NY lawsuit alleges Trump used his foundation’s assets to pay legal obligations, promote hotels

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The New York attorney general’s office announced Thursday that it is alleging illegal conduct by the Donald J. Trump Foundation in a lawsuit that also names as defendants the president and his three adult children.

The suit alleges Trump used the foundation’s charitable assets to pay off legal obligations, promote his hotels and other business interests, and buy personal items, according to a press release. The suit also claims the foundation used its name and funds to promote his presidential campaign.

The suit seeks to dissolve the foundation, and to bar Trump and his children from serving on nonprofit boards. Restitution of $2.8 million and additional penalties are also sought. The Washington Post, the New York Times and Politico have coverage.

The state has also sent referral letters to the Internal Revenue Service and the Federal Election Commission.

In a series of tweets, Trump blasted the lawsuit as a “ridiculous case” brought by “sleazy New York Democrats.”

The suit says the foundation has violated state and federal law governing charities for more than a decade, with no oversight from a functioning board of directors. Its operations were delegated to the accounting office of the Trump Organization, and the last time the board met was in 1999, the suit says.

“In the absence of a functioning board, Mr. Trump ran the foundation according to his whim, rather than the law,” the suit says.

The suit says a televised Iowa fundraiser for veterans in January 2016 was actually a Trump campaign event, and $2.8 million of the $5.6 million raised went to the foundation rather than veterans groups. The foundation ceded control of those funds to Trump campaign staff, who timed donation announcements, decided on the grant recipients and presented some of the checks at campaign events, the suit says.

Among the alleged misspending:

  • Foundation money covered the $10,000 cost of a Trump portrait hanging in one of his golf clubs.
  • The foundation paid $100,000 to a charity to settle a dispute between Trump’s Mar-a-Lago resort and the city of Palm Beach, Florida.
  • The foundation paid $158,000 to a charity to settle a claim by a golfer who said he wasn’t paid $1 million offered in a hole-in-one golf fundraiser.

Trump has already paid more than $330,000 in reimbursements and penalty taxes.

Trump founded the charity and served as its president through January 2017. Besides Trump, the individual defendants are Donald Trump Jr., Ivanka Trump and Eric Trump. The three children served on the board of directors.

The suit was filed by New York Attorney General Barbara Underwood, who replaced Eric Schneiderman after he resigned last month amid allegations of physically abusing women he was dating.

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