10-14-2016, 04:08 AM
Donald Trump used more than a quarter of a million dollars donated to the Trump Foundation to settle lawsuits against his for-profit businesses, among other ventures. This is, needless to say, highly illegal.
https://www.washingtonpost.com/politics/...story.html
https://www.washingtonpost.com/politics/...story.html
Quote:Donald Trump spent more than a quarter-million dollars from his charitable foundation to settle lawsuits that involved the billionaire’s for-profit businesses, according to interviews and a review of legal documents.
Those cases, which together used $258,000 from Trump’s charity, were among four newly documented expenditures in which Trump may have violated laws against “self-dealing” — which prohibit nonprofit leaders from using charity money to benefit themselves or their businesses.
In one case, from 2007, Trump’s Mar-a-Lago Club faced $120,000 in unpaid fines from the town of Palm Beach, Fla., resulting from a dispute over the height of a flagpole.
In a settlement, Palm Beach agreed to waive those fines — if Trump’s club made a $100,000 donation to a specific charity for veterans. Instead, Trump sent a check from the Donald J. Trump Foundation, a charity funded almost entirely by other people’s money, according to tax records.
In another case, court papers say one of Trump’s golf courses in New York agreed to settle a lawsuit by making a donation to the plaintiff’s chosen charity. A $158,000 donation was made by the Trump Foundation, according to tax records.
The other expenditures involved smaller amounts. In 2013, Trump used $5,000 from the foundation to buy advertisements touting his chain of hotels in programs for three events organized by a D.C. preservation group. And in 2014, Trump spent $10,000 of the foundation’s money on a portrait of himself bought at a charity fundraiser.
Or, rather, another portrait of himself.
Several years earlier, Trump used $20,000 from the Trump Foundation to buy a different, six-foot-tall portrait.
If the Internal Revenue Service were to find that Trump violated self-dealing rules, the agency could require him to pay penalty taxes or to reimburse the foundation for all the money it spent on his behalf. Trump is also facing scrutiny from the New York attorney general’s office, which is examining whether the foundation broke state charity laws.
More broadly, these cases* also provide new evidence that Trump ran his charity in a way that may have violated U.S. tax law and gone against the moral conventions of philanthropy.
“I represent 700 nonprofits a year, and I’ve never encountered anything so brazen,” said Jeffrey Tenenbaum, who advises charities at the Venable law firm in Washington. After The Washington Post described the details of these Trump Foundation gifts, Tenenbaum described them as “really shocking.”
“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 awhile,” Tenenbaum said.
The Post sent the Trump campaign a detailed list of questions about the four cases but received no response.
The Trump campaign released a statement about this story late Tuesday that said it was “peppered with inaccuracies and omissions,” though the statement cited none and the campaign has still not responded to repeated requests for comment.
The New York attorney general’s office declined to comment when asked whether its inquiry would cover these new cases* of possible self-dealing.
What we know about Trump's charitable giving Play Video1:24
Trump founded his charity in 1987 and for years was its only donor. But in 2006, Trump gave away almost all the money he had donated to the foundation, leaving it with just $4,238 at year’s end, according to tax records.
Then, he transformed the Trump Foundation into something rarely seen in the world of philanthropy: a name-branded foundation whose namesake provides none of its money. Trump gave relatively small donations in 2007 and 2008, and afterward, nothing. The foundation’s tax records show no donations from Trump since 2009.
[In 2007, Trump had to face his own falsehoods. And he did, 30 times.]
Its money has come from other donors, most notably pro-wrestling executives Vince and Linda McMahon, who gave a total of $5 million from 2007 to 2009, tax records show. Trump remains the foundation’s president, and he told the IRS in his latest public filings that he works half an hour per week on the charity.
The Post has previously detailed other cases in which Trump used the charity’s money in a way that appeared to violate the law.
In 2013, for instance, the foundation gave $25,000 to a political group supporting Florida Attorney General Pam Bondi ®. That gift was made about the same time that Bondi’s office was considering whether to investigate fraud allegations against Trump University. It didn’t.
Tax laws say nonprofit groups such as the Trump Foundation may not make political gifts. Trump staffers blamed the gift on a clerical error. After The Post reported on the gift to Bondi’s group this spring, Trump paid a $2,500 penalty tax and reimbursed the Trump Foundation for the $25,000 donation.
In other instances, it appeared that Trump may have violated rules against self-dealing.
In 2012, for instance, Trump spent $12,000 of the foundation’s money to buy a football helmet signed by then-NFL quarterback Tim Tebow.
And in 2007, Trump’s wife, Melania, bid $20,000 for the six-foot-tall portrait of Trump, done by a “speed painter” during a charity gala at Mar-a-Lago. Later, Trump paid for the painting with $20,000 from the foundation.
In those cases, tax experts said, Trump was not allowed to simply keep these items and display them in a home or business. They had to be put to a charitable use.
Trump’s campaign has not responded to questions about what became of the helmet or the portrait.
After the settlement, Trump put a slightly smaller flag farther from the road and mounted it on a 70-foot pole as seen in this Nov. 1, 2015, photo. (Rosalind Helderman/The Washington Post)
The four new cases of possible self-dealing were discovered in the Trump Foundation’s tax filings. While Trump has refused to release his personal tax returns, the foundation’s filings are required to be public.
The case involving the flagpole at Trump’s oceanfront Mar-a-Lago Club began in 2006, when the club put up a giant American flag on the 80-foot pole. Town rules said flagpoles should be 42 feet high at most. Trump’s contention, according to news reports, was: “You don’t need a permit to put up the American flag.”
The town began to fine Trump, $1,250 a day.
Trump’s club sued in federal court, saying that a smaller flag “would fail to appropriately express the magnitude of Donald J. Trump’s . . . patriotism.”
They settled.
The town waived the $120,000 in fines. In September 2007, Trump wrote the town a letter, saying he had done his part as well.
“I have sent a check for $100,000 to Fisher House,” he wrote. The town had chosen Fisher House, which runs a network of comfort homes for the families of veterans and military personnel receiving medical treatment, as the recipient of the money. Trump added that, for good measure, “I have sent a check for $25,000” to another charity, the American Veterans Disabled for Life Memorial.
Trump provided the town with copies of the checks, which show that they came from the Trump Foundation.
In Palm Beach, nobody seems to have objected to the fines assessed on Trump’s business being erased by a donation from a charity.
“I don’t know that there was any attention paid to that at the time. We just saw two checks signed by Donald J. Trump,” said John Randolph, the Palm Beach town attorney. “I’m sure we were satisfied with it.”
Excerpt from a settlement filed in federal court in 2007.
In the other case in which a Trump Foundation payment seemed to help settle a legal dispute, the trouble began with a hole-in-one.
In 2010, a man named Martin Greenberg hit a hole-in-one on the 13th hole while playing in a charity golf tournament at Trump’s course in Westchester County, N.Y.
Greenberg won a $1 million prize. Briefly.
Later, Greenberg was told that he had won nothing. The prize’s rules required that the shot had to go 150 yards. But Trump’s course had allegedly made the hole too short.
Greenberg sued.
Eventually, court papers show, Trump’s golf course signed off on a settlement that required it to make a donation to a group of Greenberg’s choosing. Then, on the day that the parties informed the court they had settled their case, a $158,000 donation was sent to the Martin Greenberg Foundation.
That money came from the Trump Foundation, according to the tax filings of both Trump’s and Greenberg’s foundations.
Greenberg’s foundation reported getting nothing that year from Trump personally or from his golf club.
Both Greenberg and Trump have declined to comment.
Several tax experts said that the two cases* appeared to be clear examples of self-dealing, as defined by the tax code.
The Trump Foundation had made a donation, it seemed, so that a Trump business did not have to.
Rosemary E. Fei, a lawyer in San Francisco who advises nonprofit groups, said both cases* clearly fit the definition of self-dealing.
“Yes, Trump pledged as part of the settlement to make a payment to a charity, and yes, the foundation is writing a check to a charity,” Fei said. “But the obligation was Trump’s. And you can’t have a charitable foundation paying off Trump’s personal obligations. That would be classic self-dealing.”