New York’s attorney general filed suit against President Donald Trump and his three eldest children on Thursday, alleging ‘persistently illegal conduct’ at the president’s personal charity.
The suit is filled with scathing charges against the president and his management of his self-named non-profit. It includes allegations of violations of campaign finance laws and illegal coordination with Trump’s presidential campaign.
Prosecutors charge Trump with repeatedly misusing the nonprofit to pay off his businesses’ creditors, to decorate one of his golf clubs and to stage a multimillion dollar giveaway at his 2016 campaign events.
In the suit, filed Thursday morning, New York Attorney General Barbara Underwood asked a state judge to dissolve the Donald J. Trump Foundation, according to The Washington Post.
She asked that its remaining $1 million in assets be distributed to other charities and that Trump be forced to pay at least $2.8 million in restitution and penalties.
Trump slammed the suit in series of tweets made almost immediately after knowledge of it became public.
He charged ‘sleazy’ Democrats with coming after him.
‘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 wrote.
Underwood was promoted to attorney general a fews weeks ago, succeeding Schneiderman after he resigned following allegations that he had physically abused some of his romantic partners.
She is a career staffer, not an elected official, who vowed not to seek election for a full term in the job this fall.
Given the two-year length of the investigation, a majority of it was conducted under Schneiderman, who took office in 2011.
Trump focused on the disgraced politiican in his push back.
‘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,’ he wrote.
It’s unclear what Trump was referring to when he wrote Schneiderman ran the Clinton campaign in New York.
Schneiderman was New York attorney general during the 2016 campaign. He and Clinton are both Democrats.
During that contest, his office called on Trump’s foundation to cease and desist fundraising activities in the state as the charity was under investigation for its spending.
Trump’s campaign called for a similar investigation of the Clinton Foundation and said Schneiderman was a ‘partisan hack.’
Schneiderman said concerns about the Clinton Foundation’s fundraising did not rise to the level of an investigation.
Back in 2016, critics of the Clinton Foundation waned a probe of the millions of dollars from individuals who met with the then-secretary of state after either donating or promising to donate to the non-profit, which included funding from foreign governments.
Schneiderman said the rules for reporting government funds have not been found to apply to foreign governments.
In the suit against the Donald J. Trump Foundation, Underwood also asked that Trump be banned from leading any other New York nonprofit for 10 years. It’s a penalty usually reserved for the operators of small-time charity frauds.
Donald Trump Jr., Ivanka Trump and Eric Trump were also named in the lawsuit because they have been official board members of the Donald J. Trump Foundation for years.
The foundation and its directors could face several million dollars in additional penalties, depending on how the court rules.
Prosecutors also want to bar Trump’s three eldest children from the boards of nonprofits based in New York or that operate in New York for one year.
That could force the children to cut ties with a variety of groups, including charities of their own.
They were named, Underwood wrote, because board members are supposed to scrutinize spending for signs that its leader — in this case that was their father — was misusing the funds.
She charged they exercised no such oversight. The board had not met since 1999.
‘The Foundation is little more than an empty shell that functions with no oversight by its board of directors,’ the lawsuit states. ‘In the absence of a functioning board, Mr. Trump ran the Foundation according to his whim, rather than the law.’
The investigation came after The Washington Post launched a probe of Trump’s charity, writing several articles on the subject during the presidential contest.
Underwood said their 20-month investigation, which began in June 2016, found Trump repeatedly violated laws that set the ground rules for tax-exempt foundations and his biggest violation was that donor money is meant to serve the public good – not to provide private benefits to the charity’s founders.
‘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 to The Post.
She also sent referral letters to the Internal Revenue Service and the Federal Election Commission for possible further action, adding more weight to the legal troubles the president faces.
She noted in her letters to those agencies there could be ‘possible violations’ of tax law and federal campaign law.
Trump is already under investigation by special counsel Robert Mueller on whether he obstructed justice in the probe of Russia’s role in the 2016 election.
Now he faces more legal problems because of his charity.
Trump founded his charity to give away some of the royalties from his 1987 book ‘The Art of the Deal.’
But he did not give it any money between 2008 and 2015. It’s largest donors are wrestling moguls Vince and Linda McMahon, who gave $5 million total in 2007 and 2009. Linda McMahon was appointed by Trump as head of the Small Business Administration.
Underwood charged the nonprofit was essentially one of Trump’s personal checkbooks — a pool of funds that his clerks knew to use whenever Trump wanted to pay money to a nonprofit.
Legally, Trump isn’t allowed to buy things for himself using the charity’s money, even if he was buying them from nonprofits.
The suit also lists some of the questionable expenses made by the charity, including a $10,000 on a portrait of Trump that was hung at one of his golf clubs.
And twice Trump used the charity’s money to settle legal claims against his businesses.
In 2007, he settled a dispute with the town of Palm Beach, Florida, over code violations at his Mar-a-Lago estate. The town agreed to waive outstanding fines if Mar-a-Lago gave $100,000 to the charity Fisher House.
But the donation came from the foundation and not the estate, prosecutors charged after Trump wrote a note requesting the move.
In 2012, a Trump golf club agreed to pay $158,000 to settle a lawsuit with a man who was denied a $1 million hole-in-one prize during a tournament at the club. The Trump Foundation paid the money instead of the club.
In March, after the attorney general’s investigation was underway, Trump repaid his foundation all $258,000, plus more than $12,000 in interest, the suit notes.
Underwood said Trump had already repaid amounts spent by the foundation, plus penalty taxes totaling more than $4,000.
In the case of the portrait, she said Trump’s golf club paid the foundation the ‘fair rental value’ of using the foundation-owned painting as decoration. The value: $182.
IRS rules also prohibit tax-exempt foundations from aiding political campaigns.
But Underwood cited two instances where Trump’s foundation had seemed to do so.
In August 2013, Trump donated $25,000 from his foundation to a Florida political group aiding the reelection of state Attorney General Pam Bondi. Around that time, Bondi’s office was considering whether to join an ongoing lawsuit by then-New York AG Schneiderman, alleging Trump had defrauded students at his now-defunct ‘Trump University.’
The Trump Foundation omitted any mention of Bondi’s political group from its annual report to the IRS and instead said the $25,000 donation had gone to a nonprofit in Kansas with a similar-sounding name.
Underwood said Trump’s staff blamed confusion among accounting clerks for spending the foundation’s money, instead of Trump’s own. As for the incorrect IRS filing, Underwood wrote, ‘the Foundation has no credible explanation for the false reporting of grant recipients.’
Trump repaid the $25,000 and paid a penalty tax of $2,500 for an improper political gift after it came to light in a Washington Post investigative series on the Donald J. Trump Foundation during the 2016 campaign.
However, Underwood charges that the campaign Trump’s foundation helped most was his own.
In January 2016, Trump skipped a debate among Republican presidential candidates because he was feuding with debate host Fox News. Instead, he held a televised fundraiser for veterans — bringing in millions from wealthy friends and small-dollar donors, much of which went to his foundation.
Underwood charged ‘the Foundation ceded control over the charitable funds it raised to senior Trump Campaign staff.’
She cited emails in which Corey Lewandowski, then-campaign manager, directed which veterans’ charities should receive money.
The Trump Foundation has been in legal limbo since after the election, when the president wanted to dissolve it amid growing controversy about its practices. But the foundation could not legally dissolve while it was under investigation, the New York attorney general ruled.
New York has jurisdiction over the Trump Foundation because the charity is based at Trump Tower in Manhattan and registered in New York State.
Trump has been president of the foundation since he founded it in 1987.