New York Attorney General Barbara Underwood on Thursday filed a sweeping lawsuit against the Donald J. Trump Foundation and its board of directors — the president and his three eldest children — for engaging in “a pattern of persistent illegal conduct.”
The lawsuit claims Trump’s foundation “illegally provided extensive support” to his 2016 campaign. It also alleges that the foundation engaged in “willful self-dealing” to serve Trump’s personal and business interests.
Underwood asked a state judge to dissolve the foundation entirely. She also asked that its remaining $1 million in assets be distributed to other charities, that Trump pay at least $2.8 million in restitution, and that Trump be barred from leading any other New York nonprofit for at least 10 years.
The charity’s directors, President Trump, Donald Trump, Jr., Ivanka Trump and Eric Trump were sued in their individual capacity, putting them personally on the hook for the repayment of funds.
Trump’s children were on a board that “existed in name only” and did not meet after 1999, according to the lawsuit, leaving their father without any oversight, and allowing him effectively to do with the foundation what he wished.
“The Trump Foundation was little more than a checkbook for payments from Mr. Trump or his businesses to nonprofits, regardless of their purpose or legality,” Underwood said in a statement on the results of her office’s 20-month investigation.
Trump promptly responded on Twitter, insisting that he “won’t settle this case!”
“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,” the tweet read.
A second tweet from Trump said that Schneiderman “never had the guts to bring this ridiculous case” and that “his disciples brought it when we would not settle.”
Schneiderman initiated the Trump Foundation investigation but resigned earlier this year over reports he physically abused multiple romantic partners. Underwood, a career staffer, took over his position.
A spokesman for the Trump Foundation said Underwood’s lawsuit is “politics at its very worst.”
“The Foundation currently has $1.7 million remaining which the [New York Attorney General] has been holding hostage for political gain,” the spokesman said in a statement. “This is unconscionable — particularly because the Foundation previously announced its intention to dissolve more than a year and a half ago.”
“The prior NYAG, who was recently forced to resign from office in disgrace, made it his stated mission to use this matter to not only advance his own political goals, but also for his own political fundraising,” the spokesman added. “The acting NYAG’s recent statement that battling the White House is ‘the most important work [she] have ever done’ shows that such political attacks will continue unabated.”
The lawsuit lays out new details about coordination between the foundation and Trump’s presidential campaign. The charity raised over $2.8 million in order to influence the campaign, and senior campaign staffers, including Corey Lewandowski illegally assumed control of those charitable funds, according to the suit.
In one significant incident, Trump raised money for the foundation during a January 2016 televised veterans’ fundraiser he held instead of participating in a primary debate. Lewandowski dictated how and when five $100,000 grants would be dispersed to Iowa veterans’ non-profits just days before the Feb. 1, 2016 Iowa caucuses, an alleged violation of state and federal law.
Brad Parscale, the campaign’s digital director, created a website for the fundraiser, while communications director Hope Hicks helped arrange speakers for the event.
As the lawsuit notes, Trump, under penalty of perjury, repeatedly signed IRS 990 forms affirming that the tax-exempt foundation did not carry out political activity. Yet he repeatedly violated these rules, the lawsuit alleges.
In 2013, the foundation donated $25,000 to a political group working to reelect Florida Attorney General Pam Bondi. The foundation’s annual IRS report listed a donation to a Kansas nonprofit with a similar name, and only admitted to improperly giving money to the Bondi group after the Washington Post’s David Fahrenthold reported on the transaction.
Trump’s staff said that accounting errors led to the donation being made from the foundation rather than from his company.
This alleged improper payment, detailed in the suit, is one of many abuses first surfaced during the 2016 presidential election thanks to Fahrenthold’s tenacious reporting.
These include Trump’s use of the charity’s money to settle legal disputes involving his for-profit businesses. In 2007, Trump used $100,000 of the charity’s money to settle a dispute with the town of Palm Beach over code violations at his Mar-a-Lago club. Five years later, the foundation doled out $158,000 to settle a lawsuit with a man angry that he did not receive a $1 million hole-in-one prize during a tournament at another golf club.
The lawsuit also notes that in May 2016, the foundation contributed to The Mission Continues, a veterans charity that had been established by Eric Greitens, who was then running as a Republican for governor of Missouri. The charity played a role in the recent scandals that forced Greitens to resign as governor: Greitens obtained the charity’s donor list and used it to fundraise for his campaign, potentially a serious campaign finance violation.