The New York attorney general’s investigation of the Donald J. Trump Foundation appears to have broadened to include new allegations of self-dealing by Trump that surfaced after the probe began, TPM has learned.
The town of Palm Beach, Florida, has provided documents to the New York Attorney General’s Office as part of the probe, a lawyer for the town confirmed to TPM on Wednesday. The documents relate to a legal dispute that Trump settled with the town using foundation money. The details of the 2007 Palm Beach case were first reported by the Washington Post last week.
“The New York Attorney General’s Office did contact me in regard to this matter,” John Randolph, the Palm Beach town attorney, told TPM Wednesday evening. “I just sent them the documents that I had previously sent to the Washington Post.”
New York Attorney General Eric Schneiderman had announced earlier this month, before the Washington Post’s reporting on the Palm Beach case, that his office had opened an investigation into Trump Foundation after it was reported that Trump had used foundation money to buy personal gifts for himself.
The contact with Palm Beach by the Attorney General’s Office suggests its probe had widened to include other alleged acts of self-dealing. The Attorney General’s Office declined to comment Thursday.
The Palm Beach case was one of two cases reported on by the Post in which Trump or Trump-owned businesses settled legal disputes that didn’t involve his foundation but that used foundation monies as part of the settlement.
In the the Palm Beach case, the ritzy Florida town had levied some $120,000 in fines against Trump’s Mar-a-Lago resort for erecting an 80-foot flagpole that violated local rules limiting flagpole heights to 42 feet. Trump brought a lawsuit against the town, which was later settled with Trump donating $100,000 to a charity agreed upon by Palm Beach. Trump donated to the Fisher House — a local veterans’ organization — but used money from the foundation rather than his own, in a practice experts say is blatant “self-dealing.”
Self-dealing — or the use of a charity’s money to the personal benefit of one of its operators — is a major no-no in charity world, and a violation of both state law in New York, where the Trump Foundation is registered, and IRS regulations, according to legal and tax experts.
In the second legal case reported on by the Washington Post last week, Trump used foundation money to settle a 2010 dispute over prize money in a hole-in-one contest at one of his golf courses. A man named Martin Greenberg had scored the hole-in-one at a charity event for Alonzo Mourning’s charity held at Trump National Golf Club in Westchester County, New York. When Greenberg did not receive the $1 million promised for the shot, he sued the golf course, the Mourning charity, and the insurer for the prize money. The parties agreed on a $500,000 donation to a charity of Greenberg’s choosing. A $158,000 donation was ultimately sent to the Martin Greenberg Foundation, but that contribution came from Trump Foundation, which has not received a donation from Trump himself since 2008.
TPM reached out to Greenberg’s office Wednesday, but he has not yet responded to TPM’s inquiry. The Mourning Family Foundation also has not responded to TPM’s inquires.
In interviews last week with a wide range of tax and charity law experts that included a former charities investigator in the New York Attorney General’s Office, the experts told TPM that investigations into “self-dealing” could result in a settlement between the charity and prosecutors, or, if the charity is uncooperative, a legal case could be brought.
“The attorney general has the authority to investigate those kinds of violations and seek monetary remedies, seek removal of director in appropriate cases, and pretty much everything in between,” Pamela Mann, the head of the tax exempt organizations group at the New York City law firm Carter Ledyard, who for 11 years served as chief of the Charities Bureau at the New York Attorney General’s office. “I think it’s conceivable they could also seek to involuntary dissolve a foundation because it’s not really acting like a charitable foundation.”
Correction: This story has been corrected to reflect that Trump hasn’t donated to his foundation since 2008.