The Trump Foundation's Final Accounting: Court-Supervised Dissolution, $2 Million in Restitution, and a Complete Record of Self-Dealing
Tier 1Resolved2016-01-28 to 2019-12-10
Factual Summary
On November 7, 2019, New York Supreme Court Justice Saliann Scarpulla issued the final judgment in the case brought by New York Attorney General Letitia James against the Donald J. Trump Foundation, Donald Trump, Donald Trump Jr., Ivanka Trump, and Eric Trump. The ruling ordered Trump to pay $2 million in restitution and documented a comprehensive record of self-dealing, misuse of charitable assets, and violations of nonprofit law.
The case centered on several categories of violations that the court found Trump and his family had committed in their roles as officers and directors of the foundation.
The most significant violation involved the January 28, 2016 Iowa veterans fundraiser. Trump organized the nationally televised fundraiser in Des Moines, Iowa, on the same evening as a Fox News Republican presidential debate that Trump had refused to attend. The fundraiser raised approximately $5.6 million, of which $2.823 million was donated to the Trump Foundation. Justice Scarpulla ruled that the $2.8 million "was used for Mr. Trump's political campaign and disbursed by Mr. Trump's campaign staff, rather than by the Foundation," in violation of state charity law. Campaign manager Corey Lewandowski and other campaign staff directed which veterans' organizations received the funds, timed disbursements for maximum political benefit, and used the foundation's charitable giving as a campaign event. The foundation served as a pass-through for what was functionally a campaign operation.
The court also documented specific self-dealing transactions. In 2014, a portrait of Trump was purchased at a charity auction at Mar-a-Lago for $10,000 using foundation funds. The portrait was subsequently hung at Trump's Doral golf resort in Florida. The foundation paid for a personal item that was displayed at Trump's for-profit business property. In a separate instance, the foundation paid $158,000 to settle legal claims against Trump's for-profit businesses, including a $100,000 payment to settle a lawsuit involving Trump's Mar-a-Lago club and a $58,000 payment to settle a claim against Trump's golf course in Briarcliff Manor, New York.
The foundation had also made a $25,000 contribution to a political committee supporting Florida Attorney General Pam Bondi in 2013, at a time when Bondi's office was evaluating whether to investigate Trump University. The IRS assessed a $2,500 penalty against the foundation for this contribution, which violated the prohibition on political contributions by charitable organizations. The foundation paid the penalty.
Justice Scarpulla found that Trump "breached his fiduciary duty to the Foundation" and that the other individual defendants, his three eldest children, "also breached their fiduciary duties." The court ordered Trump to pay $2 million in restitution, distributed equally to eight charities: the Army Emergency Relief, the Children's Aid Society, Citymeals on Wheels, Give an Hour, Martha's Table, the United Negro College Fund, the United Way of the National Capital Area, and the U.S. Holocaust Memorial Museum.
The Trump Foundation was dissolved under court supervision. Its remaining approximately $1.8 million in assets was distributed to the same eight charities. The court also imposed restrictions requiring that Trump provide advance notice to the Attorney General's office before serving as an officer or director of any New York nonprofit in the future.
Primary Sources
1. New York Supreme Court, People of the State of New York v. Donald J. Trump et al., Index No. 451130/2018, Final Judgment, November 7, 2019
2. New York Attorney General's Office: "Donald J. Trump Pays Court-Ordered $2 Million for Illegally Using Trump Foundation Funds," press release, November 7, 2019
3. New York Attorney General's Office: "AG James Secures Court Order Against Donald J. Trump, Trump Children, and Trump Foundation," press release, November 7, 2019
4. IRS Form 990 filings for the Donald J. Trump Foundation, multiple years
Corroborating Sources
1. CNBC: "Trump ordered to pay $2 million to settle suit claiming Trump Foundation misused funds to benefit campaign," November 7, 2019
2. NBC News: "Trump Foundation agrees to dissolve with judge to oversee dispersal to other charities," December 2018
3. FactCheck.org: "Trump Spins Court Ruling on Trump Foundation," November 2019
4. The Gazette (Iowa): "3 years after Iowa fundraiser, Trump Foundation dissolves," December 2018
5. Snopes: "Was Donald Trump Fined for 'Stealing' Money Intended for Veterans?" (rated Mixture, clarifying the legal specifics)
6. Artnet News: "Trump Only Spent $10,000 in Charity Money on a Portrait of Himself Because No One Else Wanted It, His Lawyers Say," 2018
7. Fox News: "Trump Foundation agrees to dissolve after lawsuit alleged 'illegal conduct,'" December 2018
Counterarguments and Context
Trump described the court ruling as a "victory" and claimed the judgment validated his position because the money was ultimately distributed to veterans' organizations. The Trump legal team argued that the foundation had always intended to distribute the funds to charitable organizations and that the involvement of campaign staff in directing disbursements was a logistical decision, not an attempt to misuse charitable funds. Trump's attorneys characterized the portrait purchase as a donation to the charity hosting the auction and noted that no one else had bid on the painting. Regarding the settlement payments, the defense argued that the payments served a charitable purpose by resolving disputes. However, the court found that each of these transactions constituted a breach of fiduciary duty. The judge specifically ruled that the Iowa fundraiser was "used for Mr. Trump's political campaign" rather than being directed by the foundation's board. The self-dealing transactions, including using foundation money to purchase a portrait of the foundation's president and to settle lawsuits against his for-profit businesses, are textbook examples of the kind of self-dealing that nonprofit law is designed to prevent. The case was resolved through an adjudicated court order, not a settlement, and Trump admitted to the breaches of fiduciary duty as part of the resolution.
Author's Note
This entry is classified as Tier 1 because the case was fully adjudicated by a New York Supreme Court justice. The court issued findings of fact, ordered restitution, and supervised the dissolution of the foundation. Trump paid the $2 million ordered by the court. The factual record of self-dealing and misuse of charitable assets is established by the court's ruling and is not subject to dispute.