How can Donald Trump pay the $354 million fine? - Hindustan Times

Donald Trump's New York City fraud trial: How can the former president pay the $354 million fine?

Feb 17, 2024 07:38 AM IST

Donald Trump faces a $354m fine in a civil fraud case, and experts say it will leave a severe dent in his wealth.

On Friday, a civil fraud case has resulted in a huge fine of over $354.9 million for Donald Trump, plus another $100m in interest charges. Legal experts say this will hurt the former president’s wealth a lot.

A New York judge has ruled against Donald Trump Friday, Feb. 16, 2024, imposing a $364 million penalty over what the judge said was a yearslong scheme to dupe banks and others with financial statements that inflated the former president’s wealth.(Shannon Stapleton/Pool Photo via AP, File)(AP)
A New York judge has ruled against Donald Trump Friday, Feb. 16, 2024, imposing a $364 million penalty over what the judge said was a yearslong scheme to dupe banks and others with financial statements that inflated the former president’s wealth.(Shannon Stapleton/Pool Photo via AP, File)(AP)

“It won’t make him poor, but it will take a big chunk of his money,” said ex-federal prosecutor Diana Florence.

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“His net worth will go down a lot.”

$354 million is a huge number, even for a billionaire.

On Friday, the judge gave his final verdict, telling Mr Trump to pay up and forbidding him from doing any business in the state for three years. The judge did not, however, shut down the Trump family business completely.

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Trump claims he did not do anything wrong and plans to appeal, which would pause the verdict until a higher court looks at the case.

But if he does not want to risk losing his money or property while the appeal is going on, he has to put the full amount in a deposit within 30 days.

Can Trump actually afford $354 million?

According to Forbes Magazine, Trump’s total net worth was $2.6 billion. The New York Attorney General’s Office said his net worth was $2 billion in 2021.

This means a fine of $354.9m would take away about 14-17% of his money.

But he also has to pay $83.3 million to the writer E Jean Carroll for a different defamation case that ended in January. He is also spending a lot on lawyers as he faces four criminal cases in federal and state courts.

These financial problems - more than $500 million - might be more than what Trump can afford.

Legal experts say he has some choices.

3 ways Trump can actually pay the fine amount

1. Secure a bond, but it will cost him

One way to avoid paying the full amount upfront is to secure a bond, which is a third-party guarantee that he can pay the fine. But this option is not cheap, as it will cost Trump millions more in interest and fees. He will also likely have to put up some collateral, such as property or assets.

To get a bond from a bonding company, a person usually needs to pay about 10% of the total amount owed, according to Steven Cohen of the New York Law School. That means Trump would have to pay $35 million to the bond company, and he will not get that money back.

ALSO READ| Donald Trump fined $364 million penalty in New York civil fraud case

2. Sell assets to raise enough cash

Another option is to sell some of his assets to raise enough cash to pay the fine. In a deposition in this case, Trump said he had $400 million in cash on hand. But that would not be enough to cover the fine, plus his other legal costs and fees.

“He’s got to think about what to do with his assets, how to perhaps liquidate businesses to come up with that money,” said Sarah Krissoff, a former federal prosecutor.

Trump’s wealth is mostly tied to his real estate ventures. Forbes estimated his New York real estate empire to be worth $490 million, including his flagship Trump Tower, worth $56 million. He also owns many other properties across the country, such as golf courses, hotels, condominium towers, and even a winery.

He also has a stake in the Trump Media & Technology Group, which runs the Truth Social messaging platform and is seeking a public listing. His stake is estimated to be worth almost $4 billion. But the value of that firm has fluctuated a lot in recent months, and he would not be able to sell his shares right away under the terms of the deal.

“Something is going to have to be sold or realised in order to get the money to pay for that kind of cost,” said William Thomas, a professor at the University of Michigan Ross School of Business.

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3. Ask his loyal supporters for the money

Trump may also turn to his loyal supporters to help him pay the fine. He has a massive fundraising machine that he uses to pay his tens of millions in legal fees. According to the New York Times, 10% of every dollar that he raises from his supporters goes to his defence in his civil and criminal trials.

He has two political action committees - Save America, which is his main source of legal fees, and Make America Great Again, which funds his presidential bid. He uses these entities to raise money for his legal costs, even though they are usually used for political purposes. They are separate from his official presidential campaign account.

From his first indictment in March of 2023 to the end of the year, his Save America PAC spent nearly $40 million on lawyers and other related fees, Forbes reported.

Under federal campaign finance rules, Trump could potentially use Save America to pay the court-ordered fine, said Shanna Ports, a senior counsel at the Campaign Legal Center. He would not be allowed to use his official campaign funds for this purpose, she added.

According to filings with the Federal Election Commission, his Save America PAC started the new year with $5 million in cash on hand.

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