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Trump Foundation sued for violating not-for-profit laws

New York sues the US President’s charitable foundation for using the organisation for political gain as Trump vows “I will not settle this case!”

New York Attorney-General has announced the state will sue US President Donald Trump’s charitable foundation for violating not-for-profit laws.

Trump protested the “sleazy New York Democrats” in a recent Tweet after the state’s Attorney-General sued him, three of his children and the foundation. Attorney-General Barbara Underwood claimed it was used as a “chequebook for payments.”

“This is not how private foundations should function and my office intends to hold the Foundation and its directors accountable for its misuse of charitable assets.”

Trump vowed he would not settle the case, taking to Twitter to blame the action on “disciples” of former Attorney-General, Eric Schneiderman, who resigned this May after four women in a magazine article accused him of physical abuse.

“The sleazy New York Democrats, and their now disgraced (and run out of town) A.G. Eric Schneiderman, are doing everything they can to sue me on a foundation that took in $18,800,000 and gave out to charity more than it took in, $19,200,000,” Trump wrote on Twitter, adding: “I won’t settle this case!”

The lawsuit seeks $US2.8 million of restitution plus penalties, a 10-year ban on Trump serving as a director of New York not-for-profit and one-year bans for his children.

Underwood on Thursday asked that a state judge dissolve the Donald J Trump Foundation and to ban Trump, his sons Donald Jr and Eric, and his daughter Ivanka from holding leadership roles in any New York charities.

Donald Jr, Eric and Ivanka joined the foundation’s board in 2006, although Ivanka stepped down in 2017 to work at the White House. Eric Trump also stepped down from his own charity, The Eric Trump Foundation, in December of 2016, citing that it was to avoid “assertion of any impropriety and/or a conflict of interest.”’

Underwood alleged in the lawsuit that the Trump Foundation engaged in “extensive unlawful political co-ordination” with Trump’s 2016 Presidential campaign. The case, filed in the state Supreme Court in Manhattan, followed a 21-month investigation that began under Schneiderman’s watch.

Underwood said the foundation engaged in “repeated and wilful self-dealing” to benefit Trump’s business and political interests, including buying a portrait of Trump for $US10,000 at a charity auction and using it to decorate a Trump golf course.

Another $US100,000 went to another charity in 2007 to settle a legal dispute over a flagpole erected in violation of local ordinances at Mar-a-Lago, Trump’s private club.

Trump noted Schneiderman ran the New York campaign for former US senator and secretary of state Hilary Clinton, his Democratic opponent in 2016. He added the former Attorney-General, “never had the guts to bring this ridiculous case.”

The Trump Foundation claimed the suit as “politics at its very worst”, saying the charity had spent more than it had received in donations. Its statement accused the New York Attorney-General of holding $US1.7 million of assets “hostage for political gain.”

As Trump grapples with not-for-profit donation laws, so too does Australia as national changes to donation laws are being recommended. A Greens-initiated committee released a report that looked into the donations regime’s impact on political parties.

The report recommends introducing a cap on campaign spending, which would limit donations to $3,000 per donor – and a small rise in taxpayer fund to offset the cap.

Greens leader and committee chair, Richard Di Natale, said: “Sadly this report shows that cash is still king in Australian politics, with big businesses happy to throw millions of dollars at political leaders to buy influence.”

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