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Donald Trump

Donald Trump agrees to shut down his charity, accused of ‘a shocking pattern of illegality’ by New York attorney general

  • The Trump Foundation will dissolve and its funds be disbursed to other charities, as New York pursues a lawsuit over its ‘wilful self-dealing’
  • Trump seemingly used the charity for personal interests big and small, from fixing a fountain near his Plaza Hotel to paying his son’s US$7 Scout membership fee
PUBLISHED : Wednesday, 19 December, 2018, 5:20am
UPDATED : Wednesday, 19 December, 2018, 8:13pm

US President Donald Trump has agreed to shut down his embattled personal charity and to give away its remaining money amid allegations that he used the foundation for his personal and political benefit, New York Attorney General Barbara Underwood announced Tuesday.

Underwood said the Donald J. Trump Foundation is dissolving as her office pursues its lawsuit against the charity, Trump and his three eldest children.

The suit, filed in June, alleged “persistently illegal conduct” at the foundation, which Trump began in 1987. Underwood’s office is continuing to seek more than US$2.8 million in restitution and has asked a judge to ban the Trumps temporarily from serving on the boards of other New York non-profit organisations.

Underwood said Tuesday that her investigation found “a shocking pattern of illegality involving the Trump Foundation – including unlawful coordination with the Trump presidential campaign, repeated and wilful self-dealing, and much more”.

“This is an important victory for the rule of law, making clear that there is one set of rules for everyone,” she added in a statement.

The shuttering comes after The Washington Post documented apparent lapses at the foundation. Trump used the charity’s money to pay legal settlements for his private business, to purchase art for one of his clubs and to make a prohibited political donation.

Trump denied that the organisation had done anything wrong. In late 2016, he said he wanted to close the foundation, but the New York attorney general’s office blocked that move while it investigated.

The settlement with Underwood’s office represents a concession by Trump to a state investigation he has decried as a partisan attack. The case is one of numerous legal investigations of Trump organisations that have proliferated during his presidency.

New York sues Donald Trump and family, accusing charity of ‘illegal conduct’

In a court filing in New York, Underwood said the foundation’s remaining US$1.75 million would be distributed to other charities approved by her office and a state judge.

Alan Futerfas, an attorney for the Trump Foundation, issued a statement criticising Underwood for “politicising” the agreement.

“The Foundation has been seeking to dissolve and distribute its remaining assets to worthwhile charitable causes since Donald J. Trump’s victory in the 2016 Presidential election,” Futerfas said. “Unfortunately, the NYAG sought to prevent dissolution for almost two years, thereby depriving those most in need” of the foundation’s money, he said.

Futerfas said that, over its life, the foundation had given away about US$19 million, including US$8.25 million donated by Trump himself. The rest of the money came from other donors, notably pro-wrestling moguls Vince and Linda McMahon, who gave US$5 million. Linda McMahon was later chosen by Trump to head the Small Business Administration.

The attorney general’s suit alleges that Trump used his charity’s money as his own piggy bank – including to help his presidential campaign by paying for giveaways at Iowa rallies.

Is there any way we can make some disbursements … this week while in Iowa?
Trump campaign manager Corey Lewandowski

“The Foundation was little more than a checkbook for payments to not-for-profits from Mr Trump or the Trump Organisation,” Underwood wrote in the initial suit.

The Washington Post’s reporting showed that, for years, Trump appeared to use the foundation – which was, by law, an independent entity – to make payments that bolstered his interests.

The largest donation in the foundation’s history – a US$264,231 gift to the Central Park Conservancy in 1989 – appeared to benefit Trump’s business: it paid to restore a fountain outside Trump’s Plaza Hotel.

The smallest, a US$7 foundation gift to the Scouts that same year, appeared to benefit Trump’s family. It matched the amount required to enrol a boy in the Scouts the year that his son Donald Trump Jnr was 11.

The attorney general’s investigation turned up evidence that Donald Trump Jnr, Eric Trump and Ivanka Trump – all listed as officers of the charity – had never held a board meeting. The board hadn’t met since 1999. The charity’s official treasurer, Trump Organisation executive Allen Weisselberg, told investigators that he wasn’t aware that he was on the board.

Donald Trump used charity’s money to settle his businesses’ legal disputes

State investigators asked him how the foundation’s policies would determine whether its payments were proper.

“There’s no policy, just so you understand,” Weisselberg said.

At one point, Trump used the charity’s money to make a US$25,000 political donation to Florida Attorney General Pamela Bondi, a Republican. Instead of telling the IRS about that, as required, the organisation listed that donation as a gift to an unrelated charity in Kansas with a similar name. Trump’s team blamed accounting mistakes.

During the 2016 campaign, state investigators say, Trump effectively “ceded control” of his charity to his political campaign. He raised more than US$2 million at a fundraiser in Iowa that flowed into the foundation. Then, the state said, Trump campaign manager Corey Lewandowski determined when and where it would be given away.

“Is there any way we can make some disbursements … this week while in Iowa?” Lewandowski wrote in an email cited in Underwood’s lawsuit.

Trump gave away oversized cheques from the foundation at campaign events in the key early-voting states of Iowa and New Hampshire, pausing his campaign rallies to donate to local veterans’ groups.

Donald Trump charity bid US$10,000 on Trump portrait when no one else wanted it

Federal law prohibits charities from participating in political campaigns. As president, Trump has called repeatedly for that law to be repealed.

Underwood has asked the IRS to investigate whether the Trump charity broke tax laws. The IRS has declined to comment.

In his statement on Tuesday, Futerfas praised the foundation for operating with “virtually zero expenses”.

Indeed, the Trump Foundation had no paid employees.

It also spent very little on advice from lawyers. From 2001 to 2016, Trump’s charity spent a total of US$163 on legal fees – and, in many of those years, it spent nothing.

The demise of the Trump Foundation still leaves one mystery regarding a large portrait of Trump that he bought for US$20,000 in 2007, using money from the charity. What became of it after that is unknown.

In 2017, after The Washington Post wrote about the portrait, Trump listed it as an asset on his charity’s IRS forms. He assigned it a value of US$700. But he did not say where it was.

On this year’s tax forms, however, the painting’s value was listed at US$0. Trump’s attorney did not respond to a query about why.