Charity sues after high bidder fails to pay for Trump portraits

Updated March 22, 2018
Artist Michael Israel with paintings he did of President Donald Trump and First Lady Melania Trump that were auctioned at The Truth About Israel (Photo by Steven Alembik)

When a wealthy Naples businessman reneged on his promise to pay $21,530 for 6-foot-tall paintings of President Donald Trump and first lady Melania Trump at a gala charity auction at Mar-a-Lago last month, the nonprofit sponsoring the auction, The Truth About Israel, filed suit.

Timothy Lane, 70-year-old CEO of the Hong Kong-based Everest Advisors, “is in breach of his agreement with The Truth About Israel to allow it to charge his American Express credit card for the purchase of the two paintings,” attorney Jonathan Bloom wrote in the lawsuit filed last week in Palm Beach County Circuit Court.

But Lane, who has served as a chief executive of various global companies during his decades-long career, insists he didn’t stiff the charity maliciously or because he had second thoughts about the artwork. Rather, he said he became suspicious when the organization couldn’t give him its federal tax identification number so he could write off the purchase as a charitable deduction.

“I asked for the tax-exempt number for tax purposes,” Lane recently told the Palm Beach Daily News. “They couldn’t give it to me. Nobody seemed to know what it was or where it was, so I told them not to run the credit card until I had the number. I’m still waiting.”

Boca Raton businessman Steven Alembik, who organized the Feb. 25 benefit for The Truth About Israel, insisted the group is a legitimate nonprofit. He scoffed at the claims Lane made in a Palm Beach police report.

On March 8, the Internal Revenue Service approved the organization’s tax-exempt status and assigned it a federal identification number, according to a letter Alembik sent The Palm Beach Post. It doesn’t matter that the number was issued after the gala, Alembik insisted.

“The tax ID has been provided to him,” Alembik said. “He can come up with all the excuses he wants. At the end of the day, he’s going to pay. He’s going to court and he’s going to lose.”

Bloom agreed. “It’s a contract,” the attorney said of the paperwork Lane signed.

Richard Rampell, a Palm Beach certified public accountant, said the IRS letter, even issued after the fact, is enough to get Lane a tax deduction. However, he said, Lane won’t be able to deduct the full $21,530 he agreed to pay for the two paintings anyway.

When people buy goods at charity auctions, they can only deduct the difference between the amount they paid and what an appraiser says an item is worth. If an appraiser sets the fair market value of the artwork at $21,530, Lane wouldn’t be able to claim the purchase as a donation to charity, he said.

Self-described “speed artist” Michael Israel, who did the Trump paintings and delighted the roughly 500 gala guests by producing other huge pieces of art in five or six frantic minutes, said he’s performed all over the world and never had a high bidder fail to pay up.

“It’s extremely rare for this to happen,” Israel said.

But it isn’t the first time a painting Israel did of Trump has created controversy. During the real estate tycoon’s 2016 presidential campaign, The Washington Post reported that Trump in 2007 paid $20,000 for a giant portrait Israel painted of him during another charity gala at Mar-a-Lago.

The purchase raised questions because records showed he paid for it and other personal items with funds from the Donald J. Trump Foundation. Tax experts said he may have violated laws that prohibit tax-exempt organizations from engaging in “self-dealing” by purchasing goods with contributions to the foundation. On tax returns, the newspaper reported that Trump’s accountants admitted as much by checking a box, admitting assets were transferred to what the IRS deems a “disqualified person.”

Alembik said Lane’s failure to pay for the Trump paintings at the recent gala hurt his efforts to raise money for The Truth About Israel, which was founded by Daniel Ayalon, the former Israeli ambassador to the United States, and is dedicated to educating the world about the Jewish state. As part of his contract, the artist Israel doesn’t charge for his performance but instead shares in the money raised from auctioning off his artwork.

“If the guy reneges, the charity has to pay for it,” Alembik said. He declined to reveal how much was raised at the event, saying only: “Not enough.”

Although he built a successful data resource company, Alembik said he was new to party planning. “I’ve never thrown so much as a birthday party before,” he said.

But he said that after 22 people were killed in a ISIS-fueled suicide attack outside an Ariana Grande concert in Manchester, England, in May, he wanted to do his part to stop terrorism. Longtime friends with Ayalon and familiar with the work of Ayalon’s group, Alembik said he hatched the idea of holding a benefit fundraiser in September to mark the 45th anniversary of the kidnapping and murder of 11 Israeli athletes at the 1972 Munich Olympics.

When those plans were delayed, he decided to hold it at Mar-a-Lago in rebuke of charities that were then planning to boycott the club to protest Trump’s controversial statements about a racially charged rally in Charlottesville, Va., that left one woman dead.

Alembik said he was criticized for his selected venue. But he said he voted for Trump and still supports him. “This president has Israel’s back like no other president since Ronald Reagan,” he said.

Still, he didn’t anticipate such controversy. “This was strictly a goodwill thing — for Israel and for Danny,” he said.