|September 21, 2016 — Donald Trump appears to have broken the law repeatedly by using his foundation for his personal benefit, according to a complaint filed with the IRS today by Citizens for Responsibility and Ethics in Washington (CREW). The complaint calls for an investigation into multiple acts of self-dealing by Trump and into the Trump Foundation for violating the tax code by making multiple payments and grants for the private benefit of Trump and his business interests.
According to recent news reports, in 2012 the Foundation made a $158,000 grant to the Martin B. Greenberg Foundation as part of a settlement in a lawsuit against the Trump National Golf Club, which Trump owns. The settlement included language that the Club would make a charitable donation, which was instead paid by the Foundation. Similarly, Trump pledged to donate $100,000 to charity to settle $120,000 in fines racked up by his Mar-a-Lago Club; again, it was paid by the Foundation.
The Trump Foundation repeatedly paid pledges made by Trump and his wife Melania at charity auctions. These pledges include $12,000 for an autographed Tim Tebow football helmet and two pledges for portraits of Trump, one for $20,000 and the other for $10,000. The Foundation also paid $5,000 for advertisements in charity programs promoting Trump’s hotels and made an illegal $25,000 contribution to support Florida Attorney General Pam Bondi, whose office was at the time reportedly investigating Trump University.
“The tax code strictly prohibits charitable foundations from giving private benefits to the people who run them,” CREW Executive Director Noah Bookbinder said. “Mr. Trump and the Trump Foundation appear to have repeatedly and systematically violated these prohibitions. This pattern of abusing a charitable foundation and ignoring the law should not be tolerated.”
On the self-dealing counts, Trump could personally face fines up to 200% of the improper contributions—hundreds of thousands of dollars worth—if he doesn’t correct the violations. As for the Foundation, the tax code is clear: an organization can lose its tax-exempt status even if only a small percentage of its income benefits a private individual, which would be the end of the Trump Foundation.
“One of the most egregious things a charitable foundation can do is use its funds to benefit its founders and officers,” Bookbinder said. “That appears to be what happened here. The IRS should investigate Mr. Trump and the Trump Foundation and take appropriate action.”