Trump’s misuse of charity costs him $2 million

A New York state judge ordered President Donald Trump to pay $2 million in damages to non-profit groups Wednesday after the president admitted misusing money raised by the Donald J. Trump Foundation to promote his presidential bid, pay off business debts and purchase a portrait of himself for one of his hotels.

The damage award brought an end to a protracted legal battle over the foundation, whose giving patterns and management became a flashpoint during Trump’s run for office in 2016. New York’s attorney general had filed suit last year accusing Trump and his family of using the foundation as an extension of his businesses and his presidential campaign.

The settlement, which was finalised last month and announced Wednesday in the judge’s order, included a detailed admission of misconduct that is rare for the president, who has long employed a scorched-earth approach toward fighting lawsuits.

Among Trump’s admissions: The charity gave his campaign complete control over disbursing the $2.8 million that the foundation had raised at a fundraiser for veterans in Iowa in January 2016, only days before the state’s presidential nominating caucuses. The fundraiser, he acknowledged, was in fact a campaign event.

The president also admitted to using the foundation to settle the legal obligations of companies he owned, including Mar-a-Lago, his private club in Florida, and the Trump National Golf Club in Westchester County, New York. And he acknowledged that the foundation purchased the $10,000 portrait of Trump, which was ultimately displayed at one of his Florida hotels.

Once billed as the charitable arm of the president’s financial empire, the Trump Foundation closed its doors in December, six months after the attorney general’s office sued, saying the foundation was acting “as little more than a checkbook to serve Mr. Trump’s business and political interests.”

The suit accused the foundation of engaging in “a shocking pattern of illegality” that included improperly coordinating with Trump’s 2016 presidential campaign. Charities are barred by law from advancing the self-interests of their executives.

In her ruling Wednesday, Justice Saliann Scarpulla of state Supreme Court in Manhattan found that Trump had in fact “breached his fiduciary duty” by using the foundation to advance his business and political interests.

The suit was one of several legal battles that arose between Trump and state prosecutors around the country from the moment he took office, especially in New York. The initial investigation into the foundation was launched by the former attorney general, Eric T Schneiderman, and continued through the subsequent administrations of two attorneys general.

As part of the settlement negotiations, the attorney general’s office had asked Scarpulla to ban Trump from ever running a charity again. Though the judge did not impose such a ban, she did place numerous restrictions on Trump should he seek to establish another charitable organisation.

The final details of the settlement were worked out between the current New York state attorney general, Letitia James, and Trump’s lawyers Oct 1.

Under its terms, Trump’s lawyers agreed to give the Trump Foundation’s remaining assets of $1.7 million to a group of charities that have no connection to the president or his family, including the Children’s Aid Society, the United Negro College Fund and the US Holocaust Memorial Museum. The $2 million in damages Scarpulla awarded, which were akin to a fine, were to be paid to those same groups.

Both sides agreed that three of Trump’s children who were officers of the foundation — Donald Trump, Jr, Ivanka Trump and Eric Trump — will undergo training in order to ensure they do not engage in similar improprieties.

President Trump also agreed that any charity he becomes involved with in the future will have a majority of independent directors, lawyers with expertise in non-profit law and an accounting firm to monitor its grants and expenses.

James hailed the court’s decision and the resolution of the lawsuit as “a major victory” that would send a warning to “those who would abuse charities for personal gain.” Trump, she said, had used the foundation as “a piggy bank to promote his political interests.” She added: “No one is above the law — not a businessman, not a candidate for office and not even the president of the United States.”

In a statement, a spokesman for the Trump Foundation portrayed the damages awarded by Scarpulla as a “contribution,” adding that it was “pleased to donate an additional $2 million” to “worthy organisations.”

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