Trump Foundation: Court-Ordered Dissolution for Illegal Self-Dealing and Campaign Finance Violations
Tier 1Resolved1988-01-01 to 2019-11-07
Factual Summary
The Donald J. Trump Foundation, a tax-exempt private foundation incorporated in 1988, was dissolved by court order in December 2018 after the New York Attorney General's office established a pattern of illegal conduct spanning more than a decade.
The investigation was initially prompted by Washington Post reporting by David Fahrenthold, who won a 2017 Pulitzer Prize for the work. The investigation revealed that the foundation functioned as what the Attorney General characterized as a "personal checkbook" for Trump's business and political interests. Key findings included the following: the foundation's board of directors had not met since 1999; Trump made all disbursement decisions unilaterally; foundation funds were used to settle legal claims against Trump's for-profit businesses, including $100,000 to settle a claim against Mar-a-Lago; foundation money was used to purchase personal items, including a $10,000 portrait of Trump at a charity auction; and the foundation made a $25,000 political contribution to a campaign committee associated with Florida Attorney General Pam Bondi at a time when her office was considering whether to investigate Trump University.
The most significant finding concerned a nationally televised January 2016 fundraiser for military veterans. The Attorney General found that Trump's presidential campaign directed the timing, amounts, and recipients of $2.8 million in grants from the fundraiser proceeds, constituting illegal coordination between a charity and a political campaign.
Justice Saliann Scarpulla of the New York Supreme Court found that Trump breached his fiduciary duty and ordered him to pay $2 million in damages. The foundation's remaining $1.8 million in assets were distributed to eight court-approved charities. Trump's three eldest children were required to complete mandatory training on fiduciary duties.
Primary Sources
1. NY AG Press Release, "AG James Secures Court Order Against Donald J. Trump," November 7, 2019: https://ag.ny.gov/press-release/2019/ag-james-secures-court-order-against-donald-j-trump-trump-children-and-trump
2. Decision and Order, People v. Trump, Index No. 451130/2018 (N.Y. Sup. Ct. Nov. 7, 2019): https://www.courthousenews.com/wp-content/uploads/2019/11/trump-foundation-order.pdf
3. FEC file, PMUR 611 / MUR 7425: https://www.fec.gov/files/legal/murs/7425/7425_27.pdf
Corroborating Sources
1. NPR: "Trump Foundation To Dissolve Amid New York AG's Investigation," December 18, 2018
2. CNN: "Trump Foundation agrees to dissolve under court supervision," December 18, 2018
Counterarguments and Context
Trump's attorneys characterized the legal action as politically motivated. They argued the foundation had been seeking to dissolve voluntarily since the 2016 election and that the Attorney General's office blocked dissolution to pursue litigation. Trump's legal team emphasized that foundation funds ultimately reached charitable recipients.
Author's Note
This entry contains no interpretive commentary at this time.