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NY Attorney General Sues Trump Foundation for Various Law Violations


The New York State Attorney General has filed a lawsuit against President Donald Trump and the Donald J. Trump Foundation, alleging that both violated federal and state laws in the handling of charitable donations.  Those laws prohibit charitable foundations from participating in political activity and from using nonprofit charities to advance private interests.   Trump himself signed the foundation’s annual IRS filings, under penalty of perjury, attesting that the foundation did not engage in political activity. 

Allegations include the following.  In 2007 the foundation paid $100,000 to a charity called the Fisher House Foundation.  That payment settled a dispute between the City of Palm Beach and Trump’s Mar-a-Lago resort.  In 2012, a golfer sued Trump National Golf Club after he made a hole-in-one on hole 13 at a fund-raising golf tournament that promised to pay $1 million to any player who aced the 13th hole.  As part of a settlement, the Trump Foundation paid $158,000 to a foundation run by the golfer.  Some of the money was directed by Trump’s campaign manager to be disbursed in Iowa shortly before that state’s caucuses.  The foundation purchased personal items for Trump, including a $10,000 portrait of himself that hangs in one of his golf resorts. 

Additional allegations include the following. In January, 2016 Trump hosted a nationally televised fundraiser seeking donations for veterans’ organizations.  The event collected $5.6 million in contributions, including $2.8 million that was donated directly to the Trump Foundation. The fundraiser was planned, organized and financed by campaign staff, per the complaint in the lawsuit, and afterward campaign staff controlled the distribution of the money.  Additionally, the foundation is accused of donating $25,000 to a statewide candidate in Florida and then failed to disclose the contribution.

The foundation was established in 1987.  It is a nonprofit, private corporation with the stated mission of “collecting and maintaining money exclusively for charitable, religious, scientific, literary or educational purposes.”  The lawsuit alleges that the foundation has no employees and the board of directors has not met since 1999.  A board of directors is responsible to oversee the activities of an organization to ensure the organization is meeting its goals.  A board’s duties include setting the organization’s policies, objectives and overall direction; adopting by laws; and selecting officers/senior executives.  To fulfill its responsibilities, boards typically meet monthly or every other month.

Says the complaint, “In the absence of a functioning board, Mr. Trump ran the Foundation according to his whim, rather than the law,” individually approving grants and disbursements with no oversight from board members.”

There has been debate recently about presidential immunity, meaning freedom from  prosecution.  If it exists, it applies to criminal matters and to civil violations relating to conduct done in an official capacity, meaning related to the presidency.  Immunity does not apply to acts that are unrelated to a governmental role, or to conduct occurring before the commander-in-chief became president.  The claims by the New York Attorney General are civil matters that allegedly occurred before Trump ran for office.   

The lawsuit seeks $2.8 million in restitution and damages.  Additionally, the foundation and its directors could face several million dollars in additional penalties.  The Attorney General seeks to dissolve the foundation and require its principals to cooperate with the attorney general’s office in disbursing any remaining funds it holds.  The litigation also seeks to prevent President Trump from serving as a director, officer or trustee of another nonprofit for 10 years, and his three oldest children – Donald, Eric and Ivanka – from the boards of nonprofits based in New York for one year.  They had served on the foundation board from 2006 – 2017 although it never met after 1999.

The investigation began in 2016.  At that time the New York Attorney General’s office ordered the foundation to immediately stop soliciting charitable donations in New York.  Trump had sought to dissolve the foundation once the investigation began.  However, the law prohibits a foundation from dissolving while it is under investigation.