Trump Ordered to Pay $2 Million to Charities for Misuse of Foundation



Nov. 7, 2019

A fund-raiser for veterans that Mr. Trump held in Iowa was in fact a campaign event, he acknowledged.


A state judge ordered President Trump to pay $2 million in damages to nonprofit groups on Thursday after the president admitted misusing money raised by the Donald J. Trump Foundation to promote his presidential bid, pay off business debts and purchase a portrait of himself for one of his hotels.

The damage award brought an end to a protracted legal battle over the foundation, whose giving patterns and management became a flash point during Mr. Trump’s run for office in 2016. New York’s attorney general had filed suit last year accusing Mr. Trump and his family of using the foundation as an extension of his businesses and his presidential campaign.

The settlement, which was finalized last month and announced on Thursday in the judge’s order, included a detailed admission of misconduct that is rare for the president, who has long employed a scorched-earth approach toward fighting lawsuits.

Among Mr. Trump’s admissions in court papers: The charity gave his campaign complete control over disbursing the $2.8 million that the foundation had raised at a fund-raiser for veterans in Iowa in January 2016, only days before the state’s presidential nominating caucuses. The fund-raiser, he acknowledged, was in fact a campaign event.

The president also admitted to using the foundation to settle the legal obligations of companies he owned, including Mar-a-Lago, his private club in Florida, and the Trump National Golf Club in Westchester County, N.Y. And he acknowledged that the foundation purchased the $10,000 portrait of Mr. Trump, which was ultimately displayed at one of his Florida hotels.

Though he had admitted wrongdoing in court papers, Mr. Trump attacked what he described as “the political hacks in New York State” in a defiant statement posted on Twitter on Thursday night, claiming that the foundation had given “100 percent of the funds to great charities” and that he had suffered “4 years of politically motivated harassment” by the attorney general’s office.

“All they found was incredibly effective philanthropy and some small technical violations,” he wrote.

Once billed as the charitable arm of the president’s financial empire, the Trump Foundation closed its doors in December, six months after the attorney general’s office sued, saying the foundation was acting “as little more than a checkbook to serve Mr. Trump’s business and political interests.”

The suit accused the foundation of engaging in “a shocking pattern of illegality” that included improperly coordinating with Mr. Trump’s 2016 presidential campaign. Charities are barred by law from advancing the self-interests of their executives.

In her ruling on Thursday, Justice Saliann Scarpulla of State Supreme Court in Manhattan found that Mr. Trump had in fact “breached his fiduciary duty” by using the foundation to advance his business and political interests.

The suit was one of several legal battles that arose between Mr. Trump and state prosecutors around the country from the moment he took office, especially in New York. The initial investigation into the foundation was launched by the former attorney general, Eric T. Schneiderman, and continued through the subsequent administrations of two attorneys general. The lawsuit was also based on information first reported by The Washington Post.

As part of the settlement negotiations, the attorney general’s office had asked Justice Scarpulla to ban Mr. Trump from ever running a charity again. Though the judge did not impose such a ban, she did place numerous restrictions on Mr. Trump should he seek to establish another charitable organization.

The attorney general’s office had also asked Justice Scarpulla to award damages of $2.8 million — the amount that the foundation had raised at the Iowa fund-raiser. That request was turned down too.

The final details of the settlement were worked out between the current New York State attorney general, Letitia James, and Mr. Trump’s lawyers on Oct. 1.

Under its terms, Mr. Trump’s lawyers agreed to give the Trump Foundation’s remaining assets of $1.7 million to a group of charities that have no connection to the president or his family. They included the Children’s Aid Society, Citymeals on Wheels, the United Negro College Fund, the United Way of the National Capital Area and the U.S. Holocaust Memorial Museum. The $2 million in damages Justice Scarpulla awarded, which were akin to a fine, were to be paid to those same groups.

Both sides agreed that three of Mr. Trump’s children who were officers of the foundation — Donald Trump, Jr., Ivanka Trump and Eric Trump — will undergo training in order to ensure they do not engage in similar improprieties. As board members of the foundation, the president’s children were named as defendants in the lawsuit.

Though the board was supposed to oversee the foundation’s expenditures, Mr. Trump admitted that it never met over a period of nearly two decades.

Mr. Trump agreed that any charity he becomes involved with in the future will have a majority of independent directors, lawyers with expertise in nonprofit law and an accounting firm to monitor its grants and expenses.

Ms. James hailed the court’s decision and the resolution of the lawsuit as “a major victory” that would send a warning to “those who would abuse charities for personal gain.” Mr. Trump, she said, had used the foundation as “a piggy bank to promote his political interests.” She added: “No one is above the law — not a businessman, not a candidate for office, and not even the president of the United States.”

In a statement, a spokesman for the Trump Foundation attacked the original lawsuit as “politically motivated.” (All three of the New York attorneys general who worked on the case were Democrats.) The foundation also portrayed the damages awarded by Justice Scarpulla as a “contribution,” adding that it was “pleased to donate an additional $2 million” to “worthy organizations.”


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