Trump Must Pay $2 Million to Settle Claims Against Foundation

(CN) – A New York state court has ordered President Donald Trump to pay $2 million to settle claims that he used money from his charitable foundation for his personal, business and political interests during the 2016 presidential election campaign.

President Donald Trump talks to reporters on the South Lawn of the White House on Oct. 25, 2019. (AP Photo/Susan Walsh)

New York Supreme Court Justice Saliann Scarpulla’s Thursday order appears to resolve claims that Trump used the foundation as a front for campaign events during the 2016 election cycle and that the foundation lacked oversight.

A supposed fundraiser in Iowa for military veterans in January of that year was actually a campaign event, New York Attorney General Letitia James said in a complaint against the president and the foundation he founded in 1987. The campaign contributed $2.8 million to the Trump Foundation, but the campaign, not the foundation, organized and planned the event.

In her decision, Judge Scarpulla said that Trump had breached his fiduciary duties to the foundation and that as a result of the financial mismanagement,  “waste occurred to the foundation.”

“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 wrote in the 7-page decision.

The attorney general’s office says that as part of the settlement of claims against Trump and its directors, including his children Donald Trump Jr., Ivanka Trump and Eric Trump, the Trump Foundation will be shut down and its remaining assets given to eight charities.

The $1.78 million in liquid assets will be directed to Army Emergency Relief, Children’s Aid Society, City Meals-on-Wheels, Give an Hour, Martha’s Table, United Negro College Fund, United Way of Capital Area, and US Holocaust Memorial Museum.

“The president will be subject to ongoing supervision by my office, and the Trump children had to undergo compulsory training to ensure this type of illegal activity never takes place again,” James said in a statement. “My office will continue to fight for accountability because no one is above the law – not a businessman, not a candidate for office, and not even the President of the United States.”

James’ office entered into four stipulation agreements with Trump. Last year, the president agreed to dissolve the foundation under court supervision.

The attorney general initially asked for the court to order Trump to pay $2.8 million in damages. But Scarpulla said that although the money from the Iowa fundraiser was “disbursed by Trump’s campaign staff, rather than by the foundation,” that Trump should pay $2 million instead.

“Taking into consideration that the funds did ultimately reach their intended destinations, i.e., charitable organizations supporting veterans, I award damages on the breach of fiduciary duty/waste claim against Mr. Trump in the amount of $2,000,000, without interest,” the judge wrote.

The judge also declined to order the president to pay punitive damages.

An attorney for the foundation did not immediately respond Thursday to a request for comment.

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