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Trump and his children accused of using charitable foundation ‘like a piggy bank’

The New York State Attorney General sued the Donald J. Trump Foundation on Thursday, alleging "persistently illegal conduct" and mismanagement at the president's charity. Amna Nawaz fills in the details with David Fahrenthold of The Washington Post, whose reporting helped instigate the probe.

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  • Just Woodruff:

    But first, a new legal challenge facing President Trump.

    Amna Nawaz explores how, this time, the focus is on Mr. Trump's charitable foundation.

  • Amna Nawaz:

    The New York state attorney general sued the Donald J. Trump Foundation this morning, alleging persistently illegal conduct and mismanagement at the president's charity.

    Here to explain it all, I'm joined by David Fahrenthold. He's a Pulitzer Prize-winning reporter with The Washington Post, whose initial reporting first launched the state probe looking into the Trump Foundation.

    David, welcome to the "NewsHour."

    Let's start with just the fact that this was a 20-month probe led by the New York state attorney general's office, but your reporting on this goes all the way back early to the 2016 campaign. Few people know this better than you.

    Explain to me in simplest term, what is it that the president and his three oldest children are accused of in this investigation?

  • David Fahrenthold:

    What they're accused of basically is running a tax-exempt charitable foundation like a piggy bank, using it as just another checking account for Donald Trump to buy things for himself, to pay off creditors of his business, and in 2016 to sort of act as a prop and to support his presidential campaign.

    They ran the charitable foundation. They were charged by law with safeguarding its assets, making sure they were sent for charitable purpose, and they often seemed to have ignored those responsibilities and spend it on things that help themselves.

  • Amna Nawaz:

    So, let's walk through with some of those specifics.

    Now, there is one allegation that, as you mentioned, the nonprofit charity money was used to settle in one case legal matters related to the for-profit businesses. You had first reported that.

    There is another allegation of something called self-dealing. What is that exactly?

  • David Fahrenthold:

    One of the most basic laws of nonprofit governance is that you can't take the money in your charity — if you're the leader of a charity, you can't reach into the charity's coffers and buy things that benefit yourself, even if you're buying them from other nonprofits.

    So, even though this is called the Donald J. Trump Foundation, the money was supposedly set aside for independent use for charitable purposes. What Trump did was take the money and use it to buy things that helped him.

    So, in one case, he spent $10,000 out of his charity to buy a large portrait of himself. And that portrait wound up hung on the wall at Trump's sports bar at the Doral golf resort. That's kind of an obvious example. You can't use your charity's money to buy art for the wall of your sports bar.

    And there was another case where Trump used the money in his charity to buy an ad for his hotels in the program at a charity gala in D.C. Again, even though the money went to a charity, the effect was to buy an ad for Trump's hotels. That's fine, but they got to buy it themselves. A charity can't buy it for them.

  • Amna Nawaz:

    There's a political tie in this too. There's another allegation that the foundation broke IRS rules by aiding political campaigns, including the president's own campaign.

    What do we know about that?

  • David Fahrenthold:

    There's two campaign that it allegedly helped.

    One was the campaign of Florida Attorney General Pam Bondi, a Republican who was Trump ally. Back in 2013, her office was considering whether to join a broader lawsuit against Trump University, alleging Trump University was a fraud.

    At the same time, she, Bondi, solicits a donation from Donald Trump. And he gives a $25,000 political donation out of his foundation. And so what's interesting about that is, A, that's not what you're supposed to.

    B, when the Trump Foundation filed its tax returns, its report to the IRS at the end of that year, it left off any mention of that illegal donation to a political group. Instead, it listed that $25,000 donation as a gift to another group in Kansas that had sort of a similar name, but was totally unrelated.

    Basically, it ended up disguising, whether it was on purpose or not, the fact that it had made this illegal donation, which didn't come to light until years later, when we wrote about it.

    The other charity — the other campaign that the foundation helped was obviously Donald Trump's campaign. In the beginning of 2016, Trump had this fund-raiser for veterans in Iowa, kind as a counterprogramming to a Republican debate that he was boycotting because of a feud with Megyn Kelly at FOX News.

    Trump used his foundation to sort of collect the money that came in during that veterans fund-raiser, and then he used it to give away money during his presidential campaign events.

    What we know now from looking at what the attorney general found was that the president's campaign wasn't only benefiting from sort of the goodwill that came with seeing him give away this charity's money, but the campaign itself was telling the charity who to give the money to.

    There are these e-mails where Trump campaign's manager says, OK, give this amount to this charity and this amount to that charity and let's do it on this day, when he has a rally before the Iowa caucuses.

    Basically, Trump's foundation, supposed to be independent, became a tool of his political campaign.

  • Amna Nawaz:

    We should mention the president responded on Twitter. The Trump Foundation also issued a statement basically alleging political motivation for the lawsuit.

    The statement said — quote — "This is politics at its very worst."

    And it's worth pointing out that the previous New York state attorney general, Eric Schneiderman, who resigned amid a sexual scandal, he had been a real thorn in the president's side. He had gone after Trump University, and had launched multiple lawsuits challenging the administration.

    When it comes to the lawsuit, could politics have been at play here?

  • David Fahrenthold:

    Well, certainly, Eric Schneiderman, as you said, the former New York attorney general, it began — this investigation began under his watch.

    It concludes today with this lawsuit which was launched by his successor, who happens not to be a politician. She's just an unelected official who got promoted when Schneiderman resigned.

    The question here is not who started it. Attorney generals are, by their nature, from one party or the other. The question is, what do the facts say and what has Trump said about the facts?

    If you look at the complaint itself today, you see that Trump has actually already agreed with many of their conclusions. Many of the examples of self-dealing, Trump spending money to pay off his business' debts, to make that political donation to Pam Bondi, Trump has agreed in all those case, yes, I did that, yes, that was wrong.

    And he's already paid back the money and in some cases paid an excise tax. This lawsuit is asking him to pay back more, alleging more violations that Trump hasn't yet agreed to.

    So, although he's charging it — saying this is all a political witch-hunt, it's all politically motivated, he's already himself conceded that a lot of the allegations brought by that investigation were true.

  • Amna Nawaz:

    David Fahrenthold of The Washington Post, thanks for your time.

  • David Fahrenthold:

    Thank you.

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