Democrats’ proposed state operations budget could enable New York Attorney General Letitia James to use taxpayer funds for personal legal expenses resulting from a possible Trump administration investigation.
If passed, the state operations budget would create a $10 million fund to reimburse employees for the cost of retaining “private counsel” in response to legal actions initiated by the federal government after Jan. 1, 2025 in connection with their state employment, according to the bill text. In April, the Federal Housing Finance Agency (FHFA) referred James to the Department of Justice (DOJ) for a potential probe related to allegations of mortgage fraud involving a Virginia residence first reported by White Collar Fraud.
The FBI opened a formal investigation into the matter on Thursday, according to the Times Union. (RELATED: Does Tish James Live In Her Two Houses 500 Miles From Albany? We Knocked On Doors To Find Out.)
The fund included in the proposed budget can also be used for issues “unrelated” to their employment but “reasonably likely to have been commenced” due to their work.
To determine whether a legal action against the attorney general is related to her employment, Democratic New York Gov. Kathy Hochul can consider factors like whether the attorney general has “previously initiated or otherwise participated in or supported a criminal or civil investigation or prosecution of the United States government or a United States government official,” according to the budget’s text.
Cam Macdonald, general counsel at the New York-based think tank The Empire Center, told the Daily Caller News Foundation this would appear to cover an investigation into James’ alleged mortgage fraud, noting the bill gives the governor “a long checklist of items to check off to justify the expense.”
Other factors Hochul may consider include whether the attorney general was “previously subjected to what could reasonably be construed to constitute discriminatory or retaliatory treatment by the United States government” or “holds or held a position or has taken action that is highly visible to the public or to the United States government.”
James prosecuted Trump ahead of the 2024 election, alleging in the September 2022 lawsuit that he overstated the value of his assets to obtain loans. She declined in December to drop the case that resulted in a $454 million civil fraud judgment.
The debt now tops $500 million due to interest Trump has accrued during his appeal, according to CBS News.
James promised to investigate Trump during her 2018 campaign. In November, she promised to continue pursuing Trump in court, even though he won the election.
James has filed several lawsuits against the Trump administration to block policies from taking effect.
NEW YORK, NEW YORK – FEBRUARY 14: NY Attorney General Letitia James speaks as Connecticut Attorney General William Tong (L) listens on during a press conference on the Department of Government Efficiency (DOGE) at Manhattan Federal Courthouse on February 14, 2025 in New York City. (Photo by Michael M. Santiago/Getty Images)
Abbe Lowell, who formerly represented Hunter Biden and is now representing James, called her referral to the DOJ “improper political retribution” in an April 24 letter to Attorney General Pam Bondi. Lowell recently launched a new law firm to back opponents of the Trump administration.
“The fact that Attorney General Letitia James is getting a $10 million taxpayer-funded bailout to cover her personal legal fees is an outrageous abuse of power and a slap in the face to every New Yorker struggling under the weight of inflation, high taxes and crumbling public services,” New York Republican Party Chair Ed Cox said in a statement.
“This is what corruption looks like in plain sight: political insiders rigging the system to protect their own, while hardworking families get shortchanged,” Cox continued. “Tish James used her office to wage partisan lawfare against her political opponents, and now New Yorkers are footing the bill for the consequences.”
New York Attorney General Letitia James did not respond to a request for comment.
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