As you may recall, (then) New York Attorney General Barbara D. Underwood announced on December 18, 2018, that the Trump Foundation had signed a stipulation agreeing to dissolve under judicial supervision.
On November 7, 2019, The Associated Press reported that New York state Judge Saliann Scarpulla ordered President Donald Trump to pay $2 million dollars to an array of charities as a fine for misusing his own charitable foundation to further his political and business interests.
Attorney General Barbara D. Underwood was succeed by Leticia James, who became the New York Attorney General as a result of the 2018 election. Judge Saliann Scarpulla’s decision provides more details about the stipulation between the Attorney General and the Trump Foundation, in which several things were agreed upon on October 1, 2019.
Here are some key points from Judge Saliann Scarpulla’s decision:
- In the Final Stipulation, Mr. Trump agreed to reimburse $11,525 to the Foundation for the Foundation’s payment of auction items at a charitable benefit, and to pay any additional amount that may be owed in connection with this proceeding. (The judge made it clear that the amount to be paid will be determined by her.)
- As stated above, I find that the $2,823,000 raised at the Fundraiser was used for Mr. Trump’s political campaign and distributed by Mr. Trump’s campaign staff, rather than by the Foundation… However, taking into consideration that the Funds did ultimately reach their intended designations, I. e. charitable organizations supporting veterans, I award damages on the breach of fiduciary duty/waste claim against Mr. Trump in the amount of $2,000,000, without interest, rather than the entire $2,823,000 sought by the Attorney General. Further, because the parties have agreed to dissolve the Foundation, I direct Mr. Trump to pay the $2,000,000, which would have gone to the Foundation if it were still in existence, on a pro rata basis to the Approved Recipients.
New York Attorney General Letitia James posted a press release about this case. Here is a quote from it:
“The Trump Foundation has shut down, funds that were illegally misused are being restored, the president will be subject to ongoing supervision by my office, and the Trump children had to undergo compulsory training to ensure that this type of illegal activity never takes place again,” said Attorney General James. “The court’s decision, together with the settlements we negotiated, are a major victory in our efforts to protect charitable assets and hold accountable those who would abuse charities for personal gain. My office will continue to fight for accountability because no one is above the law — not a businessman, not a candidate for office, and not even the President of the United States.”
The Trump children that Attorney General James is referring to are Trump’s three eldest. The lawsuit was against Donald J. Trump, Donald J. Trump Jr., Ivanka Trump, Eric F. Trump, and the Donald Trump Foundation. Donald Trump was the president of the Trump Foundation from the start, until January 23, 2017 (three days after he was inaugurated as President of the United States.) Ivanka Trump stepped down from her position on the Trump Foundation’s board of directors. Both Donald Trump Jr. and Eric Trump remained members of the board.
The press release on the New York Attorney General’s website states that the $1.78 million in assets currently being held by the Trump Foundation, along with the $2 million in damages to be paid by Mr. Trump, will be dispersed equally to eight charities.
Those charities are:
- Army Emergency Relief
- the Children’s Aid Society
- Give an Hour
- Martha’s Table
- United Negro College Fund
- United Way of National Capital Area
- the U.S. Holocaust Memorial Museum
Politico reported that in 2016, Trump was feuding with then Fox News anchor Megyn Kelly, and was refusing to participate in the network’s final Republican presidential primary debate before the Iowa caucuses. Instead, Trump held a rally at the same time as the debate. He called on people to donate to veteran’s charities. Politico reported that the Trump Foundation acted as a pass-through for those contributions.
The decision by Judge Saliann Scarpulla said: “…Mr. Trump’s fiduciary duty breaches included allowing his campaign to orchestrate the Fundraiser, allowing his campaign, instead of the Foundation, to direct distribution of the Funds, and using the Fundraiser and distribution of the Funds to further Mr. Trump’s campaign.”
The press release on the Attorney General’s website states: “…Additionally, Mr. Trump admitted an number of key facts about the other self-dealing transactions he initiated as chair — specifically that he used Foundation funds to settle legal obligations of companies he controlled, and that the Foundation paid for a portrait of Mr. Trump that cost $10,000. As a separate piece of the settlement, Donald Trump Jr. reimbursed the Foundation for the cost of the portrait. The settlement also requires the Foundation to be reimbursed $11,525 for sports paraphernalia and champagne purchased at a charity gala.”
This news was released approximately a week after the U.S. House of Representatives took its first major step towards starting an impeachment inquiry on President Donald Trump. The House voted 232–196 in favor of the measure, which establishes rules for open hearings and the questioning of witnesses by members of staff.
At the time I am writing this blog, we do not know what the outcome of the impeachment process will be. No one can possibly know that until it is over. That said, the decision of Judge Saliann Scarpulli makes it perfectly clear that a sitting president can be held accountable for his illegal actions.