Trump has been ordered to pay $447 million in damages. Can he afford it?

The former president was just ordered to pay $355 million in his New York fraud case, bringing the tally this year to nearly half a billion dollars in civil damages.

Donald Trump’s face is in focus in a courtroom during his fraud trial.

Donald Trump attending his trial on fraud charges at the New York State Supreme Court on October 3, 2023. Shannon Stapleton/AFP via Getty Images Abdallah Fayyad is a correspondent at Vox, where he covers the impacts of social and economic policies. He previously served on the Boston Globe editorial board.

Two recent verdicts have now left Donald Trump on the hook for nearly half a billion dollars.

On Friday, a New York judge handed the former president a $355 million penalty, and banned him from serving in a leadership position in any business in New York for three years, for fraudulently inflating his net worth to lenders in order to receive more favorable loan agreements. And in January, a Manhattan jury ordered Trump to pay the writer E. Jean Carroll $83.3 million for defaming her after she accused him of raping her. (A separate jury in May had found Trump liable for sexually abusing Carroll in the 1990s.)

Together, the damages from these two lawsuits are worth more than the amount of cash Trump claimed to have on hand last April, potentially putting him in a financial bind as he also faces debt repayments and mounting legal fees. Even if he appeals these decisions, as he is expected to do, he still likely will have to front the money while that process runs its course, or secure a bond, which would come with its own conditions.

For a well-connected billionaire, that might usually amount to nothing more than a temporary inconvenience; after all, Trump could always liquidate some of his assets or borrow even more money to cover his short-term obligations.

But Trump isn’t just one of the country’s richest men, with an estimated net worth in the low billions; he’s also running to serve a second term as president of the United States. And for any candidate for public office — let alone the presidency — being cash-strapped while owing such significant amounts of money could be a serious liability.

“It’s pretty scary from an ethics perspective,” said Virginia Canter, the chief ethics counsel at the Citizens for Responsibility and Ethics in Washington, a nonpartisan watchdog group that has chronicled Trump’s abuses of power and filed lawsuits against him.

You don’t have to look far to find the reasons why. Trump’s first term was riddled with conflicts of interest, and that’s in no small part because of his financial well-being (or lack thereof, depending on how you look at it). At the time that he tried to overturn the 2020 election, he was hundreds of millions of dollars in debt, largely stemming from loans to help rehabilitate his struggling businesses, and most of which would be coming due over the subsequent four years. Throughout his presidency, he refused to divest from his businesses, which made millions of dollars in revenue from taxpayers and continued to do work with other countries while he was in office — a practice he indicated he would repeat in a second term.

The fact that he has so many entanglements with big businesses and other nations leaves plenty of room for things to go awry. That’s why a 2020 New York Times exposé uncovering his staggering debt during his first term wasn’t just embarrassing for Trump, who has a tendency to claim he’s richer than he actually is. It also raised fears about how his debt could implicate national security.

As the former head of the Justice Department’s National Security Division told Time magazine in 2020, “For a person with access to U.S. classified information to be in massive financial debt is a counterintelligence risk because the debt-holder tends to have leverage over the person, and the leverage may be used to encourage actions, such as disclosure of information or influencing policy, that compromise U.S. national security.”

As Trump campaigns for a second term, his personal finances are becoming increasingly relevant, especially now that he has to pay hundreds of millions of dollars in damages from the two civil lawsuits.

And with his criminal cases still looming, things could get even worse for him. His debt “makes him prime for corruption and really exploiting his office for his own personal gain,” Canter said.

Is Trump actually in any financial trouble?

Trump is known for many things, but a penchant for transparency is not one of them. He famously didn’t release his tax returns when he was running for office, and because his company is not publicly traded, its finances are often opaque. As a result, his personal net worth and his business empire’s earnings have always been shrouded in mystery.

But lawsuits, media reports, and his occasional, if narrow, public disclosures have made clear that Trump’s often rosy descriptions of his wealth are far from accurate.

It’s particularly unclear just how big his cash reserves are. In a deposition last year, Trump claimed to have $400 million in cash. That is a lot of money, but if it’s accurate, the former president likely would not have much of it left after paying the damages from his recent lawsuits. (While he can, in some cases, dip into campaign cash to cover certain legal expenses, he generally can’t use those funds to pay the damages he owes.)

Lawsuits aside, Trump also has plenty of debt on his hands. His financial disclosures filed with the Federal Election Commission last year showed that he has at least $200 million in debt. And according to Forbes, his business owed roughly $1.3 billion in 2021.

That’s not as dire as it sounds, especially because Trump has been steadily paying down the money he owed when he was leaving the White House three years ago. For example, he’s paid off most of the $295 million he owed Deutsche Bank — a major source of his debt. But some of Trump’s debts warrant more scrutiny.

Ultimately, it’s impossible to know exactly how financially stable Trump is at any given moment. While some signs — like his ability to repay some of his debts or, say, him being a very wealthy man with very wealthy friends — indicate that he’s doing just fine, there are still some warning signs for his campaign. Trump has faced a steady stream of hefty legal bills that stem from his four indictments, and that has drained much of his campaign cash. In fact, Trump’s campaign has spent more than $50 million on legal fees in the past year alone. According to the Associated Press, 84 percent of spending from Trump’s Save America political action committee has gone toward covering legal expenses.

Those aren’t exactly the typical spending habits of a normal campaign. But then again, Trump isn’t a normal candidate.

Trump’s income and lack of transparency really matters

One of the most explosive details in the New York Times’s 2020 report on Trump’s leaked tax returns is that despite being incredibly rich, there were years that he paid little to no federal income tax. In 2016, when he first won the presidency, he had paid a grand total of $750 in federal income taxes. That could help explain why Trump refused to release his tax returns in the first place, though doing so has been the norm for presidential candidates since the 1970s.

As serious as it is that Trump (and other wealthy Americans) can pay virtually no federal income taxes, there are even bigger consequences to his lack of transparency. Trump’s web of business deals also provides ample opportunity for special interests and foreign governments to attempt to buy influence in his administration. Foreign governments, for example, spent millions of dollars at Trump’s businesses during his presidency. A Chinese state-owned bank paid $7 million to rent space in Trump Tower in New York during the four years Trump was president. The company stopped renting out space when Trump left office.

To believe that the potential for that kind of revenue could not influence Trump’s agenda, or even travel itinerary, would require an extraordinary level of trust in the former president — something most voters don’t have.

After all, how could a president fairly pursue a trade deal, for example, with a country he’s doing personal business with? It’s that kind of behavior that led to accusations that Trump violated the emoluments clauses of the US Constitution, which bar presidents from receiving money from foreign governments, as well as US states or the federal government outside their salary, in order to avoid undue influence.

During his presidential term, Trump also had many hidden debts, and while a lot of his creditors were big financial institutions, some were unknown. According to Forbes, for example, Trump had a previously undisclosed loan from a foreign creditor when he became president, owing nearly $20 million to a South Korean company. While Trump paid off that loan within the first six months he was in office, it’s just one example of how his potential conflicts of interest are tricky to keep track of.

In the runup to 2016, Trump misleadingly touted his wealth as a key advantage that furthered the public interest. He promised to self-fund his campaign, saying that he wouldn’t be beholden to anybody, but he failed to keep that pledge.

But the problem for Trump isn’t just his inability to self-fund his White House bids. The fact that he is constantly on the lookout for new loans or sources of income gives special interests a vehicle to curry favor with him. After his former lenders cut ties with him in the aftermath of the January 6 insurrection, for example, Axos Bank, whose CEO is a Republican donor, swooped in and loaned the former president some $225 million, helping Trump shore up his finances. (Trump has also reported new income from foreign entities, like a new deal he struck with a Saudi-based firm.)

While Trump’s lack of transparency might have served him well until now, shielding him from potential legal and political liabilities, it also could have far-reaching consequences should he win a second term this November.

“A lot of people thought Bernie Madoff was rich,” Canter said. “There are a lot of characters who portray themselves as rich, but when you look into the cookie jar, there’s nothing there.”


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