While the media villagers were distracted with their debate analysis, there was a another investigative report into the Trump Foundation scandal (although some of the cable jockeys caught it).
The latest from Rebecca Berg at Real Clear Politics is that Trump may have unlawfully used Foundation funds to launch his nacient political career. Trump Used Foundation Funds for 2016 Run, Filings Suggest:
As Donald Trump began making noise about a possible bid for president in 2011, South Carolina conservative activist Oran Smith caught the celebrity businessman’s eye as a particularly vocal and potentially influential critic.
“Trump would get thumped here,” Smith, president of the Palmetto Family Council, a social conservative public policy group, told the Christian Broadcasting Network. “He is a celebrity, but an apprentice at politics.”
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Trump called Smith and invited him to meet at Trump Tower in New York, Smith told RealClearPolitics, “to see if he could convince me those things weren’t true.”
“It probably had something to do with, I was in an early primary state,” Smith said. Trump was “laying the foundation for a … campaign,” Smith thought at the time, although “it was difficult trying to tell if he was serious about running for president or not.”
During their meeting in Trump’s office, they discussed Christian faith and religious liberty. Smith was struck by “a different Donald Trump than I expected.” On his way out the door, Smith asked that Trump consider donating to the Palmetto Family Council.
“It was a quiet donation that came with a simple cover letter,” Smith said. It read: “Great meeting with you and your wife in my office,” dated May 6, 2011. Enclosed was a check for $10,000 from the Donald J. Trump Foundation.
That check is one of at least several donations to suggest Trump used his private foundation, funded by outside donors, to launch and fuel his political ambitions. Such contributions, if they were made solely for Trump’s benefit, could violate federal self-dealing laws for private foundations.
From 2011 through 2014, Trump harnessed his eponymous foundation to send at least $286,000 to influential conservative or policy groups, a RealClearPolitics review of the foundation’s tax filings found. In many cases, this flow of money corresponded to prime speaking slots or endorsements that aided Trump as he sought to recast himself as a plausible Republican candidate for president.
Although sources familiar with the thinking behind the donations cautioned that Trump did not explicitly ask for favors in return for the money, they said the contributions were part of a deliberate effort by Trump to ingratiate himself with influential conservatives and brighten his political prospects.
“He was politically active starting in 2011,” said one source with ties to Trump, and at that point he “started to make strategic donations.”
The lion’s share of those donations came from Trump’s personal funds and went straight to political campaigns or parties. But others, in particular those directed to the nonprofit arms of conservative policy groups, originated with Trump’s foundation.
“If he could do 501(c)(3) to 501(c)(3), he did it that way,” said the source, using the tax code designation for nonprofit organizations.
But Trump has not donated to the foundation that bears his name since 2008, CNN reported last month, which means other donors bore the cost of his giving.
The donations to groups that granted Trump plum speaking slots or otherwise promoted his political aspirations also might run afoul of self-dealing rules for private foundations, which prohibit a foundation’s leadership from using donor money for its own gain.
“Getting the right to speak or access to networking events, that’s definitely starting to push into self-dealing, where you’re using the private foundation assets to benefit Mr. Trump,” said Rosemary Fei, a partner at the Adler & Colvin law firm in San Francisco, where she specializes in charity law.
Multiple Trump campaign aides did not respond to requests for comment.
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RCP’s review of IRS filings by the Trump foundation turned up a fresh conflict: a 2013 donation of $10,000 to The Family Leader, a 501(c)(4) established to “develop, advocate and support legislative agenda at the state level.” Unlike a 501(c)(3), or a nonprofit organization, a 501(c)(4) can effect policy and engage in limited political activity, and thus is subject to greater restrictions on contributions from charities.
If the Trump foundation sent its money to The Family Leader and not its affiliated nonprofit, it did not properly note it in the filing and might have failed to earmark the money for charitable purposes, a violation of IRS rules. If the money was sent to the Family Leader Foundation, it was not recorded as such.
“There’s a mistake somewhere,” said Fei. “It might be a really substantive mistake, or it could just be a reporting error or sloppiness. But improper reporting is still a violation of tax law. That’s something the IRS would look at.”
The donation also appears to have been geared toward boosting Trump’s political prospects, raising the specter of another possible violation for self-dealing.
In the same year that Trump’s foundation made that $10,000 contribution, The Family Leader featured Trump as a marquee speaker for the first time at its influential leadership summit in Iowa. The announcement raised eyebrows: Craig Robinson, editor of the Iowa Republican blog, wrote that Trump was “an odd fit for a social conservative confab,” while the Family Leader was roundly criticized by other Iowa conservatives for including Trump in the program.
But Bob Vander Plaats, the group’s president and CEO, nevertheless heaped praise on Trump — telling RCP at the time that Trump “sure would be” a serious presidential candidate in 2016 if he were to run.
“I think the best predictor of the future is to look at the past, and he’s been a pretty successful guy, so I wouldn’t count him out,” Vander Plaats said. The following year, in 2014, Trump’s foundation donated another $10,000 to The Family Leader — but this time to its nonprofit arm, in accordance with tax law. A spokesman for The Family Leader did not respond to a request for comment.
Meanwhile, there are half a dozen other such examples of Trump having used his foundation to help curry or cement favor, the IRS 990 forms show.
The Rev. Franklin Graham, president and CEO of the Billy Graham Evangelistic Association, for example, might have seemed an unusual political ally for the brash mogul from New York — but in April 2011, Graham began to publicly express support for the celebrity businessman as Trump weighed a bid for president.
“When I first saw that he was getting in, I thought, ‘Well, this has got to be a joke,’” Graham told ABC News at the time. “But the more you listen to him, the more you say to yourself, ‘You know, maybe the guy’s right.’”
Sometime in 2012, Trump used his foundation to send $100,000 to Graham’s association — one of the largest donations the foundation would make to any group that year.
But Trump’s most impactful donations might have been those to conservative groups that could offer him a platform from which to test his presidential message and garner media attention for it.
In 2013, Trump took the stage at the Conservative Political Action Conference, or CPAC, outside of Washington, D.C., where he touted his business record, railed against President Obama’s policies, and declared: “We have to make America great again.”
That same year, Trump used his foundation to donate $50,000 to the American Conservative Union Foundation, the nonprofit arm of the group that organizes CPAC and sets its program. He did not ask for a speaking slot in return, but he did not need to.
“Everyone’s too smart to say, ‘Donate and we’ll let you speak,’” said one source familiar with the donation. “It was kind of understood.”
Trump was also listed as a CPAC sponsor in 2015, in the immediate lead-up to his presidential campaign. ACU Chairman Matt Schlapp did not respond to an email from RCP asking whether Trump’s foundation footed the bill or he did.
But Trump’s greatest early political exposure might have come from Citizens United, a conservative political group whose president, David Bossie, met with Trump in 2011 about a potential presidential bid and remained a close ally. More recently, Bossie took leave from his group last month to join Trump’s campaign as deputy campaign manager.
In April 2014, when Citizens United hosted a “cattle call” of would-be Republican candidates for president in New Hampshire, Trump was there. In January 2015, at Citizens United’s Freedom Summit in Iowa, Trump was again on the program. And at the group’s South Carolina summit in May 2015, Trump also took to the stage.
The high-profile events were held in three key battleground states. And it was no fluke: Bossie had insisted Trump be included in one of the group’s events “because he was a good friend to Citizens United,” said a source with knowledge of the discussions.
It might have helped that, in 2014, Trump’s foundation donated $100,000 to the Citizens United Foundation, by far its single largest donation to any group that year. RCP reached Bossie by phone Monday and offered him an opportunity to respond; Bossie said he would call back but did not and subsequently could not be reached for comment.
Trump has maintained that his speaking invitations prior to his candidacy for president were a reflection of his popularity. At an event at the Economic Club of Washington, D.C, in December 2014, Trump thanked the club’s president, David Rubenstein, for inviting him to attend.
“David called and he said, ‘Would you do this?’” Trump said. “When David calls, I say yes.”
Trump was planning to travel to Iowa in a few weeks for the Citizens United summit there, and Rubenstein kicked off the discussion by asking whether that might mean Trump was weighing a bid for president.
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Of running for president, Trump finally said, “I am considering it very strongly.” And, for roughly an hour thereafter, he discussed policy and political themes in a setting that lent him gravitas and legitimacy.
It’s unclear when the check for $6,000 from the Donald J. Trump Foundation arrived for the Economic Club of Washington, D.C. But Trump gave his remarks Dec. 15 — and the donation appears on the foundation’s 2014 filing, suggesting it was written prior to the event or in the two weeks following it.
The money, and other donations like it, could raise further questions about whether Trump used money from his foundation’s donors for his own benefit rather than for charity.
“If what he talked about was promoting his candidacy or fundraising for his campaign, it is not only self-dealing but potentially involves the foundation in making a grant to support political activity,” said Fei. “That’s prohibited.”
By the way, the Notice of Violation letter that the New York Attorney General sent to the Trump Foundation last Friday requires:
- The Trump Foundation to supply the state with all the legal paperwork necessary to register as a charity that solicits money within 15 days.
- The Trump Foundation must also look back and determine whether it violated state law in prior years by soliciting money without authorization. If so, it must provide the financial audit reports it should have provided for those years. Those reports, Sheehan said, are also due within 15 days.
- If the Trump Foundation does not comply, it will be considered “a continuing fraud upon the people of New York.”
The Trump Foundation said it intends to cooperate fully with the investigation. Yeah, we’ll see if it produces the audit reports. October 15 falls on a Saturday, so expect to see this back in the news on Monday October 17.