New York Attorney General Sues Trump Foundation, Trump Family Over Self-Dealing

President Donald Trump takes questions from reporters before departing the White House to head to the G7 SummitPresident Donald Trump departs the White House, Washington DC, USA - 08 Jun 2018
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New York Attorney General Barbara Underwood filed suit against the Trump Foundation, President Donald Trump, his sons Donald Jr. and Eric and his daughter Ivanka, alleging illegal coordination with the Trump campaign, self-dealing transactions to benefit his business and violations of laws governing non-profits.

“As our investigation reveals, the Trump Foundation was little more than a checkbook for payments from Mr. Trump or his businesses to nonprofits, regardless of their purpose or legality,” Underwood said in a statement. “This is not how private foundations should function and my office intends to hold the Foundation and its directors accountable for its misuse of charitable assets.”

The lawsuit claims that the Trump Foundation “is little more than an empty shell that functions with no oversight by its board of directors.” It claims that the board, which includes Trump’s children, has not met since 1999 and “does not oversee the activities of the Foundation in any way.” It alleges a “pattern of persistent illegal conduct.”

Underwood’s suit claims that the foundation’s charitable assets were used to pay off Trump’s legal obligations, promote his hotels and to buy personal items. The foundation also was used to support and promote Trump’s presidential campaign, according to the lawsuit. It claims that the foundation came to be “co-opted” by the campaign.

Specifically cited is the time that Trump declined to participate in a presidential debate in advance of the Iowa caucuses and instead held a fundraiser for veterans on Jan. 28, 2016. Corey Lewandowski, then Trump’s campaign manager, dictated the timing, amounts and recipients of grants from the event, according to the lawsuit, and other campaign officials were involved in the preparations. Trump presented enlarged copies of checks to veterans groups at campaign events.

The lawsuit, filed in the Supreme Court of the State of New York, calls for enjoining Trump from serving as an office, director of trustee of a nonprofit in the state for the next ten years, and for his children to be barred for the next year. It also calls for Trump to pay up to double the amount of benefits “improperly obtained through self-dealing transactions” after July 1, 2014, and for dissolving the foundation, among other things.

“In the absence of a functioning board, Mr, Trump ran the foundation according to his whim, rather than the law,” the lawsuit states, adding that Trump was the sole signatory on bail accounts and approved all grants and disbursements.

The litigation also states that in at least five instances, the foundation engaged in self-dealing transactions that benefited Trump. Those included a $10,000 payment at a charity auction to buy a painting of Trump that was displayed at Trump’s golf club in Doral, Fla. The Washington Post’s David Fahrenthold first reported on the payment. The foundation paid excise taxes on three of the transactions and Trump restored funds to the foundation, but excise taxes have not been paid in two cases, Underwood’s office said.

Underwood’s office also said that she sent referral letters to the IRS and the Federal Election Commission, identifying possible areas of federal law for further investigation.

Trump responded quickly on Twitter.

“The sleazy New York Democrats, and their now disgraced (and run out of town) A.G. Eric Schneiderman, are doing everything they can to sue me on a foundation that took in $18,800,000 and gave out to charity more money than it took in, $19,200,000. I won’t settle this case!…….

He added, “Schneiderman, who ran the Clinton campaign in New York, never had the guts to bring this ridiculous case, which lingered in their office for almost 2 years. Now he resigned his office in disgrace, and his disciples brought it when we would not settle.”

Trump was referring to Underwood’s predecessor, Eric Schneiderman, who resigned last month amid allegations of sexual harassment and assault.