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Economics

Donald Trump also won a reprieve from justice

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IT WAS A high-stakes election for all Americans, most of all Donald Trump. Had he lost, there was a fair chance that he would have gone to prison. He faces four separate sets of criminal charges, each with a prospect of jail time. Instead, once back in the White House, Mr Trump will be able to quash his two federal indictments and the two state cases against him are all but certain to be frozen.

That Mr Trump has managed to largely evade legal accountability is partly a result of his stalling for time, in anticipation of this very outcome. His strategy was aided by the Supreme Court, a third of whose justices he appointed. And yet his supporters see a justice system that is pliable and easily weaponised. To some in MAGA world, Mr Trump’s threats to train it against his political enemies now sound eminently reasonable.

The first post-election piece of business in Mr Trump’s trials will come in the hush-money case in Manhattan, where, barring further delay, he is due to be sentenced on November 26th. In May he was convicted on 34 counts of falsifying business records to conceal a payment to a porn star. Each charge carries a maximum of four years in prison. Yet there is hardly any chance of the judge imposing jail time—constitutional scholars agree that a sitting president cannot be locked up. In any event Mr Trump’s lawyers will probably ask to postpone sentencing until after his term in office ends.

Next come the two federal cases brought by Jack Smith, a special counsel in the Department of Justice (DOJ). Mr Trump stands accused of refusing to return classified documents upon leaving the White House and of attempting to overturn his defeat after the 2020 election. He denies wrongdoing in both. DOJ policy says that a president cannot be prosecuted while in office. Extinguishing these cases is simple: Mr Trump can fire Mr Smith and direct DOJ lawyers to drop them. He can do this even before his attorney-general is confirmed, notes Mary McCord, a former federal prosecutor.

In Georgia, meanwhile, Mr Trump faces charges in state court over his meddling in the 2020 election. The case is on hold while an appeals court weighs whether the prosecutor who brought the charges should be removed for alleged impropriety. If it ever gets going again, it will not include Mr Trump so long as he is the sitting president. But his 14 remaining co-defendants could still stand trial.

Then there is the civil litigation against Mr Trump for his role in the January 6th riot. Several Capitol police officers have sued him, alleging that he instigated the attack; courts are in the middle of sorting out whether his conduct is immune from civil liability. If they say it is not immune, precedent suggests that civil suits against a sitting president can proceed.

Soon enough attention will turn from Mr Trump’s legal jeopardy to that of his opponents, whom he has vowed to target. At a MAGA victory party attended by your correspondent, shortly before the conga line started, several of his supporters suggested that Joe Biden ought to drop the federal prosecutions against Mr Trump as a show of goodwill. Then one gleefully added that she would love to see their man “take the Bidens down”.

Economics

BOI Reporting and the impact of the recent Federal Injunction

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The Corporate Transparency Act (CTA) is a legislative measure designed to enhance financial transparency

The Corporate Transparency Act (CTA) is a legislative measure designed to enhance financial transparency and mitigate risks such as money laundering, terrorist financing, and other illicit financial activities. The CTA aims to close loopholes and create a fairer business environment by requiring certain entities to disclose their beneficial ownership information. However, recent legal developments have temporarily impacted compliance requirements, bringing attention to the act’s ongoing litigation and implementation.

Federal Court Decision and Its Implications

On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a preliminary injunction in the case of Texas Top Cop Shop, Inc., et al. v. Garland, et al. (No. 4:24-cv-00478). This injunction temporarily halts the enforcement of the CTA, specifically its beneficial ownership reporting requirements. Additionally, the court order stays all deadlines for compliance.

As a result, reporting companies are currently not obligated to submit beneficial ownership information (BOI) reports to the Financial Crimes Enforcement Network (FinCEN). During the injunction, these entities are also shielded from liability for non-compliance with CTA mandates.

Despite this pause, FinCEN has clarified that companies may still voluntarily submit their BOI reports. This voluntary reporting option remains available for businesses that wish to align with the CTA’s transparency goals.

Overview of the Corporate Transparency Act

The CTA mandates that certain entities provide information about their beneficial owners—individuals who own or control a business. The act is intended to increase transparency, enhance national security, and reduce the anonymity that can facilitate financial crimes.

While the CTA has garnered support for its objectives, it has also faced legal challenges questioning its constitutionality. Courts in different jurisdictions have issued varying rulings, with some upholding the law and others granting temporary injunctions. For example, district courts in Virginia and Oregon have ruled in favor of the Department of the Treasury, asserting the CTA’s alignment with constitutional principles.

Compliance During the Injunction

Currently, the federal injunction exempts businesses from mandatory BOI filing requirements nationwide. This temporary halt will remain in place until further developments, such as a decision by an appellate court or a reversal of the injunction.

In response to the ruling, the Department of Justice, representing the Department of the Treasury, has filed an appeal. While the case proceeds through the legal system, FinCEN has confirmed its compliance with the court order.

Looking Ahead

The legal proceedings surrounding the CTA highlight the evolving nature of financial regulation. As courts continue to deliberate, businesses should monitor updates to remain informed about their obligations. By staying informed and prepared, businesses can effectively manage their compliance responsibilities and contribute to efforts that promote financial integrity and transparency.

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Economics

After a chaotic scramble, Congress strikes a budget deal

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Donald Trump is the most powerful Republican politician in a generation, but the president-elect is still no match for the most nihilistic members of his own party. The budget chaos that unfolded on Capitol Hill as the Christmas break approached is only a preview of the difficult realities Mr Trump will face when he starts to govern next month.

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Economics

Why Congress is so dysfunctional

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Budgetary chaos is a sign that governing will be harder than Donald Trump might assume

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