President Donald Trump’s long ago dispute with Palm Beach over the American flag flying over Mar-a-Lago came back to skewer the real estate tycoon Thursday when New York’s top law enforcer said it exemplified how Trump misused millions of dollars from his charitable foundation to pay off personal, business and political debts.
“Mr. Trump ran the foundation according to his whim, rather than the law,” New York Attorney General Barbara Underwood said in a 41-page lawsuit she filed against Trump, two of his children, Eric and Ivanka, and the Donald J. Trump Foundation in the Supreme Court of New York in Manhattan.
Underwood is asking a judge to shutter the foundation, to prohibit Trump from being involved in any New York charity for 10 years and to order the nation’s commander in chief to pay $5.6 million — double the $2.8 million in foundation funds she claims he used for his own benefit.
The lawsuit, that capped a two-year investigation, revealed more than a dozen examples of “improper and extensive political activity, repeated and willful self-dealing transactions, and failure to follow basic fiduciary obligations,” she wrote.
“Mr. Trump used charitable assets to pay off the legal obligations of entities he controlled, to promote Trump hotels, to purchase personal items and to support his presidential election campaign,” she said.
In a tweet, Trump blasted the investigation, noting that it began under Attorney General Eric Schneiderman, who resigned in May after four women accused him of physical abuse.
“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,” Trump wrote on his Twitter missive. “I won’t settle this case!…”
The violations Underwood cited were numerous and varied. They range from using foundation money to improperly contribute $25,000 to Florida Attorney General Pam Bondi’s 2014 campaign to pretending an event held before the 2016 Iowa caucuses was a fund-raiser for veterans when it was clearly to promote his presidential bid.
She used Trump’s flagpole fight with Palm Beach as an example of how he illegally used foundation money to settle personal and business lawsuits. Federal and state laws prohibit charity officials from using contributions to benefit themselves or their businesses - a process known as “self-dealing.”
When Trump in 2007 settled a $25 million lawsuit he filed against the town after it cited and fined him for erecting a flagpole at Mar-A-Lago that was nearly twice as high as allowed and doing so without a permit, he agreed to donate $100,000 to charity. He and town officials agreed the money would go to the Fisher House Foundation, which provides lodging for families of vets who are hospitalized.
However, Underwood said, instead of dipping into personal funds or Mar-A-Lago’s accounts, Trump wrote a check to Fisher House using foundation money. A handwritten note, included in the lawsuit, shows Trump personally directed his accountant to take money from the foundation to settle the “flag issue in Palm Beach.”
He used the same tact when he settled a lawsuit a golfer filed against The Trump National Golf Club in Westchester County, N.Y. Martin Greenberg sued after he hit a hole-in-one on the 13th hole in a charity golf tournament and the club refused to award him the $1 million prize.
Ultimately, Trump agreed to settle the lawsuit by contributing $158,000 to Greenberg’s foundation. But, Underwood said, in another example of self-dealing, Trump used foundation money instead of pulling cash out of his own wallet.
As another example of self-dealing, Underwood pointed out, was the use of foundation money to pay $10,000 for a 4-foot-tall painting of Trump that was auctioned off during a 2014 gala at Mar-A-Lago to benefit the Unicorn Children’s Foundation.
A lengthy — and complicated — part of the lawsuit deals with the machinations of funneling money to Bondi.
While the foundation in 2013 sent a $25,000 check to Bondi’s election committee, “And Justice For All,” Trump Organization officials said they were uncertain whether the money went to a Utah charity with the same name or a Kansas nonprofit named simply “Justice for All.”
After the watchdog group, Citizens for Responsibility and Ethics in Washington, complained to the IRS that foundation money had been used for a political contribution, Trump reimbursed the foundation for the $25,000 donation to Bondi.
Still, Underwood claimed, even if the illegal contribution to Bondi was “an inadvertent mistake by the Trump Organization,” as Trump claimed, it underscores the lack of oversight and training at the foundation.
She said she planned to notify the Internal Revenue Service and the Federal Election Commission of the results of her investigation so they can determine whether the foundation violated federal laws.
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