Tuesday, June 26, 2018

His foundation is now another source of legal trouble for Trump

Steve Benen (MSNBC/MaddowBlog) brings us up to date on Why the tax returns for Trump’s charitable foundation are so important.

It’s been a couple of weeks since the New York attorney general’s office accused Donald Trump’s charitable foundation of being little more than a slush fund, which, among other things, made illegal in-kind contributions for Trump’s campaign. The scope of the legal issues raised by the New York court filing [on June 14th] are still coming into focus.

There are, of course, questions surrounding the president and his family allegedly running a fraudulent charitable entity. There are additional questions about violations of federal election law, which appear to have been quite flagrant.

But what may be one of the most difficult legal angles is an issue that has long been a trouble area for Trump: tax returns.

As the New York Times recently reported, the president personally signed federal tax returns swearing that his foundation wasn’t used for political and/or business purposes, and we now know there’s quite a bit of evidence that suggests it was used for both. Indeed, the article added that when he signed those tax documents, Trump stated, under penalties of perjury, “that the foundation did not engage in transactions with interested parties, and that the foundation did not carry out political activity.”

The Washington Post’s David Fahrenthold added the other day that Trump’s signature appeared “just below a stern warning from the IRS: Providing false information could lead to ‘penalties of perjury.’”

In 2007, 2012, 2013 and 2014, the Donald J. Trump Foundation stated that none of its money had been used to benefit Trump or his businesses. But the New York attorney general found that, in each of those years, Trump had used his charity’s funds to help one of his businesses. In 2013, the attorney general alleged, Trump also failed to disclose an improper gift to a political group.

This suggests we’re not just talking about a possible one-time bureaucratic slip-up. Trump and his family stand accused of running a fraudulent charitable operation and repeatedly lying in official legal documents about the nature of the foundation’s work.

The Post’s article added, “It is a felony to knowingly file a false tax return, with potential penalties of up to $100,000 in fines and up to three years in prison. In rare cases – where prosecutors could prove the falsehood to be deliberate – people have been convicted of signing false tax returns.”

This is entirely in line with what Jenny Johnson Ware, a criminal tax attorney in Chicago, told the New York Times earlier this month: “People have gone to prison for stuff like this, and if I were representing someone with facts like this, assuming the facts described in this petition are true, I would be very worried about an indictment,”

The NY Times editorial board provided more examples from the NY AG’s court filing: Donald Trump’s Charity Begins, and Ends, at Home

For instance, the largest reported donation the foundation has made — $264,631 — was used to refurbish the fountain in front of Mr. Trump’s Plaza Hotel in New York. He has not given any of his own supposed fortune to the foundation since 2008, relying instead on the beneficence of others, whether pro-wrestling mavens or simply Americans who thought they were supporting, say, veterans. And yet the Trump Foundation was repeatedly compared with the Clinton Foundation, which, despite justifiable concern about Bill and Hillary Clinton’s dual roles as philanthropic boosters and politicians, is a credible charitable enterprise that focuses on global health and has saved perhaps millions of lives.

A lawsuit filed by the New York State attorney general, Barbara Underwood, on Thursday morning confirms many of these facts and adds a few new ones, alleging that “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,” Ms. Underwood said in a statement.

In precise and damning detail, the suit catalogs Mr. Trump’s repeated violation of both state and federal laws by tapping the foundation’s funds for his own personal purposes, including paying out legal settlements, making political contributions and purchasing a portrait of himself to hang in one of his golf clubs.

A couple of examples: In 2013, the foundation gave $25,000 to “And Justice for All,” a political organization supporting the re-election of Florida’s attorney general, Pam Bondi. But on its federal tax form, the foundation claimed that it did not contribute money to any political campaign, and that it had donated $25,000 to a Kansas-based nonprofit, Justice for All, even though it had not. The foundation later attributed the false report to an accounting error.

Days before the 2016 Iowa caucuses, Mr. Trump held a fund-raiser on behalf of military veterans, raising about $5.6 million, half of which went directly to his foundation. The money was then managed not by philanthropists but by top Trump campaign staff members, who handed it out to veterans’ organizations across Iowa just before the caucus — converting the donations into illegal campaign contributions.

That’s a start. But Ms. Underwood only has jurisdiction to file civil lawsuits in cases involving charities like the Trump Foundation. She cannot bring criminal charges against them for, say, violating campaign finance laws. So she also sent lengthy referral letters to the Internal Revenue Service and the Federal Election Commission, detailing extensive conduct that could, and clearly should, trigger further investigation. In other words, Mr. Trump, who is already dealing with multiple federal inquiries into his campaign’s involvement with Russian efforts to swing the 2016 election as well as into possible crimes by his personal lawyer and fixer, Michael Cohen, may soon find himself in even deeper trouble.

If the IRS does indeed undertake further investigation, it could well hit Trump with a criminal complaint, as a former IRS attorney says in Why the I.R.S. Should Go After Trump.

The New York State attorney general yesterday filed a lawsuit against the Donald J. Trump Foundation and its directors, accusing the charity and the Trump family of violating campaign finance laws, self-dealing and illegal coordination with the presidential campaign. It asks that Mr. Trump pay restitution and be prohibited from leading a nonprofit in New York for 10 years.

As a former attorney for the chief counsel of the I.R.S. who specialized in nonprofit organizations, I believe Mr. Trump is also criminally liable for his actions. If I were still at the I.R.S., based on the lawsuit, I would make a criminal referral, on charges of tax evasion or false statements on a tax return, or both.

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