Trump Charity Ordered To Halt Further Solicitations Due To Alleged Violations Of State Law

Last night I appeared on Fox to discuss the Trump tax disclosure and my view that such use of debt or losses to avoid taxation are allowed under federal law.  This is not say that such practices are based on good tax policy but rather that such practices are not unlawful.  Conversely, I have previously stated that the allegations over the status and operation of the Trump Foundation do raise potential liability.  Now, the F0undation has been ordered by New York AG Eric Schneiderman’s office to  “cease and desist” from soliciting charity contributions.

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.

Now the Foundation has been ordered to “immediately cease soliciting contributions or engaging in other fundraising activities in New York” and provide financial documents to the state Charities Bureau within 15 days.

I still remain surprised that Trump attorneys did not insist on the proper certification and annual auditing required under state law after the Foundation began to solicit significant contributions.  That failure has now led to the suspension of fundraising operations at the Foundation and, while unlikely, the prosecutors could ask for all of the prior contributions to be paid back to the donors.