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A New York Reign of Terror on Corporations

William L.Kovacs

March 2024

A New York Reign of Terror on Corporations

The mainstream media and the Progressive Left rejoice over New York securing a 464-million-dollar judgment against former President Trump, his inability to secure an appeal bond from an insurance company due to paralyzing fear of government retaliation, and the likelihood of Attorney General Letitia James (“AG James”) seizing his property. These actions are not part of a rule-of-law legal system. They are de facto corporate executions. Businesses in New York should be terrified as it is the beginning of a New York Reign of Terror against corporations.

The most studied Reign of Terror was also state-sanctioned violence during the French Revolution, 1789-99. “[G]overnment decided to make ‘Terror’ the order of the day to take harsh measures against those suspected of being enemies of the Revolution.” To the state of New York and its media propagandists, no person is a greater enemy of their “Revolution” than Donald Trump. The revocation of a license to operate is the equivalent of a corporate execution. As in the French Revolution, Trump received a fake trial with few due process rights. Conviction was inevitable. AG James’ actions are right out of Robespierre’s playbook.

Unfortunately, for a Reign of Terror to be successful, it must execute all enemies of the Revolution. Let the executions begin.

The Guillotine is New York Executive Law section 63(12). AG James is the executioner of anyone who engages in what she believes is a fraudulent or illegal act while conducting or transacting business in New York. In New York, fraud includes any scheme to defraud, any deceive, misrepresent, conceal, suppress, make false promises, or unconscionable contractual provisions. There is no requirement of harm. This law is so broad that almost every word, contract, advertisement, action, or business transaction in New York can be construed as fraud by the AG.

Moreover, it applies to all environmental marketing claims, even truthful ones that a consumer may not understand. In New York, a corporation is mandated to understand how a consumer would interpret an environmental marketing claim and ensure the claim does not give consumers a false impression.

Upon conviction, without a jury trial, the punishment is restitution, damages, and the cancellation of a business license. The damage award under the statute is whatever AG James seeks or so much as the court deems proper. Hence, the Attorney General and judge believed the $464 million judgment against Trump was proper justice.

All corporations making environmental claims are the new enemies of the Revolution. As the Trump trial was nearing completion, AG James, using the same law, filed a lawsuit against one of the world’s largest meatpackers for fraudulent environmental claims. The meat producer claimed to reach net-zero climate emissions by 2040. AG James believed the net-zero commitment was a fraudulent representation because the amount of carbon emissions from meat production is more than the plan can eliminate. Alleging that the meatpacker deceived consumers, New York seeks $5,000 a day for each violation, which could be related to every consumer the state believes was deceived. New York is also seeking to recoup all profits made from the claims, which are likely to be all of the corporation’s profits.

The federal and state governments will force corporations to confess their crimes. While the New York Attorney General will be unable to gather the needed information to convict the tens of thousands of corporations operating in New York of fraud, the federal government will provide the Attorney General with the corporate environmental claims she can use to allege fraud for almost any reason. The U.S. Securities and Exchange Commission’s (“SEC”) recent rule requiring detailed corporate disclosures of all climate-related risks will be in the form of a coerced confession. The SEC requires companies to report on all climate-related spending and mitigation efforts to comply with almost 900 pages of government regulations. Additionally, these corporations must disclose their environmental promises. Corporations will even have to report (guess) how they will deal with all future government climate policies. Any disclosure that appears inadequate to AG James will open the corporations to lawsuits.

AG James will figuratively receive briefing books from the SEC on all the environmental promises made by corporations. She can then pick and choose who to file fraud charges against. Every failure to meet an environmental promise could subject a company to prosecution under Executive Law section 63(12). For proof, corporations only need to look at the actions taken against the meatpacker based solely on the fact that AG James does not believe its net-zero plan will work.

The list of New York corporate fraudsters is long and growing. In addition to the SEC’s confession file, over 200 companies, most with operations in New York collectively pledged to mitigate 1.98 billion metric tons of carbon emissions annually by 2040 from a 2020 baseline. These companies are some of the biggest in the world:  Amazon, Procter & Gamble, HP, Salesforce, Mohawk Group, and Crown Holdings.

The meatpacker made similar promises, but the attorney general considered its plan fraudulent without presenting sufficient facts to discredit it. Every one of these 200-plus corporations can expect government persecution and prosecution should they disagree with the New York or federal governments or disgruntled environmental groups. As to New York,

                                       Start spreading the news; the AG is coming today,

                                       A reign of corporate terror is on its way,

                                       To rip out our businesses, New York, New York.

 

William L. Kovacs author of Devolution of Power: Rolling Back the Federal State to Preserve the Republic. His previous book Reform the Kakistocracy received the 2021 Independent Press Award for Political/Social Change. He served as senior vice president for the U.S. Chamber of Commerce and chief counsel to a congressional committee. He can be contacted at [email protected]