The President’s lawyers didn’t want any more hearings in the case against the Trump Foundation before the November midterm elections.
But on Thursday, they will appear in a downtown Manhattan courtroom for a hearing on their own motion to dismiss a June lawsuit brought by New York Attorney General Barbara Underwood. Underwood has accused President Trump and his three eldest children of running their family non-profit as a “shell corporation that functioned as a checkbook” for Trump’s business and political interests.
Thursday’s proceedings represent the Trumps’ best—if still unlikely—shot at shutting down the probe into the President’s allegedly fraudulent charity.
Because the Donald J. Trump Foundation operated at the nexus of Trump’s charitable work, political work, and family real estate business, discovery and witness testimony in the case could prove damaging to the President.
At an initial hearing this summer, Manhattan Supreme Court Justice Saliann Scarpulla urged the two parties to try to come to an agreement on key issues about the charity’s dissolution before they convened again. But Trump has insisted he won’t settle any aspect of the case. In a flurry of legal filings since June, his attorneys have made a now- familiar argument: the entire probe is just an effort by liberal law enforcement officials to tarnish Trump’s political image.
No settlement appears to be on the horizon.
According to the lawsuit, the foundation and its board of directors—Trump and Ivanka, Eric and Donald Trump Jr.—engaged in a “pattern of persistent illegal conduct.” In lieu of channeling money to legitimate charitable causes or conducting basic oversight, the foundation served as a private piggybank for Trump, Underwood alleged. Funds went to a political group supporting the re-election of Florida Attorney General Pam Bondi, as well as to settle legal disputes involving Trump’s for-profit businesses, according to the lawsuit.
Some of the most damaging allegations involve how the foundation interacted with Trump’s 2016 presidential campaign. The suit alleged that the charity raised over $2.8 million in order to influence the campaign, and that campaign staffers like Corey Lewandowski illegally assumed control of those charitable funds. Trump Organization Chief Financial Officer Allen Weisselberg, who served as the foundation’s treasurer, admitted in a deposition to improperly donating foundation funds to veterans’ groups on behalf of the campaign.
Underwood’s office has asked for $2.8 million in restitution and that the charity be dissolved entirely. Trump would be barred from serving on any New York non-profit for 10 years, and his eldest children for one year each.
Per Trump attorney Alan Futerfas, the Trumps always intended to dissolve the foundation in 2016 and only have to sort out how to distribute the $1 million it still has in funds. But according to Futerfas, the foundation never engaged in misconduct or violated its non-profit status through improper interactions with the 2016 campaign.
In an August motion to dismiss the suit, Futerfas adopted Trump’s line about the investigation: it is the meritless product of “pervasive bias” by former New York Attorney General Eric Schneiderman.
“The NYAG —the head of the entity that brought this Petition—solicited financial donations to his own campaign for re-election based on his promise to ‘lead the resistance’ and attack the President and his policies, describing the President as out to ‘hurt’ New Yorkers. The NYAG, as an entity, has issued scores of press releases trumpeting its fight against the President as evidence of its reason d’etre [sic] and its success as an agency,” the filing reads.
The document also mentions that Schneiderman served on the “Leadership Council” of Hillary Clinton’s presidential campaign and, Futerfas claims, ignored “credible and serious allegations of impropriety” at the Clinton Foundation.
Schneiderman resigned in disgrace in May following allegations that he physically abused multiple women with whom he was romantically involved.
Underwood’s office has pointed out that she brought the lawsuit three weeks after Schneiderman stepped down. In its Oct. 4 filing opposing the motion to dismiss, the New York AG’s office says that “the only individual actually accused of bias” is no longer with the office and that Futerfas has “not come close to meeting” a bias burden. Even if they had, the typical response would be “recusal of the biased person” rather than dismissal of the entire suit, the AG argued.
The attorney general’s response details again the alleged wrongdoing by the Trump family, and counters Trump’s claim that the supremacy clause of the Constitution bars the office from bringing a civil suit against a sitting president.
Underwood’s office has also pointed out that they are tasked with bringing cases involving violations of New York charity laws, and regularly do so.
Futerfas responded with another filing threatening to pursue discovery of “the NYAG’s bias in this case” if their request to dismiss is denied “in whole or in part.”
The parties will convene at 10:30 a.m. ET on Thursday in Manhattan Supreme Court, where Judge Scarpulla will decide how the case will proceed.
