Donald Trump, an industrial-sized wastebasket in a clip-on tie, reportedly spent some $258,000 of his charity’s money to settle two legal claims, according to the Washington Post. Trump has repeatedly claimed that he “never” settles lawsuits, but in fact, he frequently does. Using the Trump Foundation’s money to do so would be illegal: the IRS prohibits people running nonprofits and private foundations from “self-dealing,” which is exactly what Trump appears to have done.
The Post found two lawsuits against Trump businesses that he settled by tapping funds from the Trump Foundation. The most incredibly on-brand one was that time in 2006 when he put up a 50-foot flagpole outside his Mar-a-Lago club in Florida, even though Palm Beach’s city ordinance caps flagpoles at 30 feet. Mar-a-Lago’s fines from the city climbed to $120,000 before Trump settled the suit in 2007, the Post reports:
In a settlement, Palm Beach agreed to waive those fines — if Trump’s club made a $100,000 donation to a specific charity for veterans. Instead, Trump sent a check from the Donald J. Trump Foundation, a charity funded almost entirely by other people’s money, according to tax records.
The other suit was filed in 2011, after Marty Greenberg, the former chairman of the Commodities Exchange, hit a hole-in-one during a charity golf tournament at Trump’s National Golf Club in Briarcliff Manor, NY.
Greenberg was supposed to win $1 million, but didn’t, after the insurer backing the tournament said his ball had only traveled 139 yards instead of the required 150, and implied that maybe something funny had been done to the course. (It’s unclear who would’ve tampered with the course in this scenario.) Greenberg filed suit against Trump’s club and against NBA star Alonzo Mourning, whose charity was putting on the golf.
The Post reports that the settlement there took the same curious form as the flagpole suit: a payment from the Trump foundation, in this case to Greenberg’s own private foundation:
Eventually, court papers show, Trump’s golf course signed off on a settlement that required it to make a donation of Martin Greenberg’s choosing. Then, on the day that the parties informed the court they had settled their case, a $158,000 donation was sent to the Martin Greenberg Foundation.
That money came from the Trump Foundation, according to the tax filings of both Trump’s and Greenberg’s foundations.
You can’t do that. Self-dealing, as defined by the IRS, can take many forms, but it definitely includes the managers of charities or nonprofits giving themselves money. (There are exceptions, like if the Trump Foundation was paying back a loan that Trump had personally given to the nonprofit. But Trump hasn’t donated to his own foundation since 2008.)
This is part of a number of recent incidents of alleged self-dealing by Trump that both the Post and other news outlets have uncovered in recent weeks, including the time in 2007 that he purchased a $20,000, six-foot-tall portrait of himself with charity money. Then, the Post found, he bought another portrait of himself with charity money in 2014, this one a real steal at just $10,000.
Several tax experts told the Post that these are classic cases of self-dealing; one used the word “brazen.” New York Attorney General Eric Schneiderman recently opened an investigation into the Trump Foundation to make sure they’re complying with state laws around charitable giving.
The Trump campaign responded by calling Schneiderman a “partisan hack,” accusing him of ignoring alleged improprieties from the Clinton Foundation. Trump has claimed that donors to the Clinton Foundation were given special access to her while she served as Secretary of State. And indeed, the Associated Press found that over half the private citizens who met with Clinton during her time in office were Clinton Foundation donors. However, those people weren’t elected officials, federal employees or representatives of foreign governments. The Clinton campaign said the AP’s review “misrepresented” the meetings and presented “a distorted portrayal of how often she crossed paths with individuals connected to charitable donations to the Clinton Foundation.”
None of the Clinton Foundation controversy, however, is quite as blatant as what we’re allegedly looking at with Trump. Besides these recent controversies, there’s also the fact that Florida Attorney General Pam Bondi dropped a planned investigation of Trump University after her re-election campaign got a $25,000 donation from the Trump Foundation. Trump also hosted a Republican Party fundraiser at Mar-a-Lago for a little under $5,000, a very low price when looking at, say, the 140,000 per event he charged his own campaign to party there.
Trump paid the IRS a $2,500 fine earlier this year over the Bondi gift, which they hadn’t told the IRS about. The Trump Foundation had reported that it paid that $25,000 to another nonprofit in Kansas with the same name as Bondi’s reelection group And Justice For All. They claimed it was an honest paperwork error that they didn’t notice until the Washington Post pointed it out.
It’s unclear if these latest lawsuit settlements will catch the interest of the IRS; if they do, he could be required to pay more fines.
This also gives lie, again, to Trump’s claims that he doesn’t ever settle lawsuits. ThinkProgress recently found 13 times that Trump companies settled employment lawsuits, often brought by people who’d worked at his casinos or hotels.
Update: This post has been edited to clarify our summary of the the AP’s reporting on the Clinton Foundation.