DONALD
TRUMP'S COMPANIES DESTROYED EMAILS IN DEFIANCE OF COURT ORDERS
BY KURT EICHENWALD
ON 10/31/16 AT 11:00
AM
Over the course of
decades, Donald Trump’s companies have systematically destroyed or
hidden thousands of emails, digital records and paper documents
demanded in official proceedings, often in defiance of court orders.
These tactics—exposed by a Newsweek review of thousands of pages of
court filings, judicial orders and affidavits from an array of court
cases—have enraged judges, prosecutors, opposing lawyers and the
many ordinary citizens entangled in litigation with Trump. In each
instance, Trump and entities he controlled also erected numerous
hurdles that made lawsuits drag on for years, forcing courtroom
opponents to spend huge sums of money in legal fees as they
struggled—sometimes in vain—to obtain records.
This behavior is of
particular import given Trump’s frequent condemnations of Hillary
Clinton, his Democratic opponent, for having deleted more than 30,000
emails from a server she used during her time as secretary of state.
While Clinton and her lawyers have said all of those emails were
personal, Trump has suggested repeatedly on the campaign trail that
they were government documents Clinton was trying to hide and that
destroying them constituted a crime. The allegation—which the FBI
concluded was not supported by any evidence—is a crowd-pleaser at
Trump rallies, often greeted by supporters chanting, “Lock her up!”
Trump’s use of
deception and untruthful affidavits, as well as the hiding or
improper destruction of documents, dates back to at least 1973, when
the Republican nominee, his father and their real estate company
battled the federal government over civil charges that they refused
to rent apartments to African-Americans. The Trump strategy was
simple: deny, impede and delay, while destroying documents the court
had ordered them to hand over.
Shortly after the
government filed its case in October, Trump attacked: He falsely
declared to reporters that the feds had no evidence he and his father
discriminated against minorities, but instead were attempting to
force them to lease to welfare recipients who couldn’t pay their
rent.
The family’s
attempts to slow down the federal case were at times nonsensical.
Trump submitted an affidavit contending that the government had
engaged in some unspecified wrongdoing by releasing statements to the
press on the day it brought the case without first having any “formal
communications” with him; he contended that he’d learned of the
complaint only while listening to his car radio that morning. But
Trump’s sworn statement was a lie. Court records show that the
government had filed its complaint at 10 a.m. and phoned him almost
immediately afterward. The government later notified the media with a
press release.
Prosecutors
responded to Trump’s affidavit by showing he had fudged his claim
by using the term “formal communication”—an acknowledgment,
they said, that he had received what only he would characterize as an
informal notification—which they described as an intentional effort
to mislead the court and the public. But the allegation slowed the
case; it required government lawyers to appear in court to shoot down
Trump’s false charge.
The Trumps had more
delaying tactics. Trump announced in a press conference that his
family and their company were bringing a $100 million countersuit
against the government for libel; anonymous tenants and community
leaders, he said, had been calling and writing letters expressing
shock at the government’s “outrageous lies.” Once again,
motions, replies and hearings followed. Once again, the court threw
out the Trump allegations.
For months, the
Trumps ignored the government’s discovery demands, even though
court procedure in a civil or criminal case requires each side to
produce relevant documents in a timely manner. This allows for the
plaintiffs or prosecutors to develop more evidence in support of
their claims, as well as for the defense to gather proof to fight the
case against them. When litigation is filed or even contemplated,
scrupulous lawyers and corporations immediately impose
document-retention programs or require that any shredding or
disposing of records be halted. Courts have handed down severe
sanctions or even criminal charges of obstruction of justice against
executives and companies that destroyed records because they knew
they were going to be sued.
Yet when the
government filed its standard discovery requests, the Trumps reacted
as though seeking that information was outrageous. They argued in
court that prosecutors had no case and wanted to riffle through
corporate files on a fishing expedition. Once again, this led to more
delays, more replies, more hearings...and another specious argument
thrown out of court.
Six months after the
original filing, the case was nowhere because the Trumps had
repeatedly ignored the deadlines to produce records and answers to
questions, known as interrogatories. When a government attorney
finally telephoned a Trump lawyer to find out why, he was told the
Trumps had not even begun preparing their answers and had no plans to
do so. The Trumps also postponed and blocked depositions, refused to
provide a description of their records, as required, and would not
turn over any documents.
Finally, under
subpoena, Trump appeared for a short deposition. When asked about the
missing documents, he made a shocking admission: The Trumps had been
destroying their corporate records for the previous six months and
had no document-retention program. They had conducted no inspections
to determine which files might have been sought in the discovery
requests or might otherwise be related to the case. Instead, in order
to “save space,” Trump testified, officials with his company had
been tossing documents into the shredder and garbage.
The government
dashed to court, seeking sanctions against the Trumps. Prosecutors
asked the judge to allow them to search through the corporate files
or simply declare the Trumps in default and enter a judgment against
them. The judge opted to allow the government access to the company
offices so they could find the records themselves.
In three letters and
three phone calls, the government notified the Trumps that this
inspection would take place on June 12, 1974. When they arrived at
the Trump offices, Trump was there, but he and everyone else were
“surprised” that prosecutors had come and refused to allow them
access to documents without their defense lawyers present. A
prosecutor called those lawyers, but they were not in their offices.
The frustrated prosecutors then gave up and headed back to court.
The Trump strategy
was simple: deny, impede and delay, while destroying documents the
court had ordered them to hand over.
They were then hit
with a new delaying tactic. The Trumps submitted a filing based on
statements by Trump that radically misrepresented what had occurred
that day. He claimed a prosecutor, Donna Goldstein, had arrived at
the company without notifying the Trumps’ counsel, refused to
telephone their lawyer and demanded access to Trump’s office. The
prosecutor—accompanied, the Trumps claimed, by five
“stormtroopers”—then banged on doors throughout the office,
insisting she and her team be allowed to “swarm haphazardly through
all the Trump files and to totally disrupt their daily business
routine.”
At the same time, in
a move that caused another huge delay, the Trumps claimed that
Goldstein had been threatening Trump employees who were potential
witnesses. In several instances, the employees signed affidavits
stating they had been subjected to abuse by Goldstein, then denied it
when they were forced to testify. Even one of the government’s key
witnesses, Thomas Miranda—who told the government the Trumps
instructed managers to flag applications from minorities and that he
was afraid the family would physically harm him—suddenly announced
that prosecutors had threatened him and that he had never provided
any evidence against the Trumps.
These allegations of
misconduct, which demanded sanctions against the government for
abusing its power, required more hearings. Once again, the Trump
claims went nowhere.
In June 1975, more
than 18 months after the government filed the case and with the
Trumps still withholding potentially relevant records, the two sides
struck a settlement. The agreement—which, like all civil
settlements, did not contain an admission of guilt—compelled the
Trumps to comply with federal housing regulations against
discrimination, adopt specific policies to advance that goal, to
notify the community that apartments would be rented to anyone,
regardless of race, and meet other requirements.
The Trumps ignored
these requirements and still refused to rent apartments to
minorities, something the government proved by sending
African-Americans and non-Hispanic Caucasians to pose as applicants.
The government brought another complaint against the Trumps in 1978,
who then agreed to a new settlement.
In that case, the
government had the financial wherewithal to fight back against abuses
of the courts and the discovery process by the Trump family. But many
private litigants, who have to spend their own money and hire their
own lawyers, have been ground down by Trump’s
litigation-as-warfare-without-rules approach.
Courts are loath to
impose sanctions when litigants fail to comply with discovery
demands; in order to hurry cases along, judges frequently issue new
orders setting deadlines and requirements on parties that fail to
produce documents. But Trump and his companies did get sanctioned for
lying about the existence of a crucial document to avoid losing a
suit.
In 2009, a group of
plaintiffs claimed Trump duped them into buying apartments in a Fort
Lauderdale, Florida, development by portraying it as one of his
projects. The fine print of the dense and legalistic purchase
contracts, however, revealed that Trump had agreed only to license
his name to the developers, and when the project hit financial snags,
he walked away from it.
In their initial
disclosures in 2011, Trump and his company said they had no insurance
to cover any of their liability in this case. That was important
because an insurance policy lets the plaintiffs calculate how much
money a defendant can pay in a settlement without suffering any
direct financial consequences. In other words, that insurance lets
the plaintiff know how aggressively to pursue a settlement, knowing
the defendant will have some losses covered by the policy.
At the time, a
settlement in the then-prominent case could have been disastrous for
Trump; he faced an array of similar lawsuits because he had licensed
his name to developers around the world for projects that later
collapsed. In each case, Trump had marketed the developments as his
own, a claim contradicted by the sales contracts. A settlement in any
of these cases might have encouraged other people who had lost
deposits in a Trump-marketed development to file lawsuits against
him.
Two years after
denying that Trump had insurance that could have been used to settle
the Fort Lauderdale litigation, one of his lawyers made a startling
admission: Trump and his company had been insured all along for up to
$5 million. But no more—the policy had recently “dried up,” the
lawyer said. Stunned, the apartment buyers filed a motion seeking
sanctions against Trump and his company, arguing that the case “may
very well have settled long ago had the plaintiffs been provided with
the policy in a timely manner,” according to a court filing.
Alan Garten, General
Counsel at the Trump Organization for the past decade, said that at
the time of the original disclosure, the company’s lawyers did not
believe that the policy covered any potential liability in the
lawsuit, which he said was an error on his part. “This solely fell
on me, and if anyone is to blame for that, it’s me,’’ he said.
“It was completely an innocent oversight. And it was my innocent
oversight.’’ Garten said the other cases in this article preceded
his time at the company and he did not know the facts surrounding
them. In the Ft. Lauderdale case, Federal Judge Kathleen Williams
ruled in favor of the plaintiffs and ordered Trump to pay limited
legal fees for failing to disclose the policy, then held in reserve
the possibility of imposing additional sanctions. The case
subsequently settled.
Perhaps the worst
legal case involving Trump and his companies hiding and destroying
emails and other records involved real estate developer Cordish Cos.,
which, through an affiliate called Power Plant Entertainment LLC,
built two American Indian casinos in Florida. In January 2005, Trump
Hotels and Casino Resorts sued in a state court almost immediately
after the opening of the casinos, which both operate under the Hard
Rock brand. In his lawsuit, Trump claimed that the companies had
unlawfully conspired with one of his former associates to cheat him
out of the deal; he argued that the projects should be turned over to
him.
Negotiations with
the tribe and construction of the casinos had taken many years,
raising the possibility that the state’s four-year statute of
limitations had passed before Trump finally got around to filing his
lawsuit. If Power Plant could prove Trump knew in early 2000 that his
former associate was working on the Hard Rock deal, the case would be
thrown out of court. The clock here for the statute of limitations
starts ticking down when plaintiffs learn they have been swindled.
Trump claimed he
learned about the deal in January 2001, about the time of the
groundbreaking and more than three years before he filed suit.
However, the defendants contended he had been informed of the
projects in 1999. Trump offered no evidence in support of his
contention except his word, so the opposing lawyers filed extensive
discovery demands, seeking emails, computer files, calendars and
other records that might prove he knew about the casino deal before
2000.
A full year into the
case, Trump and his company, Trump Hotels, had produced only a single
box of documents, many of which were not relevant—and no emails,
digital files, phone records, calendars or even documents Trump
lawyers had promised to turn over. Interrogatories were still
unanswered. Lawyers for Power Plant obtained a court order compelling
Trump and his company to comply with the discovery demands and hand
over the relevant information and documents.
In a March 2006
response, Trump’s lawyers argued that the emails and other
electronic documents had not been produced because the company didn’t
have them. They claimed it had no servers until 2001—the year Trump
claimed he had learned of the Power Plant project. They also claimed
Trump Hotels had no policy regarding retaining documents until 2003.
In other words, they hadn’t turned over any emails because no
emails had been saved on a Trump server.
Judge Jeffrey
Streitfeld reacted with near disbelief. “I don't have the patience
for this,” he said. “This has been going on too long to have to
listen—and I don't mean to be disrespectful—to this double-talk.
There has to be an attitude adjustment from the plaintiff.”
Streitfeld ordered
Trump executives to file sworn statements attesting to how their
email systems had worked from 1996 onward. In response, Trump Hotels
filed an affidavit from one of its information technology managers
stating that it had had no servers prior to 2001.
That was false and
by deposing numerous IT specialists with two Trump companies—the
Trump Organization and Trump Hotels—lawyers for Power Plant
gradually chipped away at it. Finally, during a deposition nine
months after he had signed the deceptive affidavit, the same Trump
executive admitted his assertions in it were untrue. In fact, an IBM
Domino server for emails and other files had been installed in 1999,
the same year witnesses for Power Plant contended that Trump had
learned of the casino deal. Prior to that, as early as 1997, the
Trump corporations used servers off-site operated by a company called
Jersey Cape, according to sworn testimony by one of the Trump IT
experts; the following year, the Trump Organization and Trump Hotels
moved to another email provider, Technology 21.
These startling
revelations changed nothing, however, because there was no trove of
documents. The Trump records had been destroyed. Despite knowing back
in 2001 that Trump might want to file a lawsuit, his companies had
deleted emails and other records without checking if they might be
evidence in his case. Beginning around 2003, the company wiped clear
the data from everyone’s computers every year. Lawyers for Trump
Hotels had never sent out the usual communication issued during
litigation instructing employees to stop destroying records that
might be related to this case. The deletions continued, and backup
tapes were reused—thus erasing the data they held. Power Plant
lawyers also discovered that after the lawsuit was filed, Trump
Hotels disposed of a key witness’s computer without preserving the
data on it.
Data from everyone’s
computers at Trump’s company was wiped clear every year.
In subsequent
filings, Power Plant maintained that Trump Hotels had intentionally
deceived the court in its March 2006 filing when it claimed it had
located no emails relevant to the case because, at that point, it had
not yet conducted any searches of its computer system. Trump Hotels
executives did not instruct their IT department to examine backup
computer tapes until 2007, and even then the job wasn’t done,
depositions show. And when computer specialists finally attempted to
electronically locate any relevant documents that had survived the
flurry of deletions, the procedures were absurdly inadequate. While
looking for relevant documents, the technology team was told to use
only two search terms—the name of the tribe and the last name of
the former Trump associate. So even if there was an email that
stated, “Donald Trump learned the full details of the Hard Rock
casino deal in Florida in 1999,” it would not have been found by
this search.
With all this proof
that Trump Hotels had ignored every court order and filed false
documents, Power Plant asked the judge either to impose sanctions or
allow its own expert to search for relevant digital records. Trump
Hotels argued it had done nothing improper, although its lawyers
acknowledged having made some mistakes. Still, Streitfeld ordered
Trump Hotels to make its servers and computer systems available for
inspection by a computer forensics consulting firm. That review
showed there was no digital data in the computers, servers or backup
tapes prior to January 2001—the very month Trump claimed to have
learned of the Florida casino deal.
With the likelihood
of sanctions growing, Trump Hotels dropped the suit a few months
later, in part because of the company’s financial troubles. A
company involved in the Power Plant case agreed to purchase one of
Trump’s struggling casinos in Atlantic City, New Jersey, and
included as part of the deal a requirement that the litigation be
ended.
This review of
Trump’s many decades of abusing the judicial system, ignoring
judges, disregarding rules, destroying documents and lying about it
is not simply a sordid history lesson. Rather, it helps explain his
behavior since he declared his candidacy. He promised to turn over
his tax returns and his health records—just as he promised to
comply with document discovery requirements in so many lawsuits—then
reneged. As a result, he has left a sparse evidentiary trail that can
be used to assess his wealth, his qualifications for the presidency
or even his fitness. Should voters choose him to be the next U.S.
president, he will enter the Oval Office as a mystery, a man who has
repeatedly flouted the rules. He has solemnly told the country to
trust him while refusing to produce any records to prove whether he
speaks the truth or has utter contempt for it.
