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The attorney general for the District of Columbia will continue investigating whether Donald Trump’s 2017 inauguration committee misspent more than $1 million, after discussions to resolve the matter out of court stalled this month.
The AG’s office has a civil lawsuit against the inaugural committee and the Trump Organization. And this month, the case was forced into mediation, a deal-making session in which a neutral negotiator tries to get different sides to come to an agreement.
While lawyers met on July 14 to discuss resolving the case out of court, the meeting went nowhere.
According to court records, the closed-door meeting resulted in “no agreement reached.” The reason: Investigators are dead set on seeing this case through to the very end, a source with knowledge of the case told The Daily Beast.
That means the case will proceed, as all sides wait to see whether D.C. Superior Court Judge José M. López rules that the local law enforcement agency has already proven its case before trial. The office of the local attorney general, Karl Racine, has a pending motion for summary judgment arguing that the evidence already presented weighs that heavily in his favor.
The local attorney general claims the Trump Organization and Trump International Hotel Washington, D.C. were “unjustly enriched” by overbilling the nonprofit inauguration committee. The office wants the judge to force the return of $1.08 million in “misspent charitable funds.” (The AG’s office wants to award that money to another civic-minded nonprofit of its choosing.)
Racine’s office is seeking a similar outcome to the victory that New York’s attorney general had in 2018 over the Trump Foundation, forcing it to disband and hand over money to other charities.
The D.C. Attorney General’s Office did not respond to questions. And the inaugural committee’s lawyers—K. Lee Blalack II and David J. Leviss—declined an interview through a spokesman who cited “the confidentiality obligations that the Court required of all parties not to disclose any information about the mediation.”
The probe is examining how Trump’s company and his own family members enriched themselves with the 58th presidential inauguration, a weeklong string of events that are supposed to be a national celebration of the country’s transfer of power.
Every incoming presidential administration puts together a committee for the event planning. In this case, the district attorney’s lawyers are looking into the way Trump’s own children blurred the lines between the family business and what’s supposed to be a nonprofit. Investigators suspect that Donald Trump Jr., Ivanka Trump, and others bilked the inaugural celebration by funneling events to the Trump International Hotel in Washington—where the nonprofit committee was allegedly overbilled on services by the incoming president’s own company.
Although this court case is civil in nature—and must remain so to stay within the D.C. attorney general’s jurisdiction—Racine’s investigators could still refer any evidence of criminal behavior to other law enforcement agencies.
If the D.C. attorney general doesn’t score a summary judgment win, it intends to continue pursuing additional testimony from key witnesses.
As The Daily Beast reported last month, the D.C. Attorney General’s Office wants to question under oath longtime Trump family confidants who may have important information about recent discoveries in the case. At the top of the list is the Trump Organization’s chief financial officer, Allen Weisselberg, who acted outside his company role and reviewed the independent committee’s finances. Weisselberg is already in the hot seat—he was arrested last month for criminal tax fraud in New York City, as part of a separate investigation.
Government lawyers also want to interview Texas financier Gentry Beach, who was Don Jr.’s friend in college and served on the inaugural group’s finance committee.
According to investigators, Beach was behind the Trump Organization’s plan to reserve a block of hotel rooms at the Madison Washington D.C.—an arrangement that’s now under scrutiny because the Trump Organization never paid the tab. When the hotel sent it to a collections agency, then-Trump campaign official Rick Gates directed the bill collectors to change the name on the invoice to the inauguration committee. The nonprofit ended up paying $49,358.
As part of their probe of that hotel deal, investigators also want to interview Kara Hanley, who court documents identify as “a former executive assistant” at the Trump Organization.
Judge López has yet to rule on whether he will grant special permission to conduct these depositions, now that the deadline to conduct these kinds of interviews has passed.
Adding another dynamic entirely to this case is the fact that a central figure in the probe, Tom Barrack, who led the inaugural committee as its chairman, was arrested on a separate matter last week. Barrack, a wealthy investor and personal friend of Donald Trump, appeared in Brooklyn federal court on Monday to plead not guilty to charges that he used his access to the incoming president to secretly lobby for the United Arab Emirates.
When Barrack was deposed in November 2020 by Leonor Miranda, an assistant attorney general with the office’s public advocacy division, he claimed that he wasn’t involved in the Trump family’s initial selection of venues—and that he didn’t know about the block of hotel rooms that were eventually paid by his committee.
This D.C. case is one of several investigations into Trump and his company that were initiated by local prosecutors and have heated up since his departure from the White House. The most advanced probe seems to be the criminal tax fraud case in New York against the Trump Organization. Another is taking place in Fulton County, Georgia, where Trump and his political associates are accused of meddling with the state’s tabulation of 2020 election results.