Corruption, Fraud, and Structural Tax Evasion

Donald Trump, of course, pardoned multiple rich guys who defrauded people. His own son defrauded kids with cancer.

But it's not always literal fraud that he chooses as a method to pad his own pockets or those of his friends. Sometimes it's just garden-variety corruption or self-dealing.

From Heather Cox Richardson yesterday:

Vicky Ge Huang of the Wall Street Journal reported that the Trump family's cryptocurrency venture World Liberty Financial today applied for a national banking license from the U.S. Office of the Comptroller of the Currency, part of the Treasury Department. A banking license would integrate the Trump family's crypto currency more fully into mainstream finance.

If the Treasury Department issues the license — a potential outcome that critics say reveals a major conflict of interest for the president — the president and chair of the new company would be Zach Witkoff, whose father is the son of Trump's envoy to Russia Steve Witkoff, who the Wall Street Journal recently reported had been handpicked for his role by Russian president Vladimir Putin. The younger Witkoff started World Liberty Financial in 2024 with Trump's sons Don Jr., Eric, and Barron. 

Today the Star Tribune reprinted a New York Times story called "Partnership audits falter under Trump." It sounds deadly dull, but the gist is that billionaires and other rich business-owners are exploiting a tax loophole that exists for partnerships, originally mom-and-pop businesses, to cheat on taxes for their real estate partnerships and hedge funds. Profits from these types of partnerships went up more than ten-fold between 2000 and 2022 (from $202 billion to $2.6 trillion). We are not talking chump change here. 

Under Biden, the IRS had hired a bunch of experts on partnership law and taxes and begun to crack down on this, but the DOGE lay off of discretionary hires laid waste to all those recent hires, so the cases are being dropped. Of course!

The final paragraph of the story:

A recent study by a team of business and law school professors [at Stanford, NYU, and Chicago] found that audits of complex partnerships had a "high return on investment," generating $20 in collected taxes for each $1 spent by the IRS. That return is more than eight times what the IRS generates from auditing corporations, the researchers found.

But if it's health care fraud that's wanted, there's always the old one by Florida Senator Rick Scott, or the ongoing Medicare Advantage scams like that of UnitedHealth Group (Star Tribune gift link), which alone runs into multiple billions of dollars. 

I know it's fruitless to spend energy being outraged over the Right's hypocrisy. But it's so hard being in Minnesota and having to listen to blah blah blah about this state being the site of the greatest fraud of all time when all of that, and more, is constantly being carried out by Trump's family, friends, and supporters.