The New York attorney general disclosed Monday that it ordered Donald Trump’s personal charity to cease fundraising immediately after determining that the foundation was violating state law by soliciting donations without proper authorization.
The message was conveyed in a “notice of violation” sent Friday to the Donald J. Trump Foundation, of which Trump is president.
The night before, The Washington Post had reported that Trump’s foundation — which had subsisted entirely on other people’s donations since 2008 — had failed to register with the state as a charity soliciting funds.
Because of that, Trump’s foundation had avoided rigorous annual audits that New York state requires of charities that seek the public’s money. Those audits would have asked, among other things, if the Trump Foundation’s money had been used to benefit Trump or one of his businesses.
“The Trump Foundation must immediately cease soliciting contributions or engaging in any other fundraising activities in New York,” wrote James G. Sheehan, the head of the charities bureau in the office of Attorney General Eric Schneiderman
In addition, Sheehan wrote, the Trump Foundation was ordered to supply the state with all the legal paperwork necessary to register as a charity that solicits money within 15 days.
Trump’s foundation must also look back and determine whether it violated state law in prior years by soliciting money without authorization, Sheehan wrote. If so, the foundation must provide the financial audit reports it should have provided for those years. Those reports, Sheehan said, are also due within 15 days.
If Trump’s foundation did not comply, Sheehan wrote, it would be considered “a continuing fraud upon the people of New York.”
Trump campaign spokeswoman Hope Hicks responded in written statement, “While we remain very concerned about the political motives behind AG Schneiderman’s investigation, the Trump Foundation nevertheless intends to cooperate fully with the investigation. Because this is an ongoing legal matter, the Trump Foundation will not comment further at this time.”
Schneiderman has endorsed Democrat Hillary Clinton, Trump’s rival in the presidential race.
Last month, his office launched a broader probe of the Trump Foundation after stories in The Washington Post identified cases where Trump appeared to have used the charity’s money to buy portraits of himself, and to settle lawsuits involving his for-profit businesses. In addition, Trump’s foundation gave a $25,000 gift to a campaign committee supporting Florida Attorney General Pam Bondi (R). Nonprofits like the Trump Foundation are prohibited from giving political gifts.
Legal experts said the move to suspend the Trump Foundation’s ability to raise money was a common reaction in cases where a charity solicited funds without authorization.
“You have to register with the attorney general if you’re going to raise money from the public. And they’re not doing it. So this would happen to anybody,” said Daniel Kurtz, an attorney in private practice who previously oversaw the New York attorney general’s charities bureau.
“I think this is probably pretty close to a form letter,” Kurtz said of the notice sent to Trump’s foundation.
Trump started his foundation in 1987, to give away the proceeds of his book, “The Art of the Deal.” It has no paid employees, and a board of five: Trump, three of his children, and a longtime Trump Organization employee. They all work a half-hour per week, according to the foundation’s most recent Internal Revenue Service filing.
For years, Trump himself was the Trump Foundation’s only source of money: Between 1987 and 2006, he donated $5.4 million.
But, by the end of 2006, Trump had given away almost all the money he had put in — leaving just $4,238 in the foundation’s coffers. His giving abruptly shrank and then dried up: Trump gave $35,000 in 2007, $30,000 and then no donations at all after that, tax records show.
Instead, Trump’s name-branded charity has been sustained entirely by other people’s money. Some of those donors have not said if Trump himself solicited their gifts.
Vince and Linda McMahon, the pro-wrestling executives, gave a total of $5 million, and have declined comment. NBC Universal, which televised Trump’s reality show, “The Apprentice,” has declined to explain the reason behind its $500,000 gift in 2012.
But in other cases, there is evidence that Trump was involved in asking for the money or directing it to the Trump Foundation.
There was a $100,000 gift from Norwegian Cruise Lines in 2005, after Trump’s wife Melania served as “godmother” to a new ship. A spokeswoman for the cruise line said the Trumps helped arrange a donation to the Trump foundation, as part of that deal.
In 2011, Trump appeared on a televised “roast” on Comedy Central and directed that his $400,000 appearance fee be sent to the Trump Foundation instead.
Trump’s foundation has also received about $1.9 million from a New York businessman named Richard Ebers, who sells high-end tickets and once-in-a-lifetime experiences to wealthy clients. Two people familiar with that arrangement said that Ebers owed Trump, for goods and services he had purchased — and was instructed to pay Trump’s foundation instead.
The Trump Foundation made its most wide-ranging request for donations earlier this year. In the wake of a fundraiser that Trump held for veterans in Iowa, the Trump Foundation set up a public website, donaldtrumpforvets.com. It took donations via credit card, which Trump said would be passed on to veterans’ groups.
Under New York law, Trump’s foundation was supposed to obtain a special registration before it solicited gifts from the public. And the law’s definition of “solicit” was quite broad: “to directly or indirectly make a request for a contribution, whether express or implied, through any medium.”
The state required that any charity that solicited $25,000 or more per year in New York to register under a provision called “7A,” for its article heading.
The most significant consequence, for a charity of Trump’s size, would have been a requirement that the charity submit to an annual audit by outside accountants. Trump’s charity never did.
Trump’s campaign has not said anything about why. Earlier this fall, Trump had implied that he had trusted lawyers to run the foundation properly.
“Well, I hope so,” Trump said, when asked if the foundation had followed the law. “I mean, my lawyers do it.”
But the Trump Foundation has reported spending very little on legal fees — at least, prior to this year. Between 1990 and 2014, the most recent year for which tax records are available, the foundation spent a total of $211 on lawyers.