Trump’s charity admits to illegitimate ‘self-dealing’

23 Nov 2016


President-elect Donald Trump's charitable foundation has admitted to the US Internal Revenue Service that it violated a legal prohibition against ''self-dealing,'' which bars non-profit leaders from using their charity's money to help themselves, their businesses or their families, according to a Washington Post report.

The admission was contained in the Donald J Trump Foundation's IRS tax filings for 2015, which were recently posted online at the nonprofit-tracking site GuideStar. A GuideStar spokesman said the forms were uploaded by the Trump Foundation's law firm, Morgan, Lewis & Bockius.

The Washington Post could not immediately confirm if the same forms had actually been sent to the IRS.

For 2015, the Trump Foundation checked ''yes'' when asked whether it had transferred ''income or assets to a disqualified person'' - which in this context might be Trump, a member of his family or a Trump-owned business - and checked ''yes'' again when asked if it had engaged in any acts of self-dealing in prior years. For 2014, the foundation answered ''no'' to these questions.

Another line on the form asked whether the Trump Foundation had engaged in any acts of self-dealing in prior years. The Trump Foundation checked yes again.

Such violations can carry penalties including excise taxes, and the charity leaders can be required to repay money that the charity spent on their behalf.

During the presidential campaign, The Post reported on several instances in which Trump appeared to use the Trump Foundation's money to buy items for himself or to help one of his for-profit businesses.

But the new Trump Foundation tax filings provided little detail, so it was unclear if these admissions were connected to the instances reported in The Post.

The Trump Foundation tax forms did not, for instance, describe any specific acts of self-dealing. They also did not say whether Trump had paid any penalties already. That kind of detail would be submitted on a separate IRS form, which was not included in the information posted online by GuideStar.

Trump's team did not respond to a request for comment Tuesday.

The New York attorney general's office is investigating Trump's charity, following up on reports in The Post that described apparent instances of self-dealing going back to 2007. A spokesman for Attorney General Eric Schneiderman declined to comment, other than to say ''our investigation is ongoing''.

The IRS also did not immediately respond. That agency has not said if it is investigating the president-elect's charity.

The Trump Foundation has existed since 1987. This appeared to be the first time that it had admitted committing such a violation.

Philip Hackney, who formerly worked in the IRS chief counsel's office and now teaches at Louisiana State University, said he wanted to know why the Trump Foundation was now admitting to self-dealing in prior years - when, in all prior years, it had told the IRS it had done nothing of the kind.

''What transactions led to the self-dealing that they're admitting to? Why weren't they able to recognize them in prior years?'' Hackney said. He said that, since the prior years' returns were signed by Trump, that opened the president-elect to questions about what he had missed and how.

During the presidential campaign, The Post revealed several instances - worth about $300,000 - where Trump seemed to have used the Trump Foundation to help himself. From 2009 until this year, the charity was funded exclusively with other people's money, an arrangement that experts say is almost unheard of for a family foundation.

In two cases, The Post reported, the Trump Foundation appeared to pay legal settlements to end lawsuits that involved his for-profit businesses.

So far, Trump has said nothing about how he will run his foundation when he takes office - or what he will do to avoid potential conflicts of interest involving Trump Foundation donors.

In contrast, when she was preparing to take office as secretary of state in 2009, Hillary Clinton was closely questioned about the operations of the global charity founded by her husband.

As a result, the president of the Clinton Foundation signed a memorandum of understanding with the Obama administration that placed certain restrictions on its activities, notably limiting some donations from foreign governments.

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