Republican presidential candidate Donald Trump, a critic of his competitor's Clinton Foundation, now finds his own charitable foundation under scrutiny, after a new probe revealed a number of possibly illegal activities that could land him in hot water.
Allegations of bribes and improper use of charity funds have rocked the Trump Foundation, Mr. Trump’s charity. If the allegations prove true, Trump could be in violation of rules against “self-dealing,” a practice in which nonprofit leaders use charitable money for their own purposes.
“I represent 700 nonprofits a year, and I’ve never encountered anything so brazen,” charity legal advisor Jeffrey Tenenbaum told The Washington Post. “If he’s using other people’s money – run through his foundation – to satisfy his personal obligations, then that’s about as blatant an example of self-dealing [as] I’ve seen in a while.”
Review of legal documents and interviews reveal that in at least four cases, Trump may have used a total of $285,000 in Trump Foundation money to settle personal lawsuits.
In one case, the Trump Foundation settled a lawsuit between a Trump-owned golf course and another party by writing a check for $158,000 to the plaintiff’s favorite charity. In 2013, Trump spent $5,000 in Foundation money to pay for hotel advertisements at DC preservation group events.
In 2007, the town of Palm Beach levied $120,000 in fines on the candidate after he failed to address a flagpole that violated local height ordinances. The town agreed to forgive the fines if Trump wrote a $100,000 check to a charity for veterans.
In two separate instances, Trump spent a total of $30,000 in Trump Foundation money on portraits of himself sold at charity fundraisers.
Also within the past week, the watchdog group Citizens for Responsibility and Ethics in Washington (CREW) alleged that Trump paid Florida Attorney General Pam Biondi $25,000 not to join in a lawsuit against Trump University, according to the Daily Beast. The Attorney General’s office has admitted that Ms. Biondi sought a donation from Trump at the time of the lawsuit.
“In the worst-case scenario for Trump and the Foundation, the IRS could take away the Foundation’s non-profit status – effectively ending it – and charge tax penalties for the political and private benefit of its actions for Trump. Trump and Bondi could face federal felony charges from the Department of Justice, the highest charges carrying up to 10 years in prison,” said CREW spokesperson Jordan Libowitz, according to the Daily Beast.
“This reaches above a distraction for them due to the legal implications of it and long litigation possibility,” a former senior aide to Trump said. “Look, Donald signed those checks…. he’s on there. He’s liable.”
Although Trump was the Foundation’s only donor when he founded it in 1987, his donations dwindled in the 2000s, finally ceasing entirely in 2009. That means that the Foundation is funded nearly entirely by other peoples’ money.
Moreover, although 40 US states require charities raising money within state lines to register in those states, the Trump Foundation is not registered in 38 states. While it is not strictly illegal to raise money before registering in a state, charities are expected to register in the near term.
“Any time a charity fails to follow the law, they risk damaging the public’s perception of their ethics,” Sandra Miniutti, the chief financial officer of Charity Navigator, an organization that ranks charities, told The New York Times.