Donald Trump scored a huge victory late last month when a New York court reduced his bail from half a billion dollars to $175 million after his lawyers expressed difficulty posting bail for the entire judgment while he appealed. But the former president’s lawyers may have made a crucial mistake by failing to disclose that a billionaire financier had offered to pay the entire $464 million judgment, according to ProPublica, and legal experts say that could cost them dearly.
“It is unethical to knowingly present false information initially or to fail to correct erroneous information provided to the court,” Laurie Levenson, a professor at Loyola Law School, told Salon.
Although lawyers do not always have “direct information” from their client, they have an “ethical obligation” under the code of conduct to correct false statements and information, she explained, noting that while Trump’s lawyers “at some point” knew they had “made a false statement” in court, they had a “responsibility to clarify that.”
“You have, first and foremost, a duty to push your client to tell you the truth and find out what’s really going on,” Levenson said, adding that a potential ethics issue “shows the court that it doesn’t simply cannot trust Trump’s lawyers” and encourages the court. court to “make more effort to verify the facts”.
Before the appeals court’s ruling, Trump’s lawyers told the court it was “virtually impossible” to obtain bond for the full amount. The lawyers explained that around 30 companies contacted by Trump refused to cover him, either because they did not want to take the risk or because they did not want to accept real estate as collateral. Those refusals made releasing the total “an impossible bail requirement,” they said.
However, before the appeals panel reduced the bond, a billionaire lender contacted Trump’s team to provide security for the entire amount. In an interview with ProPublica, California billionaire Don Hankey said he contacted Trump’s lawyers several days before the bail reduction, telling them he was willing to offer the full amount and use real estate as collateral.
“I saw that they were being rejected by everyone and I said, ‘Well, that doesn’t seem like a difficult bond to file,’” Hankey told the outlet.
The appeals court ruled in Trump’s favor as Hankey and the former president’s representatives negotiated. The court did not provide an explanation for its decision, and Hankey later gave Trump bail for the reduced amount.
It is unclear whether Trump’s lawyer, Alina Habba, and the rest of Trump’s legal team were informed of Hankey’s offer to cover the entire amount. Trump’s lawyers did not respond to ProPublica’s requests for comment.
This uncertainty raises the question of whether they actually violated the relevant ethics rule, Rule 3.3(a)(1), according to Stephen Gillers, a law professor at New York University who specializes in legal ethics.
If Trump’s legal team was aware that his statement about meeting bail was false, they violated the rule, Gillers told Salon. However, if it wasn’t true but they thought it was before learning it was false, their statement would not constitute a violation even though they would have been required to “correct the statement.” after learning of its “falsity”.
“If the statement was true at the time they said it and subsequent events made it false, some might view the rule as ambiguous as to whether lawyers would be required to correct the statement,” Gillers said, explaining that even then, he believes “the lawyers would have had a duty to correct this statement.”
At the time Trump’s lawyers informed the court of their difficulties in posting bail, Hankey told ProPublica he had not yet contacted Trump’s team.
Because of the schedule, lawyers could claim “they didn’t know if he could support the full amount,” according to Bennett Gershman, a Pace University law professor and former New York prosecutor, who noted that ” the knowledge of the legal team is essential.” “.
“But what this episode demonstrates is that the failure of Trump’s lawyers to notify the court that was considering their motion shows their incompetence, their indifference to ethical conduct, or simply their contempt for the good conduct of lawyers,” he told Salon.
If the court finds that Trump’s legal team violated ethics rules, Gillers said they could be “referred for disciplinary action” either by the court, the attorney general or a member of the public, or that a disciplinary committee could pursue the matter without “necessity.” for an external complaint.”
Disciplinary action for such violations can take several forms, Levenson added. Although dependent on the jurisdiction and disciplinary body, the process would begin with a hearing and could result in a private or public reprimand. “More serious consequences” could be suspension or even disbarment, she explained.
Although she doesn’t expect serious consequences if Trump’s lawyers are found guilty of a violation of the rule, Levenson said a violation would be “at least a stain on their record.”
“First of all, they will have no credibility, not only with this court, but frankly with other courts,” she explained. “I mean, a judge can’t trust lawyers who have already made false statements and haven’t tried to fix them.”
“The appeals court may feel blindsided by the fact that Trump’s lawyers did not at least inform them of the possibility of obtaining bail for the full amount,” Gershman added, emphasizing that it was of an “embarrassing moment” for the court. “As the court can see, the attorneys sat back and let the court make a difficult decision that it ultimately did not have to make.”
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The run on the former president’s bonds grew out of the civil fraud case brought by the New York attorney general, which accused Trump and his co-defendants of defrauding banks and insurers by exaggerating his assets and value net in the financial statements. Trump had one month to post bail, or risk having his properties seized and posted last week after receiving a 10-day extension from the appeals court.
Still, the former president isn’t quite out of the woods with his connection yet. In a brief court filing last Thursday, New York’s attorney general asked Trump or Hankey’s company to prove that the company had the means to meet the $175 million bond, ProPublica notes. The possibility that his lawyers failed to disclose relevant bail information to the court could also diminish Trump’s victory, experts say.
The court could change its decision and “impose higher bail” after asking Trump’s lawyers to explain, Gillers said.
Although Levenson believes it is “unlikely” that the court will revisit the bond and subsequently reset it, she said the appeals court may take that information into account when deciding any further issues regarding the deposit that would arise, for example if the government requested that it be lifted. .
“It’s always important to know whether you’ve given genuine representations to the court,” Levenson said. “It matters for the decision on this issue. It will matter for the decision on subsequent issues. It matters for your reputation. It matters for how other courts perceive you. It still matters.”
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