D.C. Prosecutors Set Their Targets on Don Jr.’s Posse

Photo Illustration by The Daily Beast/Getty
Photo Illustration by The Daily Beast/Getty

The District of Columbia’s attorney general will have to wait just a little longer to find out if three more people in the Trump family circle can be forced to testify, as investigators continue to look into whether Donald Trump’s 2017 inauguration committee misspent more than $1 million and enriched his own company.

A local judge Sunday, on the eve of a potentially critical court hearing in that case, ruled that he won’t even let the D.C. attorney general’s office argue in court on Monday why it should subject these key witnesses to tough questions.

The local government’s case centers on how Trump’s kids blurred the lines between the family business and what’s supposed to be a nonprofit, potentially milking the inaugural celebration by funneling events to the Trump International Hotel in Washington where the committee may have overpaid on services.

Recent filings made by the AG’s office show that the probe is starting to home in on the actions of Trump’s longtime financial confidant and others.

“The world’s about to learn how Trump’s inner circle—with Trump’s full knowledge—took advantage of the presidential inauguration,” said Stephanie Winston Wolkoff, who helped put together inaugural events and is now a lead witness for the government in this case.

“Everything they did was all about self-dealing. They had a nonprofit pay them for their own hotel at an inflated cost,” she told The Daily Beast.

Topping the list of witnesses D.C. investigators now want to interview is Allen Weisselberg, the Trump Organization’s chief financial officer. The AG’s office wants to question him under oath, as Weisselberg played a peculiar role in reviewing financial transactions of what’s supposed to be the independent inaugural committee—something far outside his duties at the family company.

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The inaugural committee is supposed to be a short-lived nonprofit whose sole task is to quickly put together celebrations for an incoming president. But Trump’s inauguration committee looped in Weisselberg three months after the celebration in 2017 to conduct an audit of the committee’s finances, according to public court documents filed by the AG last month. Mother Jones was the first to reveal Weisselberg’s enlarged role in the scandal.

The second person investigators now want to question is Gentry Beach, a Texas financier who was Don Jr.’s college buddy and served on the nonprofit’s finance committee. Government lawyers identified Beach as a person who coordinated the Trump Org’s reservation of hotel rooms—a $50,000 business expense that was later paid by the nonprofit.

Investigators also want to depose another person who put that deal together: Kara Hanley, who is described in court documents as “a former executive assistant” at the family business. Hanley was listed as a Trump Organization employee on a “friends and families” guest list for events, according to records obtained by The Daily Beast.

Weisselberg’s attorney, Mary Mulligan, declined to comment. Neither Beach nor Hanley responded to calls and text messages.

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As this case has progressed, the window for government investigators to conduct these interviews has closed. All three of these people reside more than 25 miles away from the nation’s capital, which means they can’t be forced to appear in court and testify during a trial, according to the D.C. superior court rules. That’s why the local AG is asking Judge José M. López to grant special permission to conduct these depositions.

“The district wishes to move forward as soon as possible with deposing the three individuals… so that any testimony can be preserved for trial and is as accurate as possible,” government lawyers wrote in a recent filing.

But on Sunday, Judge López canceled an afternoon hearing he had previously set for Monday, June 28, postponing the AG’s ability to make its argument in court.

D.C. investigators are closing in on Weisselberg just as the New York attorney general and Manhattan district attorney are doing the same, albeit for a separate criminal probe into bank fraud and tax evasion.

However, this case is civil, not criminal, so the office of D.C. Attorney General Karl A. Racine isn’t seeking prison time for any of those involved. Instead, the AG wants to recover any improperly spent money and hand it over to a nonprofit that will put it to use for the public good.

The AG’s office claims the committee violated the law for two reasons: It wasted charitable funds and allowed Trump World insiders to personally benefit from the nonprofit.

In court filings, investigators laid out how Trump’s hotel in Washington initially quoted a charge of $3.6 million for the event space, food, and drinks over eight days. When Trump’s inner circle wised up to the idea that the exorbitant price could reek of corruption, then-Trump campaign official Rick Gates negotiated a lower price. But not much lower.

Investigators say the presidential inauguration committee, referred to in court documents as the “PIC,” was repeatedly charged more money than it should have been. They cited one example in which the Trump Hotel’s director of catering tried to lower the price for one event on inauguration day—only to be instructed to raise it back.

“It was categorically improper for the PIC to spend almost $300,000 in charitable funds meant to benefit the public on what was a private party for the Trump children and the guests staying at the hotel their family owned,” government attorneys stated in a filing.

That one event on Jan. 20, 2017, included $175,000 in rental charges, plus $113,000 in food and drinks for the event, according to court documents.

Investigators also say another event ended up being a private party during the evening of the inauguration for Donald Trump Jr., Ivanka Trump, Eric Trump, and hotel guests—blowing $288,367 in rent and food.

“I didn’t understand why anything was being done for the kids. It’s not a birthday party. This is for the United States of America swearing in the most powerful executive in the world,” Winston Wolkoff, who said she had to awkwardly jockey to block the creation of events that were clearly self-dealing, like Junior’s hunting-themed “Sportsman’s Ball” and Ivanka’s “Ladies Luncheon.”

“Why is Ivanka bringing together 100 influential women when she’s not on the Cabinet?” she said. “These kids were doing events for themselves... by them, for them, with them... with other people’s money meant for a nonprofit.”

If Judge López eventually allows the additional depositions to go forward, investigators plan to ask why the presidential inauguration committee went out of its way to pay a debt for The Trump Organization. Investigators are examining how the Trump Organization contracted Madison Washington D.C. Hotel for a block of rooms for Trump family and friends during inauguration week, but in typical Trump fashion, didn’t pay for some of the unused rooms. When the Madison hotel sent the unpaid bill to a collection agency, Gates directed the collections agency to change the name on the invoice to the inauguration committee—which ended up paying $49,358.

According to court documents, Gates told investigators that the hotels were part of a freebie to donors who already put up cash for the inauguration effort. But investigators want to ask Beach, the money manager in Dallas, about the hotel rooms. It was his name, after all, on paperwork for the initial contract.

According to court filings, the D.C. Attorney General’s office has already subjected nearly a dozen people involved to questions in depositions. The top-ranking ones include Ivanka, Don Jr., Gates, and inaugural committee chairman Thomas Barrack. Investigators also got sworn, out-of-court testimony from inauguration committee CEO Sara Armstrong, CFO Heather Martin, and event planner Ramsey Stewart.

Government lawyers have also deposed several employees: Trump Hotels CEO Eric Danziger, Trump International Hotel's managing director, Mickael Damelincourt, and the hotel's sales director, Patricia Tang.

The inaugural committee, the Trump Organization, and the Trump International Hotel had tried to block the attorney general from even bringing it up at the upcoming hearing on Monday.

The Trump Organization did not respond to requests for comment.

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