NEW YORK: New York’s attorney general sued U.S. President Donald Trump, three of his children and his namesake foundation on Thursday, alleging "persistently illegal conduct" at the nonprofit, including support for Trump’s 2016 presidential campaign.
Barbara Underwood, the attorney general, asked a New York state judge to dissolve the Donald J. Trump Foundation and to ban Trump, his sons Donald Jr. and Eric, and his daughter Ivanka from holding leadership roles in New York charities.
Underwood said her office’s 21-month investigation, begun under her predecessor Eric Schneiderman, uncovered "extensive unlawful political coordination" by the foundation with Trump’s campaign, as well as "repeated and willful self-dealing" to benefit Trump’s personal, business and political interests.
Among the transactions the lawsuit cited as illegal was a US$10,000 (£7,513) payment to the Unicorn Children’s Foundation for a portrait of Trump purchased at a fundraising auction in 2014, and US$100,000 paid to another charity to settle a legal claim in 2007.
"Mr. Trump ran the Foundation according to his whim, rather than the law," the lawsuit said. (Lawsuit https://on.ny.gov/2lbdv0V))
The lawsuit, in the state Supreme Court in Manhattan, seeks US$2.8 million of restitution plus penalties, a 10-year ban on Trump serving as a director of a New York nonprofit, and one-year bans for his children.
"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. "That is not how private foundations should function."
The Republican president attacked the lawsuit in a series of posts on Twitter that blamed Democratic politicians in his home state.
"The sleazy New York Democrats, and their now disgraced (and run out of town) A.G. Eric Schneiderman, are doing everything they can to sue me on a foundation that took in US$18,800,000 and gave out to charity more money than it took in, US$19,200,000," Trump wrote. "I won’t settle this case!"
The Trump Foundation issued a statement criticizing the lawsuit as "politics at its very worst" and accusing the attorney general of holding its US$1.7 million in remaining funds "hostage for political gain."
The foundation said Trump himself had contributed more than US$8 million, and that the foundation had already announced its intention to dissolve in 2016.
The lawsuit adds to legal problems affecting Trump, including an investigation by Special Counsel Robert Mueller into whether Trump’s 2016 campaign colluded with Russia. Trump has denied there was any collusion, and Russia has denied meddling in the election.
The lawsuit challenges the Trump Foundation’s role in a fundraiser for military veterans that Trump organised in 2016 instead of taking part in one of the Republican debates.
Some US$2.8 million went to the foundation, the lawsuit said, and the foundation wrongly ceded control of those funds to Trump’s campaign staff, who wrongly disbursed grants at campaign rallies for Trump’s political benefit.
Paul S. Ryan, head of litigation at Common Cause, a nonpartisan watchdog group in Washington, said the New York filing provides details of actions that could also violate a federal ban on campaigns funnelling "soft money" through nonprofits.
"This involvement of the Trump campaign in the foundation’s disbursements right before the Iowa caucuses may very well violate the campaign finance law soft money ban," Ryan said in an interview.
(Reporting by Jonathan Stempel in New York; Additional reporting by Ginger Gibson and Doina Chiacu in Washington and Brendan Pierson and Jonathan Allen in New York; Editing by David Gregorio and Chizu Nomiyama)