BY: TANNER KENNEY
Recently-ascended New York State Attorney General Barbara Underwood has announced numerous charges against the Donald J. Trump Foundation alleging, among other crimes, that the organization “used charitable assets to pay off the legal obligations of entities he controlled to promote Trump hotels, to purchase personal items and to support his presidential election campaign[.]” Included in the lawsuit are allegations that President Trump and his children were directly involved in the financial impropriety and are personally responsible for the malfeasance, including a $10,000.00 purchase of an oil painting of Trump.
The suit requests a minimum of $2,800,000.00 in compensatory restitution in addition to fines and a demand that the organization divest and dissolve itself immediately. AG Underwood’s spokesperson added that the case will be tried in civil court as opposed to criminal due to the fact that the Office of the Attorney General does not have jurisdiction over the financial dealings of nonprofits in the State of New York. On their face, these crimes are shocking, to say the least.
While the suit, itself, is shocking and scandalous, it is the charity’s ties to the financing of political campaigns throughout the nation for decades that perfectly embodies the need for campaign finance reform. The intent of these actions – to subvert the American electoral system for personal, corporate, and partisan gains – should be of the greatest concern to American citizens around the world as the ways in which ‘dark money’ is funneled to and through campaigns changes by the day.
The alleged criminal nature of the Donald J. Trump Foundation is emblematic as well as both a microcosm and unintended consequence of the continued deregulation of American campaign finance. However, it should be noted that the serious nature of the accusations will bring about a great deal of scrutiny, and rightfully so. Should the charges be upheld, the legal precedents that could be set are unquestionably game-changing for the American political landscape.
AG Underwood’s office has not only sued Trump’s foundation in the State of New York, it has also referred criminal charges to both the Internal Revenue Service (IRS) and the Federal Elections Commission (FEC), meaning the charity could face multiple lawsuits on both the state and federal levels. The Office of the AG also alleges that the Foundation’s criminal activity occurred for nearly two decades and turned explicitly political prior to Trump’s announcement that he would be running for president in 2015.
These allegations, in particular, are the most pertinent to the crimes mirroring the structure of Political Action Committees (PACs) throughout the nation since the 2012 elections in that its purpose revolved around the expenditure of funds solicited as charitable donations from individuals, corporations, and anonymous donors, alike. Thankfully, the rights of states to investigate and prosecute entities that have done business in-state have been preserved, meaning that the Office of the Attorney General of New York State is able to litigate the alleged crimes of a Virginia-based charity aimed at benefitting veterans.
If the lawsuit’s allegations are proven to be true, the Foundation’s intent was to deliberately deceive watchdogs as to where Trump Foundation funds were to be directed, including the charitable entities that the funds were intended for, in the first place. This is evidenced by the follow-up emails between the Campaign and the Foundation.
On one occasion during the 2016 elections – which are currently under investigation by Special Counsel Robert Mueller III for numerous instances of Russian meddling – it is alleged that then-candidate Trump utilized funds received during a campaign rally intended to support American military veterans. The Donald J. Trump Foundation received half of the $5,200,000.00 in donations accepted from attendees, however, “the foundation allowed the Trump campaign to direct how funds were spent.” (The Atlantic)
According to Marc S. Owens, a former director of the nonprofit oversight division at the IRS, “[s]ome of the facts are extraordinary. The failure to have board meetings since 1999, for example. You don’t see that very often[.]” A similar situation is currently playing-out in the media regarding the National Rifle Association (NRA) and its ties to the Russian government. The NRA has expressed a strong desire to limit the public exposure of its major donors, moving forward, as its actions during the 2016 elections are being investigated by the Special Counsel.
The criminal nature of these political activities occurs neither solely nor independently in the worlds of nonprofits, PACs, and lobbyists, rather in the confluence of the three wherein ethical boundaries are nonexistent and oversight is limited due to the non-explicit activity of advisors and consultants. While American nonprofits have great strides to make in terms of self-policing fundraising and lobbying activities as well as executive compensation, their strong financial oversight is what makes the case against the Trump Foundation possible to begin with.
Therefore, the legislation providing the pathway for PACs, McCain-Feingold, must be further amended to strengthen its financial oversight capacity with more stringent limitations for contributions and spending. In order to prevent what amounts ill-gotten representation in all levels of government, the amount a single person, organization, or entity can contribute to a PAC must be reduced and the overall amount of money collected by a single candidate from all PACs, combined, should be tied to a percentage of the amount received from individual donors in the district that the elected official intends to represent.
When given both the scope and quantity of the evidence supporting the charges against President Trump’s charitable foundation, it is easy to understand why the underlying investigation preceding the lawsuit took, at minimum, two years to complete prior to the AG’s announcement. Unfortunately for the prosecution, this means that the initial investigation was spearheaded by ex-AG Eric Schneiderman, himself run out of office for the disgraceful actions he took in both his private and professional lives. Surely this element of the case will be seized upon by the Trump Foundation’s legal team as well as his more vocal supporters in the media.
Primarily, the success of the case against the Donald J. Trump Foundation and its leadership team is vital for American progress if for no other reason than to uphold the letter of the law and to ensure a viable path forward for genuinely charitable organizations to remain as such. If the case is invalid, as the Trump Administration and its supporters have shouted since the announcement of the lawsuit, then the entirety of the enforcement of the rule of law in the nation must come into question as well – an outcome that is not only implausible, but unnecessary.
Around the world, the United States has seen its diplomatic influence diminish considerably, historic trade partners condemn the Trump Administration and turn their backs in anger, and the political leverage of a free and open society virtually disappear with the separation of undocumented children from their families at its borders. The actions taken and policies supported by the Trump Administration are, in their collection, a fantastic example of what not to do to encourage communion and progress.
Ultimately, however, it may be the actions taken prior to the election of Donald J. Trump to the office of President of the United States that forces him out of the White House, taking numerous other semi-permanent residents of Washington, D.C. with him. The types of loopholes utilized by politicians, businessmen, and grifters to line their pockets and fund their ill-gotten coffers for future political missives – perfectly exemplified by the Trump Organization, when given its alleged criminal activity in Panama and throughout the world – must end immediately.
Tanner Kenney is an energy and media professional with a background in journalism and received his M.S. in Global Affairs, Environment & Energy Policy from NYU’s Center for Global Affairs. Recently, Tanner has focused on the advocacy of sustainable development through renewable energy technologies, transportation efficiency, and inclusive public policy.
Photo Credit: Jabin Botsford / The Washington Post
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