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President Donald Trump on Thursday was sued by New York’s attorney general for alleged unlawful political conduct and other allegedly illegal actions by his Trump Foundation.
The lawsuit, which charges the president by name as well as his children Donald Jr., Ivanka and Eric, alleges “improper and extensive political activity, repeated and willful self-dealing transactions, and failure to follow basic fiduciary obligations or to implement even elementary corporate formalities required by law.”
The suit by the New York attorney general, Barbara Underwood, who replaced Eric Schneiderman upon Schneiderman’s resignation in May, is seeking to dissolve the foundation as well as fine the Trumps, and bar any of the charity’s board members from roles at any New York nonprofit.
The president quickly sought to rebut the charges:
The sleazy New York Democrats, and their now disgraced (and run out of town) A.G. Eric Schneiderman, are doing everything they can to sue me on a foundation that took in $18,800,000 and gave out to charity more money than it took in, $19,200,000. I won’t settle this case!...
— Donald J. Trump (@realDonaldTrump) June 14, 2018
....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 2 years. Now he resigned his office in disgrace, and his disciples brought it when we would not settle.
— Donald J. Trump (@realDonaldTrump) June 14, 2018
The lawsuit charges that “Trump used charitable assets to pay off the legal obligations of entities he controlled, to promote Trump hotels, to purchase personal items, and to support his presidential election campaign.”
The lawsuit examines Trump’s behavior in Iowa, when he withdrew from a Republican debate and instead held a fundraiser for veterans groups. “In 2016, the Board knowingly permitted the Foundation to be coopted by Mr. Trump’s presidential campaign, and thereby violated its certificate of incorporation and state and federal law by engaging in political activity and prohibited related party transactions.”
The Trump Foundation made an improper in-kind contribution of at least $2.82 million that “provided Mr. Trump and the Campaign a means to take credit at campaign rallies, press briefings, and on the Internet, for gifts to veterans charities.”
Other allegations include making a $100,000 payment to the Fisher House Foundation to settle legal claims against Mar-A-Lago by the City of Palm Beach, making a $158,000 payment to the Martin B. Greenberg Foundation to settle legal claims against Trump National Golf Club and making a $10,000 payment to the Unicorn Children’s Foundation for a painting of Trump bought at an auction for that charity.
Another allegation is that the Trump Foundation didn’t have an investment policy, even though New York law requires one. “Although in recent years the average monthly value of the Foundation’s assets was over $1 million, the Foundation kept its funds in a money market account, earning negligible interest.”
Steve Goldstein is MarketWatch's Washington bureau chief. Follow him on Twitter @MKTWgoldstein.
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