In yet another twist in what can only be described as an eventful presidential race, Donald Trump has been accused of using $258,000 from his charitable foundation to settle lawsuits involving his for-profit businesses. Not considered the typical non-profit leader by many, Trump may have broken "self-dealing" laws, which bar non-profit leaders from channeling charity money towards personal expenditures or their own businesses.
At the center of the scandal is a $100,000 donation that Trump's Mar-a-Lago Club was supposed to make in order to dismiss a lawsuit over $120,000 in unpaid fines. But the check didn’t come from the Mar-a-Lago account, it was paid from charitable Donald J. Trump Foundation, which is funded in the main by donations from people other than Trump.
But the story doesn’t end there. When one of Trump's golf courses was due to make a donation to settle a lawsuit, the $158,000 also came from the Trump Foundation. It’s reported that the Foundation’s funds have also been used for other non-philanthropic reasons including $10,000 allegedly used to purchase a portrait of Trump from a charity fundraiser and $5,000 being used to buy ads for his hotels.
As well as possibly being investigated by the New York attorney general for potentially breaking state charity laws, Trump could be forced to reimburse the foundation and/or pay penalty taxes if the IRS goes after him for self-dealing.
“I represent 700 nonprofits a year, and I’ve never encountered anything so brazen,” Jeffrey Tenenbaum, who advises charities at the Venable law firm in Washington, told the Washington Post. “If he’s using other people’s money — run through his foundation — to satisfy his personal obligations, then that’s about as blatant an example of self-dealing [as] I’ve seen in awhile,” Tenenbaum said.