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Can Cyrus Vance, Jr., Nail Trump?

In 1988, Vance decided to move with his wife to Seattle. He recalls that, as he was packing his car, his father, who had expected his son to take his place in New York society, admonished him, “not in a friendly way, ‘Cy—you are raising the white flag on your career!’ ” But in Seattle Vance launched a firm that was a notable success. One of his law partners, Robert Sulkin, told me that Vance became “the go-to guy” in town for criminal defendants: “He was great on his feet—quick-witted but never nasty.” Among the people whom Vance represented was Thomas Stewart, a right-wing corporate mogul accused of myriad campaign-finance violations.

In 2004, Vance returned to New York, to work at the firm Morvillo, Abramowitz. Five years later, he ran for Manhattan D.A. Unlike his legendary predecessors Thomas Dewey, Frank Hogan, and Morgenthau—press-savvy crusaders who all sought higher political office—Vance was a liberal policy wonk more interested in talking about subjects like community-based crime-reduction strategies. He was courteous but aloof; his idea of blowing off steam was to meditate daily. Bruce Gyory, a New York political strategist, said, of Vance, “He doesn’t like politics much, and he’s not all that good at it.” Nevertheless, despite what the Times called a nearly fatal “aversion to self-hype”—and with the help of name recognition, Morgenthau’s backing, and generous campaign funds—he won.

The Trump family first attracted Vance’s legal attention a decade ago. At the time, Donald Trump was a reality-TV star and a real-estate developer spreading the lie that President Barack Obama hadn’t actually been born in the U.S. Trump had cultivated a relationship with Morgenthau, hosting him and his wife at Mar-a-Lago, his club in Palm Beach. Vance knew Trump only casually, having crossed paths with him at events around New York City. Vance’s office learned that condominium owners at the Trump SoHo believed they had been cheated by Trump’s children Donald, Jr., and Ivanka, who were managing the project for the family business, the Trump Organization. The buyers alleged that the Trumps had lied to them by inflating the number of apartments that they had sold, thereby misleading them into thinking the condominiums were better investments than they were.

Several prosecutors in Vance’s office wanted to press charges, but he was unpersuaded. During the same period, he had repeatedly been scorched in the tabloids after the collapse of a hasty attempt to press rape charges against Dominique Strauss-Kahn, the prominent French statesman and former head of the International Monetary Fund, for allegedly forcing himself on a hotel housekeeper. Vance had lost faith in the accuser’s credibility. But the woman’s lawyer, Kenneth Thompson, blasted Vance for failing to “stand up.” Justified or not, the Strauss-Kahn reversal was a public-relations fiasco. A legal peer of Vance’s told me, “You can’t have cases that fall apart. Does that affect someone psychologically? Maybe.”

Vance’s opposition to charging the Trump children in the SoHo case stirred scandal after a 2017 investigative report—produced jointly by ProPublica, WNYC, and The New Yorker—revealed that, a few months after meeting with Marc Kasowitz, a lawyer for the Trumps, Vance told his prosecutors that he had overruled their recommendation to go ahead with the criminal case. Several months after Vance dropped it, the report revealed, he accepted a sizable donation from Kasowitz. After the article appeared, Vance returned the donation: thirty-two thousand dollars.

Adam Kaufmann, the former chief of the Investigation Division in the D.A.’s office, whom Vance overruled on the Trump SoHo matter, dismisses the notion that Vance was bought off. Vance, he said, “wrestled with the case from the beginning.” The condominium owners were not particularly sympathetic victims—their apartments were primarily used as pieds-à-terre—and real-estate practices in New York are so often sleazy that it would have been hard to persuade a jury beyond a reasonable doubt that the Trumps were unusually criminal. Kaufmann told me, “I did think there was enough there to keep going, but I also understand his position. If I were the D.A., not a level down, I might have done the same.”

Vance defended his decision, telling me, “The job isn’t about going after big targets just because they’re wealthy people. There has to be sufficient evidence, and there have to be sufficient reasons.” He noted, “At that time, the Trump family was just the Trump family. He wasn’t President.” Vance’s team investigated the case for two years, but he never became convinced that it merited criminal charges. Among other problems, the apartment owners settled their grievances privately with the Trump Organization, then declined to coöperate with prosecutors. Vance said, “I had a hundred thousand other cases in the office that year, with victims who actually wanted us to take the case.”

Mary Trump, a psychologist and the former President’s niece, who is suing him and two of his siblings for allegedly defrauding her out of her proper inheritance, sees it differently. “Vance let two of my cousins off the hook,” she told me. “If he hadn’t, he may well have kept Donald from running. Do you really think he could have run for President when two of his children were indicted for fraud?” She hopes that Vance will be more aggressive this time, given that the Republican Party—which has twice declined to convict Trump in impeachment trials—clearly lacks the will to impede his possible comeback. A felony conviction wouldn’t disqualify Trump from a second term, but a prison sentence would certainly make it harder for him to be elected again. “It’s incredibly urgent that Vance prosecutes Donald now,” she said.

Vance has shown that he is capable of redressing his past lapses: last year, his office delivered an impressive conviction in the case of the movie mogul Harvey Weinstein, despite having declined to pursue charges against him five years earlier. Weinstein was sentenced to twenty-three years in prison for sexual crimes against two women. Vance believed that they didn’t have a strong enough case, but Ambra Battilana Gutierrez, a model who accused Weinstein of sexual misconduct in 2015, contends that Vance should have pursued charges then: “Vance made the mistake. It’s very clear who he listens to—the powerful and rich—not a powerless model like me.” Vance returned to the case, in 2018, only after the Times and The New Yorker exposed Weinstein’s serial sexual predation. The belated conviction, perhaps the biggest of the #MeToo era, helped bolster Vance’s reputation. He now faces an even riskier target in Trump.

Vance launched his criminal probe into the President as a stopgap measure in August of 2018, after federal prosecutors declined to pursue him for his alleged role in the payment of hush money to the porn star Stormy Daniels. During the 2016 Presidential campaign, she had threatened to reveal publicly that she and Trump had had an affair. Trump’s former lawyer Michael Cohen was sentenced to three years in federal prison partly for crimes connected to the hush money. But court documents made it clear that Trump participated in the scheme with Cohen. The documents referred to the President as “Individual-1,” who ran “an ultimately successful campaign for President of the United States.” Yet Trump remained an unindicted co-conspirator, because the Justice Department was unwilling to prosecute a sitting President. State and local prosecutors have their own authority to pursue crimes in their jurisdictions, and Vance and the New York attorney general, Letitia James, opened separate investigations of Trump, who was then a New York resident, and whose business is based in New York.

Cohen was once Trump’s most loyal associate, willing to do and say nearly anything to protect him. That has long since changed. On “Mea Culpa,” a podcast that Cohen now hosts, he recently made his resentment clear. “I went to frickin’ prison for him and his dirty deeds,” he said. “It’s the Vance investigation that I believe causes Trump to lose sleep at night. Besides the horror of actually having to open up eight years of his personal income-tax statements, Vance is accumulating a vast road map of criminality for which Trump must answer.” Cohen, who has been coöperating with Vance’s office, believes that Trump’s children and Allen Weisselberg, the Trump Organization’s chief financial officer, are also under legal scrutiny.

The initial focus of Vance’s inquiry was the hush-money payments. Trump has denied any involvement with Daniels or with Karen McDougal, a former Playboy model who made similar allegations. But Cohen has produced checks indicating that Trump reimbursed him for some of the hush-money payments—and falsely described them as legal expenses. Cohen has alleged that the payments were authorized by both Trump and Weisselberg. Meanwhile, Trump’s story about the payments has changed. He initially claimed no knowledge of them. Then, after his lawyer Rudy Giuliani described the payments as reimbursements, Trump said that they represented a “monthly retainer” for Cohen’s legal services. Neither Trump nor Weisselberg has been charged with a crime. (Mary Mulligan, a lawyer representing Weisselberg, declined to comment.) But, if Trump or anyone in his company misrepresented the illicit payoffs as legal expenses, they may have violated New York laws prohibiting the falsification of business records. Such crimes are usually misdemeanors, but they can become felonies if they were committed as part of other offenses, such as tax fraud or insurance fraud.

Vance’s probe has since expanded into a broad examination of the possibility that Trump and his company engaged in tax, banking, and insurance fraud. Investigators are questioning whether Trump profited illegally by deliberately misleading authorities about the value of his real-estate assets. Cohen has alleged that Trump inflated property valuations in order to get favorable bank loans and insurance policies, while simultaneously lowballing the value of the same assets in order to reduce his tax burden.

As the Times has revealed, Trump paid only seven hundred and fifty dollars in federal income taxes during his first year as President, and he paid no federal income taxes at all during ten of the preceding fifteen years. He claimed hundreds of millions of dollars in business losses, and between 2010 and 2018 he reported twenty-six million dollars in “consulting fees” as business expenses. Among these fees, $747,622 went to Ivanka Trump for projects she was already working on as a salaried employee of the Trump Organization. The consulting fees are being scrutinized by the legal teams of both James and Vance. James is investigating possible civil charges. She obtained court orders that forced the Trump Organization to turn over documents and that compelled Trump’s son Eric, who helps run the company, to answer questions. Vance, meanwhile, is focussed on criminal offenses. The widened scope of the D.A.’s investigation was hinted at in a court filing last August, which stated that the office was now looking into “possibly extensive and protracted criminal conduct at the Trump Organization.”

Several knowledgeable sources told me that, in the past two months, the tone and the pace of Vance’s grand-jury probe have picked up dramatically. A person who has been extensively involved in the investigation said, “It’s night and day.” Another source, who complained that things had seemed to stall while Vance waited for Trump to leave the White House, and then waited for his tax records, said, of the D.A.’s office, “They mean business now.” Earlier, this source had felt that Vance’s team seemed slow to talk to some prospective witnesses. But recently, the person said, prosecutors’ questions have become “very pointed—they’re sharpshooting now, laser-beaming.” The source added, “It hit me—they’re closer.”

The change came soon after the D.A.’s office made the unusual decision to hire a new special assistant from outside its ranks—Mark Pomerantz, a prominent former federal prosecutor. Pomerantz was brought on, one well-informed source admits, partly “to scare the shit out of people.” The press has characterized Pomerantz, who formerly headed the criminal division of the U.S. Attorney’s Office for the Southern District of New York, as a specialist in prosecuting organized crime, largely because he supervised the team that, in 1999, obtained a conviction of the son of John Gotti, the don of the Gambino crime family. In fact, it was not a major case. Pomerantz’s deeper value, say those who know him, is that he has spent the past two decades at the eminent firm Paul, Weiss, artfully representing rich and powerful white-collar criminal defendants. This experience makes him capable not just of bringing a smart case but also of anticipating holes through which a wily target might escape. “He’s a brilliant lawyer,” Roberta Kaplan, a litigator who has worked with Pomerantz, said. “He knows when to push and when not to.” Anne Milgram, a former attorney general of New Jersey, who previously worked in the Manhattan D.A.’s office, under Morgenthau, said that Pomerantz “likely has greater stature than any of the candidates for D.A. right now.” She believes his presence will insure that the Trump case is in steady hands when Vance’s successor takes office. Given Trump’s talk of a witch hunt, Milgram noted, the fact that Pomerantz comes from outside the D.A.’s office helps take the case “out of politics.”

Vance also recently hired a top forensic-accounting firm, F.T.I., that is capable of crunching vast amounts of financial data. Taken together, George Conway told me, the hirings “are signs that the D.A.’s office is approaching this investigation very seriously—they clearly think they have something, and they’re trying to hone it and move it to a jury in New York.”

Milgram agrees: “In my experience, when you drill a hole, you wouldn’t often go for eighteen months unless there’s some evidence leading to a crime.” Bharara told me, “All the signals indicate that there’s a belief on the part of that office that there’s a good chance of a charge.” But, he warned, “no one should be under the illusion that this is easy or a slam-dunk case.”

To some extent, the direction of Vance’s probe can be gleaned from his office’s subpoenas, and from the questions that prosecutors are asking potential witnesses. Deutsche Bank, until recently one of Trump’s largest lenders, has been subpoenaed and debriefed by investigators. Employees at Aon, Trump’s former insurance company, have reportedly been questioned. Vance’s team is also said to be looking into whether the Trump Organization, after having a lender forgive more than a hundred million dollars in loans for a skyscraper project in Chicago, declared the windfall and paid taxes on it. In addition, according to the Wall Street Journal, Vance’s team is intensifying its focus on financial dealings involving Seven Springs, Trump’s estate in Mount Kisco, New York. And, according to three people familiar with Vance’s probe, in recent weeks Vance and Pomerantz, along with investigators in the D.A.’s Major Economic Crimes Bureau, have conducted several videoconference interviews with people knowledgeable about the Trump Organization. Although Vance is described by one source as “absolutely committed” to the probe, he has apparently asked few questions during these sessions; Pomerantz has dominated, putting interviewees at ease with jokes and exploring not just dry legal details but also the social and corporate culture of the Trump world, with an eye toward exposing how financial decisions were made. Since the probe began, Michael Cohen has participated in seven sessions, and, according to sources, he has not held back. He told prosecutors, “Nothing goes on in the Trump Organization without Donald Trump knowing it. It’s like the boss of bosses in an organized-crime family. No one has to ask if the boss signed off. They know he did.”

Hold onwait until those people are out of the way.
“Hold on—wait until those people are out of the way.”
Cartoon by Kendra Allenby

Prosecutors may hesitate to call Cohen as a witness, given that he is a convicted felon and an admitted liar. But Paul Pelletier, a highly regarded former federal prosecutor, told me, “I’ve used much worse people than him. Angels don’t swim in the sewers. You can’t get angels to testify.” What would be crucial, he said, is corroborating Cohen’s allegations.

Source: Can Cyrus Vance, Jr., Nail Trump?

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