A New York judge ordered Donald Trump to pay $2 million to a group of nonprofit organizations as part of a settlement in a civil lawsuit against his charitable foundation.
The lawsuit alleged that President Trump and his three eldest children – Don Jr., Ivanka and Eric – used the Donald J. Trump Foundation for political and personal gain.
The four were accused of violating federal and state campaign finance laws and abusing the Donald J. Trump Foundation’s tax-exempt status.
But Thursday’s order appears to bring the lawsuit to an end.
‘Mr. Trump’s fiduciary duty breaches included allowing his campaign to orchestrate the Fundraiser, allowing his campaign, instead of the Foundation, to direct distribution of the Funds, and using the Fundraiser and distribution of the Funds to further Mr. Trump’s political campaign,’ Manhattan Supreme Court Justice Saliann Scarpulla wrote in the ruling.
A New York judge ordered Donald Trump to pay $2 million to a group of nonprofit organizations as part of a settlement in a civil lawsuit
President Trump and his three eldest children – Don Jr., Ivanka and Eric – faced charges they used the Donald J. Trump Foundation for political and personal gain
The money must be paid by Trump himself for breaching his fiduciary duty to properly oversee his foundation, Scarpulla ordered.
‘I direct Mr. Trump to pay the $2,000,000, which would have gone to the Foundation if it were still in existence, on a pro rata basis to the Approved Recipients,’ the judge wrote.
Scarpulla also declined to impose punitive damages on Trump, which would have added millions to the settlement, because, she ruled, he had taken the necessary steps to ensure the alleged illegal activity would not occur again.
The foundation was dissolved in December as part of negotiations with the New . York Attorney General’s office.
Trump had vowed to fight the civil lawsuit. He tweeted last year: ’I won’t settle this case!’
The suit was filed by then-New York Attorney General Barbara Underwood in June of last year.
Underwood was promoted to the job this past summer, succeeding then New York Attorney General Eric Schneiderman after he resigned following allegations that he had physically abused some of his romantic partners.
Underwood is a career staffer, not an elected official, and she did not seek election for a full term.
Letitia ‘Tish’ James was elected to the position and said she intended to aggressively investigate Trump’s businesses and finances.
As the state attorney general, Underwood had sought $2.8 million in restitution plus additional financial penalties. And she wanted the court to ban the Trumps from serving on the boards of other New York charities for a period of one year.
Donald Trump Jr., Ivanka Trump and Eric Trump were named in the lawsuit because they were official board members of the Donald J. Trump Foundation for years.
There were reports on how Trump used charity’s funds pay off legal settlements for his private business, to purchase art that decorated one of his clubs and to make a prohibited political donation.
The suit was filled with scathing charges against the president and his management of his self-named non-profit. It includes allegations of violations of campaign finance laws and illegal coordination with Trump’s presidential campaign.
Prosecutors charged Trump with repeatedly misusing the nonprofit to pay off his businesses’ creditors, to decorate one of his golf clubs and to stage a multimillion dollar giveaway at his 2016 campaign events.
In her June filing, Underwood charged the nonprofit was essentially one of Trump’s personal checkbooks — a pool of funds that his clerks knew to use whenever Trump wanted to pay money to a nonprofit.
Legally, Trump isn’t allowed to buy things for himself using the charity’s money, even if he was buying them from nonprofits.
The suit also listed some of the questionable expenses made by the charity, including a $10,000 on a portrait of Trump that was hung at one of his golf clubs.
And twice Trump used the charity’s money to settle legal claims against his businesses.
Donald Trump Jr., Ivanka Trump and Eric Trump were named in the lawsuit because they were official board members of the Donald J. Trump Foundation – the Trump family is see with the Prince of Wales and Duchess of Cornwall during June’s state visit to England
President Trump was ordered to personally pay the money
In 2007, he settled a dispute with the town of Palm Beach, Florida, over code violations at his Mar-a-Lago estate. The town agreed to waive outstanding fines if Mar-a-Lago gave $100,000 to the charity Fisher House.
But the donation came from the foundation and not the estate, prosecutors charged after Trump wrote a note requesting the move.
In 2012, a Trump golf club agreed to pay $158,000 to settle a lawsuit with a man who was denied a $1 million hole-in-one prize during a tournament at the club. The Trump Foundation paid the money instead of the club.
In March, after the attorney general’s investigation was underway, Trump repaid his foundation all $258,000, plus more than $12,000 in interest, the suit notes.
Underwood said Trump had already repaid amounts spent by the foundation, plus penalty taxes totaling more than $4,000.
In the case of the portrait, she said Trump’s golf club paid the foundation the ‘fair rental value’ of using the foundation-owned painting as decoration. The value: $182.
IRS rules also prohibit tax-exempt foundations from aiding political campaigns.
But Underwood cited two instances where Trump’s foundation had seemed to do so.
In August 2013, Trump donated $25,000 from his foundation to a Florida political group aiding the reelection of state Attorney General Pam Bondi. Around that time, Bondi’s office was considering whether to join an ongoing lawsuit by then-New York AG Schneiderman, alleging Trump had defrauded students at his now-defunct ‘Trump University.’
The Trump Foundation omitted any mention of Bondi’s political group from its annual report to the IRS and instead said the $25,000 donation had gone to a nonprofit in Kansas with a similar-sounding name.
Underwood said Trump’s staff blamed confusion among accounting clerks for spending the foundation’s money, instead of Trump’s own. As for the incorrect IRS filing, Underwood wrote, ‘the Foundation has no credible explanation for the false reporting of grant recipients.’
Trump repaid the $25,000 and paid a penalty tax of $2,500 for an improper political gift after it came to light in a Washington Post investigative series on the Donald J. Trump Foundation during the 2016 campaign.
However, Underwood charges that the campaign Trump’s foundation helped most was his own.
In January 2016, Trump skipped a debate among Republican presidential candidates because he was feuding with debate host Fox News. Instead, he held a televised fundraiser for veterans — bringing in millions from wealthy friends and small-dollar donors, much of which went to his foundation.
Underwood charged ‘the Foundation ceded control over the charitable funds it raised to senior Trump Campaign staff.’
She cited emails in which Corey Lewandowski, then-campaign manager, directed which veterans’ charities should receive money.
The Trump Foundation has been in legal limbo since after the election, when the president wanted to dissolve it amid growing controversy about its practices. But the foundation could not legally dissolve while it was under investigation, the New York attorney general ruled.
New York has jurisdiction over the Trump Foundation because the charity is based at Trump Tower in Manhattan and registered in New York State.
Trump had been president of the foundation since he founded it in 1987 until it was shuttered in December.
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