Follow the Money — Why Trump Isn’t Out of the Woods Yet
Author: Greg Valliere
April 30, 2019
AN ASSUMPTION THAT DONALD TRUMP has been cleared of wrongdoing by Robert Mueller — which is the President’s spin to his supporters — is far from accurate. His furious attempt to block disclosure of his financial dealings, and his unwillingness to cooperate with Congress, have kept alive efforts in the House to bring about impeachment charges.
FOLLOW THE MONEY: We’re old enough to remember the Watergate mantra that the money trail eventually would trip up Richard Nixon, and it did. But the hush money from Nixon was chump change compared to hundreds of millions of dollars in loans to Trump, who sued Deutsche Bank and Capitol One yesterday in an effort to stop their cooperation with federal investigators probing Trump’s financial dealings. He also will fight all the way to the Supreme Court to keep his tax records secret.
THIS IS THE SMOKING GUN: Trump’s greatest vulnerability is his financial irregularities, which could greatly damage his re-election bid. To be blunt, we believe there’s evidence of sweetheart loans from foreigners, including Russian oligarchs, that Trump has sought to conceal — not necessarily because they’re impeachable, but because they would greatly embarrass him and weaken him politically.
TO COMPLICATE MATTERS, Trump’s behavior after release of the Mueller report has prompted even moderate Democrats to conclude that there’s a case to be made that he’s now obstructing justice — rejecting all subpoenas, refusing to let aides testify. Nancy Pelosi, who doesn’t want to consider impeachment, is facing growing unrest among her troops, who are angered by Trump’s stonewalling.
WE STILL DON’T THINK THERE ARE 67 VOTES in the Senate to convict, far from it. But impeachment isn’t the issue; it’s largely the money trail. Again, to be blunt: did everyone — from Trump and his family to Paul Manafort — seek to enrich themselves through foreign dealings they subsequently have attempted to conceal? This is an issue that blue collar workers in Pennsylvania understand — a money grab by powerful politicians.
WE WOULD ARGUE that keeping Trump in office, avoiding impeachment, would be the smart move by Democrats. They have the upper hand in the House — last fall’s elections really did matter — and they can eventually shine a light on Trump, starting with testimony from Mueller this summer, which will be explosive.
BUT IT’S THE MONEY TRAIL that will resonate with voters, who may conclude there’s something fishy that’s making Trump desperate to conceal what’s in his financial records. The Trump Foundation, a slush fund that he repeatedly raided, also could become a huge controversy, a potential tax felony.
YES, THE ECONOMY IS STRONG and that will help Trump’s re-election bid. But he faces a challenging Electoral College map and one crucial issue regarding his finances: can he run out the clock, stalling and spinning and suing until the election? Maybe not — the election is still 18 months away, which is plenty of time for investigators to follow the money trail.
The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.
AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), Highstreet Asset Management Inc. (Highstreet), AGF Investments America Inc. (AGFA), AGF Asset Management (Asia) Limited (AGF AM Asia) and AGF International Advisors Company Limited (AGFIA). AGFA is a registered advisor in the U.S. AGFI and Highstreet are registered as portfolio managers across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. AGF AM Asia is registered as a portfolio manager in Singapore. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
For further information, please visit AGF.com.
© 2020 AGF Management Limited. All rights reserved.