Giant loophole may protect Trump-property liquor licenses throughout US, despite his felony hush-money conviction
Trump says he does not hold a liquor license anywhere in the United States.
Keeping his name off the paperwork can insulate him from laws barring felons from holding licenses.
Trump may not be liable for liquor licenses held by tenants or under LLCs where he's not an officer.
Keeping his name off the paperwork may protect former President Donald Trump if state officials anywhere in the US try to revoke liquor licenses at Trump-branded properties due to his new felony status, experts told Business Insider.
New Jersey officials revealed this week that they are looking at the licenses at his three golf courses there.
The licenses remain current at the three golf courses, located in Colts Neck, Bedminster, and Pine Hill, a spokesperson for the New Jersey Attorney General's office said, confirming that the division of alcoholic beverage control is "reviewing" the status of the licenses.
More than a dozen bars and restaurants serve alcohol on the premises of Trump-branded or Trump-owned hotels and golf courses in New Jersey, New York, Florida, and California, a survey by Business Insider found.
These states prohibit felons or people convicted of "moral" offenses such as fraud from holding a liquor license.
But Trump "is not the holder of any liquor license in New Jersey, and he is not an officer or director of any entity that holds a liquor license in New Jersey — or anywhere in the United States for that matter," the GOP presidential frontrunner said through a spokesman.
That may keep him insulated.
Trump may not be responsible for liquor licenses held in the name of his tenants or under LLCs for which he is not on the paperwork, experts said.
If Trump's name is not connected to the license, then his conviction could be moot, said William Fay, a former New Jersey deputy attorney general who worked with the enforcement bureau of the state's division of alcoholic beverage control.
Just because Trump's name is in the title of the LLC, doesn't mean he's a member or owner, Fay said.
If he is a member of the LLC, then simply being licensed as an LLC wouldn't offer any sort of protection. If he's not a member, it could, Fay said.
But there are loopholes to this loophole
"Just because he is not on the paperwork doesn't mean he's scot-free," explained Aaron H. Pierce, a Manhattan-based attorney who specializes in alcoholic beverage-control law in New York.
Trump-branded properties in Manhattan house a half-dozen bars and restaurants that serve alcohol, including the memorabilia-crammed "45 Wine & Whiskey Bar" at Trump Tower.
Say Trump is landlord to the bar operators at one of these properties, and it's the bar operators who hold the liquor license, Pierce said.
Or say the bar is owned by an LLC for which Trump is not listed as a director or officer, he added.
If Trump is charging the bar a flat rent, his felony status won't impact that liquor license. But if he is directly profiting from liquor sales — meaning getting a cut of the bar till — then that's another story, said Pierce, partner at the business law firm Pierce & Kwok LLP.
"If he's not on the paperwork, but he's profiting directly from the sale of alcohol, then he's not off the hook," he said.
Trump would still have options, though, even if his hush-money conviction voided one or more of his liquor licenses.
In New York, Trump could ask for a certificate of relief from civil disabilities, Pierce said.
A "CRD," as it's called, would be issued by the judge at or after sentencing, and it can help someone with a conviction overcome certain licensing requirements.
If New Jersey determines that Trump's hush-money conviction disqualifies him as a licensee, as it's a crime of "moral turpitude," Trump could divest from the LLC that owns the license, said Fay, the former prosecutor at the division's enforcement bureau.
"As I understand, it involves some sort of misrepresentations, so I would assume there's some fraud in that — so theoretically, it would be a moral turpitude crime," Fay said. "Then, yeah, the next option would be to divest his interest."
"People do tend to pass it on to other LLC members. Sometimes you'll see family members," said Fay. "But I would imagine this would be under some sort of close review at the ABC to make sure it's above board."
Trump could also have his lawyers make the case at a hearing before an administrative judge that his conviction does not qualify for license-revocation, Fay said.
Challenging the revocation could take months or years, during which the license would stay in place, Fay said.
"I don't imagine that will happen here," Fay said of a potential hearing. "There may be conversations that occur proactively, whether it's the golf courses or Trump himself, to take action to absolve himself of a potential issue."
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