Trump Ordered to Pay $2 Million to Charities for Misuse of Foundation - The New York Times 11/7/19, 5(47 PM

Trump Ordered to Pay $2 Million to

Charities for Misuse of Foundation
The president admitted he had used funds raised by the
Donald J. Trump Foundation to promote his campaign and
pay business debts.
By Alan Feuer

Nov. 7, 2019 Updated 8:11 p.m. ET

A state judge ordered President Trump to pay $2 million in damages to nonprofit groups on
Wednesday 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 Wednesday 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.

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Trump Ordered to Pay $2 Million to Charities for Misuse of Foundation - The New York Times 11/7/19, 5(47 PM

Though he had admitted wrongdoing in court papers, Mr. Trump attacked what he described as
“the political hacks in New York State” in a tweet on Wednesday 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 Wednesday, 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.

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Trump Ordered to Pay $2 Million to Charities for Misuse of Foundation - The New York Times 11/7/19, 5(47 PM

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.”

Trump’s Charity
NEW Calls
YORK Attorney
NEW General’s Suit
YORK | Trump a Political
Ordered Attack
to Pay $2 Million toAug. 31, 2018
Charities for Misuse …PLAY THE CROSSWORD Account

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Trump Ordered to Pay $2 Million to Charities for Misuse of Foundation - The New York Times 11/7/19, 5(47 PM

New York Attorney General Sues Trump Foundation After 2-Year Investigation
June 14, 2018

The Donald J. Trump Foundation, Explained June 14, 2018

Trump Foundation Will Dissolve, Accused of ‘Shocking Pattern of Illegality’ Dec. 18, 2018

Alan Feuer covers courts and criminal justice for the Metro desk. He has written about
mobsters, jails, police misconduct, wrongful convictions, government corruption and El
Chapo, the jailed chief of the Sinaloa drug cartel. He joined The Times in 1999.
@alanfeuer

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