October 17, 2018; CNN
With all the other ongoing investigations of the president, the uses and abuses of the Trump Foundation as a kind of microcosm could easily be overlooked for its significance if it were not for the New York State Attorney General’s office, which is renowned for its aggressiveness on the misuse of charity.
Last summer, New York’s attorney general sued the Trump Foundation, charging it with “improper and extensive political activity, repeated and willful self-dealing transactions, and failure to follow basic fiduciary obligations or to implement even elementary corporate formalities required by law.” The suit was back in the news last week when former Trump attorney Michael Cohen met with a team of federal and New York State investigators looking into the Foundation and President Trump’s business dealings. Cohen’s meeting with the prosecutors could signal his willingness to corroborate the charges that have been leveled and sparked speculation about what additional allegations would result.
Cohen could validate that the basic oversight of a nonprofit’s operations that a board of directors is expected to provide, serving as a check and balance for ineffective management, was absent. The New York AG has alleged that the Foundation’s board had not met for years, and that the “investigation found that the Foundation operated without any oversight by a functioning board of directors. Decisions concerning the administration of the charitable assets entrusted to the care of the Foundation were made without adequate consideration or oversight and resulted in the misuse of charitable assets for the benefit of Donald J. Trump.”
The board of the Foundation was totally missing in action, to the point that individuals listed as members did not know they held that role. With no functioning board, Donald Trump was able to personally direct the Foundation’s activities and appears to have used it as another source of funds to support his personal interests and presidential campaign.
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“In the absence of a functioning board,” the petition says, “Mr. Trump ran the Foundation according to his whim, rather than the law,” individually approving grants and disbursements with no oversight from board members. Trump campaign staff apparently decided not just who was to get money, but at what political events the presentation of checks would occur. NPQ noted shortly after initial charges were filed that “not only did Trump freely mix the affairs of his charity and the campaign, he did so quite openly. Did he not know this was disallowed, or did he just not much care?”
The charges include instances where Foundation assets were used to benefit President Trump’s business and personal interests. The New York Times cites “several payments of foundation funds to settle legal disputes involving Mr. Trump’s businesses, including a $100,000 payment in 2007 to settle claims against Mar-a-Lago and a $158,000 payment in 2012 to settle claims against the Trump National Golf Club.” And, on an even more personal level, “In 2014, the foundation paid $10,000 to the Unicorn Children’s Foundation for a painting of Mr. Trump that hung at the Trump National Doral Miami golf resort,” a story NPQ covered back in 2016.
Little is known about what was discussed at this most recent meeting. CNN reported that “representatives for both the attorney general’s office and the US attorney’s office declined to comment. Petrillo didn’t immediately respond to a request for comment.” While New York State has shared the information it gathered that supports the current charges with the US Department of Justice, the Federal Election Commission, and the IRS, we do not know whether any of these organizations has begun its own investigation of possible violations of the federal statutes covering foundations nor when Cohen provided new information that might make that more likely.
When the controversy originally emerged, President Trump announced that the Foundation would be dissolved to avoid any future conflicts of interest. New York State, when it filed it charges, blocked this action pending outcome of the criminal case.—Martin Levine