Trump Must Pay $2 Million for Using Charity Cash on Politics

Erik Larson

(Bloomberg) -- President Donald Trump was ordered by a New York judge to pay $2 million in restitution after he admitted to using his charitable foundation to raise money for political purposes during the 2016 campaign.

The order handed down Thursday largely resolves a lawsuit filed by the New York attorney general’s office over violations of the state’s nonprofit laws.

The restitution is based on New York’s claim that the Trump Foundation held a televised fundraiser in Iowa to raise money that was ultimately distributed by the campaign for political purposes, instead of by the charity. Trump had claimed the case was politically motivated, but that argument was rejected a year ago when the judge denied his request to dismiss the lawsuit.

“I am the only person I know, perhaps the only person in history, who can give major money to charity ($19M), charge no expense and be attacked by the political hacks in New York State,” Trump tweeted Thursday. “No wonder why we are all leaving!”

New York Attorney General Letitia James, a Democrat, said in a statement on Thursday that she had separately reached a series of agreements with Trump and his charity to resolve the state’s claims without a trial. Under the deals, she said, Trump “admits to personally misusing funds at the Trump Foundation.“

Trump also agreed to restrictions on future charitable service and to alert James’s office if he starts another charity. The settlements also require mandatory training for Trump’s children, Donald Trump Jr., Ivanka Trump, and Eric Trump, who were on the charity’s board.

New York had sought restitution of $2.8 million plus interest. New York Supreme Court Justice Saliann Scarpulla said a lower amount was justified because the money Trump’s campaign improperly distributed had ultimately made its way to charitable causes. The judge, citing Trump’s agreement with James, also declined New York’s request for Trump to pay more than $5 million in damages.

The law offices of Alan Futerfas, which represents the Trumps and the charity in the lawsuit, issued a statement on behalf of a foundation spokesperson that characterized the restitution as a donation because, under the court order, the money will all go charity.

Read More: No One Wanted Trump Portrait, So His Charity Had to Buy It

“We are pleased that the court, in rejecting the attorney general’s frivolous request for statutory penalties, interest and other damages, recognized that every penny ever raised by the Trump Foundation has gone to help those most in need,” according to the statement. “Now that this matter is concluded, the Trump Foundation is proud to make this additional contribution.”

James had earlier reached an agreement with Trump that he would shutter the foundation and distribute its remaining $1.78 million to charities chosen by her office. Thursday’s ruling lists the charities, including Meals-on-Wheels, United Negro College Fund and the U.S. Holocaust Memorial Museum.

Trump also agreed to reimburse $11,525 to the foundation for its use of charity money to buy items at a charitable auction, according to the ruling.

New York has argued that neither Trump nor his three eldest children provided evidence rebutting the state’s claims that they failed to meet as a board, oversee grant-making or implemented policies to protect the charity’s funds from abuse.

“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,” Scarpulla said in the ruling.

The foundation’s statement on Thursday said the charity had donated more than $19 million to hundreds of charities. More than $9 million of that total came directly from Trump, whose net worth is about $3 billion.

The case is People of the State of New York v. Trump, 451130/2018, Supreme Court of the State of New York, County of New York (Manhattan).

(Updates with Trump’s tweet in fourth paragraph.)

To contact the reporter on this story: Erik Larson in New York at elarson4@bloomberg.net

To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Joe Schneider, Peter Blumberg

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