There's Always Tax Fraud

The SCOTUS Presidential Immunity Decision has a loophole big enough to drive the entire US Code through

I know I’m a bit late to the party here, given I’m addressing a SCOTUS decision that’s a month old, but I think it’s important to summarize my perspective on Trump v. United States, which finds the president is absolutely immune from criminal prosecution for core presidential acts, and that the president is at least *presumptively* immune from criminal prosecution for a great deal of his official conduct while acting as president.

My goal here is not to write some kind of explainer on the decision, because there’s been a lot of coverage on that already. My goal isn’t even to voice my opinion on the overall soundness or utility of the decision. Rather, my goal is primarily to respond as a practicing white collar defense attorney to certain concerns voiced by legal commentators like Sarah Isgur, who prior to the decision feared that a court finding “Too little immunity” would create “an endless cycle of prosecutions.” Echoing Justice Kavanaugh in oral argument, Isgur fears that “The ability to find some vague statute will be used against the current president or the next president…and the next president and the next president after that.”

This logic was not the primary basis of the court’s decisions, but it certainly animated it. In his decision, Chief Justice Roberts pointed out with grave concern that “Virtually every President is criticized for insufficiently enforcing some aspect of federal law (such as drug, gun, immigration, or environmental laws). An enterprising prosecutor in a new administration may assert that a previous President violated that broad statute. Without immunity, such types of prosecutions of ex-Presidents could quickly become routine.”

Some justices put it in even graver terms in oral argument. Justice Alito challenged the prosecution in the following way: “I'm sure you would agree with me that a stable democratic society requires that a candidate who loses an election, even a close one, even a hotly contested one, leave office peacefully if that candidate is -- is the incumbent…Now, if a -- an incumbent who loses a very close, hotly contested election knows that a real possibility after leaving office is not that the president is going to be able to go off into a peaceful retirement but that the president may be criminally prosecuted by a bitter political opponent, will that not lead us into a cycle that destabilizes the functioning of our country as a democracy?”

So: to some degree, the argument goes, presidential immunity is necessary to stop a cycle of tit-for-tat political prosecutions that could destabilize our democratic society. Incoming presidents conjure up imagined crimes, only to be targeted by even-more imaginary crimes on the way out the door. An eye for an eye and the whole world goes blind. A tit for a tat and the whole world has teats. Immunity, it is argued, puts a stop to this cycle, so we can get back to normal.

My response is pretty simple:
1) The immunity decision does almost nothing to stop “political” prosecutions, thanks to a clever loophole I’ve discovered. Okay, I didn’t really discover it, but I’m stunned no one is talking about it.

2) This is weird to me, given that it’s fairly obvious, you don’t need to be a criminal defense attorney to spot it. You don’t even need a law degree.

3) I predict this loophole certainly will be used to prosecute future presidents.

As a result, the immunity decision does almost nothing to stop bad faith political prosecutions of future presidents.

I: How Prosecutions Work

I’m including this section both for my lay audience, and for my legal audience, since I think lawyers often get lost in the nuts and bolts and forget how the machine functions overall.

Prosecutions are brought by prosecutors, who are a species of government bureaucrat. Depending on the jurisdiction, prosecutors are either directly elected (say, a district attorney) or subordinate to an agency (as is the case with federal prosecutors). Prosecutors are not simply the people who litigate criminal cases after they begin, an important function of prosecutors is they decide which cases to charge. Indeed, this function is so central to a prosecutor’s role that they’re typically afforded considerable deference in making this decision: it’s difficult to prosecute, question, sue, or fire a prosecutor for charging out a bad case or “failing to charge” a good one. They decide which cases to bring. Juries and judges, to a lesser extent, decide whether their case is a good one.

Because prosecutors are either elected or subordinate to elected executive officials, every single prosecution is political because every prosecution involves political considerations like the following:
* should drug dealers be punished or should we focus on something else?
* how annoyed will the voter’s be if I dismiss this shoplifting case?
* will a jury of 12 random people really believe this sonofabitch did it?

A prosecutor that considers the political effect of their prosecutions will flourish and be re-elected (or keep their job). A prosecutor that disregards the political consequences of their decision will be fired and replaced by someone more politically sensitive.

Along with the political nature of the system, there are ordinarily very few ways to dismiss a criminal case before trial. In most jurisdictions (and especially in the federal system) there is no criminal equivalent of summary judgment, a civil mechanism where a court decides whether there’s enough evidence to let a case proceed to trial. Generally, criminal cases will proceed to trial unless a plea agreement is reached or the prosecutor decides to drop the case. The court will not throw out a case because there’s “not enough evidence”, because a judge rarely acts as a factfinder. Courts generally see this factfinding power as the provenance of the jury.

As usual with criminal law, there’s a segment of My Cousin Vinny which is instructive

In this segment, Vincent Gambini learns an important lesson: his clients can’t “skip” important parts of the judicial process simply because, in their opinion, they’ve been wrongfully charged. They have to settle that at trial. As the old saying goes, “you can beat the rap, but you can’t beat the ride.”

For at least some SCOTUS justices, this was a serious concern of the presidential immunity decision: Immunity is not simply a right not to be found guilty, it’s a right not to be tried at all, so it functions much like the sort of “automatic win” Mr. Gambini is seeking: a way to skip all the court processes, up to and including trial. As Alito put it in oral argument: “a lot can happen between the time when an indictment is returned and the time when the former president finally gets vindication perhaps on appeal.” Part of Alito’s basis in finding immunity was to allow the president to skip all that process, in the event of a bad faith prosecution.

But, thanks to my clever loophole, bad faith prosecutions can still happen quite easily. All you need to do is prosecute the president for tax fraud.

II: Okay, You Got Me, It’s not Really a Loophole

Time to come clean, I’m calling it a loophole for dramatic purposes, to drive up clicks and get some much-needed traffic on this blog. In reality, this isn’t a loophole because it covers the vast bulk of possible criminal conduct. Under the plain text of the SCOTUS decision, “There is no immunity for unofficial acts.”

I’m frankly flabbergasted how little this has come up. It wasn’t raised as a potential counterargument to the imagined evil of tit-for-tat political prosecutions by any side in the Trump v. United States oral arguments, and to my knowledge it hasn’t been addressed on any of the good legal podcasts (Even Sarah Isgur’s own Advisory Opinions).

To me, it’s a blindingly obvious counter to the idea that immunity provides a shield against partisan reprisal. Let me elaborate:

It’s often said that the average person commits three federal felonies a day. In fact, some skeptics of the Trump prosecutions resort to this very cliche to attack his prosecutions. As an attorney who specializes in white collar cases, I don’t necessarily disagree with the sentiment. Some common examples of crimes you might commit every day include:

1) 18 U.S. Code § 1014: Which punishes knowingly making “any false statement or report” on a loan application, no matter how small. This statute is the famous “headshot” featured in seasons 3 & 4 of The Wire.

2) 18 U.S.C. § 1343: “wire fraud”, which punishes “obtaining money or property by means of false or fraudulent pretense” and using “interstate wires” in some way. Rather famously, not honoring certain terms in a sales contract, say a promise not to resell an item, might be wire fraud in some contexts.

3) 26 U.S. Code § 7201, which punishes one who “willfully attempts in any manner to evade or defeat any tax.” Try to get around the tax code, and it might be a felony.

As with most white collar offenses, the saving grace is the government must prove the offense was done willfully (or at least knowingly). To put it in simpler terms, it’s not a crime to make a mistake on a loan application or your tax return, but it’s a crime to lie (again, no matter how small). But critically, for all three statutes, the distinction is pretty subtle and it’s for a jury to decide whether the conduct appears to be a good-faith mistake or a bad faith act of deceit.

All a prosecutor needs to do to kick off a prosecution under any of these statutes is allege that certain potentially innocent conduct (applying for a loan, buying something over the internet, filing a tax return) was done, somehow, with a willful intent to deceive. At trial, a hapless defendant might ultimately exonerate themselves, but remember that for justices like Kavanaugh, Alito, and Roberts, the damage would already have been done: lot can happen between the time when an indictment is returned and the time when the former president finally gets vindication perhaps on appeal.

All three of my examples are purely private conduct: applying for a personal loan, making a deal, filing your income taxes…no conceivable presidential immunity would apply, but a prosecutor, acting in bad faith, could easily charge them.

To be clear, for my examples, a potential bad-faith prosecutor would only have to do the following

1) For a violation of 18 U.S. Code § 1014: The prosecutor would have to point to any loan the outgoing president had taken out, and allege that any part of the application was willfully false, for example, when taking out a loan it’s often important to disclose the value of certain assets that can be used as collateral. The prosecutor could simply allege that a house, valued at $350,000 on the application, was actually worth $350,001. The prosecutor would have to allege the applicant president knew the true value of the asset was $350,001.

2) For a violation of 18 U.S.C. § 1343: the prosecutor would have to point to some transaction the outgoing president had engaged in over interstate wires, say he bought something with a credit card. The prosecutor would have to allege that the transaction was undertaken with some intent to defraud the vendor (or the credit card company), say that the purchaser violated some term of the credit card’s use (good luck reading and deciphering all the fine print)

3) For a violation of 26 U.S. Code § 7201: the prosecutor would have to point to some tax, any tax, that the president had to pay but did not (please, for the unimaginative, take me at my word this is trivial). The prosecutor would merely have to allege that the failure to pay this tax had been deliberate.

III: It Gets Worse

For a lot of crimes, we don’t even need the defendant to *do* anything affirmative. The case can rest on the testimony of an accuser, alone. What follows is just one example, which I’ve chosen simply because the caselaw is crystal clear on this narrow point: It’s pretty uncontroversial that a president isn’t immune from allegations of rape, or sexual assault. Trump and his retinue of lawyers did not, in their wildest flights of lunacy, allege any immunity that swept that broadly, nor did SCOTUS grant him such immunity. The law has been clear on this since the 1990s, as the Trump decision points out: As for a President’s unofficial acts, there is no immunity. The principles we set out in Clinton v. Jones confirm as much. When Paula Jones brought a civil lawsuit against then-President Bill Clinton for acts he allegedly committed prior to his Presidency, we rejected his argument that he enjoyed temporary immunity from the lawsuit while serving as President.

But of course, this makes every outgoing president vulnerable to what is arguably the most vituperative and bad-faith of all political prosecutions: the poorly-founded sexual assault allegation.

Again, a prosecutor can bring any case they like. In my home jurisdiction of Minnesota, the law is quite clear that a sexual assault allegation doesn’t even require corroboration: a prosecutor in Minnesota can bring a sexual assault case to trial on the testimony of a victim alone. This law isn’t terribly controversial or unusual: most crimes don’t need to be corroborated to proceed to trial. As in all things, it’s usually up to the jury whether certain events did or did not happen.

It follows that all a prosecutor needs to do to bring a bad-faith prosecution against an outgoing president, one that could easily result in significant prison time, is find someone, somewhere, willing to say they’d been sexually assaulted. The story could be implausible and farfetched, it could be provably and totally false, but the case would survive to trial, where, as aforementioned, the damage would already be done according to Roberts, Alito, and Kavanaugh.

This isn’t some special quirk of sexual assault law, quite a few other criminal offenses could proceed to trial based on the uncorroborated testimony of a single victim or police witness, no matter how superficially incredible. Other examples include: terroristic threats, physical assaults, robbery, threatening to kill a president or incoming president, or issuing a false weather report.

IV: “These Things Must Come to Pass, but the End is Not Yet.”

I write this mostly as a prediction: this decision will not function as a serious bar to bad faith or political prosecutions, and when these prosecutions are brought in the future, bad-faith prosecutors will simply employ my loophole. Future presidents (potentially even Trump!) will distinguish their actions from the present prosecutions of a former president by making the claim that they are pursuing purely personal conduct: a cycle of reprisals will still be possible, where every incoming president conjures up a pretextual crime the outgoing incumbent has committed.

What prevents that cycle isn’t immunity, it’s the same thing that prevents all bad-faith prosecutions: the political nature of the prosecutor’s office itself. Prosecutors aren’t disincentivized from bringing “bad” cases because of explicit legal deterrence, they’re disincentivized because when they bring bad cases, they get their ass kicked at trial by competent defense attorneys like me. This is by no means a perfect deterrent to political prosecution, but it’s a far better one than immunity for “official acts”, which are a very, very, very narrow subset of potential crimes.