I doubt the subject of today’s Office Hours is keeping you up at night worrying — unless your name is Donald J. Trump. But the question of how he’s going to come up with the cash he owes provides a window into the finances of America’s 45th president.
As you recall, the Friday before last, Judge Arthur Engoron determined that Trump owes more than $350 million in penalties in his New York state business fraud case.
Engoron also ordered Trump to pay additional pre-judgment interest going back as far as when New York attorney general Letitia James began her investigation in March 2019. The attorney general’s office has calculated the interest due so far brings the current total he owes to more than $450 million.
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The statutory 9 percent annual interest rate will keep accruing at more than $600,000 per week unless or until Trump puts up the entire amount.
Trump has until March 17 to decide what to do. If he can’t or won’t pay the amount due, Attorney General James said she is prepared to “ask the judge to seize his assets,” including some of his best-known properties such as 40 Wall Street.
Trump has already put $5.5 million into a state-controlled escrow account to cover the first defamation judgment he owes E. Jean Carroll. He owes her another $83 million following the federal court ruling in late January that he had defamed her again, which he is appealing.
Even if winning the presidency this year enables Trump to shut down the federal criminal cases, it won’t help him avoid the civil liability he faces in New York.
So where does Trump come up with the cash? I see three possibilities, none of them easy.
1. Trump could pause the interest collection while he appeals Engoron’s decision by depositing the full amount in a New York state-controlled escrow account.
But it’s unclear Trump has enough cash to do this. Last year he testified under oath that he had about $400 million in liquid assets.
To come up with more cash, he’d have to sell some of his real estate assets. But he has very limited time to do this.
2. Alternatively, Trump could find a company prepared to help him post a bond that will assure the state he can pay the penalties if his appeals fail.
But this would mean paying a premium to the bond company and offering it collateral, probably in the form of his real estate. Yet he may have few options for bond companies because the court’s verdict bars his company from applying for a loan from any firm that does business in New York for the next three years.
One of his billionaire backers could step in and essentially launder a loan to him through a bond company in another state. This would be illegal, but has illegality ever stopped Trump?
3. A third possibility is Trump gets the money from his stake in Trump Media & Technology Group — his social media company, whose flagship product, Truth Social, has become the social media platform of choice for Trump to attack his critics and political opponents.
Shares of Digital World (a publicly traded shell company) have soared on expectations that its merger with with Trump’s Media & Technology Group will be completed and that Trump will win the Republican nomination for president — yet another example of how Trump trades on his public office for personal gain.
The stock traded on Monday at $47 per share. At that price, Trump’s stake would be worth nearly $4 billion. But the deal may not be completed in time, and even if it is, Trump won’t be legally entitled to cash in his stake. But, again, when has the law stopped him?
4. Trump could generate enough cash to pay the fine imposed by Engoron if he sold 890,000 pairs of his new gold sneakers.
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Robert Reich is a professor at Berkeley and was secretary of labor under Bill Clinton. You can find his writing at https://robertreich.substack.com/.
