According to Law360, the New York state attorney general's office accused the Trump Foundation on Thursday of self-dealing in a suit seeking a ban on President Donald Trump from operating any Empire State nonprofit for 10 years, one-year bans for three of his children and $2.8 million of restitution.
The Manhattan Supreme Court lawsuit, which also seeks to dissolve the foundation, comes after what New York Attorney General Barbara Underwood called an extensive investigation of the Trump Foundation's payments to political allies on behalf of the president and for-profit ventures grouped under his Trump Organization.
Underwood's office said it has sent referral letters to the IRS and Federal Election Commission identifying what it calls possible violations of federal law and asking for further investigation.
The suit says three of the president's kids, Donald Trump Jr., Ivanka Trump, and Eric Trump, the foundation's other board members besides the president, should receive one-year directorship bans. They provided "no oversight" amid the lawbreaking, the suit alleges.
President Trump took to Twitter, his favorite medium, soon after the lawsuit was announced to blame "sleazy" Empire State Democrats for inventing what he called a "phony crime."
"I won’t settle this case!" Trump said via Twitter, asserting that his foundation, which was set up in 1987 and is located at Trump Tower on 5th Avenue in Manhattan, has given more to charity, $19.2 million, than it has taken in, $18.8 million.
One of the suit's central allegation involves what the attorney general's office calls false statements made to New York officials by the foundation about a January 2016 campaign event in Iowa.
Trump campaign staffers co-opted the foundation, calling the event a fundraiser for veterans, when in fact it was a campaign event ahead of the Iowa caucus, the suit alleges.
More than $2.8 million raised at that event flowed from the foundation at the direction of senior Trump campaign staff, who dictated how the money would be spent, according to the lawsuit.
Former Trump campaign manager Corey Lewandowski pushed Allen Weisselberg, the foundation's treasurer and a top Trump business captain, for money to be doled out in Iowa in the days ahead of the Feb. 1 caucuses, the suit says. Trump won the Iowa Republican caucus on his way to winning the presidency in November 2016.
Those payments, according to the suit, amounted to "related-party transactions," or illegal self-dealing. It seeks restitution of that amount, plus potential penalties.
The foundation also made an unlawful $25,000 political donation to the campaign of Florida attorney general Pam Bondi in 2013, the suit says. That money was reimbursed to the foundation by Trump in 2016 after news reports detailed the payment, the suit notes, alleging several other allegedly unlawful foundation transactions as well.
The case is State of New York v. Trump et al., case number 451130/2018, in Manhattan Supreme Court.
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