MANHATTAN (CN) – New York Attorney General Barbara Underwood marked the president’s birthday on Thursday with a $2.8 million lawsuit that seeks to dissolve the Donald J. Trump Foundation for violations of state and federal law.
“As our investigation reveals, the Trump Foundation was little more than a checkbook for payments from Mr. Trump or his businesses to nonprofits, regardless of their purpose or legality,” Underwood said in a statement. “This is not how private foundations should function and my office intends to hold the foundation and its directors accountable for its misuse of charitable assets.”
Lobbing self-dealing allegations against Trump, the foundation and his children sitting on the board of directors, the 41-page petition in Manhattan Supreme Court marks the culmination of an investigation that began in June 2016.
“For more than a decade, the Donald J. Trump Foundation has operated in persistent violation of state and federal law governing New York state charities,” the suit begins.
Months after the start of the attorney general’s probe, Washington Post reporter David Fahrenthold put the Trump Foundation’s transactions under public scrutiny for the first time with a Pulitzer Prize-winning series. The articles alluded to violations of state and federal law that would not be formally alleged until Thursday.
“In sum, the investigation revealed that the foundation was little more than a checkbook for payments to not-for-profits from Mr. Trump or the Trump Organization,” the petition states.
Underwood’s petition highlights five expenditures made with charity money, including two legal settlements and Trump’s purchase of a painting of himself.
“This pattern of illegal conduct by the foundation and its board members includes 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 petition states.
Pushback from the Trump Foundation was swift, attributed to an anonymous spokesperson and originating from a Trump Organization email address.
“This is politics at its very worst,” the statement says. “The foundation has donated over $19 million to worthy charitable causes – more than it even received. The president himself – or through his companies – has contributed more than $8 million. The reason the foundation was able to donate more than it took in is because it had little to no expenses.”
A dogged chronicler of the foundation, Fahrenthold noted that the Trump Organization sent the statement because the charity has no staff.
Attorney General Underwood skewered the foundation for lacking oversight and internal controls.
“In the absence of a functioning board, Mr. Trump ran the foundation according to his whim, rather than the law,” the petition says. “Mr. Trump, who was the sole signatory on the foundation’s bank accounts, approved all grants and other disbursements from the foundation. Accounting staff for the Trump Organization had responsibility for issuing checks from the Foundation, and issued the checks based solely on Mr. Trump’s approval before presenting the checks to Mr. Trump for signature.”
The first charity-funded settlement described by Underwood involved 2006 zoning issues with his private club Mar-A-Lago.
A receipt for the $100,000 that Trump had to pay to the Fisher House Foundation as part of that settlement is included in the petition. It shows a handwritten notation that the money came from the "DJT Foundation.”