Because most guys running around making international trips to multiple countries who have no visible means of support besides large money transfers from “venture capital firms and individuals” have millions of dollars in bank accounts in their names and in the names of their wife/girlfriends.
Are you able to follow this insane narrative? This is the guy the House Republicans have been relying on as their chief source of information about supposed $5 million bribes to both Joe Biden and Hunter Biden. This is the crap they want to impeach Biden for? Smirnov, the star of his own private season of the old spy sitcom Get Smart, has been telling Comer and his buddies that Hunter Biden was taped making phone calls about the bribes in a hotel in Kyiv that was “wired” by Russian intelligence and “under control of the Russians.”
Only one problem: Hunter Biden not only has never been in that hotel, he has never been in Kyiv, Ukraine.
Prosecutors told the judge in Nevada that Russian intelligence is still using the Kyiv hotel to record “prominent Americans” in order to provide “kompromat” in the 2024 election. “Thus, Smirnov’s efforts to spread misinformation about a candidate of one of the two major parties in the United States continues,” the DOJ memo concludes.
Ummmmm…isn’t this the kind of stuff that was happening back in 2016 in London and Rome and even Moscow when “operatives” for Trump’s campaign were meeting with Russian intelligence agents who were peddling “dirt” on Hillary Clinton? And Marina Butina was gamboling around with NRA officers and escorting them to Moscow and shacking up with Republican campaign operatives while she was employed as “special assistant” to Aleksandr Torshin, who was acting chairman of the Senate of the Russian Federation and a close pal of Putin.
With all the Russians and all the intelligence agents and all the meetings with Republican officials of one kind or anotherand all the secrets and lies passed between them all the way up to and including the campaign chairman of the Republican nominee for president, here is a simple way to understand it.
It’s the same playbook Trump has used his entire life. Get caught doing something, anything, and immediately accuse your opponents of the same thing or worse. Charge after charge of sexual harassment and assault? Hmmm, let’s see…how about a pizza joint where pedophile Democrats are trafficking children out of the basement? In business up to your neck with Russians and taking money from foreign governments? Find some goofball with two or three foreign passports and bank accounts full of funny money traveling around the world meeting with Russian intelligence officials and get him to accuse the Bidens of taking bribes.
What Donald Trump has always called the “Russia hoax” was never a hoax at all. It was real, and it is continuing, and it now reaches into the United States Congress and is driving the movement there to impeach President Biden for things he never did, but ironically, for stuff Republicans have been doing for at least a decade.
So where is the big Biden impeachment investigation right now, after the fourth or fifth witness they’ve advertised as “the one” falls apart in a spectacular hail of indictments and DOJ memos alleging all kinds of Russian hanky-panky? Well, Comer and Jordan have their committee staffers purging the name “Smirnov” from anything with their fingerprints on it. Seems like they’ve got their work cut out for them.
Lucian K. Truscott IV, a graduate of West Point, has had a 50-year career as a journalist, novelist, and screenwriter. He has covered Watergate, the Stonewall riots, and wars in Lebanon, Iraq, and Afghanistan. He is also the author of five bestselling novels. You can subscribe to his daily columns at luciantruscott.substack.com and follow him on Twitter @LucianKTruscott and on Facebook at Lucian K. Truscott IV.