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How Trump may have used his charitable foundation for personal and political gain

As the New York attorney general investigates allegations of criminal misconduct by the Trump Foundation, the president announced he is shutting it down. The Washington Post’s David Fahrenthold has been reporting on scrutiny of the organization since before the 2016 election, and he joins William Brangham to discuss how the president may have leveraged his charity for personal and political gain.

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  • William Brangham:

    Meanwhile, the second big legal development of the day was this: President Trump is shutting down his charitable foundation.

    This comes as the New York attorney general is investigating the charity, and Trump's children, for what's been described as — quote — "persistently illegal conduct."

    The Washington Post's David Fahrenthold has been following the money in this case from the very beginning.

    David, welcome back to the "NewsHour."

    Before we talk about the closing of the foundation, could you just remind us, what is it that the foundation is accused of doing that was illegal?

  • David Fahrenthold:

    Three things, basically.

    First, Trump used the foundation as kind of a checkbook for himself. Nominally, this money was in an independent charity. It had its own charitable aims. It was supposed to spend money for charity. He used the money to settle business disputes, to settle legal disputes involving his for-profit businesses.

    So he used the charity's money to save his businesses $260,000 on legal settlements. He also use the charity's money to buy portraits of himself, including one that hung up on the wall at one of his golf clubs. And he in the 2016 campaign basically turned over his campaign — his charity to his campaign, and let his campaign dictate when money was raised and when money was given out, including with big checks that he gave out in the middle of his campaign rallies in Iowa and New Hampshire.

  • William Brangham:

    In addition to those allegations, did the foundation actually do any charitable donations?

  • David Fahrenthold:

    It did.

    The Trump Foundation, it was started 1987. It gave out a lot of money to charities. And almost all of its money was given to various charities. What's interesting here is not — the accusation is not that Trump took the money and bought a Lamborghini with it or took the money and bought a yacht.

    He used the money. He gave the money to other charities, but in the process, he was buying things for himself. So I think, in Trump's mind, as long as the money from his charity ended up in another charity, that was fine.

    That's actually not the way the law works. If he was using his money to save himself money, just to basically save his businesses money, even if it went to another charity, that was allegedly against the law.

  • William Brangham:

    David, you touched on the campaign earlier.

    I want to read something that Barbara Underwood,the New York attorney general, wrote about the foundation — quote — "A shocking pattern of illegality involving the Trump Foundation, including unlawful coordination with the Trump presidential campaign, repeated and willful self-dealing, and much more."

    Can you explain a little bit more the unlawful connection, coordination with the Trump campaign?

  • David Fahrenthold:

    Sure.

    One of the sort of bedrock principles of charity law is that charities can't get involved in politics. They're — they're prohibited from participating in or aiding any political campaign. Most charities stay way away from that line because they don't want to get in trouble with the IRS.

    What Trump did in this case, though, is, he used the Trump Foundation as kind of a prop for his campaign. In the last days before the Iowa caucuses in 2016, Trump held a big televised fund-raiser that was meant as kind of a counterprogramming for a Republican debate that he was skipping. He raised a bunch of money for veterans. And then that money from other people flowed into his foundation.

    Then, in the successive days, when he was campaigning in Iowa, he would sort of stop his rallies in Iowa and say, OK, bring forth the local veterans charity that I have selected. Here's a giant check from the Donald J. Trump Foundation for $100,000 to this charity.

    They would then say oh, Mr. Trump, you're so generous. And then, after they sat down, the rally would continue.

    Basically, he used this charity as a way of bolstering two key aspects of his persona in that campaign, that he was rich, rich enough to give money away like nothing, and also that he cared a lot about veterans, because that's who got the money.

    His campaign — I'm sorry — his charity, this theoretically independent entity, made all that possible.

  • William Brangham:

    Lastly, I mentioned that the Trump children might be involved in this. What is their legal exposure? What's their involvement with the foundation?

  • David Fahrenthold:

    Donald Trump was president of this foundation, and had been since the beginning.

    But, in the last few years, his children were on the board of directors, Don Jr., Ivanka and Eric. They were on the board of directors for this foundation.

    Now, legally, that gives them a duty to the foundation, a duty to safeguard its money, safeguard its assets, make sure that the president, their father, isn't misspending its money, using the foundation to help himself.

    Not only do they not do that, but the New York attorney general in her investigation found that the board that they were on hadn't actually met at all since 1999. So, they are included in this because they took on a legal duty to safeguard the foundation's funds, and didn't fulfill that duty, according to the A.G.

  • William Brangham:

    David Fahrenthold of The Washington Post, thank you, as always.

  • David Fahrenthold:

    Thank you.

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