NY files suit vs Trump, alleges charity misuse
NEW YORK CITY — New York’s attorney general filed a suit against US President Donald Trump and his three eldest children on Thursday, alleging “persistently illegal conduct” at the president’s personal charity and saying that Trump had repeatedly misused the nonprofit organization to pay off his businesses’ creditors, to decorate one of his golf clubs and to stage a multimillion-dollar giveaway at 2016 campaign events, according to a report in The Washington Post.
In the suit, Attorney General Barbara Underwood asked a state judge to dissolve the Donald J. Trump Foundation.
Underwood asked that its remaining $1 million in assets be distributed to other charities and that Trump be forced to pay at least $2.8 million in restitution and penalties, The Post added.
Underwood also asked that Trump be banned from leading any other New York nonprofit organization for 10 years — seeking to apply a penalty usually reserved for the operators of small-time charity frauds to the president of the United States, The Post added in its report.
The allegations of sweeping misuse by Trump of his personal foundation came on the same day that he faced another legal setback, with the rejection by an appeals court in New York of his request to halt a defamation lawsuit filed by a former “Apprentice” contestant. That decision leaves open the possibility that Trump could be deposed in the case.
Meanwhile, Underwood sent letters to the Internal Revenue Service and the Federal Election Commission in which she identified what she called “possible violations” of tax law and federal campaign law by Trump’s foundation.
The claims in the New York attorney general’s suit could trigger tax penalties by the IRS, according to tax-law experts, who noted that the Justice Department can also bring criminal charges when prosecutors believe tax-law violations are “willful.”
Marc Owens, a former head of the IRS’s nonprofit division, called the suit “an extraordinary catalogue of how not to run a private foundation. There’s little else [Trump] could have done that would have made it worse.”
Underwood did not run for her office; she was promoted to attorney general just weeks ago, succeeding Eric Schneiderman after he resigned following allegations that he had physically abused several romantic partners.
Trump responded to the suit by calling it politically motivated.
“Schneiderman, who ran the Clinton campaign in New York, never had the guts to bring this ridiculous case, which lingered in their office for almost two years,” Trump wrote on Twitter. “Now he resigned his office in disgrace, and his disciples brought it when we would not settle.”
Amanda Miller, a spokeswoman for Trump’s company, echoed Trump’s assertion that the suit was politically driven, saying: “This is politics at its very worst.”
Underwood declined to comment on the case beyond issuing a written statement.
“As our investigation reveals, the Trump Foundation was little more than a checkbook for payments from Mr. Trump or his businesses to nonprofits, regardless of their purpose or legality,” she said in the statement.
In the suit, Underwood noted that Trump had paid more than $330,000 in reimbursements and penalty taxes since 2016. But she asked the judge to require Trump to pay millions more.
She said a 20-month state investigation found that Trump had repeatedly violated laws that set the ground rules for tax-exempt foundations — most important, that their money is meant to serve the public good, not to provide private benefits to their founders, The Post reported.