Now that former President Donald Trump has been convicted of 34 counts of falsifying business records, his supporters are making wild claims: Trump couldn’t call witnesses (he could and did), or Trump couldn’t testify because of a gag order (he could have if he wanted to), or the underlying theory of the case was novel.
This final claim has some substance but misconstrues the conspiracy to evade federal campaign finance laws. Business and campaign finance crimes can overlap, a crossroads I’ve examined for nearly 20 years. So, let me explain why the Manhattan DA’s approach comports with American anti-corruption laws.
The original indictment charged Trump with “FALSIFYING BUSINESS RECORDS IN THE FIRST DEGREE … with intent to defraud and intent to commit another crime and aid and conceal the commission thereof, made and caused a false entry in the business records of an enterprise…”
As Just Security explained last year, “New York firms are required to ‘keep correct and complete books and records of account’ for the purposes of state regulators and tax authorities.”
When a corporation participates in an election law crime, it often violates business laws. Sloppy bookkeeping can be at the heart of both problems. In my forthcoming book, Corporatocracy, I write about the campaign finance crimes to which Ryan Salame and Nisad Singh, executives at the crypto financial firm FTX, pleaded guilty last year, including straw donor schemes using $100 million in illegal corporate funds in the 2020 and 2022 elections. How could that happen? The overseer of FTX’s bankruptcy, John Ray III, later testified before Congress that “there was literally no record keeping” at the once-lauded company during the years Sam Bankman-Fried, the former CEO, was running it. In March, a federal district court sentenced Bankman-Fried to 25 years in prison for an admixture of securities frauds. The same court sentenced Salame to 7.5 years for his campaign finance crimes and for running an unlicensed money-transmitting business.
There’s a whole history of interlinked corporate and campaign finance crimes. As I described in my first book, Corporate Citizen, back in the 1970s, Watergate investigations revealed that hundreds of corporations had donated to U.S. campaigns. This was a legal problem because when a publicly traded company illegally gave to President Richard Nixon’s campaign (the Committee to Re-Elect the President or CREEP), the company and the committee broke campaign finance laws. When it submitted inaccurate financials to the investing public, it violated securities laws, too.
This Watergate revelation about illegal corporate political spending prompted a Securities and Exchange Commission investigation. Stanley Sporkin, then-director of SEC Enforcement and later a titan of the Washington legal community, wanted to know how corporate payments could end up in a presidential campaign when such donations violated the Tillman Act. Sporkin told an interviewer for PBS Frontline:
How does Gulf Oil record a transaction of a $50,000 cash payment? I wanted to know, what account did they charge? Do they have an account called “Bribery”? And so, I decided to ask one of my investigators to go out and find out how they did it…. When we looked into these funds, we found out they were not only being used domestically in the United States for illegal campaign contributions, but we found that the same monies were being used to bribe officials overseas in connection with the companies’ business.
As the SEC reported to Congress in 1976: “Millions of dollars . . . have been inaccurately recorded in corporate books and records to facilitate the making of questionable payments.”
One post-Watergate reform was the Foreign Corrupt Practices Act of 1977 (FCPA). If a corporation commits a foreign bribe and misrepresents it as a legitimate business expense, then the firm has, under the FCPA, committed what is called “a book and records” offense. The statute’s structure is thus similar to the structure of the state-law charges against Trump for his inaccurate corporate records.
When Trump was charged with 34 counts of falsifying business records to cover up a conspiracy in the 2016 election—the hush money scheme to silence Stormy Daniels—the electoral conspiracy elevated the crime from 34 misdemeanors to 34 felonies.
The contribution limits during the 2016 election only allowed Michael Cohen to donate $2700 to the Trump campaign. The $130,000 hush money he paid Daniels for the campaign’s benefit was about 50 times that.
Like the missing financial records at crypto giant FTX or the sleight-of-hand accounting revealed in the Watergate investigations, the business records at the Trump Organization were shoddy. The plans to repay Cohen for the Stormy Daniels payment are scrawled in Trump CFO Allen Weisselberg’s handwriting to “gross up” the payment to cover taxes Cohen would owe. This is no way to run a business or, as it turns out, to run a campaign. And now ex-President Trump, the beneficiary of this 2016 election conspiracy, is a convicted felon for not keeping honest books and records. He’s hardly alone, and the charges against him were hardly unfair.
