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Why One of Trump’s Biggest Legal Threats Is New York’s Attorney General

This is the Trump Docket, where we track some of the most important legal cases of the Trump presidency and how their results could shape presidential power. Questions, comments, or thoughts about cases to cover? Email us here.

After two years of legal wrangling, the Trump Foundation will soon be no more. Last month, in the midst of a dramatic month for cases that stem from President Trump’s pre-presidency life, a judge signed off on a plan to shutter Trump’s much-criticized personal foundation. Under the new agreement, the foundation will be dissolved under court supervision.

In effect, the deal implies that the foundation cannot be trusted to disburse its remaining $1.7 million to legitimate nonprofits. But even though the foundation is dissolving, the lawsuit against the foundation will continue, with the New York attorney general seeking damages for the foundation’s alleged “extensive and persistent violations of state and federal law,” including the illegal use of foundation money to pay off legal settlements, buy portraits of Trump, and promote Trump’s 2016 campaign.

The December settlement is an important reminder of the risk that the state of New York poses for Trump. In particular, New York is uniquely well-positioned to go after Trump where it could hurt him most — through his businesses. In fact, New York has been one of the most significant and I’d argue most underrated legal hazards for Trump since he began his campaign for president. Here are three reasons why.

New York has jurisdiction over Trump’s family businesses

Pursuing legal challenges against Trump has become something of a sport among Democratic attorneys general over the past two years, but most of these fights focus on actions taken by Trump’s administration rather than matters that implicate him personally. But because Trump’s businesses and his presidential campaign are registered in New York, state officials have the authority to investigate and potentially prosecute him for violations of state law.

Trump’s attorneys have argued in a separate case that involves a former “Apprentice” contestant who’s suing Trump for defamation in New York that as president, he should be immune to lawsuits in state courts. It’s an open constitutional question, but two judges have already come down against Trump, saying that when unofficial conduct is involved, there’s no reason to exempt the president from state lawsuits. The case is still being appealed, but even if it’s decided in Trump’s favor, legal actions could still be brought against his businesses or children.

Worse still for Trump, state prosecutions are pardon-proof, since the president’s power to grant clemency extends only to federal crimes. This means that while Trump could pardon an associate or family member implicated in, for example, the Mueller investigation (or even try to pardon himself), his get-out-of-jail-free card won’t work in New York. There’s even been a push to amend New York’s double jeopardy laws to make it possible for someone convicted (and, hypothetically, pardoned) under federal law to be prosecuted for corresponding violations of state law.

State prosecutors are especially tough on financial misconduct

Then there’s the fact that the offenses where Trump has the greatest potential liability in New York — for example, tax or other kinds of corporate fraud — are ones the New York attorney general’s office is particularly adept at handling. Over the past 15 years, New York has steadily stepped up its prosecutions of financial crimes. “Fraud cases are the linchpin of what most attorneys general do, and the laws are particularly strong in New York,” said Paul Nolette, a political science professor at Marquette University who studies state attorneys general.

Trump knows this firsthand, because of a previous tangle with former attorney general Eric Schneiderman. The state sued Trump University for defrauding customers in a case that was settled for $25 million. And because Trump ran for office, opening his businesses to a whole new level of national scrutiny, the Trump Foundation lawsuit may have only been the beginning. Before he resigned last year, Schneiderman was reportedly cooperating with special counsel Robert Mueller on matters related to Mueller’s investigation of Russian interference in the 2016 election, and state tax officials said they’re looking into potential massive tax fraud by the Trump family after reporting from The New York Times last fall. Meanwhile, New York’s new attorney general, Letitia James campaigned on a promise to hold the president accountable across a wide range of issues, including his businesses and finances.

“The Mueller investigation is the shiny object everyone is watching,” Berit Berger, a former federal prosecutor and the executive director of Columbia Law School’s Center for the Advancement of Public Integrity, told me. “But under everyone’s nose are what look like much more straightforward violations of state law, including some pretty flagrant tax fraud. Depending on what happens with Mueller, that could be what actually sinks the big ship.”

New York prosecutors may have the clearest shot at indicting Trump while he’s president

Finally, legal experts told me that if New York officials have sufficient evidence against Trump and the appetite for a protracted legal battle, they may have the best chance at testing a high-stakes constitutional unknown: Is it possible to issue a criminal indictment against a sitting president?

Unlike their federal counterparts, state prosecutors are not bound by a Department of Justice policy that says that a sitting president is immune from indictment (a former president is fair game). “I think it would be hard for a judge to tell New York that it can’t pursue charges for criminal violations of its own state law by Donald Trump that occurred before he was president,” said Andy Wright, former associate counsel to President Obama.

Not everyone I spoke with agreed with this view, however. Andrew Coan, a law professor at the University of Arizona and the author of a new book about special prosecutors, said there might even be a stronger argument against allowing state attorneys general to indict a president. “The attorney general of New York only speaks for her state’s voters, not the country as a whole,” he said. “So it seems strange to let that person do something that would significantly impair the president’s ability to serve.”

But even without an indictment — which would unleash an epic constitutional showdown — New York could still threaten Trump’s business empire through civil suits or prosecutions of his family members and inflict a significant amount of political damage on the president in the process.

None of this, of course, answers one key question: If New York is such a danger to Trump, why haven’t prosecutors or the attorney general filed charges or a lawsuit against the president or his businesses?

The Trump Foundation case is actually a good example of why one shouldn’t read too much into the state’s relative inaction. Reports that the foundation was being used for Trump’s personal benefit began while he was still running for office, but the lawsuit wasn’t filed until 18 months after Trump took office. (There is currently one other case in New York involving Trump — the lawsuit from the former “Apprentice” contestant — that we’re tracking as part of the Trump Docket.) But New York officials could be waiting until after Mueller’s probe is concluded to take further legal action — or they might be investigating other instances of potential corporate fraud that we aren’t yet aware of.

Other cases

Pre-presidency Trump

  • Attorneys for Paul Manafort, the former Trump campaign chair who was recently accused of violating his plea agreement with special counsel Robert Mueller, failed to fully redact sensitive details from a recent legal filing in the case. As a result, we learned that Manafort was accused of sharing presidential campaign data with a business associate who has links to Russian intelligence, and that during the campaign he discussed a plan for peace in Ukraine — which Russia and its allies were advocating as a path to lifting Ukraine-related sanctions on Russia. On Tuesday, a subsequent, correctly redacted filing from Mueller spelled out a few more details, including a confirmation that Konstantin Kilimnik, a former Manafort aide with alleged ties to Russian intelligence, is still a focus of the investigation.
  • Sentencing may be postponed for Rick Gates, a former Trump campaign aide and business partner of Manafort, who has been cooperating with Mueller’s investigation. Prosecutors requested a two-month delay in his sentencing because Gates is still assisting with “several ongoing investigations.”

President Trump

Although the case is paused until the partial government shutdown ends, the 4th Circuit Court of Appeals scheduled oral arguments in the District of Columbia and Maryland’s emoluments lawsuit against Trump for the court’s March 19-21 session.

The Trump administration

  • The D.C. Circuit Court of Appeals reversed the lower court’s injunction in a case involving Trump’s ban on transgender military service members, concluding that the previous judge had incorrectly concluded that the policy was a “blanket ban on transgender service.” The decision had no immediate impact, though, because three other lower courts still have an injunction against it.
  • A second trial over the addition of a citizenship question to the 2020 Census concluded in California on Friday. During the trial, an expert testified that the question would deter Latinos and noncitizens from responding to the Census.
  • A trial also ended last week in a case involving the Trump administration’s decision to revoke temporary protected status for Haitian immigrants. During the proceedings, Trump’s use of the word “shithole” to describe Haiti and other countries came up repeatedly. Attorneys for the Haitians are arguing that the decision to end the policy was spurred by racial bias.
  • The Supreme Court rejected an unusual challenge to Matthew Whitaker’s appointment as acting attorney general last November. In a case involving separate issues related to gun rights, the plaintiff and his lawyers asked the Supreme Court to remove Whitaker’s name from the case — arguing that his appointment was illegal — and instead name Deputy Attorney General Rod Rosenstein as a party in the case. Without spelling out their reasons, the justices denied the request on Monday.
  • A district court judge in New York struck down the Trump administration’s decision to add a citizenship question to the 2020 Census, saying Commerce Secretary Wilbur Ross illegally violated federal law when he added the question. Notably, the judge said that while Ross wasn’t honest about why he added the citizenship question, the plaintiffs hadn’t proved that his aim was discriminatory. The Trump administration is expected to appeal the decision to the U.S. 2nd Circuit Court of Appeals, and ultimately, the case could end up before the Supreme Court.

Amelia Thomson-DeVeaux is a senior editor and senior reporter for FiveThirtyEight.