On Monday, Ben Protess, William K. Rashbaum, and Jonah E. Bromwich of the New York Times reported on a plea deal to end the tax-fraud charge brought by the Manhattan district attorney’s office against Allan Weisselberg, the former CFO for the Trump Organization. Subtitled “Allen H. Weisselberg, who was charged with participating in a tax scheme, will not cooperate with the district attorney’s investigation into Donald J. Trump,” the article reported:
[Weisselberg] is nearing a deal with Manhattan prosecutors but will not cooperate with a broader investigation into Mr. Trump, according to three people with knowledge of the matter. If it becomes final, a plea deal . . . would bring prosecutors no closer to indicting the former president but would nonetheless brand one of his most trusted lieutenants a felon. On Monday, Mr. Weisselberg’s lawyers and prosecutors met with the judge overseeing the case, according to a court database. The judge scheduled a hearing for Thursday, a possible indication that a deal has been reached and a plea could be entered then. . . .
Two people with knowledge of the matter said that Mr. Weisselberg was expected to receive a five-month jail term. With time credited for good behavior, he is likely to serve about 100 days. The other terms of Mr. Weisselberg’s deal were not clear, including whether he had made additional concessions to prosecutors to receive it. His lawyer, Nicholas A. Gravante Jr., confirmed that he was in negotiations but declined to discuss the specifics. Another lawyer for Mr. Weisselberg, Mary E. Mulligan, declined to comment, as did a spokeswoman for the Manhattan district attorney, Alvin L. Bragg. . . . Mr. Weisselberg, while admitting his own guilt, is not expected to implicate anyone in the Trump family.
With the reporting by the Times circulated widely and not contradicted, I reviewed on Tuesday why Bragg’s office faced such daunting obstacles in bringing a case that would present more serious problems for Donald Trump, and why the Weisselberg deal appeared to spell the effective end of Bragg’s investigation. But in politics or the law, as Yogi Berra once said of baseball, it ain’t over ’til it’s over. On Wednesday, Molly Crane-Newman of the New York Daily News reported that Weisselberg would testify against the Trump Organization:
The Trump Organization’s longtime chief financial officer is expected to admit to conspiring with the Trump Organization and Trump Payroll Corporation in a criminal tax fraud scheme while head of the company’s finances at a Manhattan court hearing on Thursday, the Daily News has confirmed. Allen Weisselberg is expected to criminally implicate Trump’s family real estate business. . . . As part of the CFO’s plea deal — for which he’ll serve five months max on Rikers Island, the source said — Weisselberg is expected to agree to testify against the Trump companies if they choose to go to trial in October, and he’s called as a witness.
The three Times reporters fired back this morning:
As part of the plea deal, the executive, Allen H. Weisselberg, will be required to testify at the company’s trial if prosecutors choose to call on him, and to admit his role in conspiring with Mr. Trump’s company to carry out the tax scheme. That testimony could tilt the scales against the company, the Trump Organization, as it prepares for an October trial related to the same accusations. . . . The plea deal does not require Mr. Weisselberg to cooperate with a broader investigation into Mr. Trump, and his admissions will not implicate the former president.
As it turned out, that was accurate: Weisselberg pleaded guilty to all charges, but won’t testify against Trump.
What happened here? Partly that two sets of reporters were spinning the same thing differently. The important thing to bear in mind is that the Trump Organization is not a person, it’s a company. As a legal matter, it can only commit a crime — including conspiracy — if some authorized agent or officer of the Trump Organization commits the criminal act with the required criminal state of mind. Who might that someone be? For starters, the obvious answer is Weisselberg himself. If the CFO of the Trump Organization is guilty of tax fraud — and a guilty plea necessarily means he is — then that itself is evidence that the company is guilty, too. It is not necessary for Weisselberg to finger anyone else in order for his admission of his own guilt to be evidence against the Trump Organization.
Where things get trickier is that the indictment also charges a conspiracy. Conspiracies, by definition, have to involve two distinct conspirators. The law gets trickier on the question of when a corporation can be treated as separate from its own agents and subsidiaries. For example, under the federal antitrust-law Copperweld rule, which New York’s own antitrust law follows, a corporation can’t conspire with its own subsidiaries. But that rule exists for reasons particular to antitrust law. New York also follows the rule that an officer or agent of a corporation can’t tortiously interfere with the corporation’s contracts unless the officer or agent acted outside the scope of their employment. But that, too, is a rule designed to prevent every breach of contract lawsuit against a company from turning into a personal lawsuit against the people through whom it acted. By contrast, under the federal RICO statute, which bars a person from running a criminal enterprise through a pattern of racketeering activity, the person and the enterprise can be a company and its sole shareholder. But that, too, is due in part to the purpose of the RICO statute to ban individuals from misusing the form of organizations such as unions and corporations.
To steer clear of this legal thicket, the indictment says that Weisselberg conspired with “Unindicted Co-conspirator #1,” ensuring that the conspiracy is more than just Weisselberg in his personal capacity conspiring with Weisselberg as the agent of the Trump Organization:
From at least 2005 through the date of this indictment, the named defendants and others, including Unindicted Co-conspirator #1, agreed to and implemented a compensation scheme with the object of enabling Weisselberg to underreport his income to federal authorities, and thereby evade taxes and falsely claim federal tax refunds to which he was not entitled…
On or about March 31, 2005, the Trump Corporation, acting through its president, entered into a lease for an apartment on Riverside Boulevard in New York, New York with a rider designating Allen Weisselberg and his spouse as the sole occupants who would use the apartment as a primary residence. On or before April 5, 2010, the Trump Corporation, acting through its agent, Unindicted Coconspirator #1, underreported Allen Weisselberg’s taxable income for the tax year 2009.
Is Donald Trump “Unindicted Co-conspirator #1”? Highly unlikely, given that the indictment discusses Unindicted Co-conspirator #1 immediately before and after a reference to “the Trump Corporation, acting through its president” — that president, in 2005, being Donald Trump. Also, Unindicted Co-conspirator #1 may or may not be an officer or employee of the company: The indictment just says “agent,” which could be the organization’s outside tax preparer. Jose Pagliery of the Daily Beast, recounting this morning’s hearing, argues that it may be Trump Organization company controller Jeffrey S. McConney, who received immunity to testify before the grand jury.
If Weisselberg’s admission of guilt is used at trial, that could move the remainder of the investigation a step closer against the Trump Organization. But unless we see a further plot twist, this doesn’t seem to contradict the original report that Weisselberg is not giving the prosecutors much more than just an admission of his own guilt, so they would still be at a dead end in pursuing Trump himself.
This item has been updated since publication to incorporate news from the hearing.