Trump Organization, inaugural committee must pay DC $750K over claims of misspent nonprofit funds

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President Donald Trump and First Lady Melania Trump dance at the Freedom Ball on January 20, 2017 in Washington, D.C.
Getty Images

Former President Donald Trump‘s 2017 inaugural committee and his company have agreed to pay the District of Columbia $750,000 to resolve allegations that those entities and the Trump hotel there illegally misused non-profit funds to enrich the Trump family, D.C.’s attorney general said Tuesday.

The Trump Organization and the committee admitted no wrongdoing in the settlement. But the deal is the latest legal black eye for the former president.

Trump faces a pending criminal investigation in Georgia over allegations that he illegally interfered in the 2020 presidential election there, and a civil probe in New York, whose attorney general has said there is evidence the Trump Organization illegally manipulated the stated value of real estate assets for financial benefit.

“No one is above the law — not even a president,” said D.C. Attorney General Karl Racine in a statement announcing the settlement of a lawsuit he filed against the Trump entities in 2020. It alleged more than $1 million in improper payments to the Trump International Hotel in Washington.

“After he was elected, one of the first actions Donald Trump took was illegally using his own inauguration to enrich his family. We refused to let that corruption stand,” Racine said.

The District of Columbia alleged in its lawsuit that the Trump Inaugural Committee, which is a non-profit corporation, coordinated with members of Trump’s family “to grossly overpay for event space” at the Trump hotel during his 2017 inauguration as president, the AG’s office noted at the time.

“Although the Inaugural Committee was aware that it was paying far above market rates, it never considered less expensive alternatives, and even paid for space on days when it did not hold events,” the office said.

“The Committee also improperly used non-profit funds to throw a private party for the Trump family costing several hundred thousand dollars.”

Trump’s adult children, Donald Trump Jr. and Ivanka Trump, were questioned under oath by lawyers for Racine as part of the lawsuit, as was Rick Gates, the deputy chairman of the inaugural committee.

Gates in a December 2016 email told Ivanka Trump that he was worried about “the optics” of the presidential inaugural committee being asked to pay $3.6 million for room rental and minimum food and beverage costs.

“The cost itself seems quite high compared to other property buyouts for the week,” Gates told her in that email, which was included in court documents as part of the lawsuit.

The settlement money from the Trump entities will be split between two nonpartisan nonprofit organizations in Washington, Mikva Challenge DC, and DC Action.

Racine’s office said those groups “promote civic engagement, democracy, and youth leadership in the District.”

Thomas Barrack, a billionaire friend of Donald Trump who chaired the former president’s inaugural fund, exits following his arraignment hearing at the Brooklyn Federal Courthouse in Brooklyn, New York, U.S., July 26, 2021.
Brendan McDermid | Reuters

Trump in a statement said, “Given the impending sale of The Trump International Hotel, Washington D.C., and with absolutely no admission of liability or guilt, we have reached a settlement to end all litigation with Democrat Attorney General Racine.”

Trump added, “As crime rates are soaring in our Nation’s Capital, it is necessary that the Attorney General focus on those issues rather than a further leg of the greatest Witch-Hunt in political history. This was yet another example of weaponizing Law Enforcement against the Republican Party and, in particular, the former President of the United States. So bad for our Country!”

The twice-impeached Trump often has blasted other investigations of himself and the Trump Organization as “witch hunts.”

Trump’s friend Thomas Barrack, a private equity investor, was chairman of the 2017 inaugural fund. Barrack was arrested last July on federal charges of illegally lobbying Trump when he was president on behalf of the United Arab Emirates.

Barrack has pleaded not guilty in that case and is awaiting trial.

Gates pleaded guilty in 2018 in a separate federal prosecution, also unrelated to the inaugural committee, to conspiracy against the United States and lying to federal investigators.

He was sentenced to 45 days in jail after testifying against Trump’s 2016 presidential campaign chief Paul Manafort, Gates’ former business associate,’ at Manafort’s own criminal trial related to financial crimes for their work in Ukraine.

Trump later pardoned Manafort, who had been convicted.

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