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Judge Lifts Contempt Order Against Trump in Civil Inquiry
The former president must pay a $110,000 fine that accumulated during the two-week contempt and meet other conditions or the order will be reinstated, a judge said.
Donald J. Trump was released from a judicial order holding him in contempt of court on Wednesday, ending an embarrassing two-week period for the former president, whose business practices are under civil investigation by the New York state attorney general.
A New York State judge, Arthur F. Engoron, held Mr. Trump in contempt late last month after finding that he had failed to comply with the terms of a December subpoena sent by the attorney general, Letitia James, requesting documents from his personal files. The judge ordered Mr. Trump to pay $10,000 a day until he complied, leading to a $110,000 penalty.
On Wednesday, Justice Engoron withdrew the contempt order, but set a few conditions, including requiring Mr. Trump to pay the fine. The judge ruled that if Mr. Trump and his company did not meet the conditions by May 20, he would reinstate the contempt order and retroactively apply the $10,000-a-day fine.
In an effort to cooperate with the judge’s original contempt order, lawyers for Mr. Trump filed a number of recent court documents attesting to a thorough search of his records. An outside company also assured the judge that it had reviewed a vast number of files — more than 1,300 boxes — including Mr. Trump’s hard-copy calendars, records in file cabinets at the Trump Organization’s offices in Midtown Manhattan and boxes of documents at off-site storage facilities.
The sweeping search for evidence in Mr. Trump’s records did not appear to turn up much information. Mr. Trump’s lawyers asserted that they did not locate any new records responsive to the subpoena from Ms. James.
Still, the battle over the records — and the contempt order against Mr. Trump — set the stage for Ms. James to potentially take legal action against the former president.
Ms. James, a Democrat, said in a court filing earlier this year that the Trump Organization had engaged in “fraudulent or misleading” business practices. But she argued then that she needed to obtain additional records and testimony — including the documents sought from Mr. Trump’s personal files — before taking any legal action.
Because Ms. James’s investigation is civil, she cannot file criminal charges but she can file a lawsuit. In the contempt hearing last month, a lawyer from her office, Kevin Wallace, indicated that a suit could come soon, saying that the office was preparing to file an action against Mr. Trump in the near future.
Ms. James’s inquiry is focused on whether Mr. Trump’s annual financial statements falsely inflated the value of his real estate properties and other assets so that he could secure favorable loans and financial benefits. That area of focus overlaps with a separate criminal investigation from the Manhattan district attorney’s office, which had been moving toward an indictment of Mr. Trump early this year before prosecutors developed concerns about proving the case.
Mr. Trump has denied wrongdoing and called Ms. James a “Radical Left Racist.”
While lawyers for the former president said that they conducted a thorough search for the records being sought by Ms. James’s investigators, Justice Engoron said in April that the lawyers had not provided enough detail in official legal documentation about how those searches were conducted, who conducted them and when they were conducted, and he moved to hold Mr. Trump in contempt.
The Trump Investigations
Numerous inquiries. Since Donald J. Trump left office, the former president has been facing civil and criminal investigations across the country into his business dealings and political activities. Here is a look at the notable inquiries:
Mr. Trump’s lawyers have appealed the contempt order and that will continue, they signaled Wednesday. While Mr. Trump must pay the $110,000, the money might be held in escrow for now, meaning that Ms. James’s office might not receive the money until after the appeal is decided.
The $110,000 sum, while little more than a rounding error for someone of Mr. Trump’s wealth, underscores the severity of the contempt. Mr. Trump is loath to part with his money, and his lawyers argued aggressively to drop the financial component of the contempt order.
“It’s a lot of money,” Alina Habba, one of his lawyers, remarked at the hearing on Wednesday.
Along with the fine, Mr. Trump’s lawyers must file at least one additional document from Mr. Trump’s administrative assistant attesting to the company’s policy for storing his records. Separately, the outside company reviewing Mr. Trump’s records, HaystackID, must complete its review of the documents. Mr. Trump’s lawyers said that about five boxes remain unsearched.
In addition to demanding records from Mr. Trump, Ms. James has also sought to question the former president and two of his adult children, Donald Trump Jr. and Ivanka Trump, under oath. (Her office interviewed another member of the family, Eric Trump, in October 2020.) Justice Engoron ordered that the Trumps sit for questioning, but they appealed that order and will argue the issue before an appellate court later Wednesday afternoon.
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