September 7, 2016
CREW files IRS complaint against Donald Trump & Trump Foundation
Donald Trump and the Trump Foundation appear to have broken the law by giving $25,000 to a political group supporting Florida Attorney General Pam Bondi in an effort to discourage her office from investigating Trump University, thus using the Foundation for Trump’s personal benefit, according to an IRS complaint filed today by Citizens for Responsibility and Ethics in Washington (CREW). The complaint calls for an investigation into the Foundation for violating the tax code by providing a private benefit to Trump and his business interests and falsely representing its political giving on its tax returns. The complaint further calls for an investigation into Trump for engaging in prohibited self-dealing.
A private foundation cannot operate for the benefit of its founders or board, or businesses they own or manage. Likewise, it is illegal self-dealing when an officer or director of a private foundation uses the foundation for their own benefit. As the founder of the Foundation, Trump unquestionably cannot benefit from its actions. The Foundation’s contribution to the Bondi-backing group appears to be an attempt to benefit Trump and the Trump-owned Trump University by influencing the Attorney General’s decision on a lawsuit against Trump University.
Trump has previously bragged about his history of making donations to politicians in order to benefit his businesses, claiming, “When I want something, I get it,” and, “When I call, they kiss my ass.”
“Private foundations exist for the public good, that’s why they’re tax-exempt,” CREW Executive Director Noah Bookbinder said. “They absolutely cannot be used to attempt to quash an investigation into their founder’s business.”
CREW originally filed a complaint against the Trump Foundation in March after first noticing the donation, as foundations are prohibited from giving to political organizations. The Foundation claimed on its tax returns that it engaged in no political activity and listed a different, permissible group as receiving the contribution. Despite Trump’s spokeswoman claiming, “all is squared away” with the IRS because Trump or the Foundation paid a penalty, we checked, and the Foundation still has not corrected the false information on its tax return, nor did the penalty address the false statements on tax returns or the new allegations raised in today’s complaint.
“The Trump Foundation’s handling of this illegal political contribution reads like a checklist of tax violations,” Bookbinder said. “The IRS must investigate.”
In addition to the previous IRS complaint against the Trump Foundation, CREW has also filed an IRS complaint against the Foundation for illegally being used to benefit Trump’s campaign, as well as complaints with the Inspector General for Florida’s Office of the Attorney General and the state’s Commission on Ethics against Bondi for her role in this matter.
Click HERE to read the complaint and HERE, HERE and HERE to read the supporting exhibits.
Click HERE for the original complaint, HERE for the second complaint and HERE for the Florida complaints.
Click HERE to read a timeline and overview of Trump and Bondi’s relationship.
Citizens for Responsibility and Ethics in Washington (CREW) is a
non-profit legal watchdog group dedicated to holding public officials
accountable for their actions. For more information, please visit www.citizensforethics.
Trump and Bondi’s Controversial Relationship
Florida Attorney General Pam Bondi will speak at the Republican National Convention tonight on behalf of Donald Trump. Like many speakers, she has a personal history with Trump—but it’s unlikely that any other speaker’s relationship with Trump has led to so many legal complaints or so many unanswered questions.
Trump and Bondi are entangled in a major political scandal involving a $25,000 illegal contribution made by the Trump Foundation, a non-profit charitable foundation, to a political group supporting Bondi’s election. Bondi personally solicited the contribution from Trump himself, and received it around the time it was reported that her office was investigating Trump University. After the contribution, Bondi’s office told reporters there was no investigation into Trump. The Trump Foundation told the IRS it made no political contributions and instead of listing the Bondi group, listed a Kansas organization with a similar name to which they could legally donate.
CREW’s investigation has led to a complaint with the IRS against the Trump Foundation and complaints against Bondi with the Inspector General for Florida’s Office of the Attorney General and the state’s Commission on Ethics. See below for a timeline of events and a series of unanswered questions for Bondi and the Trump Foundation.
Does the Trump Foundation review or audit its books? Many charities and private foundations obtain independent financial audits or otherwise review their finances each and every year. An audit should have revealed that a check was written to And Justice for All, the Florida 527, and not Justice for All, the Kansas 501(c)(3) organization listed in the Foundation’s tax forms. It should also have shown that no money was ever sent to the Utah group to which staffers now claim the Foundation believed the money was sent.
Where did the Trump Foundation intend the money to go? Attorney General Bondi personally solicited Donald Trump for the donation. When asked about the contribution in 2013, Mr. Trump appeared to acknowledge it was meant for the Florida 527 group, voicing his support for Ms. Bondi in a public statement. But in statements following CREW’s complaint, his staffers claim to have no knowledge of it being meant for the Florida group, nor of how it got there.
How did Attorney General Bondi solicit Trump, and what did she ask for? Presumably, she would have known that the Trump Foundation could not legally give to a political organization, so how did she approach the ask for the contribution? Was she clear that the solicitation was political in nature? The public comments in response to our complaint state that Trump organization staffers had no idea that this was a political solicitation and had to look up records for charities that shared its name to guess where to send the money. Are they saying that the Attorney General of Florida failed to mention that the donation was for political activity?
Where did the Kansas group come from? The Trump Foundation presumably keeps records of its contributions. Staffers now claim they were unaware the money went to the Florida 527 because they believed the check had gone to a Utah non-profit. So how did a group in Kansas, complete with the correct address, end up listed as the recipient on the Foundation’s taxes?
How was the Foundation unaware of the details of one if its largest contributions? The contribution to And Justice for All was one of the largest given out by the Trump Foundation in 2013, yet staffers claim not to know where the money went or how it got there. Most foundations have procedures for grants and other solicitations. Are staffers claiming that they received a request for a large amount of money knowing only the name of the organization with no other details about the organization or what the funds would be used for? Are they saying that they then looked up the name of the organization in a book, picked one that was similar (a ProPublica search finds more than half a dozen 501(c) groups with similar names filed a return that year), and then decided to give the contribution without seeking any other information or attempting to contact the group or follow up after the money had been sent? Were the people in charge of awarding the money not told of the solicitation from Attorney General Bondi?
What happened after the money was sent? Was there a cover letter, presumably addressed to the Utah organization, and if so, did that raise questions with the Florida organization? If the Foundation sent a check, presumably it would have seen a canceled check at some point; did that raise any red flags? Was there any follow up when the Utah group did not acknowledge receiving the funds? Did the Foundation or other parts of the Trump organization receive acknowledgement of the funds or any further contact from Attorney General Bondi or the Florida group? If so, what was it, and did it raise concerns with staffers apparently unaware of the true recipients of the money?
How did the money end up in Florida? The Trump organization has said that Attorney General Bondi solicited the contribution, and Mr. Trump’s 2013 statements to the press suggest that he intended the money to go to support her. However, the treasurer of the Trump Foundation appeared unaware of the Florida tie to the solicitation or of how the check arrived in Florida. If Trump staffers instead intended to send it to the Utah non-profit, why was it sent to the Florida political organization instead, and why did those who intended it to go to the Utah group not question when the money was sent to Florida instead? As they presumably received media requests about it, how could they not be aware that the money ended up in Florida?
Do Donald Trump, the Trump Organization and the Trump Foundation all share the same accounts payable department? According to the Wall Street Journal, “Ms. Hicks said that the accounts payable department of the Trump Organization had received a donation request from Ms. Bondi and issued a check to And Justice For All from the Trump Foundation.” If they do in fact share a single accounts payable department, does that department look at the source of the donation request and then decide who should make the contribution? How are the records kept to assure that organizations are appropriately differentiated? The International Business Times has already reported on issues with proper accounting for staffers working for both the Trump Organization and the presidential campaign.
Who oversees the Trump Foundation? If the Trump campaign’s spokeswoman has given an accurate account of what happened, there were apparently critical errors at every step of this process. It appears, based on her statements, that no one involved with the campaign, the Foundation or the Organization had any idea about these errors until this spring. Who has oversight responsibilities over the Foundation, which would have included preventing, detecting and responding to serious errors like these? Who okayed the money being sent to Florida?
Feb. 2008-May 2011: The Florida Office of the Attorney General (OAG) receives at least 22 complaints regarding Trump University, the Trump Institute, and related entities.
Aug. 2013: New York Attorney General Eric Schneiderman files lawsuit against Donald Trump, The Trump Entrepreneur Institute aka Trump University and the former president of Trump University for “engaging in persistent fraudulent, illegal and deceptive conduct.”
Sept. 13, 2013: The Orlando Sentinel reports that OAG told them, “We are currently reviewing the allegations” in the NY lawsuit. A few days later, OAG tells thePalm Beach Post the same thing.
Sept. 17, 2013: The Donald J. Trump Foundation makes a $25,000 contribution to And Justice for All, a political group backing Bondi. The donation, illegal for a 501(c)(3) private foundation to give, was personally solicited by Bondi from Trump.
Oct. 15, 2013: According to documents turned over in response to a CREW public records request, OAG told reporters that “there was no consideration of whether to join [the New York lawsuit]. In light of the fact that the Attorney General’s Office received only one consumer complaint 2.5 years ago, there is no investigation at this time.”
Oct. 17, 2013: The Tampa Bay Times reports that And Justice for All acknowledged receiving the contribution from the Trump Foundation.
Oct. 17-18, 2013: Despite previously acknowledging the 22 complaints (sometimes 23 due to a duplicate record) to reporters, internal emails show OAG employees weeded out any complaint about Trump Institute and related entities to claim there was only one complaint against Trump University.
2014: In its 2013 taxes, the Trump Foundation claims it made no donations to political entities and replaces And Justice for All with a different, similarly named group in Kansas to which they would legally be allowed to donate.
March 21, 2016: CREW files an IRS complaint against the Trump Foundation for making the illegal political donation.
March 22, 2016: Trump representatives admit to the illegal donation, blaming an increasing series of clerical errors.
June 6, 2016: Bondi’s spokesman tells the AP that the Attorney General was unaware of the 20+ complaints against Trump entities when she solicited the donation.
June 7, 2016: Bondi tells the Tampa Bay Times “I never, nor was my office, investigating him. Never. I would never lie. I would never take money. I’ve been obviously devastated over this.”
July 6, 2016: CREW files complaints against Bondi with the Inspector General for Florida’s Office of the Attorney General and the state’s Commission on Ethics for potentially violating the law by failing to investigate or take legal action regarding complaints against Trump University and related entities after an affiliated political organization received acontribution from the Trump Foundation.
Copyright © 2016 Eric M. Appleman/Democracy in Action.
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