A lawsuit seeking $2.8 million in restitution plus additional penalties was filed against the Donald J. Trump Foundation and its directors by the New York Attorney General’s office today. The foundation’s directors refer to President Donald J. Trump and three of his children: Donald J. Trump, Jr., Ivanka Trump, and Eric Trump. The lawsuit also seeks to dissolve the foundation under special court supervision.
A Trump spokesperson described the filing as “politics at its very worst.”
The lawsuit was filed in the Supreme Court of the State of New York in New York County which, unlike supreme courts in many states, is not the state’s high court. It alleges that the foundation raised more than $2.8 million in a manner that sought to influence the 2016 presidential election. The dollars were fundraised during a televised event Trump held in January of 2016 in lieu of participating in a debate prior to the Iowa Caucuses.
The timing, amounts, and recipients of grants were allegedly dictated by campaign staff, including Corey Lewandowski, then-campaign manager, in violation of state and federal law. At least five grants of $100,000 were reportedly made to Iowa organizations in the days leading up to the caucuses.
President Trump has made all decisions related to the foundation, according to the suit, with no approval of policies or grants by the board of directors. An investigation has shown that the board of directors has not met since 1999. A 2016 report by CNN revealed that, per tax records, then-candidate Trump had not made a personal donation to the foundation since 2008.
The foundation allegedly made at least five transactions that were illegal, however, because they benefited the president’s business or personal interests. These include a $158,000 payment to settle claims against Trump National Golf Club and $100,000 to settle legal claims against his Mar-A-Lago resort. Funds were restored to the foundation for all alleged self-dealings following the beginning of the investigation, but excise taxes reportedly remain unpaid for the two expenditures made to settle legal claims.
“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,” said Attorney General Barbara Underwood 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.”
A request for comment relating to proceeding steps and whether the lawsuit marks the conclusion of Underwood’s investigation into the foundation was not returned prior to publication.
The suit further seeks a court order finding that the foundation’s directors breached their fiduciary duties and must reimburse the foundation for self-dealings and pay penalties of up to double the benefit received. It further seeks to enjoin President Trump from serving as a director, officer, or trustee of a nonprofit incorporated or conducting business in New York for 10 years and each of the other directors for one year or until he or she receives training on fiduciary service. The office has also sent referral letters to the Federal Election Commission and Internal Revenue Service that detail why Underwood believes further investigation and potential legal action is warranted by the two authorities.
In a statement, the Trump Organization attributed the timing of the announcement to coincide with today’s Inspector General’s report on the Hillary Clinton email investigation and President Trump’s recent diplomatic meeting with North Korean leader Kim Jong-un. It notes that the foundation has sought to dissolve and distribute $1.7 million in remaining dollars for the past 18 months, but has been unable to due to the investigation.
The statement particularly focuses on the political leaning and aspirations of former New York Attorney General Eric Schneiderman, alleging that he had focused on the Donald J. Trump Foundation as opposed to potential misconduct by the Clinton Foundation. It points to Schneiderman’s announcement of the investigation less than two months prior to the 2016 presidential election while, at the same time, serving on Clinton’s New York leadership council. The statement repeatedly refers to Schneiderman, who resigned last month following allegations that he abused romantic partners, as “disgraced.”
The statement adds that President Trump has “either himself, or through his wholly-owned companies” donated over $8.2 million to the foundation and that the remaining $1.7 million has been “held hostage” by the New York Attorney General’s office. Donations are otherwise prepared for The Children’s Aid Society, New York City Police Foundation, United Negro College Fund, and United States Holocaust Memorial Museum, among others.
“This is unconscionable – particularly because the foundation previously announced its intention to dissolve more than a year and a half ago,” a Trump Foundation spokesperson said in an email. “The prior NYAG, who was recently forced to resign from office in disgrace, made it his stated mission to use this matter to not only advance his own political goals, but also for his own political fundraising. The acting NYAG’s recent statement that battling the White House is ‘the most important work [she] have ever done’ shows that such political attacks will continue unabated.”