New York Attorney General: Trump Charitable Foundation Violated The Law

Oct 3, 2016
Originally published on October 3, 2016 4:30 pm

The office of New York State Attorney General Eric Schneiderman issued a "Notice of Violation" to the Donald J. Trump Foundation and ordered the foundation to cease and desist from soliciting contributions in New York.

The notice states that the Trump Foundation failed to register with the Charities Bureau before soliciting contributions or engaging in fundraising activities.

Schneiderman's office said in a press release it found that "the Trump Foundation 'is in violation of section 172 of Article 7-A New York's Executive Law, which requires charitable organizations that solicit contributions in New York State to register with the Charities Bureau and to provide annual financial reports and annual audited financial statements.' Despite failing to register pursuant to Article 7-A, the Trump Foundation solicited contributions in New York State earlier this year, in violation of New York law.

"The notice directs the Trump Foundation to 'immediately cease soliciting contributions or engaging in other fundraising activities in New York' and 'to provide the [AG's] Charities Bureau with the information specified in Section 172 within fifteen (15) days' of receiving the notice."

The Notice of Violation is here.

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AUDIE CORNISH, HOST:

We're going to learn more about the new legal problems for the Donald J. Trump Foundation. New York's attorney general has ordered the Trump Foundation to stop soliciting donations in the state. Attorney General Eric Schneiderman sent a notice of violation to the foundation. It accuses the organization of fundraising in New York even though it's not registered to do so as required by law.

Joining me with more is NPR's Joel Rose. He's in New York. And Joel, what is - exactly does this mean - a notice of violation?

JOEL ROSE, BYLINE: Well, it's essentially a cease and desist letter from the attorney general saying to the Trump Foundation, you need to get your legal house in order. The Trump Foundation was originally set up as a private foundation to give away Donald Trump's money, but we know because of reporting by The Washington Post that Trump has not given any of his own money to the foundation in many years, which means it's been supported by gifts from others.

The New York attorney general's office is saying if you're going to raise money from the public, the law in New York says you have to register. So now the Trump Foundation has 15 days to do that.

CORNISH: So does this fundraising ban apply in New York or everywhere else?

ROSE: That's a good question. And I talked to some experts on charitable law in New York state, and this is the best answer I can give you.

Technically New York attorney - New York's attorney general only enforces the law in New York. But if you wanted to look at this broadly, the Trump Foundation is incorporated in New York, so you could argue that any fundraising activity it does is therefore happening at least partly in New York.

CORNISH: What have we heard from Donald Trump or his campaign about this?

ROSE: In a statement, the campaign says the Trump Foundation will cooperate with the investigation, but it remains, quote, "very concerned about possible political motives," unquote, behind the investigation. Eric Schneiderman, the New York attorney general, is a Democrat. And when news of this investigation broke a few weeks ago, the Trump campaign called Schneiderman a political hack who is trying to help Hillary Clinton.

Schneiderman and Trump have also clashed before. Schneiderman is already suing for fraud over Trump's real estate seminars which were billed as Trump University. So all this puts Attorney General Eric Schneiderman in sort of a difficult spot.

I talked to Pamela Mann, who's the former head of the charity's bureau in the New York attorney general's office now in private practice. She put it this way.

PAMELA MANN: They're kind of damned if they do and damned if they don't. If they move quickly, they're opening themselves up for argument that they're doing it with the election in mind, but if they don't pursue something that's obviously illegal, that could be seen as political as well.

CORNISH: So Joel, what happens now? I mean is this about the Trump Foundation cleaning up some paperwork and moving on? Or what can they do?

ROSE: Well, not necessarily. In order to comply with the New York law, the lawyers I talked to said that the Trump Foundation would have to produce audited financial statements for all of the years that they were fundraising and soliciting funds. And if they don't comply with that, the attorney general's office could then go to a judge and seek penalties for failing to register, which in the most extreme case could include dissolving the charity altogether.

And there's a whole other set of allegations that were raised by reporting on the Trump Foundation that include what's known as self-dealing. That's when a foundation uses its assets to benefit the foundation's board or staff instead of benefiting the public. And the lawyers I talked to said those charges would take a lot longer to investigate and to build a legal case. But it is possible that the New York attorney general may well be looking into that angle as well.

CORNISH: That's NPR national correspondent Joel Rose. Joel, thank you.

ROSE: You're welcome, Audie. Transcript provided by NPR, Copyright NPR.