Trump Foundation Accused of Being ‘Shell Company’ in NY Lawsuit
The Trump Foundation is being sued by the state of New York for using Foundation funds for personal and political gains.
New York Attorney General Barbara Underwood accused the Trump Foundation of acting as a shell company in a memo filed Thursday as part of a lawsuit brought by the state of New York against the charity.
The lawsuit, which was first filed against the Trump foundation in June, alleges that the foundation used charitable donations and funds raised for the charity for personal gains.
“As the attorney general’s petition alleges, and as the evidence shows, the Trump Foundation was a shell corporation that functioned as a checkbook from which the business entity known as the Trump Organization made payments – using other people’s money, as Mr. Trump did not personally contribute to the foundation after 2008 – to charities and political committees,” Underwood wrote in a Thursday memo. “On multiple occasions, the payments were made for the personal benefit of Mr. Trump or a Trump business.”
Trump and the state of New York both want the foundation dissolved; however, New York wants acknowledgment of wrongdoing and the return of $2.8 million the foundation collected from a political fundraiser in Iowa in 2016.
The Trump Foundations lists Trump’s children, Eric, Ivanka and Donald Jr. as the foundation’s directors but Underwood alleges they failed to ever hold a meeting once they joined the foundation in 2006.
The foundation responded to the June lawsuit by filing a motion to dismiss in August. Trump’s attorney has attempted to frame the New York lawsuit as a politically motivated attack and recently issued a statement defending the foundation’s work.
“This case involves the unprecedented circumstance of a state agency suing a charitable Foundation that, since its inception in 1987, has raised $17.5 million dollars and, upon dissolution, will have given over $19 million to charitable causes,” Trump’s attorney Alan Futerfas wrote. “The reason the Donald J. Trump Foundation could do this is because – unlike many other charitable foundations – it paid no salaries to board members or employees (even though the law entitles it do so), provided no perks, and, consequently, had virtually no operating costs, save for accountants and professional fees. Practically every dime it received went to charitable causes.”
Trump Foundation Accused of Illegal Activity and Self-Dealing
The New York lawsuit cites numerous instances of alleged illegal activity by the foundation. In one instance, the lawsuit alleges the foundation participated in a nationally televised Trump Campaign fundraiser to solicit charitable donations from the public. The Foundation then ceded control of the $2.8 million raised to the Trump Campaign which used the money to influence the 2016 election. The lawsuit alleges when the Foundation participated in the fundraiser and handed over the money to the Campaign, the Foundation participated in illegal political activity.
Six additional illegal transactions by the Foundation are referenced in the lawsuit. In one transaction President Trump was sued by the town of Palm Beach, Florida but Trump directed the payout to Palm Beach to come from his foundation. The Foundation, however, was not named in the lawsuit.
In a second instance described in the lawsuit, the Trump Foundation auctioned off a membership to the Trump National Golf Clubs worldwide with the claim the money raised would benefit the Donald J. Trump Foundation. Instead, the money the Trump Foundation raised was used to pay a legal debt the Trump National Golf Club owed.
The four other instances mentioned in the lawsuit allege various other instances of the Foundation’s funds being used for personal gain including to purchase a $10,000 portrait of Trump.
A hearing on the motion to dismiss is scheduled for October 25th.