Lawyering, Politics, Society

New York Attorney General Moves Against Trump Foundation

495px-Donald_Trump_by_Gage_SkidmoreWe have been discussing the serious allegations against Donald Trump’s charitable foundation, which have been used in transactions that are linked to Trump’s businesses rather than charities.   — which has been sustained for years by donors outside the Trump family — has never obtained the certification that New York requires before charities can solicit money from the public, according to the state attorney general’s office.  Now, New York Attorney General Eric Schneiderman (D) has made the surprising allegation that the Donald J. Trump Foundation does not have the necessary registration and annual audit to operate as a large foundation.  I have been critical of Schneiderman in his investigation of climate change skeptics.  However, the failure to obtain this necessary registration and comply with basic auditing is quite surprising. Once again, I am unclear how any attorneys representing Trump could continue to maintain the charity without satisfying such basic legal requirements, particularly one (the auditing) designed to prevent the very type of intermingling of funds that been raised by critics.

Any charity that solicits more than $25,000 a year from the public must obtain this registration before raising money and submit to annual audits to assure that no money is used to benefit the officers through self-dealing. Schneiderman could move to enjoin the charity and even force the return of past money raised by Trump.  What is known is that the Trump Foundation took in at least $1.67 million through Trump’s website.  Trump has reportedly given at least $5.4 million between 1987 and 2006.

In Trump’s defense, two points should be raised. First, there is still a considerable amount of money given to charity from this foundation, even if you consider the couple of controversies that we discussed earlier.  Second, for much of its history, Trump was the only donor.  That would allow him to claim the minimal level of reporting and certification under Estates, Powers and Trusts Law.  His attorneys did in fact file annual reports during that period in compliance with the law and there was likely no required independent audit.

The key period will be the last decade when the Foundation began to solicit donations from third parties.  The gradual change may have blindsided Trump’s attorneys but it should not have.  At some point, the charity had change to a major solicitor of charitable funds.

This is a serious matter because courts treat these requirements as straightforward and unrelenting standards.  There is little room for interpretation. That would place the New York attorney general in a commanding position unless the certification and auditing allegations are proven false.

190 thoughts on “New York Attorney General Moves Against Trump Foundation”

  2. I just helped edit a new edition of Notation For The Daily Outsider that incorporated this from The Fortune’s Geoff Colvin….Trump is not a fool–but the immense cost is starting to add up..and I can’t understand either why a “foundation” was used as it were–the question is where the ultimately accountability lies…and here is the thing–he’s not helping his own cause by tweeting out hate tweets at 3:00 AM:

    Fortune Power Sheet By Geoff Colvin.

    Daily insights on leaders and leadership
    By Geoff Colvin

    FOLLOW SUBSCRIBE ANON TIP

    September 30, 2016

    “If @realDonaldTrump loses this election, im betting he personally goes bankrupt w/in 7 yrs. Thats how toxic his brand now is.” So tweeted self-made billionaire Mark Cuban yesterday, and while I take no position on the bankruptcy forecast, Cuban’s point about Trump’s brand is valid and important. Trump’s presidential run – unlike virtually all his previous attention-seeking behavior – may cost him significant money.

    Trump deserves credit for hatching a genuine business innovation: branded high-end real estate. No one had previously created a brand that could be put on an office building or a hotel or an apartment building or a golf course and that would give any of those properties a patina of luxury and success. Trump did it, and the brand was his name. His business strategy over the past 40 years has been to keep himself in the public eye because every mention of his name in the media built the value of the brand.

    At least that’s how it worked until now. Over the past 12 months Trump has almost certainly been devaluing his brand among the customers who are most important to his businesses – high-income individuals plus the corporations that rent space in his office buildings and hold conferences and meetings in his hotels or hotels that have licensed his name. Trump’s supporters in the election tend to be less educated and poorer than voters overall; they’re not his customers. By contrast, he’s losing heavily among college-educated voters, a group that includes most of his individual customers. Corporate customers find it increasingly difficult to associate themselves with Trump-branded real estate because of his astonishing ability to offend assorted groups – Latinos, Muslims, women, the disabled. No mainstream corporation wants to offend those groups by occupying space with Trump’s name in shiny gold capital letters on the front.

    There’s evidence that Trump’s brand devaluation is happening. Bloomberg cites research showing that among consumers earning over $150,000 a year, the Trump brand’s value had plummeted by the end of last year. Other research finds that the market share of Trump casinos, hotels, and golf course plunged 14% from July 2015 to July 2016.

    If Trump the brand were put on mass-market consumer products, time might heal the wounds that Trump the man has inflicted on it. But corporate customers won’t forget what he has said, nor will many high-end individuals. Quite a few Latinos, Muslims, women, and disabled, regardless of income, won’t forget either.

    It would be a mistake to think that Trump hasn’t thought about all this. He has been a skillful brand steward for decades. Maybe he has a plan for repositioning his brand, or maybe he’s so confident of winning in November that he believes he’s about to ascend into a higher realm entirely. But it would be ironic if the man who once bragged that he could be the first person ever to turn a profit on running for president instead decimated his fortune by running.

  3. This is weird. God knows, likely there’s lots to find here and the prosecuter should go for it. It’s the bizarre contrast with the Clinton e-mails and Clinton foundation which involve billions of money, money laundering, pay to play and foreign govt. interference in US policy, that gives this investigation the smell of the political.

    By all means, have at it.

  4. Just one among many democrat attorney generals who abuses their power. After all the ends do justify the means; don’t they?

  5. Why doesn’t Trump have better attorneys? He’d better start wiping his hard drives and getting immunity deals.

    I just want the same standard of law applied to everyone. If HRC’s foundation could be used as a slush fund for her, her husband, and their cronies, and sell State access to foreign dictators, and not be prosecuted, then, really, who can?

    No more one way for thee, another for me.

    Apply the law equally to everyone, Trump, HRC, and all the rest of us peasants.

  6. Trump has been around for decades–yes, decades–and, from the information contained in this article, so has his charitable organization. One need not be cynical to comprehend that this obscure, no-name AG is just trying to make a name for himself at this point, showing the Democrats that he is a good boy–jumping when they direct him to jump. Tell us, Eric, when did these allegations suddenly surface? How long have you been asleep at the wheel? If you, and your office, have been sitting on this, supposed, damning information until now, you have some splaining to do. Don’t tell us–you suddenly had an epiphany. Decades of abuse, allegedly, at it just suddenly dawned on you, in a dream. Yeah. We all see this for exactly what it is–the eleventh hour feeble and transparent attempt to put Cankles, at any cost, into the White House. Once the dust settles, and Trump has been found to be in compliance with all of the necessary rules and regulations, the intended harm will have been done. The water boy for the Democrats will have done their bidding, and Hillary will throw some political post in Eric’s lap for acting as her hatchet man. His faithfulness to the Party will not go unnoticed or uncompensated. I can only hope that Trump turns the tables, using his ample resources, to thoroughly investigate Eric, himself, and shine the hot and piercing light of intense scrutiny on him. Wait until the skeletons tumble out of his closet.

      1. Reporters are finally doing their job and investigating Trump. How about that Castro deal? Clinton has been investigated for years. In the end these stories won’t damage Trump’s election chances. He is blowing himself up by obsessing on a former Miss Universe.

        1. Doubt that Cuban deal will get him locked up but he does appear to have run afoul of the Cuban community in Florida.

  9. Trump should deny everything. He should claim their was no intent to violate the law. And everyone involved should not cooperate with the investigation until they’ve received full immunity from prosecution. That has proven an effective method for other high profile cases, however one ingredient is missing; he will not have the cooperation of the MSM.

    2. Excellent point re the MSM Olly!

      Btw did you watch Obama’s Town Hall at Fort Lee? I have never seen such a lacklustre performance from the master of rhetoric. He looked like he would rather be anywhere than at Ft. Lee. And he snapped at Jake for trying to interject that he was referring to Trump. Quite bizarre

  10. One question I would love to hear in the upcoming town hall style debate where members of the audience get to participate is, “Mr. Trump, you put forth your acumen as a businessman as your main claim of value should you be elected President. An integral part of that value is that you don’t pay personal taxes, that you are smart. Warren Buffet has stated that he also pays so little, less than his secretary, that he feels that it is unjust to Americans, that the tax structure should be changed, and that the current situation is unfair. Neither he nor you would send the IRS money unless you had to, regardless of how smart you feel you are or how unfair Buffet considers the system. You both function within the system. Would you change the system to reflect a more just proportioning of tax to personal revenue? Would you mirror Warren Buffet’s feelings that the present tax structure that benefits you both by creating a structure where you paid the going rate that applies to your income?”

  12. First of all, there is no way whatsoever that Trump doesn’t know what his lawyers, all his lawyers, are doing and no way he doesn’t personally direct and put his stamp of approval on any and every thing that goes out. Regardless of whether or not the lawyers appear to have their own business and are not a part of Trump’s corporation, they are ‘in house’.

    Secondly, the benefits to society/charities from Trump’s activities far outstrip the amounts he has used personally or dispensed in a sloppy manner. Trump, like Clinton or any other high mucky muck, has that ego that intervenes and gives the owner the latitude to dispense with these or those technicalities and/or use some funds at their convenience.

    The only difference between Clinton and Trump thus far is that Clinton has been raked over the coals on this and other issues while Trump is still enjoying the first coat of paint from that broad brush. The necessary element here is to disclose everything relevant to the elements that form the self professed values of each candidate. For Clinton that has been her performance as Secretary of State and this is as well known as can be. For Trump it is his claims of potential due to his claims of success as a business man. What is missing here is a more complete disclosure of Trump’s dealings regarding taxes, etc. If Clinton has to go through the ringer regarding emails and such then Trump should have to go through the ringer regarding his financial success. His financial success is his claim to fame, why he says he is the best option.

    Regarding these charities details this is an unnecessary distraction from more important stuff. Trump may have created this nonsense on purpose.

  13. A working example for Clinton & Trump, Al Capone was finally taken down for tax evasion.
    Also the Congress needs a vote of no confidence against James Comey.

    Judicial Watch Panel: Clinton Scandal Update – Emails and the Clinton Foundation

  15. I suppose he hasn’t watched Clinton Cash and won’t go after the Clinton Foundation.

    1. The Clinton and Obama crime families are protected groomed politicians…

      What can you epect when a person connected with HBSC and their known drug and terrorism money laudering operations is the head of the Federal Burea of Investigation?

  16. Look at Trump’s utter lack of transparency regarding all his shady dealings and aides and frauds during the campaign: the phase at which pandering and wooing is typically at its highest.

    Then imagine this vacuous know-nothing holding real power: the obfuscations and denials and grimy connections will be absolutely endless. And there will be zero accountability for anything.

    (Countering with Clinton criticism doesn’t change that fact.)

    1. They both stink. I have no confidence in this election. It seems both candidates should be wearing stripes or orange or whatever is fashionable these days in the penal system.

  18. Heaven forbid that a Republican candidate should be prosecuted with the same degree of zeal that is applied to a Democratic candidate.

  19. I can see it now. If there is a trial, every time that Trump tries to introduce evidence, the Attorney General will object. Why? Lack of foundation!

  20. Good for the AG – Trump seems to have crossed the line.

    Wish that the U.S. AG (Loretta Lynch) had shown the same commitment to the law (and Hillary violations).

    As usual, there seems to be a double standard in the application of the law.

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