DC sues inaugural committee, alleging abuse of funds
WASHINGTON >> The District of Columbia is suing President Donald Trump’s inaugural committee and two companies that control the Trump International Hotel in the nation’s capital, accusing them of throwing parties for the Trump family with nonprofit funds, and overpaying for event space at the hotel.
The district’s attorney general, Karl Racine, said the inaugural committee had been “blatantly and unlawfully abusing nonprofit funds to enrich the Trump family.” The lawsuit, announced Wednesday, alleges that the committee abused nonprofit funds and coordinated with the Trump family to “grossly overpay for event space” in the hotel.
The committee has maintained that its finances were independently audited, and that all money was spent in accordance with the law.
It was the latest allegation that Trump and his family have used public and nonprofit funds spent at Trump-owned properties to enrich themselves — part of the peril of Trump not fully withdrawing from his businesses while he is president. Trump has maintained ownership but turned the reins over to his adult sons, who have bristled at the charge that they are profiting off their father’s presidency.
The suit alleges the committee coordinated with the hotel’s management and members of Trump’s family to arrange the events and that committee staffers knew they were paying prices that were “grossly above market rate” but didn’t consider less expensive alternatives.
The committee raised an unprecedented $107 million to host events celebrating Trump’s inauguration in January 2017. But the committee’s spending has drawn mounting scrutiny.
“District law requires nonprofits to use their funds for their stated public purpose, not to benefit private individuals or companies,” Racine said. “In this case, we are seeking to recover the nonprofit funds that were improperly funneled directly to the Trump family business.”
Prosecutors found that Rick Gates, a former Trump campaign aide who flipped on the president during the special counsel’s Russia investigation, personally managed discussions with the hotel about using the space, including ballrooms and meeting rooms. One of the event’s planners raised concerns about pricing with Trump, Gates and Ivanka Trump, according to the lawsuit. Ivanka Trump is the president’s daughter and a senior White House adviser.
Those concerns included a written warning that the price proposal was at least twice the market rate. But Gates went through with it anyway, at a cost of $1.03 million, the suit says.
In one instance, Gates contacted Ivanka Trump and told her that he was “a bit worried about the optics” of the committee paying such a high fee, Racine said.
Stephanie Winston Wolkoff, a former adviser to first lady Melania Trump who played a leading role organizing the inaugural parties, had also told Trump, when he was presidentelect, and Ivanka Trump that she was uneasy with the offer, Racine said. Winston Wolkoff later followed up with an email to Gates and Ivanka Trump warning that the hotel’s proposal was at least twice the market rate, Racine said.
Prosecutors say the committee could have hosted inaugural events at other venues either for free or for reduced costs but didn’t consider those options.