Trump char­ity faces new ques­tions

State AG of­fice says mogul’s foun­da­tion not cer­ti­fied in N.Y.

Baltimore Sun - - ELECTION 2016 - By David A. Fahren­thold

WASH­ING­TON — Don­ald Trump’s char­i­ta­ble foun­da­tion, which has been sus­tained for years by donors out­side the Trump fam­ily, has never ob­tained the cer­ti­fi­ca­tion that New York re­quires be­fore char­i­ties can so­licit money from the pub­lic, ac­cord­ing to the state at­tor­ney gen­eral’s of­fice

Un­der the laws in New York, where the Don­ald J. Trump Foun­da­tion is based, any char­ity that so­lic­its more than $25,000 per year from the pub­lic must ob­tain a spe­cial kind of regis­tra­tion be­fore­hand. Char­i­ties as large as Trump’s must also sub­mit to a rig­or­ous an­nual au­dit that asks — among other things — whether the char­ity spent any money for the per­sonal ben­e­fit of its of­fi­cers.

If New York At­tor­ney Gen­eral Eric Sch­nei­der­man finds that Trump’s foun­da­tion raised money in vi­o­la­tion of the law, he could or­der the char­ity to stop rais­ing money im­me­di­ately. With a court’s per­mis­sion, Sch­nei­der­man could also force Trump to re­turn money his foun­da­tion has al­ready raised.

The Trump cam­paign did not re­spond to a re­quest for com­ment Thurs­day.

Sch­nei­der­man’s of­fice de­clined to com­ment on whether it was in­ves­ti­gat­ing the lack of regis­tra­tion for the Trump Foun­da­tion. Sch­nei­der­man had pre­vi­ously launched an in­ves­ti­ga­tion of the foun­da­tion in the wake of re­ports that Trump used his char­ity’s money to make a po­lit­i­cal gift, to buy paint­ings of him­self and to set­tle le­gal dis­putes in­volv­ing his for-profit busi­nesses.

Tax fil­ings show that in each of the last 10 years for GOP pres­i­den­tial nom­i­nee Don­ald Trump, whose foun­da­tion may have raised money in vi­o­la­tion of New York law, ad­dresses sup­port­ers at a rally Thurs­day in Bed­ford, N.H. which there are records, the Trump Foun­da­tion raised more than $25,000 from out­siders. Tax records alone do not re­veal whether the do­na­tions amounted to so­lic­i­ta­tions un­der New York law, but in sev­eral cases there is strong ev­i­dence that they did.

For in­stance, the foun­da­tion has re­ceived more than $2.3 mil­lion from com­pa­nies that owed money to Trump or one of his busi­nesses — but that were in­structed to pay the foun­da­tion in­stead, ac­cord­ing to peo­ple fa­mil­iar with those trans­ac­tions.

In the most ob­vi­ous ex­am­ple of a pub­lic so­lic­i­ta­tion, the Trump Foun­da­tion set up a web­site this year to col­lect small-dol­lar do­na­tions that it promised to pass along to vet­er­ans. In all, the web­site said, the Trump Foun­da­tion took in $1.67 mil­lion through that site.

But, as of this week, the Trump Foun­da­tion had not ob­tained the state regis­tra­tion re­quired to ask for do­na­tions, ac­cord­ing to a spokesman for Sch­nei­der­man.

Ex­perts on char­ity law said they were sur­prised that Trump’s foun­da­tion — given its con­nec­tions to a wealthy man and his com­plex cor­po­ra­tion — did not reg­is­ter to so­licit funds.

“He’s a bil­lion­aire who acts like a thou­sandaire,” said James Fish­man, a pro­fes­sor at Pace Uni­ver­sity’s law school in White Plains, New York. He said Trump’s foun­da­tion seemed to have made er­rors that were more common among small fam­ily foun­da­tions.

“You wouldn’t ex­pect some­body who’s sup­posed to be so­phis­ti­cated, and brags about his busi­ness prow­ess, would run his foun­da­tion like this,” Fish­man said.

The Trump Foun­da­tion was es­tab­lished by Trumpin 1987 to give away the pro­ceeds of his book “The Art of the Deal.” Trump is still the foun­da­tion’s pres­i­dent.

For many years, Trump was the foun­da­tion’s sole donor: He gave a to­tal of $5.4 mil­lion between 1987 and 2006.

Un­der state law, the foun­da­tion dur­ing that pe­riod was re­quired to have only the least-de­mand­ing kind of cer­ti­fi­ca­tion, re­ferred to as “EPTL,” be­cause it is gov­erned by the Es­tates, Pow­ers and Trusts Law.

Un­der that regis­tra­tion, the Trump Foun­da­tion filed an­nual re­ports with the IRS and the state. But the state did not re­quire an in­de­pen­dent au­dit to en­sure that the char­ity was han­dling its funds prop­erly.

But start­ing in the early 2000s, Trump’s foun­da­tion be­gan to change. It be­gan to take in do­na­tions from other peo­ple.

At first, it hap­pened a lit­tle bit at a time. In 2004, for in­stance, an au­to­graph seeker sent $25 to Trump Tower, along with a book he wanted Trump to sign. The book came back signed. The money was de­posited in the Trump Foun­da­tion.

Then, the gifts be­gan to get larger.

In 2005, Trump’s wife, Me­la­nia, was named “God­mother” of a new ship launched by Nor­we­gian Cruise Lines. As part of its agree­ment with Me­la­nia Trump, the cruise lines said, it gave $100,000 to the Trump Foun­da­tion.

In the mean­time, Trump dras­ti­cally re­duced his gifts. Af­ter 2008, tax records show he stopped giv­ing al­to­gether. Since then, ac­cord- ing to tax records, the Trump Foun­da­tion has re­ceived all of its in­com­ing money — more than $4.3 mil­lion — from other donors.

Un­der state law, char­i­ties that so­licit do­na­tions from oth­ers in New York must reg­is­ter un­der a dif­fer­ent law, called “7A” for its ar­ti­cle head­ing.

In that law, the def­i­ni­tions of “so­licit” and “in New York” are both broad. So­licit means “to di­rectly or in­di­rectly make a re­quest for a con­tri­bu­tion, whether ex­press or im­plied, through any medium.”

“The only t hing it wouldn’t cover is some­body giv­ing money with­out be­ing asked,” said Pamela Mann, a for­mer head of the New York State char­i­ties bu­reau, who is now in pri­vate prac­tice at Carter Led­yard & Mil­burn. “The law says that so­lic­it­ing from the pub­lic in New York, with­out be­ing registered to do so, is an il­le­gal act.”

The Trump Foun­da­tion has re­ceived more than $25,000 from peo­ple other than Trump in all of the last 10 years shown in tax records.

In sev­eral cases, re­port­ing by The Wash­ing­ton Post has in­di­cated that the Trump Foun­da­tion or Trump him­self did help bring in the money.

Then, this year, Trump skipped a Repub­li­can pri­mary de­bate in Iowa and in­stead held a tele­vised fundraiser for vet­er­ans’ causes. As part of that ef­fort, he set up a web­site, www.don­aldtrump­, which took do­na­tions via credit card — and sent them to the Don­ald J. Trump Foun­da­tion.

“Over 1,670,000 raised on­line,” said the thank-you mes­sage from the Trump Foun­da­tion, af­ter The Post made a $10 do­na­tion in March.

The most im­por­tant con­se­quence of not reg­is­ter­ing un­der the more rig­or­ous “7A” level was that the Trump Foun­da­tion was not re­quired by the state to sub­mit to an an­nual au­dit by out­side ac­coun­tants. In such an au­dit, char­ity law ex­perts said, the ac­coun­tants might have checked the foun­da­tion’s books — com­par­ing its records with its out­go­ing checks, and ask­ing whether the foun­da­tion had en­gaged in any trans­ac­tions that ben­e­fited Trump or his busi­nesses.

In re­cent years, The Post has reported, Trump’s foun­da­tion does ap­pear to have vi­o­lated tax laws in sev­eral in­stances.

In 2013, it gave a do­na­tion to a po­lit­i­cal group sup­port­ing Florida At­tor­ney Gen­eral Pam Bondi, a Repub­li­can, de­spite a ban on non­profit groups mak­ing po­lit­i­cal gifts. The Trump Foun­da­tion then filed an in­cor­rect tax fil­ing, which omit­ted any men­tion of that gift, and said in­cor­rectly that the money had gone to a char­ity in Kansas. Trump paid a $2,500 penalty tax for that po­lit­i­cal gift this year.

In two other in­stances, Trump’s foun­da­tion has made pay­ments, which ap­peared to help set­tle le­gal dis­putes in­volv­ing Trump’s for-profit busi­nesses.

Those two cases are un­der in­ves­ti­ga­tion by Sch­nei­der­man.

Just this week, his of­fice re­quested that a Florida at­tor­ney pro­vide a copy of the foun­da­tion check that Trump had sent to set­tle the Mar-a-Lago case.

Trump’s son Eric has his own foun­da­tion, also based in New York, which raises money from the pub­lic through an an­nual golf tour­na­ment.

But un­like his fa­ther’s char­ity, the Eric Trump Foun­da­tion has registered to so­licit funds in the state and files an an­nual au­dit re­port. The foun­da­tions share an ac­coun­tant, Don­ald Ben­der of the firm Weis­erMazars.

A spokes­woman for the firm de­clined to com­ment.


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