STATE OF NEW YORK
OFFICE OF THE ATTORNEY GENERAL
28 LIBERTY STREET
NEW

YORK, NEW YORK 10005

BARBARA D. UNDERWOOD

Attorney

DIVISION OF SOCIAL JUSTICE

General

CHARITIES BUREAU
James G.

Sheehan,

Bureau Chief

June 14, 2018

The Honorable David J. Kautter

Acting Commissioner
Internal Revenue Service
1111 Constitution Ave., NW.
Washington, DC. 20224
Re:

Referral for Donald J. Trump Foundation

(ETN

#

13-3404773)

Dear Commissioner Kautter:

The Charities Bureau of the New York State

Attorney General’s Office (“OAG”) is
organizations, ensuring their compliance

responsible for regulating New York State charitable
with governing rules and law, and representing the interests of charitable beneficiaries. On June
14, 2018, the OAG filed a petition for involuntary dissolution against the Donald J. Trump
Foundation (the “Foundation”), a New York not-for-profit corporation, in New York State court.
The petition and accompanying papers set forth facts that the OAG uncovered during the course
of an investigation of the Foundation with respect to potential violations of New York law
governing related party transactions, the administration of charitable assets, and the management
and oversight of the not-for-profit corporations (the “Investigation”).1
As detailed in the

petition, the Charities Bureau has concluded that the Foundation and its
multiple sections of New York State law, including provisions that
prohibit foundations from engaging in self-dealing, from wasting charitable assets, and from
violating the Internal Revenue Code (“Code”) by, among other things, making expenditures to
directors and officers violated

influence the outcome of an election. I write to refer to the Internal Revenue Service evidence of

1

A copy of the Petition and the Affirmation of Assistant
the Memorandum of Law are attached hereto.

Attorney

General Steven Shiffman

(“Shiffman Affi”)

and

 The Honorable David J. Kautter
June 14, 2018
Page 2

possible violations
Investigation.

of the Code

and

the Foundation and

by

by

Mr.

Trump

uncovered

by

the

detailed in the attached IRS Form 13909, the Investigation found that:
the President of the Foundation’s board, Mr. Trump, used Foundation assets for personal gain;

Specifically,

as

(l)
(2) the Foundation impermissibly intervened in a political campaign by, among other things,
attempting to influence the outcome of the 2016 presidential election; (3) the Foundation failed to
report excise tax liability properly; and (4) the Foundation engaged in deceptive and/or improper
filndraising practices.2 The Investigation further found that the Foundation engaged in
impermissible political activity and a related-party transaction during the 2016 presidential Trump
Campaign, as well as on one occasion in 2013 .3 The Investigation also revealed that the Foundation
entered into at least six related-party transactions that directly benefitted Mr. Trump or entities that
he controlled, and in some instances failed to properly report excise tax liability with the IRS.
Set forth below is the factual

Investigation, as well as
the analysis that led us to conclude that the Foundation may have violated provisions of the Internal
background

uncovered

by

the OAG

Revenue Code.
FACTUAL BACKGROUND

The Foundation is

recognized as tax-exempt under Section 501(c)(3) of the Internal
Revenue Code and is classified as a private foundation under Section 509(a) of the Code. As such,
it may not “participate in, or intervene in (including the publishing or distributing of statements),
any political campaign on behalf of
any candidate for public office.”4 In accordance with the
Code and New York State law, the Foundation’s certificate of incorporation provides that “[n]o
of the corporation shall be diverted in any manner directly or indirectly or
part of the property
otherwise inure to the benefit of any member, trustee, director or officer of the corporation or any
private individual.”5 The certificate of incorporation further provides that “[n]o part of the
activities of the corporation shall be
participating or intervening in (including the publication
or distribution of statements) any political campaign on behalf of any candidate for public office.”6
.

.

.

.

.

.

2

.

.

.

The OAG received documents from the Foundation and certain other third

parties during the

course

of its

but did not request or receive documents directly from the Trump Campaign.
See OAG’s completed IRS Form 13909, which this letter is intended to supplement.

investigation,
3
4

See 26 U.S.C.

§ 501(c)(3);

see

also IRS Revenue

Ruling 2007-41,

2007-25 I.R.B.

(June 18, 2007),

available at

https://www.irs. gov/pub/irs-drop/rr-07-4 1 .pdf
5

Shiffman

2, Donald J. Trump Foundation Certificate of Incorporation, dated February 2, 1987 (“Certificate
Sixth; N-PCL §§ 406 & 515(a).
Shiffman Aff., Ex. 2, Certificate of Incorporation at Section Seventh; N—PCL § 406.

Aff.,

Ex.

of Incorporation”), at Section
6

 The Honorable David J. Kautter
June

14, 2018

Page

3
Facts Supporting OAG’s Determination that the Foundation Intervened in

a

Political

Attempt
Influence the Outcome of the 2016 Presidential Primary
Election, and that the Foundation Engaged in Deceptive or Improper Fundraising
Practices
Campaign in

to

an

The OAG

Investigation obtained compelling evidence that the Donald J. Trump for
President, Inc.7 (the “Trump Campaign”) extensively directed and coordinated the Foundation’s
activities in connection with a nationally televised fundraiser for the Foundation in Des Moines,
Iowa on January 28, 2016 (the “Iowa Fundraiser”), including the timing, recipients, and amounts
of disbursements of the proceeds from that event. As was well-publicized at the time, the
Investigation confirmed that then-candidate Trump decided to hold the Fundraiser at the same time
as a televised debate of the Republican presidential candidates, in which Mr. Trump declined to
participate.8 The events took place less than one week before the February 1, 2016 Iowa caucuses.
to its

with the Charities Bureau, the Foundation “held [the] nationally
televised fundraiser in Iowa to raise funds for veterans’ organizations
[and] created a website

According

filing

.

.

.

online.”9 The Investigation found that, in fact,
the Iowa Fundraiser was planned, organized, and paid for by the Trump Campaign, with
administrative assistance from the Foundation. The event was billed as the “Donald J. Trump
Special Event for Veterans,” and the website through which the public could get tickets for the
event listed a Campaign staffer
the Iowa Deputy State Director for Donald J. Trump for
Inc.
as
the
event
President,
“Organizer.” Brad Parscale, a Trump Campaign consultant who
eventually became the Trump Campaign’s digital media director (and is now Mr. Trump’s reelection campaign manager), created the event website, located at DonaldTrumpForVets.com,
which featured the name of the Foundation at the top of the home page and informed Visitors that
“the Donald J. Trump Foundation is a 501(c)(3) nonprofit organization.”10 Executives of the
Trump Organization, including Allen Weisselberg, its Executive Vice President and CFO, and Jeff
McConney, its Senior Vice President and Controller both of whom regularly performed tasks for
the Foundation took direction from Mr. Parscale on the proj ect.11
to allow donors to make charitable contributions

—

—

—

—

At the televised

fundraising event, the podium was decorated with a sign that used
slogans, displaying the Foundation’s DonaldTrumpForVets.com website

Campaign

themes and

7

Trump for President, Inc.,

Donald J.

F EC Form

1, Statement of Organization, June 29, 2016, available

at

http://docquery.fec.gov/pdf/839/201701209041435839/201701209041435839.pdf#navpanes=0.
8
See, e. g., “Trump Campaign Statement on F ox News Debate,” Donald J. Trump for President website, Jan. 26, 2016,
ht_tp://goo.g1/8Rhm8 g; Philip Rucker, Dan Balz, and Jenna Johnson, Trump Says He Won ’t Participate in GOP Debate
on Fox News, WASH. POST, Jan. 26, 2016, available at
hgps://www.washingtonp_ost.com/politics/trump-says-hewont-participate-in-gop—debate—on-fox-news/2016/01/26/58fa0b2e-c490-l 1 e5 -a4aaf25866ba0dc6

stog.html?utm_term=.8d08e6a3f2de.

9

Shiffman Aff., Ex. 10, 2016 Form CHAR410-A, Part G, Line 3(c).
1°
Shiffman Aff., Ex. 7, Transcript of Jeff McConney at 134-35.
1‘

Shiffman Aff., Ex. 6, Transcript of Allen Weisselberg at 36-37. In addition, on the day of the Iowa Fundraiser,
January 28, 2016, Mr. Weisselberg and Mr. McConney flew to Des Moines, Iowa, to be present with the Foundation’s

checkbook at the Fundraiser in

case Foundation grants were to be disbursed that night. See Shiffman Aff., Ex. 6,
29-32,
36-37,
39-40; Shiffman Aff., Ex. 7, McConney Tr. at 128—30. Mr. McConney understood
Weisselberg
that he was attending the Fundraiser on behalf of the Foundation. McConney Tr. at 133; Weisselberg Tr. at 29-32.

Tr. at

 The Honorable David J. Kautter
June 14, 2018
Page 4
on a

blue

with Mr.
America

placard with a red border identical to Mr. Trump’s standard Trump Campaign sign, along
Trump’s name in capital letters and the Trump Campaign’s trademarked slogan, Make
12
Great Again!

The Fundraiser

$5.6 million in tax-free donations, some of which
directly
private
charity groups. Of that total, $2.823 million was
deposited into the Trump Foundation account.l3
from the

went

reaped approximately

donors to veterans

the

Fundraiser, senior Trump Campaign staff dictated the manner in which the
proceeds, including the timing, amounts, and recipients of the
The
grants.
Investigation found that Trump Campaign staff instructed the Foundation to make at
least four grants in Iowa right before the February 1, 2016 Iowa caucuses, the first nominating
contest of the presidential primaries for the 2016 presidential election. On January 29, 2016, Corey
Lewandowski, then Mr. Trump’s campaign manager, emailed Mr. Weisselberg, to ask, “Is there
any way we can make some disbursements [from the proceeds of the fundraiser] this week while
in Iowa? Specifically on Saturday [January 30“‘].”14 Mr. Weisselberg, who testified that he
understood that Mr. Lewandowski “wanted some checks with him when he went [to Iowa],”15
wrote back to Mr. Lewandowski asking the Trump campaign manager “to put together a list of the
Iowa veterans organizations you have in mind along with dollar amounts... [Will] give them to
the boss.”16 Later that same day, Mr. Lewandowski emailed Mr. McConney a list of veterans
organizations, created by Trump Campaign staff and approved by Mr. Trump, that should receive
the grants from the Foundation.”

Following

Foundation would disburse those

The Foundation then

permitted the Trump Campaign to exhibit and award enlarged
presentation copies of supposed Foundation checks to grant recipients at Trump Campaign rallies
for the political benefit of Mr. Trump in his campaign for President. Mr. Trump held several such
rallies in Iowa in the days leading to and including the day of the Iowa caucuses, February 1, 2016.
During those campaign appearances, Mr. Trump personally distributed the presentation copies of
Foundation checks to Iowa veterans groups in his capacity both as Foundation president and
presidential candidate. The Foundation’s name and address were printed on the enlarged
presentation checks, along with the Trump Campaign’s slogan, “Make America Great Again!” Mr.
in large letters, with a smaller reference to the DonaldTrumpForVets.com

Trump’slsname

website.

12

Mr.

Trump received a trademark for the well-known Make America Great Again slogan in 2013. See US. Patent
Office, Trademark Electronic Search System Entry for “Make America Great Again,” available via

and Trademark

https://www.uspto.gov/trademarks~application-process/search-trademark—database.
13
‘4
15
16

See Shiffman

Aff., Ex. 14, Document entitled Veterans Fundraiser January 28, 2016.

Shiffman Aff., Ex. 15, Email exchange between Allen
Shiffman Aff., Ex. 6, Weisselberg Tr. at 133.
Id.

17

Shiffman Aff., Ex. 16, Email from

18

See

Weisselberg to Corey Lewandowski dated January 29,

2016.

Corey Lewandowski to Jeff McConney dated January 29, 2016.
hgpszflgoogl/JoZMbS (photograph of Mr. Trump and presentation check at campaign event at Orpheum Theatre
in Sioux City, Iowa on January 31, 2016); h_ttps://goo.gl/RiZ4g1 (photograph of Mr. Trump and presentation check at
campaign event at Adler Theater in Davenport, Iowa on January 30, 2016).

 The Honorable David J. Kautter
June 14, 201 8
Page 5
On

January 29, 2016, at a Trump Campaign rally in Council Bluffs, Iowa, Mr. Trump
enlarged presentation copy of a $100,000 check to Partners for Patriots.19 Jerry
Falwell, Jr., making a campaign appearance with Mr. Trump, touted Mr. Trump as a candidate,
stating, “I mean, how often do you see a presidential candidate giving money away instead of
taking it. I think that is wonderful.” Mr. Falwell went on, “we have got a group here today that is
going to receive the second disbursement of that six million dollars that was raised the other night.
delivered

an

If that group would come on the stage now, it’s called Partners for Patriots.” At the time that Mr.
Trump gave the check copy to Partners for Patriots, however, the Foundation was still unaware

Trump Campaign had selected Partners for Patriots to receive the funds.20 The actual
payment was requested by the Trump Campaign and issued by check from the Foundation’s
account only on February 10, 2016.21
that the

On

Trump Campaign event in Davenport, Iowa, the Campaign
staged the disbursement of a presentation check for $100,000 to the Puppy Jake Foundation,
another veterans’ charity. Video of the event shows Mr. Trump presenting an enlarged copy of the
check to the recipient foundation and receiving a round of applause from the audience for doing
so.22 The pattern repeated the next day, January 31, 2016, when Mr. Trump announced at a Trump
Campaign rally in Sioux City, Iowa a Foundation grant of $ 1 00,000 to Support Siouxland Soldiers,
again presenting an enlarged promotional version of a supposed Foundation check emblazoned
with his campaign slogan.23
January 30, 2016,

at

a

On

February 1, 2016, Mr. Trump awarded another enlarged presentation copy of a
$100,000 check to the Mulberry Street Veterans Shelter at a Trump Campaign rally in Cedar
Rapids, Iowa. During the rally, Mr. Trump himself drew a connection between the distribution of
checks and his political polling numbers:
In lieu of the

[Republican presidential primary] debate, I said let’s have a rally for
At that rally, we raised in one hour six million dollars.
So
what we did, we raised this money, and we are giving it out, and we just gave out
a check for a hundred thousand dollars a little while ago, and we are giving out
another check, and they can bring it up and we are going to deliver it right here
We have so many of these checks. They are all over the place. We are giving them
out. This was in lieu, and, by the way, the poll numbers just came down from New
Hampshire, I went through the roof. I think they respect the fact that I, that we stand
So, congratulations to Mulberry Street.24
up for our rights

the veterans.

.

.

.

.

.

.

.

.

.

.

19

See https://www.c-span.org/video/?403936—1/dona1d-trun1p-campaign-rallv—council-bluffs-iowa.

Shiffman

21

Shiffman Aff., Ex. 22, Document entitled Donald J. Trump Foundation Inc. List of Contributions

and
22
23

Ex.

accompanying

26, Email exchange between Corey Lewandowski and Jeff McConney dated February 8, 2016.

check

to Veterans 2016

images.

See https://www.voutube.com/watch?v=Arn9d 5vu-BU.
See h
://Www.dail
ail.co.uk/news/article-3426562/Even-Melania-cam ai ns-Donald-Trum —uses—famil

invites-children-aboard-private-jet—minute-push-Iowahtml.
24

.

.

2°

Aff.,

.

See

https://www.voutube.com/watch?v=WPnzNomBiuE.

-

 The Honorable David J. Kautter
June 14, 2018
Page 6
From the

beginning,

the Foundation and the

Trump Campaign

communicated about the

handling of disbursements from the Fundraiser, and continued to do so for months after.
Throughout, records obtained from the Foundation reflect that the Foundation ceded control over
the distribution of its charitable funds to senior staff of the

Trump Campaign. For example, at the
outset of the Iowa campaign events that, featured the Foundation disbursements, Mr. Weisselberg
of the Foundation asked Mr. Lewandowski, the campaign manager, to “start thinking how you
want to distribute the funds collected for the Vets 7’25 In the ensuing email exchange, as noted
above, Mr. Lewandowski made it clear that he wanted the first disbursements to be made “while
in Iowa” on the Saturday before the Iowa caucus.26 Similarly, on February 16, 2016, Mr.
McConney wrote Mr. Lewandowski on behalf of the Foundation seeking further direction from
the Trump Campaign concerning the Foundation’s fundraising activities and charitable
disbursements: “Do you have
how much for each
website up and
On

charity??

.

a
.

.

list of which veterans charities you want these funds sent to and
Lastly, how much longer do you want to keep the TrumpForVets

running?”27

May 31, 2016,

after press reports about the Foundation’s failure to disburse all of the
28
the charitable giving of the
during the Iowa fundraiser,

charitable funds it had received
Foundation

again became the centerpiece to a Trump Campaign political event at which Mr.
Trump promoted his candidacy in announcing additional grants of Foundation money to veterans
groups. At that event, Mr. Trump discussed the presidential campaign while identifying the groups
to receive those residual funds.29 And as with the Iowa events, the Trump Campaign’s slogan was
prominently displayed in connection with the announcement of Mr. Trump’s charitable giving.30
Mr. Trump also challenged the press to compare his efforts to those of his political opponent:
“When I raise money for the veterans, and it’s a massive amount of money, find out how much
Hillary Clinton’s given to the veterans. Nothing.”31 At the press conference, Mr. Trump invited
25

Shiffrnan Aff., Ex. 15, Email

exchange

between Allen

Weisselberg

and

Corey

Lewandowski dated

January 29,

3.0),?"
27

Shiffman Aff., Ex. 19, Email from Jeff

McConney to Corey Lewandowski, copy to Allen Weisselberg, dated
16,2016.
February
28
David Fahrenthold, Trump said he raised $6 million for veterans. Now his campaign says it was less. David
Fahrenthold, WASH. POST, May 21, 2016, available at hgps://www.washingtonpost.com/politics/trump-said—he—
raised-6-million-for-vets-now-his-cam ai

n-sa

s-it-was—less/2016/05/20/871 127a8-1d1f-1 1e6-b6e0Four months

afterfundraiser, Trump says he gave $1 million
hgps://www.washingtonpost.com/news/postpolitics/wp/2016/05/24/four—months-1ater-donald-trump-says-he-gave-1-million-to—veteransgroup/?noredirect=0n&utm_term=.0e2 1 5 97aab8f
29
David Fahrenthold, Trump said he raised $6 million for veterans. Now his campaign says it was less. David
Fahrenthold, WASH. POST, May 21, 2016, available at hgps2//www.washingtonpost.com/politics/trump-said-he—

c53b7ef63b45_story.html?utmflterm=.aa71f025 8643;
to veterans group, WASH.

POST, May 24, 2016, available

raised-6—million-for-vets-now-his-cam ai
c53b7ef63b45

n-sa

at

s-it-was-less/2016/05/20/871 127a8-1d1f- 1 1e6-b6e0Four months

afterfundraiser, Trump says he gave $1
https://www.washingtonpost.com/news/post—
politics/wp/ZO16/05/24/four-months-1ater—donald—trump-says-he-gave-1-million—to-veterans—
stog.html?utm term=.aa7lf0258643;

to veterans group, WASH.

POST, May 24, 2016, available

million

at

group/?noredirect=on&utm term=.0e2 1597aab8f
3°

David F ahrenthold and Jose A. DelReal, Trump Rails Against Scrutiny Over Delayed Donations to Veterans Groups,
POST, May 31, 2016, available at ht_tps://www.washingtonpost.com/news/post—politics/wp/2016/05/3 1/trurnp—

WASH.

rails-against-scrutiny-over—delayed-donations-to-veterans-groups/?utm
31
https://bit.ly/2ImPa64 at 14:00

term=.ctbdefb8845e.

 The Honorable David J. Kautter
June

14, 201 8

Page

7

a

veteran, Al Baldasaro (a Republican member of the New Hampshire state legislature who worked
the Trump campaign during the primary), to address the reporters. During his speech, Mr.

on

Baldasaro

applauded Mr. Trump’s fundraising efforts for the veterans charities, and repeated his
Trump’s candidacy.32 That same month, the Trump Campaign uploaded to its
website a chart identifying the recipients of the charitable, tax-free contributions received during
the “Donald J. Trump Veteran Fundraiser” in Iowa five months earlier.33
endorsement of Mr.

All of the grants issued by the Foundation from the proceeds of the Iowa Fundraiser
which did not include any funds donated by Mr. Trump personally were selected by the Trump

—

—

Campaign, with the only approval by the Foundation coming from Mr. Trump (who served as
president of the Board and signed each check distributing the proceeds from the Fundraiser), whose
political campaign both controlled and benefitted from the manner in which the grants were
disbursed. The Foundation Board

never

met to discuss the Foundation’s involvement in the

Fundraiser or any of the Trump Campaign events at which the proceeds from it were disbursed.
Nor did the Board ever approve the grants that were made from the proceeds.
And as a
consequence, the Trump
its political ends.34

The Foundation

Campaign coopted

engaged

the benefit of a tax—free, charitable

in unlawful

political activity

on

at least

one

giving

process to

other occasion. On

September 9, 2013, the Foundation issued a check in the amount of $25,000 to “And Justice for
All,” a Florida political organization that supported the re-election of Pam Bondi to the position
of Florida
some

General. On March 23, 2016, the day after a Washington Post story revealed
of the details of the transaction and reported that a government watchdog group had filed a

Attorney

complaint about the contribution, the Foundation filed
transaction, and Mr. Trump paid the applicable excise tax.

an

IRS Form 4720

disclosing

the

Facts Supporting OAG ’s Determination that the Foundation Was Engaged in Self-Dealing
Transactions for the Benefit ofIts President and Companies He Controlled, and that the

Organization Failed to Report Excise Tax Liability Properly
In addition to the

political activity described above, the OAG Investigation revealed other
instances of the unlawful conduct by the Foundation that form the basis for this referral.
Specifically, the Investigation revealed that the Foundation entered into at least five self-dealing
transactions that directly benefitted Mr. Trump or for-profit entities that he controlled:
0

32

On

September 11, 2007, the Foundation made a $100,000 payment to the Fisher House
Foundation, a charitable organization, to settle legal claims against Mar-A-Lago, LLC,

Id. at 18:40.

33

ht_tps://goo.gl/C6KdXN (archive copy of May 30, 2016 Trump Campaign webpage featuring chart of Foundation
grants); see also ht_tps://goo.gl/5k4Tuk (archive copy of May 24, 2016, Trump Campaign webpage featuring CBS
press report on statements of Mr. Lewandowski regarding Mr. Trump’s contributions to veterans groups).
34
In fact, at the time of the Fundraiser, Mr. Trump had a significant financial stake in the prosperity of his
presidential campaign committee, having already provided $17.5 million in personal loans toward his public
promise to self-fimd all the most reason to spend tax-exempt charitable donations of others, rather than his own
campaign funds, on costly political gestures.
—

 The Honorable David J. Kautter
June

14, 2018

Page

8
LC

(“Mar-A—Lago”), an entity in which Mr. Trump has a 99.99% ownership interest, by
City of Palm Beach;
On February 14, 2012, the Foundation made a $158,000 payment to the Martin B.
Greenberg Foundation, a charitable organization, to settle legal claims against The Trump
National Golf Club, which is owned by DJT Holdings, LLC, an entity that is directly and
indirectly owned by Mr. Trump, and other defendants by Martin B. Greenberg;
On November 5, 2013, the Foundation made a $5,000 payment to the DC Preservation
League, a charitable organization, for promotional space featuring Trump International
Hotels in charity event programs. This payment was made for the benefit of Trump
International Hotel Management, LLC, an organization controlled by the directors of the
Foundation;
On March 20, 2014, the Foundation made a $10,000 payment to the Unicorn Children’s
Foundation, a charitable organization, for a painting of Mr. Trump purchased at an
auction for that charity and displayed at Trump National Doral Miami, an entity owned
by Trump Endeavor 12 LLC, which is owned by Mr. Trump; and
On December 14, 2015, the Foundation made a $32,000 payment to the North American
Land Trust, a charitable organization that preserves natural resources, in connection with
a pledge by Seven Springs, LLC, an
entity that is owned by DJT Holdings, LLC, to fund
the

0

0

0

0

the management of a conservation easement.
None of these transactions

Among those

were

approved by the

F oundation’s Board.

other

transactions, on February 14, 2012, the Foundation made a $158,000
Greenberg Foundation, a charitable organization, to settle legal claims
The
National
Golf Club (“TNGC,” a Trump-owned business entity) and other
against
Trump
defendants by Martin B. Greenberg. Under the terms of the settlement, TNGC agreed to pay
$158,000 to settle Mr. Greenberg’s claim that he had been improperly denied a prize for shooting
a hole-in-one at a charity golf tournament. Not only did TNGC not pay the settlement
money itself,
the Trump Organization raised the $158,000 payment by auctioning off a lifetime membership in
Mr. Trump’s golf courses on the website Charitybuzz.com, claiming that the auction would benefit
the Trump Foundation. The Investigation concluded that the Foundation improperly used the funds
it received from the auction to satisfy the obligations of the TNGC, and constituted improper selfdealing. To date, it is the OAG’s understanding that no excise taxes have been paid on this
payment

to the Martin B.

transaction.

The Foundation paid excise taxes

the other

self-dealing transactions that were the focus
exception of one transaction the payment to the Fisher House
Foundation in settlement of legal claims against Mar-A-Lago that appears to be outside the statute
of limitations. The Trump Foundation later filed IRS Form 4720s for four of these transactions,
but has never done so with respect to the Fisher House Foundation or the Greenberg Foundation
payments. The OAG mentions all of these transactions here, however, because they support our
conclusion that the Foundation has a history of failure to adopt procedures adequate to comply
of the OAG

Investigation,

with IRS law and rules.

with the

on

—

 The Honorable David J. Kautter
June 14, 201 8
Page 9
LEGAL ANALYSIS

Section

501(c)(3) prohibits tax-exempt not-for-profit organizations from participating or
intervening “any political campaign on behalf of
any candidate for public office.” This is an
absolute prohibition there is no such thing as a de minimis violation of this rule
and it applies
to both private foundations and public charities.35
in

.

.

.

—

—

A communication that

“explicitly advocates the election or defeat of an individual to public
unquestionably
political campaign activity.36 The IRS has not defined “explicitly
advocates,” but the Federal Election Commission (“FEC”) has defined the parallel term “expressly
advocating” the election or defeat of a candidate. Under that definition, express advocacy includes
“communications of campaign slogan(s)” which in context “can have no other reasonable meaning
office”

is

than to urge the election
imposes excise taxes on

or

defeat of

a

candidate.”37 Section 4945 of the Internal Revenue Code

expenditures that are made to “influence the outcome of any specific
public election,”
impose excise taxes to be imposed on any organization manager
who agreed to an expenditure knowing that it was a political expenditure.38 The disbursement of
checks from the Iowa Fundraiser proceeds by the Foundation and Mr. Trump seem to meet both
and Section 4955

of these standards.

addition, other conduct by a section 501 (c)(3) organization is evaluated using a facts and
circumstances test to determine whether it constitutes political participation or intervention.39 In
one ruling from 2012, the IRS determined that when a tax-exempt organization was founded and
controlled by a political figure who recently ran for office, the organization’s activities that
“coincide with [the founder’s] political interests” were political activity.40 This suggests that when
a political candidate also controls a tax-exempt organization, the organization’s activities that
support the candidate’s campaign can constitute political activity.
In

Here, the OAG Investigation revealed clear coordination between the Trump Campaign
and the Foundation, which appears to amount to impermissible political participation or
intervention by the Foundation. These violations may have been knowing and Willfill given Mr.
of the well-established

political activity in support of a
candidate by not-for-profit organizations,“ as well as the central role played by Mr. Trump in
distributing Foundation grants at his campaign events in Iowa. The Foundation assisted in setting
up the website to use for the Iowa Fundraiser, permitted donors to the Fundraiser to take advantage
of its tax-exempt status, staff were sent to Iowa with the Foundation checkbook, they followed up
with Trump Campaign staff about where Foundation money should go after the event, and the
Foundation was featured prominently at Trump Campaign events after the fundraiser. This
Trump’s

35

awareness

See IRS Revenue

Ruling 2007—41,

available

at

prohibition

on

https://www.irs.gov/pub/irs-drop/rr—07-41.pdf.

501(c)(3).
36

IRS Revenue

37

11 CPR.

3*

See 26

39

Rev. Rul.

40

Priv. Ltr. Rul. 201224034.

41

Shiffman

Ruling 2004—06.
§ 100.22(a).
U.S.C. § 4945(d)(2), 26

2004-06;

U.S.C.

Rev. Rul. 2007-41.

Affi, 11 43.

§ 4955(d)(1).

See also 26 CPR. 53.4955-1.

See also 26 U.S.C.

§

 The Honorable David J. Kautter
June 14, 2018
Page 10

demonstrates not

only close coordination between these entities, but also reveals that the Trump
Campaign
using the Foundation’s assets both its checkbook and its personnel to assist the
Trump Campaign. For these reasons, the OAG has concluded that the Trump Foundation violated
its New York State charter, the New York Not For Profit Law (“NPCL”), and engaged in
impermissible political activity and improperly attempted to influence the outcome of the 2016
presidential election in violation of section 501(c)(3). As the attached petition lays out in detail, it
was

—

—

is for all of these

reasons

that the OAG moved under Article 11 of the NPCL to dissolve the

Foundation.
If the IRS determines that

activity,

it may revoke the

not-for-profit organization engaged in prohibited political
organization’s tax exemption, impose excise taxes, or both.42
a

CONCLUSION

The OAG

revealed several instances of close coordination between the
and the Foundation with respect to the Iowa Fundraiser and the distribution of

Investigation

Trump Campaign
grants from it, as well as use of the Foundation’s assets both its checkbook and its personnel
to assist it in the 2016 presidential campaign. This impermissible political activity by a tax
exempt
foundation, combined with its pattern of engaging in self-dealing transactions that benefitted Mr.
Trump and/or his business entities, led the OAG to seek involuntary dissolution of the Foundation
and other equitable state law remedies against its directors, and to conclude that a referral to your
agency was appropriate.
—

—

If you have any

questions, please

contact

me

at

(212)

416-8401.

Jam

cc:

IRS EO
US.

Classification, via email
Treasury Inspector General

to

SQ
wwg
s

are/3s

G. Sheehan

eoclass@irs.gov

for Tax Administration

Cheryl

A. Teser, Senior Program Analyst to the
Director, EO Examinations, via email

Richie Heidenreich, IRS Referrals Unit
Enc.

42

See IRS Fact Sheet 2006-17; 26 U.S.C. §§ 4945, 4955. As you are aware, federal law prohibits executive branch
interference with any audit or investigation you may conduct in response to this referral. See 26 U.S.C. § 7217. In
addition, Section 4941 of the Code imposes an excise tax on certain transactions (acts of self-dealing) between a

private

foundation and

to fall within this

disqualified persons. The Iowa
prohibition. See 26 U.S.C. § 4941.

Fundraiser and the other transactions described above appear

 STATE OF NEW YORK
OFFICE OF THE ATTORNEY GENERAL
28 LIBERTY STREET
NEW

YORK, NEW YORK 10005

BARBARA D. UNDERWOOD

Attorney

DIVISION OF SOCIAL JUSTICE

General

CHARITIES BUREAU
James G.

Sheehan, Bureau Chief

June 14, 2018

Commissioner Caroline C. Hunter, Chair
Commissioner Ellen L. Weintraub, Vice Chair
Commissioner Matthew S. Petersen
Commissioner Steven T. Walther
Lisa J. Stevenson,

Acting

General Counsel

Federal Election Commission
1050 First Street NE

Washington,
Re:

DC 20463

Referral of the Donald J.

Trump
as

for

America,

Trump Foundation, Trump Organization, Donald J.
Bradley T. Crate in his official capacity

and their agents, and

treasurer.

Dear Commissioners and Ms. Stevenson:

The Charities Bureau of the New York State
for

New York State charitable

Attorney General’s Office (“OAG”) is
organizations, ensuring their compliance

responsible
regulating
with governing rules and law, and representing the interests of charitable beneficiaries. On June
14, 2018, the OAG filed a petition for involuntary dissolution against the Donald J. Trump
Foundation (the “Foundation”), a New York not-for-profit corporation, in New York State court.1
The petition and accompanying papers set forth facts that the OAG uncovered during the course
of an investigation of the Foundation with respect to potential violations of New York law
governing related party transactions, the administration of charitable assets, and the management
and oversight of the not-for-profit corporations (the “Investigation”).
As detailed in the

petition, the Charities Bureau has concluded that the Foundation and its
directors and officers violated multiple sections of New York state law, including provisions that
prohibit foundations from engaging in self-dealing, from wasting charitable assets, and from
violating the Internal Revenue Code by, among other things, making expenditures to influence the
1

A copy of the petition and the Affirmation of Assistant
the Memorandum of Law are attached hereto.

Attorney

General Steven Shiffrnan

(“Shiffman Aff.”) and

 June 14, 2018
Page 2
outcome of

an

election. I write to refer to the Federal Election Commission

(the “Commission”)
(“FECA” or the “Act”) by
Campaign
the
course
of
the
during
Investigation.

evidence of possible violations of the Federal Election
the Foundation and
The

Trump Campaign uncovered

Investigation acquired

Act

substantial credible evidence that the Foundation disbursed in

Republican presidential primary election at the
leadership of the Trump presidential campaign committee
and apparently with the candidate’s knowledge and approval.2 As such, the Foundation made
and the committee knowingly accepted
prohibited, excessive, and unreported in—kind
contributions during the 2016 presidential election cycle. Moreover, the evidence of coordination
and control further indicates that the Foundation and campaign may have violated the so-called
soft money provisions of the Act as amended by the Bipartisan Campaign Reform Act of 2002
(“BCRA”). Finally, we refer certain additional evidence relating to a $25,000 prohibited
contribution the Foundation made in 2013 to the political committee of another candidate for
public office for any further action that the Commission may deem warranted under the
excess

of $2.8 million to influence the 2016

direction and under the control of senior

—

—

circumstances.
FACTUAL BACKGROUND

recognized as tax-exempt under Section 501(c)(3) of the Internal
Revenue Code and is classified as a private foundation under Section 509(a) of the Code. As such,
it may not “participate in, or intervene in (including the publishing or distributing of statements),
any political campaign on behalf of
any candidate for public office.”3 In accordance with the
Code and New York State law, the Foundation’s certificate of incorporation provides that “[n]o
of the corporation shall be diverted in any manner directly or indirectly or
part of the property
otherwise inure to the benefit of any member, trustee, director or officer of the corporation or any
private individual.”4 The certificate of incorporation further provides that “[n]o part of the
activities of the corporation shall be
participating or intervening in (including the publication
or distribution of statements) any political campaign on behalf of any candidate for public office.”5
The Foundation is

.

.

.

.

.

.

.

.

.

Investigation obtained compelling evidence that Donald J. Trump for President, Inc.6
(the “Trump Campaign”) extensively directed and coordinated the Foundation’s activities in
connection with a nationally televised charitable fundraiser for the Foundation in Des Moines,
Iowa on January 28, 2016 (the “Iowa Fundraiser”), including the timing, recipients, and amounts
of disbursements of the proceeds from that event. As was well-publicized at the time, and as the
Investigation confirmed, then-candidate Trump decided to hold the Fundraiser at the same time as
The

2

3

parties during the course of its
directly from the Trump Campaign.
(June 18, 2007) available at https://www.irs.gov/pub/irs-drop/rr-

The OAG received documents from the Foundation and certain other third

investigation,

but did not request

See IRS Revenue

or

Ruling 2007-41,

receive documents
2007—25 I.R.B.

also 26 U.S.C. § 501(c)(3).
4
Shiffrnan Aff., Ex. 2, Donald J. Trump Foundation Certificate of Incorporation, dated Feb. 2, 1987
Incorporation”), at Section Sixth; N.Y. Not-For-Profit Corp. Law §§ 406 & 515(a) (“N-PCL”).

07-4l.pdf;
5
5

see

Shiffman Aff., Ex. 2, Certificate of Incorporation at Section Seventh; N-PCL § 406.
Trump for President, Inc., FEC Form 1, Statement of Organization, June 29, 2016.

Donald J.

(“Certificate

of

 June

14, 2018

Page

3

televised debate of the

a

participate.7 The

Republican presidential candidates, in which Mr. Trump declined to
events took place less than one week before the February 1, 2016 Iowa caucuses.
to its

According

filing

with the Charities Bureau, the Foundation “held [the] nationally
organizations
[and] created a website

televised fundraiser in Iowa to raise funds for veterans’

.

.

.

allow donors to make charitable contributions online.”8 The

Investigation found that, in fact,
planned, organized, financed,
by the Trump Campaign, with
administrative assistance from the Foundation. The event was billed as the “Donald J. Trump
Special Event for Veterans,” and the website through which the public could get tickets for the
event listed a Campaign staffer
the Iowa Deputy State Director for Donald J. Trump for
as the event “Organizer.”
Brad Parscale, a Trump Campaign consultant who
President, Inc.
became
the
eventually
Trump Campaign’s digital media director (and is now Mr. Trump’s reelection campaign manager), created the event website, located at DonaldTrumpForVets.com,

to

the Iowa Fundraiser

and directed

was

—

~

which featured the

of the Foundation at the top of the home page and informed visitors that
Foundation is a 501(c)(3) nonprofit organization.”9 Executives of the Trump

name

“the Donald J.

Trump
Organization, including Allen Weisselberg, its Executive Vice President and CFO, and Jeff
McConney, its Senior Vice President and Controller both of whom regularly performed tasks for
—

the Foundation

—

assisted Mr. Parscale in connection with the website

project.10

At the televised

fundraising event, the podium was decorated with a sign that borrowed
Trump
slogans, displaying the DonaldTrumpForVets.com website on a blue
placard with a red border and star pattern identical to the design of Trump Campaign signs and
billboards, with Mr. Trump’s name in capital letters and his trademarked campaign slogan, Make
11
America Great Again!
Campaign themes and

The Fundraiser
went

directly

from the

reaped approximately $5.6 million in tax-free donations, some of which
private donors to veterans charity groups. Of that total, $2.823 million was

contributed to the Foundation.12
7

See, e. g., “Trump Campaign Statement on Fox News Debate,” Donald J. Trump for President website, Jan. 26,
2016, hflp://goo.gl/8Rhm8g; Philip Rucker, Dan Balz, and Jenna Johnson, Trump Says He Won ’t Participate in
GOP Debate on Fox News, WASH. POST, Jan. 26, 2016, available at
h

s://www.washin

ost.com/ olitics/trum

'

'

s-he-wont—

-debate-on-fox-news/2016/01/26/
58fa0b2e-c490-1 165 -a4aa—f25 866ba0dc6_stog.html?utm term=.8d08e6a3f2de; Maggie Haberman and Nick
Corasaniti, Donald Trump, In Feud With Fox News, Slums Debate, NY. TIMES, Jan. 26, 2016, available at
on

-sa

ht_tps://www.nflimes.com/20l6/01/27/us/politics/trump-feud-fox-debate.html.
3

Shiffman

9

Shiffman

Aff., Ex. 10, 2016 Form CHAR410—A, Part G, Line 3(c).
Aff., Ex. 7, Transcript of Jeff McConney at 134-35.
1°
Shiffinan Aff., Ex. 6, Transcript of Allen Weisselberg at 36-37. In addition, on the day of the Iowa Fundraiser,
January 28, 2016, Mr. Weisselberg and Mr. McConney flew to Des Moines, Iowa, to be present with the Foundation’s
checkbook at. the Fundraiser in case Foundation grants were to be disbursed that night. See Shiffman Aff., Ex. 6,
Weisselberg Tr. at 29-32, 36-37, 39-40; Shiffman Aff., Ex. 7, McConney Tr. at 128-30. Mr. McConney understood
that he was attending the Fundraiser on behalf of the Foundation. McConney Tr. at 133; Weisselberg Tr. at 29-32.
11
See hflpM/aabcnews.com/images/N ightline/ 160129 nt1_debate_1239_16x9 992.jpg (photograph of event podium
and candidate). Mr. Trump received a trademark for the well-known Make America Great Again slogan in 2013. See
US. Patent and Trademark Office, Trademark Electronic Search System Entry for “Make America Great Again,”
Registration No. 4773272, available via at https://www.uspto.gov/trademarks-application-process/search-trademarkdatabase. The registration application confirms that the purpose of the original mark was for “Political action
committee services, namely, promoting public awareness of political issues” and “F undraising in the field of politics.”
12
See Shiffman Aff., Ex. 14, Document entitled Veterans Fundraiser January 28, 2016.

 June

14,2018

Page

4

the Fundraiser, senior Trump Campaign staff dictated the manner in which the
Foundation would disburse those proceeds, including the timing, amounts, and recipients of the

Following

grants. The Investigation found that Trump Campaign staff instructed the Foundation to make five
grants in Iowa right before the February 1, 2016 Iowa caucuses, the first nominating contest of the
presidential primaries for the 2016 presidential election. On January 29, 2016, Corey
Lewandowski, then Mr. Trump’s campaign manager, emailed Mr. Weisselberg to ask, “Is there

[from the proceeds of the fundraiser] this week while
Saturday [January 30”‘].”13 Mr. Weisselberg, who testified that he
understood that Mr. Lewandowski “wanted some checks with him when he went [to Iowa],”14
wrote back to Mr. Lewandowski asking the Trump campaign manager “to put together a list of the
Iowa veterans organizations you have in mind along with dollar amounts.
[Will] give them to
the boss.”15 Later that same day, Mr. Lewandowski emailed Mr. McConney a list of veterans
organizations, created by Trump Campaign staff and approved by Mr. Trump, that should receive
any way we can make
in Iowa? Specifically

some

disbursements

on

.

.

.

the grants from the Foundation.16
The Foundation then

permitted

the

Trump Campaign

to exhibit and award

enlarged

presentation copies of supposed Foundation checks to grant recipients at Trump Campaign rallies
for the political benefit of Mr. Trump and to support his campaign for President. Mr. Trump held
several such

political rallies in Iowa in the days leading to and including the date of the Iowa
caucuses, February 1, 2016.
During those campaign appearances, Mr. Trump personally
distributed the presentation copies of Foundation checks to Iowa veterans groups in his capacity
both as Foundation president and presidential candidate. The Foundation’s name and address were
printed on the enlarged presentation checks, along with the Trump Campaign slogan, “Make
America Great Againl,” Mr. Trump’s name in large letters, with a smaller reference to the
DonaldTrumpForVets.com website.17
January 29, 2016, at a Trump Campaign rally in Council Bluffs, Iowa, Mr. Trump
enlarged copy of a $100,000 check to Partners for Patriots.18 Jerry Falwell, J r., making
a campaign appearance with Mr. Trump, touted Mr. Trump as a candidate, stating, “I mean, how
often do you see a presidential candidate giving money away instead of taking it. I think that is
wonderful.” Mr. Falwell went on, “we have got a group here today that is going to receive the
second disbursement of that six million dollars that was raised the other night. If that group would
come on the stage now, it’s called Partners for Patriots.” At the time that Mr. Trump gave the
check copy to Partners for Patriots, however, the Foundation was still unaware that the Trump
Campaign had selected Partners for Patriots to receive the funds.19 The actual payment was
On

delivered

13

an

Shiffman Aff., Ex. 15, Email

exchange

between Allen

Weisselberg

and

Corey

Lewandowski dated

January 29,

20 16.
14

Shiffman

15

1d.

Aff.,

Ex.

6, Weisselberg

Tr. at 133.

16

Shiffman

17

See

18

See https://www.c—span.org/video/?403936—1/donald-trump-campaign-rallv-council-bluffs-iowa.

19

Shiffinan Aff., Ex. 26, Email

Aff., Ex. 16, Email from Corey Lewandowski to Jeff McConney dated January 29, 2016.
hgps://goo.gl/J02Mb8 (photograph of Mr. Trump and presentation check at campaign event at Orpheum Theatre
in Sioux City, Iowa on January 31, 2016); ht_tps://goo.gl/RiZ4gl (photograph of Mr. Trump and presentation check at
campaign event at Adler Theater in Davenport, Iowa on January 30, 2016).

exchange

between

Corey Lewandowski and Jeff McConney dated February 8,

2016.

 June

14, 2018

Page

5

requested by the Trump Campaign
February 10, 2016.20
On January 30, 2016, at

and issued

by check

from the Foundation’s account

only

on

Trump Campaign event in Davenport, Iowa, the campaign staged
enlarged presentation check for $100,000 to the Puppy Jake
Foundation, another veterans’ charity. Video of the event shows Mr. Trump presenting an enlarged
copy of the check to the recipient foundation and receiving a round of applause from the audience
for doing so.21 The pattern repeated the next day, January 31, 2016, when Mr. Trump announced
at a Trump Campaign rally in Sioux City, Iowa a Foundation grant of $100,000 to Support
Siouxland Soldiers, again presenting an enlarged promotional version of a supposed Foundation
check emblazoned with his campaign slogan.22
a

the disbursement of another

On

February 1, 2016, Mr. Trump awarded another enlarged presentation copy of a
$100,000
Mulberry Street Veterans Shelter at a Trump Campaign rally in Cedar
Rapids, Iowa. During the rally, Mr. Trump himself drew a connection between the distribution of
checks and his political polling numbers:
check to the

In lieu of the

rally

dollars.
and

[Republican presidential primary] debate, I said let’s have a
At that rally, we raised in one hour six million
So what we did, we raised this money, and we are giving it out,

for the veterans.
.

.

.

just

we

ago, and

gave out

.

a

giving

we are

.

.

check for

a

out another

to deliver it

here..

hundred thousand dollars

a

check, and they

it up and

We have

can

bring

little while
we

many of these checks.
them out. This was in lieu, and,

going
right
They are all over the place. We are giving
by the way, the poll numbers just came down from New Hampshire, I went
through the roof. I think they respect the fact that I, that we stand up for our
So, congratulations to Mulberry Street.23
rights
are

.

That

same

(also

known

Mr.

day,
as

.

Trump

Fundraiser

was

over

beginning,

held.

the Foundation and the

example,
Weisselberg

Shiffinan

Trump Campaign communicated about the
Fundraiser, and continued to do so for months after the

Records obtained from the Foundation reveal that the Foundation ceded

the distribution of its charitable funds to senior staff of the

Aff.,

Ex.

accompanying

campaign

Trump Campaign. For
disbursements,
campaign manager, to “start

events that featured the Foundation

of the Foundation asked Mr.

Mr.

and

so

presented a $100,000 check to Americans For Independent Living
Equal Living) at a campaign rally in Waterloo, Iowa.24

at the outset of the Iowa

2°

.

also

of disbursements from the

handling

.

.

Americans for

From the

control

.

.

Lewandowski, the

22, Document entitled Donald J. Trump Foundation Inc. List of Contributions

check

2‘

See https://www.voutube.com/watch?v=Am9d 5vu-BU.

22

See h

://www.dail

to Veterans 2016

images.
ail.co.uk/news/article-3426562/Even-Melania-cam ai ns-Donald-Trum —uses—famil

invites-children-aboard-private-jet—minute-push-Iowahtml.

23

See

24

See h

httDs://www.voutube.com/watch?v=WPnzNomBqu.
s://www.

e

ima es.com/detail/news- hoto/check-is- resented-to-americans-for—inde endent-livin

news-photo/S07895720#/check-is-presented-to—americans—for-independent-living-a-veterans—bv-pictureid507895720.

-

 June 14, 2018
Page 6

thinkng how you want to distribute the funds collected for the Vets.”25 In the ensuing email
exchange, as noted above, Mr. Lewandowski made it clear that he wanted the first disbursements
to be made “while in Iowa” on the Saturday before the Iowa caucus.26 Similarly, on February 16,
2016, Mr. McConney wrote Mr. Lewandowski on behalf of the Foundation seeking further
direction from the Trump Campaign concerning the Foundation’s fundraising activities and
charitable disbursements: “Do you have a list of which veterans charities you want these funds
sent to and how much for each charity??
Lastly, how much longer do you want to keep the
.

TrumpForVets
On

website up and

May 31, 2016,

.

.

running?”27

after press reports about the Foundation’s failure to disburse all of the
during the Iowa fundraiser,28 the charitable giving of the

charitable funds it had received

Foundation

again became the centerpiece to a Trump Campaign political event at which Mr.
Trump promoted his candidacy in announcing additional grants of Foundation money to veterans
groups. At that event, Mr. Trump discussed the presidential campaign while identifying the groups
to receive those residual funds.29 And as with the Iowa events, the Trump Campaign’s slogan was
prominently displayed in connection with the announcement of Mr. Trump’s charitable giving.30
Mr. Trump also challenged the press to compare his efforts to those of his political opponent:
“When I raise money for the veterans, and it’s a massive amount of money, find out how much
Hillary Clinton’s given to the veterans. Nothing.”31 At the press conference, Mr. Trump invited

veteran, Al Baldasaro (a Republican member of the New Hampshire

legislature who worked
on the Trump campaign during the primary), to address the
reporters. During his speech, Mr.
Baldasaro applauded Mr. Trump’s fundraising efforts for the veterans charities, and repeated his
endorsement of Mr. Trump’s candidacy.32 That same month, the Trump Campaign uploaded to its
a

25

Shiffman

Aff.,

Ex.

state

15, Email exchange between Allen Weisselberg and Corey Lewandowski dated January 29,

20 1 6.

261d
27

Shiffman Aff. Ex. 19, Email from Jeff McConney to

Corey Lewandowski,

copy to Allen

Weisselberg,

dated

February 16, 2016.
28

David F ahrenthold,

F ahrenthold, WASH.

Trump said he raised $6 million for veterans.

POST, May 21, 2016, available

raised-6-million-for—vets-now-his—cam ai

n-sa

at

Now his

campaign says

it

was

less. David

ht_tps://www.washingtonpost.com/politics/trump-said-he-

s-it-was-less/2016/05/20/871 127a8-1d1f—1 le6—b6e0-

c53b7ef63b45_stom.html?utm_term=.aa71f0258643;

Four months

afterfundraiser, Trump says he gave $1
hfips://www.washingtonpost.com/news/post—
politics/wp/ZO 16/05/24/four-months-later-donald-trump-says-he-gave-1-million-to-veterans—
group/?noredirect=on&utm_term=.0e2 15 97 aab8f.
to veterans

group, WASH.

POST, May 24, 2016, available

million

at

29

Transcripts, Trump Gives Account of Veterans Fundraiser, CNN, May 31, 2016, available at
hfip://transcripts.cnn.com/TRANSCRIPTS/l605/3 l/ath.01.html; David F ahrenthold, Trump Announced His Gifts
Veterans. Here’s What We Learned, WASH. POST, May 31, 2016, available at

to

https://www.washingtonpost.com/news/post-politics/wp/2016/05/3 O/tomorrow-trump-will—give-more-details-about—

his-donations-to-vets-heres-what-we—still-dont-know/?utm_term=.044b6 l 5 14083.
3°
David Fahrenthold and Jose A. DelReal, Trump Rails Against Scrutiny Over Delayed Donations to Veterans Groups,
WASH. POST, May 3 l, 2016, available at hgps://www.washingtonpost.com/news/post-politics/wp/2016/05/3 l/trumprails-a ainst—scrutin —over—dela ed—donations-to-veterans- ou s/ ?utm_term=.cfbdefb8845 e.
31
https://bit.ly/21mPa64 at 14:00.
32

Id. at 18:40.

 June

14, 2018

Page

7

website

a

chart

the “Donald J.

identifying the recipients of the charitable, tax-free contributions
Trump Veteran Fundraiser” in Iowa five months earlier.3’3

received

during

All of the grants issued by the Foundation from the proceeds of the Iowa Fundraiser
which did not include any funds donated by Mr. Trump personally were selected by the Trump

—

—

with the

only approval by the Foundation coming from Mr. Trump (who served as
signed each check distributing the proceeds from the Fundraiser),
whose political campaign both controlled and benefitted from the manner in which the grants were
Campaign,

President of the Board and

disbursed. The Foundation Board

never met to discuss the Foundation’s involvement in the
of
the
any
Trump Campaign events at which the proceeds from it were disbursed.
Nor did the Board ever approve the grants that were made from the proceeds. And as a
consequence, the Trump Campaign coopted the benefit of a tax-free, charitable giving process to

Fundraiser

its

or

political ends.34
The

Foundation

in unlawful

political activity within the Commission’s
jurisdiction
September 9, 2013, the Foundation issued a check
in the amount of $25,000 to “And Justice for All,” a Florida political organization that supported
the re-election of Pam Bondi to the position of Florida Attorney General. On March 23, 2016, the
day after a Washington Post story revealed some of the details of this transaction and reported that
a government watchdog
group had filed a complaint about the contribution, the Foundation filed
an IRS Form 4720 disclosing the transaction, and Mr.
Trump paid the applicable excise tax.
on

at

least

engaged

one

other occasion. On

LEGAL ANALYSIS

The Commission exercises exclusive civil

provisions

of the Act and the Commission’s

jurisdiction to interpret and enforce the
implementing regulations.35 This referral does not

to address every

respect in which the evidence here submitted or otherwise available to the
Commission may implicate the federal campaign finance laws. Nonetheless, the following
assessment gives OAG reason to believe that the Foundation and the Trump Campaign
may have
violated federal laws within the Commission’s enforcement jurisdiction. These violations may

purport

have been

knowing

and willful

given

the well-established

prohibition

on

accepting

excessive

or

corporate in-kind contributions.
1.

The Foundation Made Prohibited and Excessive In-Kind Contributions to the

Trump Campaign

of the

”

that It

Knowingly Accepted

and Failed to

Report.

The circumstances recited above demonstrate that the Foundation disbursed at the direction
Trump Campaign more than $2.8 million the Foundation had raised during the campaign—

hgpsz//goo.gl/C6KdXN (archive copy of May 30, 2016 Trump Campaign webpage featuring chart of Foundation
grants); see also hgpsz//goo.gl/5k4Tuk (archive copy of May 24, 2016, Trump Campaign webpage featuring CBS
press report on statements of Mr. Lewandowski regarding Mr. Trump’s contributions to veterans groups).
34
In fact, at the time of the Fundraiser, Mr. Trump had a significant financial stake in the prosperity of his presidential
campaign committee, having already provided $17.5 million in personal loans toward his public promise to self-fund
all the more reason to spend tax-exempt charitable donations of others, rather than his own campaign funds, on
costly political activities.
35
52 U.S.C. § 30106(b)(l).

—

 June 14, 2018
Page 8

sponsored fimdraising event in Iowa. Approximately $500,000 of those grants were vigorously
promoted by the candidate and other campaign staff and speakers during a series of campaign
rallies in Iowa on the eve of the Iowa caucuses—the first nominating contest of the 2016
presidential primary season. The Investigation further obtained compelling evidence that these
expenditures were made at the behest and direction of Trump Campaign staff and for the specific
purpose of benefitting Mr. Trump’s performance in the Iowa caucuses specifically and as a federal
candidate

generally.36

Federal law prohibits corporations from making contributions from their general treasury
funds in connection with any election of a candidate for federal office.37 This prohibition upon
corporate contributions includes not-for-profit corporations, which are further prohibited from

engaging in political activity pursuant to the Internal Revenue Code. Nor may a candidate
political committee knowingly accept a corporate contribution.38 An expenditure made
coordination with
or

a

candidate

committee and must be

or

authorized committee is

reported

as an

expenditure

in

in-kind contribution to that candidate

an

made

or

by

that candidate

or

committee.39 An

or gift of money or anything of value
“expenditure” under the Act is any “payment, distribution
made by any person for the purpose of influencing any election for federal office” or “a written
.

.

.

.

.

.

contract, promise,

or

agreement” to do 50.40 Such a payment or disbursement of a thing of value is
or cooperation with or at the request or suggestion of” the

“coordinated” if it is “made in concert
candidate

or

his

campaign.41

A.

The Foundation Made

an

Expenditure when

It Disbursed in Excess of

$2.8 Million for the Purpose of Influencing the Presidential Election.

noted, the terms “contribution” and “expenditure” include gifts or payments of money
or “anything of value” so long as they are made “for the
purpose of influencing” the election of
to
Federal
office.42
The
of
value”
is construed broadly, and includes
any person
phrase “anything
As

goods

or

services

provided without charge

or

at less than the usual and normal

charge.43

Investigation amply demonstrate that the
Trump Campaign specifically orchestrated the Iowa Fundraiser and subsequent campaign events
for its political benefit. In particular, the campaign events where Mr. Trump personally distributed
promotional checks from the Foundation to veterans groups at official campaign rallies, just days
in advance of the Iowa caucuses, underscore that the grants were intended to benefit Mr. Trump’s
The facts and circumstances

36

Additional evidence

beyond

without

developed

in the

what the OAG collected from the Foundation may be in the

limitation, evidence relating to the use of the list of donors
Campaign, including,
Mr. Parscale in connection with the Iowa fundraiser, www.donaldtrumpforvets.com.
37
52 U.S.C. § 30118(a).
38

Id.

39

52 U.S.C.

4°

52 U.S.C.

custody

of the

Trump
by

to the website created

§ 30116(a)(7)(B)(i); 11 C.F.R. § 109.20.
§§ 30101(9), 30118(a).
4152 U.S.C. § 30101(17)(B); see 11 C.F.R. § 109.20(a).
42
See 52 U.S.C. § 30101(8)(A)(i), (9)(a)(i); 11 C.F.R.§§ 100.7(a)(l), 100.8(a)(1). Any contribution or expenditure is
required to be disclosed by the receiving” and disbursing committee. 52 U.S.C. § 30104(b); 11 CFR §§ 104.3(a)-(b),
104.13. The Trump Campaign apparently did not report any amounts related to the distribution of the grants as a
contribution of the Trump Foundation.
43
11 CFR §§ 100.7(a)(1)(iii)(A), 100.8(a)(l)(iv)(A).

 June

14, 2018

Page

9

ambitions

as

candidate

constitute

expenditures

For these

that is, for the purpose of influencing the
under the Act.

—

reasons, the OAG has concluded within its

presidential

election

—

and thus

state enforcement

authority
impermissible political expenditures
to promote and benefit the Trump Campaign and Mr. Trump’s political ambitions, notwithstanding
that the grants were made not to the Trump Campaign, but to recipient charities identified by the
Trump Campaign.44 That finding appears consistent with the FECA, given the broad statutory and
regulatory definitions of “contribution” and “expenditure,” which include “directly or indirectly”
providing “anything of value”—here, the enormous promotional value afforded the candidate
through symbolic distribution during campaign events of the tax-deductible proceeds of others’
charitable giving—beyond merely the campaign’s direct receipt of a payment or money.
Therefore, given that the grants were made at the explicit direction of the Trump Campaign—
indeed, at the direction of the campaign manager, who specified their distribution on the weekend
before the Iowa caucus—there appears to be a compelling factual basis to conclude that the
for the purpose of influencing any election for federal office.”45
payments were “made
same

own

that the charitable disbursements of the Foundation constitute

.

In

.

.

certain

Advisory Opinion Requests concerning whether federal
officeholders’ participation in charitable events resulted in contributions or expenditures by or on
behalf of the candidate, the Commission has examined the degree to which the requestors’
involvement in those events related to their candidacy and campaign activity or, rather, their status
as Officeholder.46 Because the degree of separation that the requestors stipulated to when obtaining
those Advisory Opinions differs radically from the circumstances uncovered in the Investigation,
they do not appear to afford any protection against a Commission enforcement action here. By
way of example, the Commission explained in Advisory Opinion 1999-34 that “[t]he question of
whether the event or your participation in the event is also for the purpose of promoting your
candidacy may be answered by considering the various features of the event and its promotion,
and the role of the Committee.” In that Opinion, the officeholder’s participation was intended to
benefit local elementary schools and charitable organizations organized under 501(c)(3), not the
re-election campaign as candidate, because, among other stipulated facts, the event would be held
several months before the relevant primary election and “the disbursement of the proceeds will be
controlled by each benefitting PTA or other [charitable] organization.”47 In contrast, “a candidate’s
participation in an event as a candidate would cause the Commission to determine the event was
in connection with an election.”48 Here there can be no genuine question that the rallies and events
at which Mr. Trump and other campaign speakers promoted his Foundation’s philanthropic giving
were Trump Campaign events that Mr. Trump attended in his capacity as a candidate for federal
office. Moreover, the campaign committee’s extensive coordination of all the material elements
of the featured charitable giving further confirms that publicizing the gifts of the Foundation in the
context of a political event was intended to serve the purpose of promoting and advancing Mr.
Trump’s prospects as a federal candidate in the looming election contest.

44

response

to

See Petition at 33-60.

45

52 U.S.C.

46

See,

§§ 30101(9), 30118(a).
Advisory Op. 1999-11 (Byrum); Advisory Op.
47
Advisory Op. 1999-34 at 5.
48
Id. at 5 n.3 (citing Advisory Op. 1999-2 (Premera) at 4).
e. g.,

1999-34

(Bilirakas).

 June 14, 2018
Page 10
B.

The

in

Trump Campaign Directed and Coordinated with
Making Expenditures to Benefit the Campaign.

the Foundation

The

Investigation uncovered evidence of extensive coordination between the senior-most
Trump Foundation and the Trump Campaign regarding both the Iowa fundraiser
distribution of the charitable proceeds the Foundation received as a result.

members of the
and the

The Act

concert, with,

or

at the

that

“expenditures made by any person in cooperation, consultation, or
request or suggestion of, a candidate, his authorized political committees,

provides

their agents, shall be considered to be a contribution to such candidate.”49 The Commission’s
coordination regulations distinguish coordinated expenditures generally from expenditures for
or

coordinated communications

specifically.50

It appears that the disbursements that are central to
those provisions of the Act and Commission regulations that

this matter would be
address coordinated

governed by
expenditures generally,

that

is, 52 U.S.C. § 30116(a)(7)(B)(i) and
§ 109.20, not the coordinated communications regulation at 11 CPR. § 109.21.51

11 C.F.R.

In addition to the facts

already related, the Investigation obtained other evidence that the
Trump Campaign played
determining the fate of the grants. For example, Campbell
a
Burr,
Trump Campaign staffer, sent several emails to, among others, Mr. McConney and
Mr. Lewandowski, with subjects such as “Vet Donations” and “Updated Vet Donations List.”52
Ms. Burr addressed the recipients as the “Team” and provided “an updated list of checks that have
been sent to the veterans groups.”53 In that email, she also noted that several of the donations on
the list were “going out today,” reflecting the control of the campaign staff over the
disbursements.54 Mr. Weisselberg, the Trump Organization’s EVP and CFO, admitted that he
understood that Ms. Burr was assisting Mr. Lewandowski in making “sure these funds got to where
they had to get to.”55 In addition, on March 22, 2016, Mr. Lewandowski wrote to Mr. Weisselberg
the lead role in

49
5°

Id. §

30116(a)(7)(B)(i).
Compare 11 C.F.R. § 109.20,

with id.

§

109.21.

51

Nonetheless, the conduct prong of the coordinated communication regulation at 11 CPR. § 109.21(d) identifies
several activities that the Commission has indicated would constitute actionable coordination even in the circumstance
of public communications.

First, the grants can fairly be said to have been “created, produced, or distributed at the
suggestion of” the Trump Campaign. Indeed, the Trump Campaign selected all the grant recipients and the
amounts they would receive. Id. § 109.21(d)(1)(i). Second, the Campaign was materially involved in determining
the content, intended audience, and timing of the grant presentations and payments. Id. § 109.21(d)(2)(i)—(v). The
metadata from the file containing the list of veterans organizations that Mr. Trump allegedly approved to receive
grants confirms that the list was created by the campaign. Mr. Lewandowski sent this list to the Foundation “staff’—
that is, Trump Organization personnel whose responsibilities included performing work for the Foundation—who
assisting with cutting the checks for the grants. See Shiffman Aff., Ex. 16, Email from Corey Lewandowski to Jeff
McConney, dated January 29, 2016 (with metadata for the attachment). Third, there appears to have been substantial
discussion between the Foundation and the Trump Campaign about these grants, as “information about the candidate’s
plans, projects, activities, or needs [was] conveyed to [the Foundation], and that information [was] material to the
creation, production, or distribution” of the grants. Id. §109.21(d)(3). If the level of coordinated activity would be
sufficient to satisfy the elevated degree of cooperation necessary to satisfy the conduct prong of the coordinated
communication regulation, it should amply satisfy the definition of coordination under the regulatory provision of
general application at 11 C.F.R. § 109.20.
52
See Shiffman Aff., Ex. 20, Email from Jeff McConney to Larry Glick and Deborah Tarasoff, dated March 7, 2016.

request

.

.

or

.

,

53

5.
55

52:
Shiffinan Aff., Ex. 6,

Weisselberg

Tr. 164.

 June

14, 2018

Page

11

and Mr.

McConney, asking that a check for $100,000 be sent to the Marine Corp Law Enforcement
Foundation, and noting that the media has been asking if they received money from the
Foundation.56 Mr. Weisselberg and Mr. McConney complied and cut a check the same day.57
In sum, the factual record revealed in the

publicly

available

information, the internal

written communications of the relevant staff and managers, and the testimonial admissions of
relevant witnesses all support the conclusion that the Trump Campaign and the Foundation

extensively

coordinated the decision to conduct the fundraiser in lieu of attending the Iowa debate

and in turn the

manner

in which they would then

the prospects of then-candidate

positively

spend those donated funds, calculated to influence
Trump in the imminent caucuses and presidential

election.58
2.

The

Trump Campaign’s Control Over the Foundation’s
Money Prohibitions of the Act

Activities

May

Also

Violate the Soft
As amended under

BCRA, the Act prohibits a candidate or committee from soliciting,
receiving, or directing another person to make a contribution, donation, or transfer of funds, or any
other thing of value, that is not subject to the prohibitions, limitations, and reporting requirements
of the Act. This “soft-money ban” also applies to entities that are directly or indirectly established,
financed, maintained, or controlled by a candidate or committee. The Commission has developed
ten non—exclusive factors

(collectively, the “EFMC factors”), set out in 11 CPR. § 300.2(c)(2), to
determine whether a person or entity (the “sponsor”) “directly or indirectly established, financed,
maintained or controlled” another person or entity under 52 U.S.C. § 30125. These factors are
examined in the context of the overall relationship between the sponsor and the entity to determine
whether the presence of any factor or factors is evidence that the sponsor “directly or indirectly
established, financed, maintained or controlled” the entity.
Mr.

candidacy,

Trump’s
was

eponymous

Foundation, although formed well prior to his announcement of
by him, and during the 2016 presidential campaign he was

nonetheless established

authorized to, and did, exercise considerable control over all aspects of its activities as the Board
President. The evidence collected in the Investigation further reflects that Mr. Trump personally
consulted in connection with the grants and authorized those disbursements, signing and
delivering checks and the cover correspondence.59 Moreover, the Foundation received a

was

substantial amount of donations,

over

$2.8 million,

as a

result of the

January 28,

2016 fundraiser

56

Shiffman Aff., Ex. 21, Email from Corey Lewandowski to Allen Weisselberg, dated March 22, 2016.
Id.; Shiffman Aff., Ex. 22, The Donald J. Trump Foundation Inc. List of Contributions to Veterans; Shiffman Aff.,
Ex. 23, Email from Jeff MeConney to Deborah Tarasoff, dated March 22, 2016.
57

58

In addition to the prohibition against making
corporations, including their officers, directors,

accepting a corporate in-kind contribution, the Act prohibits
other representative agents, from facilitating the making of
contributions to federal candidates and committees. See 11 C.F.R. § 114.2(t)(1). Facilitation includes “using corporate
resources or facilities to engage in fundraising activities in connection with any federal election” and covers,
among other things, ordering staff to plan, organize, or carry out a fimdraising project as part of their work
responsibilities using corporate resources and the use of corporate facilities in connection with fundraising activities.
As noted, the Trump Organization and Foundation authorized the use of staff time to assist and administer the Iowa
fundraiser at the direction of the Trump Campaign and subsequent grant awards as instructed by the Trump Campaign,
resulting in in—kind contributions to the campaign.
.

1

59

.

or

or

.

See,

e. g.,

Shiffman

Aff.,

Ex.

20, Emails between

Mr. Lawrence Glick and others dated March

7, 2016.

 June 14, 2018
Page 12

that the

Trump Campaign planned

and

organized

in connection with the

pending presidential

election. Further, as explained, the Foundation’s disbursements of more than $2.8 million in grants
were undertaken at the express direction and control of the Trump Campaign and, once more, in
connection with the

pending presidential election. Given this and other evidence of direction and
control by Mr. Trump, the Trump Campaign, and their agents, it appears that the Foundation was
established, financed, maintained, or controlled by Mr. Trump and the Trump Campaign within
the meaning of the BCRA soft-money provisions—thus subjecting the Foundation and its agents
to those limits and prohibitions as well.60

CONCLUSION
The

Campaign
as

well

revealed many instances of close coordination between the Trump
and the Foundation with respect to the Iowa Fundraiser and subsequent distributions,

Investigation

as use

of the Foundation’s assets—both its checkbook and its

personnel—to influence the
§§ 30101(17)(B) and 30125 and

2016

presidential campaign, activities that implicate 52 U.S.C.
§§ 109.20(a) and 300.2, among other provisions of
implementing regulations.
11 C.F.R.

Should you have any
OAG

Investigation, please

questions

contact

me

or

at

the Act and the Commission’s

wish to obtain additional information

(212)

concerning

611% {Q

Ja

CC:

the

416-8401.

es

G. Sheehan

in

AnnaLou Tirol

Acting Chief, Public Integrity Section
US. Department of Justice, Criminal Division
950 Pennsylvania Avenue, NW
Washington, DC 20530—0001

Richard C.

Pilger

Director, Election Crimes Branch, Public Integrity Section
US. Department of Justice, Criminal Division
950 Pennsylvania Avenue, NW

Washington,

DC 20530-0001

Enc.

5°

For these reasons, the

certain solicitations

on

inapplicable

here.

activities

taken “in connection

are

regulations permitting federal candidates to make
regard to the prohibitions and limits of the Act are
§ 30125; 11 C.F.R. § 300.65. That safe harbor does not apply where a charity’s
with” a federal election, as in this case. See 11 C.F.R. § 300.65(a)(1), (2)(ii), (d).

exception

in the Act and Commission

behalf of charitable

See 52 U.S.C.

organizations

without