INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 RECEIVED NYSCEF: 08/30/2018 SUPREME COURT COUNTY --- ---- THE OF ---- the --- PEOPLE BARBARA State OF THE STATE OF NEW YORK NEW YORK ------------------------x OF THE D. STATE UNDERWOOD, of New OF NEW Attorney YORK, by General of York, Index No. 451130/2018 Petitioner, -against- DONALD IVANKA DONALD J. TRUMP, TRUMP, J. TRUMP DONALD ERIC J. TRUMP F. TRUMP, and JR., the FOUNDATION, Respondents. _______ _ __ _ _ __ __----------------------X MEMORANDUM RESPONDENTS' OF LAW SUPPORT IN MOTION TO DISMISS LAW 565 OF OF ALAN OFFICES Fifth New (212) 7th Avenue, New York, York 684-8400 asfuterfas@futerfaslaw.com Attorney 1 of 47 for Respondents floor 10017 S. FUTERFAS INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 RECEIVED NYSCEF: 08/30/2018 TABLEOFCONTENTS TABLE OF AUTHORITIES PRELIMINARY iii STATEMENT 1 ARGUMENT 4 POINT THE ONE VETERANS FUNDRAISER A RELATED-PARTY A RELATED A. PARTY INTEREST A 2. The Interest" "Financial a Monetary Benefit 6 7 WAS NOT TRANSACTION NO WILLFUL AND 8 CONDUCT INTENTIONAL 12 POLITICAL B. THE 26 U.S.C. 14 § 501(c)(3) WAS NOT FUNDRAISER VETERANS ACTIVITY POLITICAL FOUNDATION 1. The 2. To 15 Foundation the Extent Personal POlNT CONSTITUTE 14 UNDER ACTIVITY BY THE NOT DID ACTIVITY POLITICAL A. did Mr. Capacity, not Trump Such in Engage Engaged Improper in Political is Expressly Political Activity Activity 17 in his Allowed 19 THREE CAUSES SHOULD FOR Requires FUNDRAISER FUNDRAISER VETERANS PROHIBITED ALL 5 TWO POINT THE WAS A FINANCIAL REQUIRES "Transaction" of Meaning VETERA-NS THERE 5 TRANSACTION A RELATED-PARTY C. CONSTITUTE A TRANSACTION IN 1. THE B. NOT DID TRANSACTION BE WHICH OF ACTION RELIEF CAN TO RELATING BECAUSE DISMISSED THEY INDIVIDUAL FAIL BE GRANTED TO DONATIONS STATE A CLAIM 20 2 of 47 INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 RECEIVED NYSCEF: 08/30/2018 DAMAGE ALL A. B. THE C. THERE POINT FOUR THE FOUNDATION'S WAS NYAG'S IT DISQUALIFIES THE STATUTE BUT PO1NT SIX THERE IS NO SUSPENSION C. THE FOR THIS DISMISSAL NOT ADMISSIONS 21 22 SPECIAL OF THE RELIEF PETITION ARISING 24 FROM AND THE CITED CITED 29 FACTS HERE BY THE NYAG IS BOARD BY WHERE RELIEF OF DISSOLUTION INJUNCTIVE ON THE BARS INJUNCTIVE FROM CASES THAT ARE DISSOLUTION INCOMPATIBLE 31 UNWARRANTED SERVICE IS 31 UNWARRANTED 31 NYAG DEMONSTRATE WOULD BE UNPRECEDENTED THE RELIEF HERE FACTS 32 SEVEN COURT LACKS OVER JURISDICTION MR. TRUMP 36 EIGHT RESPONDENTS FILE 20 TRANSACTIONS RESOLVED, PRECEDENTS THE B. PO1NT ARE PAID RESPONDENTS MAINTAINING REQUIRES BASIS AN ORDER THIS FROM OF THE A. PO1NT BEEN OF ASSETS AGAINST BIAS OF LIMITATIONS TWO NEARLY WITH OR WASTE ANY BECAUSE ALREADY FIVE ALL IS HAVE NO LOSS AND MOOT ARE SELF-CORRECTIONS PERVASIVE PROCEEDING POINT CLAIMS DAMAGES POTENTIAL AN ANSWER SHOULD AND BE GIVEN OBTAIN AN OPPORTUNITY DISCOVERY TO 38 CONCLUSION 39 ii 3 of 47 INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 RECEIVED NYSCEF: 08/30/2018 TABLE OF AUTHORITIES Cases Page(s East 242-44 77th 1616 Second Alvarez v. Cheek v. Clinton Ave. United States, v. Jones, 520 Cuomo v. Daniels, Ct. (Sup. Dennis Gun Club, Misc. Sullivan Greene States, v. United Hancock IDT v. Train, Corp. In re Dodge In re Cline In re Tarble, Johnson U.S. 's Trust, 25 N.Y.2d 80 U.S. Const. Lefkowitz v. Loengard v. Santa Corp. Volkswagon v. Thiboutor, Fe 448 U.S. 2009 WL 3823257 (1990)................24 37 and Thomas 653 (2d Cir. 2009)................................................8 )........................................................................33 2009) 7 N.Y.3d 7, Merlo, 1998)........................................................34 (2006).................................................................7 Cir. 1996).....................................................................8 (1976).........................................................................................36 Witter & (1969) ................................................................................. 471 732 (1st of New 70 N.Y.2d (1st 12 N.Y.3d Co., 132 139 (2009)............................29 2010)..............................................................38 Dep't ...........................................................................................38 (1871) of America, Indus., (2d August 273 v. State 199 28, 1348 93 A.D.2d v. Hornblass, (A), Dean 408 397, 158 ..................................................................4 (1986) County 72 A.D.3d v. Donovan, 75 N.Y.2d Auth., F.3d Aramony N.Y. 167 Stanley Co., .................................................................................26 575 Oct. F.3d v. Morgan Lawrence Main 426 Insurance (1991).................................................................................12 1226 v. Spitzer, 79 Liquor 324 (1935) Inc., v. William Corp. Mutual (1997).....................................................................................36, County Ct. State 320, 192 3d (Sup. DaimlerChrysler York 78 U.S. 681 25 opinion, U.S. U.S. NYAG Vacco, slip 295 York .................................................................................8 2006) 68 N.Y.2d 498 v. Metacon Dep't v. New Hosp., States, New v. Greater (1st Restaurant United Cordiano 103 100, v. Prospect Berger LLC Street, 31 A.D.3d Dep't 293 York, Inc., 262 1983)................................................................25 366 N.Y. N.Y.S.2d 634 (1944) 157 (1st ...............................................6 Dep't 1975)...........................32 (1987)........................................................................4 1 (1980)............................................................................................37 ... 111 4 of 47 38 INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 Majewski RECEIVED NYSCEF: 08/30/2018 v. Broadalbin-Perth Manhattan Marinello & Ear Eye, v. United Cent. Throat Hosp. 138 States, v New of Anonymous Matter of Gates Matter of Tristram K, 36 A.D.3d Matter of Yolanda D., 88 N.Y.2d Mueller 26 A.D.3 Ct. Health Erie People v. Adams, People v. Alexanders People v. Boothe, People v. Brown, People v. Calderone, People v. Carlin, People v. Coe, People v. Finnegan, People v. Illardo, People v. Olden Cty. 608 Dep't Store, 3d Jr., N.Y. April People v. Zimmer, d 288 (1st Dep't (1st Dep't 70 N.Y.2d Corp., 972 (1988)..............31 2006)....................................................31 2006)..................................................................7 31 Misc.3d Oakwood, 1210A N.Y.S.2d Dep't 719 (1st Dep't 1973)................................32 2009).........................................................................6 (2015)..........................................................................................6 53 39 536 530, 1103 Crim. (N.Y.C. (St. Lawrence Co. Ct. 1991).........................................24 2017)............................................24 (1995).......................................................................................6 (1979).........................................................................................8 1206 Misc.3d 2013 (A), WL 1390877 3, 2013)............................................................................................34 417 Intern., (1980)......................................................................................25 Inc., A.D.2d 51 N.Y.2d 344 (1988)............................................................................................13 51 N.Y.2d 77 at (1st 408 James, v. Zappacosta, Hosps. (1819)................................................................................36 1098, 852 48 N.Y.2d People & 316 2d 85 N.Y.3d v. Tempur-Pedic 1999).....................28 (2018).......................................................................12 Health Inc., Misc. 71 N.Y.2d People Co. (N.Y. (2013).................................................................................25-28 247 56 Misc. v. Shinkle, 126 (1996)..................................................................................7 402 A.D.3d 151 People Misc.2d (1998).....................................6 2011)...................................................................................................13 25 N.Y.3d Ct., 186 577 790 Care 20 N.Y.3d 68 1101 147 17 U.S. v. Elderwood (Sup. City v Hernandez, v. Maryland, (Sup. York 91 N.Y.2d Dist., v. Spitzer, S. Ct. Matter McCulloch School 390 928 30 (2d 986 Misc.3d Dep't (N.Y.Co. 2011)..........................................4 1980)................................................................25 (1980)......................................................................................25 . 1V 5 of 47 INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 RECEIVED NYSCEF: 08/30/2018 People by Abrams People by Vacco ex rel. People 2014 People Presider Slip Spitzer 256 Inc., Island U.S. Inc. 6847064 Schneiderman of N.Y v. City v. Twentieth SOS Oil of New York State of New York Tennessee Tompkins April 2013 1997)...................34 121A, .........................................6 (2008) 501 (S.D.N.Y. 395, A.D.2d 614087 38 N.Y.2d 404 223 (1957)....................................4 (2nd (S.D.N.Y. Dep't 1989).....................21 1996)................................ 83 (1975)...........................................................29 98 N.Y.2d Fund., 249 (2002).........................................29 (1879)......................................................................................36 117 v. Bisceglia, 420 United States v. Dyer, United States v. Kupfer, United States v. Santopietro, 1369 141, 105 F.3d (2d 1226 948 ......................................................................................6 (1896) U.S. F.2d 1241(A) 2008).............................................................8 WL 1996 York, 257 other 39 Misc.3d Inc., 152 States Morris LLC, Securities Island, United v. Philip 80 of Long 88 F.3d Watson 11 N.Y.3d 3 N.Y.2d v. Aramony, on Misc.3d Ct. 1998).................................................................32 Corp., States in part Sup. (2007)............................................................10 Film United 792 Dep't Watch, Regiment N.Y. 922 40 Hospital, Corp., U.S. 149 (N.Y. 1987)........................4 8, 2013)..................................................................................32 of New v. Seventh v. Hunter, 46 Dep't (1973)..................................................................................37 River Bank 100 501 (1st 2013).............................................................................................7 v. Cortelle v. Davis, vacated (1st F. Supp.2d Bank State 248 Century-Fox v. Barklays Stamm Misc.2d 353 2014).......................................................................29 N.Y.S.2d of America Cty., v. Norstar Corp. A.D.2d Securities, Co. University Esopus , 592 Suisse 836 475 (S.D.N.Y. Ulster Ct. U.S. v. Banc v, Lower (Sup. Sillman A.D.2d 174 Inc., (N.Y. v. Grasso, v. Staten Capital *6 135 Corp., A Car, v. Credit 51912U 411 WL Scott Op. Photo Rent v. Rodriguez, Reddington Salix v. Alamo TRW v. Int'l. Schneiderman ex rel. Polzer v. D.B.M Cir. 95 S.Ct. (10th grounds, Inc., 1996)...............................................................34 915 (1975)......................................................22 1990)......................................................................21 Cir. F. Supp. Companies, (4th Cir. 145 166 551 (D. F.3d U.S. 2015)..............................................................13 Conn. 88 142 6 of 47 1996), (2d Cir. 1998)..........................................21 (2007)...................................................37 6-7 INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 RECEIVED NYSCEF: 08/30/2018 Winegrad v. New Yaniveth R. ex rel. STATE STATUTES York Univ. Med. Ctr., S. v. LTD Ramona 64 N.Y.2d Realty Co., 851 (1985)......................................................4 27 N.Y.3d 186 (2016) ......................................6 CPLR 404(a).................................................................................................................................38 3211(a)(5) 121 (a)(7)3 ..........................................................................................................................20 ..........................................................................................................................20 EPTL § 8-1.9(c)(4)(D)..................................................................................................................13 § 8-1.8(a)(5).......................................................................................................................14 N-PCL § 102..................................................................................................................................5,6 ..................._.....................................................................................5 § 102(a)(23)(i)......... 102/24' .......................................................................................................................... § § 406(a)(5) 1, 5 .........................................................................................................................14 § 715.............................................................................................................................1, 5, 6 § 715(f)(3)..........................................................................................................................21 § 715(f)(4)............................................................................................................................5 § 717...................................................................................................................................14 § 720...................................................................................................................................14 McKinney's Cons. McKinney's Statutes, FEDERAL STATUTES 26 Laws of N.Y., § 239 Book 1, Statutes § 231...............................................................7 .............................................................................................................8 U.S.C. § 501(c)(3) § 4941(d)(1) 404(a)...................................................................................................... passim .........................................................................................................................9 § 4941.............................................................................................................................9, § 4945.................................................................................................................................14 FEDERAL REGULATIONS Treas. Reg. § 53.4941(d)-2(f)(2)......................................................................................................9 Treas. Reg. § 53.4941(d)-2(f)(9)......................................................................................................9 Treas. Reg. § 1.170A-15(d) ...........................................................................................................23 . V1 7 of 47 21 INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 U.S. RECEIVED NYSCEF: 08/30/2018 CONSTITUTION U.S. Const. U.S. Const. U.S. Const. art. cl. 1 ............................................................................................................37 II, §2, art. II, § 3 ....................................................................................................................37 art VI, §2.....................................................................................................................36 ARTICLES Michael W. Durham, Through Storm "Correcting Thicket," the Campaign Roils Tax Excise 28 No. as Obama Cancels A Violations: 2 Prac. Tax 25 Law. New Appearance, Practical (Winter Guide 2014)...................................22 York Oct. Times, 29, 2012. http://www.nytimes.com/2012/10/30/us/politics/ storm-affects-candidates-on-campaign- AUTHORITIES MISCELLANEOUS Black's Law Chapter 466 N.Y. St. Sen., (May Rev. Rul. (9th Dictionary of the Laws Introducer's 25, 2007-41, 2007 trail.html.............................................................15 WL ed. of New 7 2009)........................................................................................6, York Memorandum of 2016 in Bill (Assemb. Support of Sen. 10365B) Bill ........................................9 7913B 2016)............................................................................................................... (IRS RRU), 2007-25 I.R.B. 1421, 2007=1 C.B. 1576989...........................................................................................15, .. V11 8 of 47 9-10 1421, 17, 18, 19 INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 RECEIVED NYSCEF: 08/30/2018 PRELIMINARY This case involves the Foundation that, since its dissolution, will have given Foundation Trump no to board salaries perks, and, fees. this - where a suit penny raised every President and Trump brought is warranted for relief and, The for related the have the this claims of the for the to charitable dollars and, The law reason for individuals upon the it do have who - it paid provided and found donated J. Donald so), accountants We a charitable foundations entitles causes. and suing charitable save costs, a foundation to of the the that on the of improper for the meaning 26 the no professional no case like practically relief U.S.C. individual of action donations 9 of 47 to the that to TWO) Foundation to the or monetary. fundraiser - made was not Nor ONE) a did Veterans Respondents Fundraiser. a claim state charity (POINT respect Veterans the fail equitable 102(24). (POINT Dismissal Fundraiser") with Petition the ("NYAG"). that "Veterans F. "Respondents"), televised nationally campaign respect York Eric Trump, to dismiss either §§ 715, § 501(c)(3). with of New (the of N-PCL in a political motion is warranted, 2016 28, their causes - the Ivanka Jr., (collectively, State asserts January of support for any activity six in J. Trump, "Foundation") allegations or intervene meaning law Petition NYAG's within in any damages show Iowa Moines, (the General The Donald Trump"), of Attorney fail participate engaged other though agency million causes. many operating Foundation grounds. transaction within (even ("Mr. memorandum multiple in Des Foundation not J. Trump moreover, party Fundraiser J. Trump centerpiece veterans - unlike went against $17.5 to charitable no it received raised a state to charity. Office on million virtually brought Donald the by has or employees dime was submit respectfully is because had Donald the this of circumstance 1987, $19 members every in over do consequently, Practically unprecedented inception could STATEMENT simply Additionally, between 2007 INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 and 2015 RECEIVED NYSCEF: 08/30/2018 (the Foundation was of are also event that This substantial 22 of record was Schneiderman, against the later. NYAG himself to his donations attack (Futerfas the 1All annexed own at ¶ 21 facts thereto, contained are claims of but THREE) occurred beyond and injunctive equitable where the caution, (POINT paid. that for election Trump's and of by his In the Foundation has been (Id. has the relief sought prevented head for Clinton's 11) in the incorporated of the to from doing But that brought describing the on his President NYAG, as an entity, accompanying Affirmation The by reference as if fully 2 10 of 47 in an promise as out issued set forth at ¶¶ 7-8, in New to "hurt" to scores 21= T. in her happened financial resistance" New and Yorkers. of press S. Futerfas herein. York - solicited the 19, Eric to what "lead is a FOUR) General Petition of Alan There Aff.") comparison this has request (POINT Council" pales based President. then-Attorney that Lastly, SEVEN) back-story. ("Futerfas NYAG, under Trump, EIGHT) the 2018 Mr. Respondents entirety, "Leadership entity re-election policies, 30, against (POINT a disturbing towards the 2016, action (POINT has August at ¶ 20) in its discovery. NYAG the this he is President. granted Petition October to Hillary Ex. seek dated S. Futerfas, to bring while unjustified the right is not and antipathy - the Petition complaint campaign and were to transactions particularly Constitution, President. and President Aff. U.S. appointed candidacy Mr. an abundance taxes NYAG's law, challenges therein).1 cited excise relate the after of the the of Alan exhibits The the unprecedented public and of SIX) dismissal Affirmation and facts Out federal The FIVE) also to answer all moot. Donations shortly (POINT Clause opportunity (See since memorandum Supremacy in the Individual on the NYAG. and (POINT dissolve This the of the unwarranted the so by reimbursed Limitations. voluntarily are Donations") fully most Moreover, Statute "Individual and releases all exhibits INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 RECEIVED NYSCEF: 08/30/2018 its trumpeting agency. did not concerns NYAG's the President and a very play are as evidence counsel would significant intensified have role the by of its reason to ignore NYAG in the fundamental legal d'etre all and of that its to believe and investigating and factual the documentary success that this this bringing deficiencies as an case. the underlying claims. Indeed, the against Respondents (Id.) antipathy These fight NYAG efforts by Court in no position was Respondents of partiality; matter as this its without to will to fairly do and impartially resolve relief is sought so. Accordingly, of conflict overwhelming For litigation. conclude, undoubtedly these and interest; reasons as well, its on the based makes despite matter, dismissal clear NYAG's appearance to resolve of the that so many unwillingness resulting seek we this record this Petition. ARGUMENT Legal On a motion in the complaint determines N.Y.2d 151-52 entitled element of the of the for complaint claim, 141 511 bare factual legal consideration. Sud right factual of within W. 232nd allegations conclusions Owners Connaughton (2017). 3 11 of 47 in a complaint inferences 423, incredible to 424 assert facts in to be drawn v. Chipotle Mexican and Leon Co., should be are 98 not 1995). of support from v. Realty facts Dep't (1st as alleged inference, v. Jennifer inherently fails facts theory." legal Corp. contained and the favorable possible cognizable any plaintiff and accepts Court every A.D.2d allegations recovery." of 211 v. Sud, if the is warranted or if the an enforceable 137, While fit "the § 3211, benefit the as alleged (1994); inference, to preferential "Dismissal 87-88 (2002). a favorable plaintiffs facts the 83, to CPLR pursuant accords whether only 144, accorded N.Y.3d as true, 84 N.Y.2d Martinez, allow to dismiss Standard them Grill, an do Inc., not 19 INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 RECEIVED NYSCEF: 08/30/2018 "The court motions." judgment People citing People by Abrams 3 N.Y.2d Corp., sufficient to make a prima facie to the N.Y of (1985). Only motion 3d for the the after of such prima this not judgment material fact. in of facie been to produce issues of made "does evidentiary fact which at 326. 4 12 of 47 in the proof require doubt form, admissible favor...'" or those Id with ; Alvarez motion tendering v. must sufficient fact.") denial York is no in case." law, 1987). Film judgment of 2011), Century-Fox [his] facie a summary of Dep't there allegations as a matter v. New (1st proof, a prima issues (N.Y.Co. where judgment "requires showing 354 to summary apply 990 v. Twentieth evidentiary of material Winegrad has cases "Unsupported to judgment any those directing that 986, 353, to establish serve Misc.3d Sillman tender standards A.D.2d for (1986)("proponent papers." showing law 30 135 3212(b). entitlement absence opposing of 324 of must of same Inc., reserved issues Rule will the Corp., remedy triable C.P.L.R. 320, the summary existence Photo "Petitioner proof showing to make sufficiency establish citing under Intern., as a matter court demonstrate Failure and (1957). 68 N.Y.2d Hosp., evidence 853 material or inadmissible Prospect Int'l. is a drastic the supra, insufficient v. D.B.M 404 395, 'warrant Tempur-Pedic, the of existence proceedings v. Tempur-Pedic judgment Summary as to the special evaluates of the regardless motion, Univ. Med Ctr., burden shifts to the in admissible form a trial of the action." 64 N.Y.2d party of 851, opposing sufficient to Alvarez, 68 INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 RECEIVED NYSCEF: 08/30/2018 ONE POINT THE VETERANS FUNDRAISER A RELATED The allegation centerpiece that the Veterans Foundation purportedly campaign. (Third "willful and facts the Foundation that the no transactions" a "related into boards the of for damages the However, "transaction" any the presidential double ¶ 101) was as a matter alleged in which conduct law. A FINANCIAL was ("RPT") interest and or any in which revised laws, be properly defined other the of, and "Related "related approve, After supervise. they is titled 1, 2014, July informed organization charitable agreement transaction, a financial action Nor REQUIRES not-for-profit that the by transaction" party any York's requires and entered law. in because Trump's seeks (Petit. interest" York of TRANSACTION NYAG is the A TRANSACTION of New Transactions" New cause to Mr. § 715(f)(4). a "financial under transaction party The ¶ 100) relief monetary contribution" Petit. had and related "in-kind to state.a fails equitable to N-PCL party" as required IN 715 million ("COA"), "related for a prohibited pursuant PARTY INTEREST Party Action Petition A RELATED Section a $2.8 conduct," participated Thus, A. of was CONSTITUTE TRANSACTION demands Fundraiser Cause show Petition's made intentional alleged "willful." of the NOT DID PARTY December party 2015, as: in which arrangement corporation or any affiliate a related party of the corporation has is a participant... N-PCL a related Thus, related The in (effective § 102(24) party" "related Section 3) "has party 102, party recently 11, 2015 interest;" provision, added to May requires transaction a financial transaction" were Dec. to New and 26, that: 2017). in which Section current York's "transaction" 1) a 4) "the 715, charitable 5 13 of 47 occurred; Corporation and laws the is a in of the 2) "a participant." definition corresponding as part which New York INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 RECEIVED NYSCEF: 08/30/2018 Revitalization Act of these interpreting interest" interest" "The statute to effectuate used." "In import their with 25 dictionary definitions Yaniveth R. ex rel. no has (the and "Act"), the by and we have found no cases See 80, 583 when effect understood plain Realty Co., that courts these language the 27 N.Y.3d and words [the] v. Staten v. Broadalbin-Perth construe in that 149 N.Y. words of connection of meaning 192 a is clear of v. Hunter, 186, - Reddington Majewski and of to interpret meaning must] context words obliged omitted); meaning, in the else effect. are Tompkins in determining Yet statutory to the [courts definition, guideposts courts the or anywhere interest" be given quoting quoting N-PCL the at 17. must is that (2008), (1998), a statutory MOL (2015)(quotation 89 of "financial and and 251 or 715 Petit. legislature 247, S. v. LTD Ramona 102 Benefit defining so as to give commonly as useful case Legislature, N.Y.3d of Sections construction statutory 577, a Monetary NYAG. the 11 N.Y.3d absence usual found of the 91 N.Y.2d the in be construed Hospital, Dist., (1896). of intent v. Brown, School defined chosen rule the University Cent. were it should People Island 123 - Nor governing unambiguous, 2014 30, Requires We have transactions. party "financial is not scheme. statutory related Interest" "Financial "Financial in this June provisions. A 1. effective 2013, a word ordinary have or 122- 117, regarded phrase." (quotation (2016) omitted). settled Equally interpretation." be read "is People and given effect would have been written which might arise." the principle v. Finnegan, 85 N.Y.3d as it is written People if the Legislature v. Boothe, by the had are 53, 58 not not all envisaged 402, 6 14 of 47 legislate (1995)(and Legislature, 68 A.D.3d to 403 under cases as the the (1st cited). court problems Dep't the 2009), may and guise of "A statute think must it should complications quoting Lawrence or INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 Const. RECEIVED NYSCEF: 08/30/2018 v. State Since "financial ordinary meaning. Barklays Bank of nature an adjective that v. Banc defined word Id., "Transaction" esp., (9th ed. of by the has than formation, Stamm the management (9th an interest especially 2009)). to derive Salix of money, ed. is the plain Capital U.S. "Finance" 2013) in "financial" Since sound" (S.D.N.Y. Law defines Dictionary "finance." noun v. to Black's Law "logically *8 706 See and credit, is banking, 2009). "transaction" word two dozen alia: performance, in times "the is also Section or an instance act or discharge of a not defined 715, including of conducting contract." by the in the title. or other business Law (Black's Yet statute. Dictionary 2009)) section other is to "give paragraph the the as, inter is defined In the court interest," more ed. 6847064 Dictionary common "Transaction" of Meaning appears Law (9th of the with its 1996)(referring equivalent, it is also WL 2013 source. Black's its 885 definition concerned Black's or money be given reference operation"). Dictionary the using business it should n.. 2 (S.D.N.Y. it precedes, LLC, quoting "financial "transaction" further of statute, *2, with Law that by Securities aspect The Like a list context of America 2. 1635 in the "financial equated noun the (1944). is an appropriate of meaning 639 by 614087 (Black's modifies as "[t]hat dealing; plain defined WL as an "interest investments." and by the 634, Dictionary 1996 York, investment." an of this meaning Inc. of New N.Y. is not Law Black's interest" "financial 293 York, interest" to derive Dictionary the of New Corp. defining words, words effect some a related "transaction, "in which to every meaning." a related word, Matter the transaction, party agreement party or any has if possible, of Tristram other a financial and K., 15 of 47 word "transaction" arrangement," and interest..." presume 36 A.D.3d that N-PCL every 147, is accompanied 151 word, (1st is modified § 102(24). phrase, Dep't The or clause, 2006); see INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 Matter RECEIVED NYSCEF: 08/30/2018 Yolanda of Book 1, Statutes N.Y.3d guided determining by the This of rule v. City F.3d 1348, in a word LLC 1355 v. Illardo, things or concepts principles These interest "in THE B. Cir. 1996). Cons. DaimlerChrysler of N.Y., Laws Corp. Mutual that transaction" VETERANS rule the 'by 416 408, 31 v. Spitzer, "a 7 § 239 Section 715 is not in which the not-for-profit of specific a sociis unless and 79 of Street, 2006), quoting describing one has See N-PCL A RELATED 2009) meaning in the generis"). ejusdem party the States, 77th a general a related is a participant. NOT East words of Cir. "the Dep't (1st meaning ("Noscitur (2d v. United 242-44 103 100, the triggered WAS keeps.'" be requirements." that means should implies thing 221 199, Greene generis series one court or regulatory citing it the of F.3d statutory A.D.3d to explain Statutes, FUNDRAISER of ejusdem Thus, used are 575 Inc., company Co., (1979). sort Club, mention (S.D.N.Y.2008), the Insurance "the to a list 506 501, McKinney's citing elements transaction," party alterius, Gun Similarly, a particular dictate the add is determined York of Id., McKinney's as a "related v. Metacon [to] 48 N.Y.2d People also effect"); est exclusio F. Supp.2d of words New unius "not , 592 (2d a series to be given proscribed Cordiano a court of N.Y series." conduct expressio other." the v. Greater same the maxim cautions Scott word see (1996); (2006)(same). In exclusion 795 790, § 231)("Every 660 653, 88 N.Y.2d D., a financial § 102(24). PARTY TRANSACTION For "transaction" NYAG the to even in occurred; which and in which; 4) "the Corporation The statutory language clearly engages in First, word the gymnastics. NYAG 2) "a related [i.e., does These alleges a related allege that not the party transaction [Mr. to the are facts here, Trump];" is a Foundation] apply efforts party it has 3) "has participant." here. The to establish a financial See N-PCL NYAG understands that: interest;" § 102(24) this unavailing. intangible non-monetary, 8 16 of 47 political benefits satisfy 1) a the and INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 RECEIVED NYSCEF: 08/30/2018 requirement and the of Campaign denotes interest" in those Mr. Trump's and intangible definition foundation and As 2(f)(9), 2 8072, to his assistance into and derived a "financial constitute if these Trump "financial" benefits do not Even statute. Mr. voters of meaning collateral charities made to Republican plain indirect donations and In of of this not fact, disbursements these campaign, raised collateral in which "transaction[s] of Jason and New Lilien, [Mr. York Bureau 26 foundations' U.S.C. legislature Chief New of the York § 4941. made 9 17 of 47 26 law is a benefit the tax of, a § 4941(d)(1). excludes explicitly receive, may of a private U.S.C. state arising from May rights" that "naming are donations See Treas. amendments Charities Senate, 549 concept § 53.4941(d)-2(f)(2). Reg. regulations their between a person the "self-dealing" or for by that on the law, federal recognition Treasury under Commissions, under Treas. for tax or use states modeled foundation." "self-dealing" principle, was or facilities to, a private "public which 715, federal services, foundation." self-dealing law Under transfer of Section York goods, in exchange the New . . . and of a private to Code.2 including benefactors Authorities, Ch. of history under definition example see testimony Corporations, A.B. of 4. Example of the grants profile The veterans those or assets income benefits, activities benefit" "incidental 30 were convert person; The at 16) to wealthy granted thus "furnishing of the a clear to Revenue Internal the tenuous charitable fails. Intangible, legislative the a disqualified MOL Petit. not Foundation's candidates construct meaning transactions includes: person incidental the that and disqualified with party under term defined the "The interest." related "self-dealing" This and do is consistent of increased the or reputation, a financial This ¶ 58: quantifiable. within donations Petit. Foundation the consequences has Trump] and by profile and groups.") monetary disbursements the (See charitable constituent something from (See look important among interest." a "financial Bureau, 28, 2013. deemed Reg. to the Standing NY Bill § Act an 53.4941(d)- in 2016 Committee Jacket, to on 2013 INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 RECEIVED NYSCEF: 08/30/2018 clarify that a transaction or the related party's Laws of New York in of not simply It also and 836 Grasso, for law made Campaign" . . .") recognizes facts. veterans' This cognizable by ; id. sleight under the at Foundation 17: "Mr. of hand N-PCL obviously § 102(24) party Memorandum it. at 7: "Mr. benefitted fails. because A not "campaign" 10 18 of 47 clearly is de Quite of liability ex rel. Spitzer v. to re-write Court claim to that that benefitted interest "in is not the a in the campaign's "transaction" terms statutory the Foundation's "campaign" the from politically a financial he had interest the it suggests only financial financial a place because a "substantial this scrambles it shifts Trump the People common have interest. for to ask the interest financial is See Id. in one "transaction," it would § 715. is not remedy to amend to expand standards in N-PCL NYAG's interest" financial no substantive whereas also intended than greater profile," an "increased... the example, had Introducer's benefits, it deliberately is the Trump had because but of the 466 of related is a "financial dilemma MOL. is de minimis, Chapter definition and in which Legislature" the at 20) legislature the legislature organizations itself See Sen., or non-monetary The the For (NYAG If the is certainly (2007). St. organizations "circumvent by its MOL transactions interest it is to ask case; "transaction." the 51 40, NYAG to donations excluded established the N.Y. veterans' at 20) to is de minimis. (clarifying (Petit. intangible is attempting incompatible the have transaction 2016). to MOL financial N.Y.S.2d The grants not officers this grants Petit. 10365B) "publicity" that if the transaction interests); 25, (May to include would NYAG the directors was (See a de minimis plainly, to fit law. Bill financial Foundation's "financial" of minimis; the 7913B claim the the definition so. Bill NYAG's from resulting said Sen. in the (Assemb. de minimis transaction" party interest of 2016 to exclude The a "related financial transaction Support is not interest in his campaign's success success" under the any is not INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 RECEIVED NYSCEF: 08/30/2018 of the stretch NYAG The "transactions" interest significant success acknowledges "the Trump which benefits regularly benefits a charity event receive other any by supporting Indeed, good received reason, but fail. and campaign, provided was gave is no no in fact Foundation him the to the planned, Trump... id. at 17: "Mr. Trump's the of engaged NYAG the Indeed, financed campaign. and (See directed donated in interest Foundation or to the recipient a substantial and the none. event had Trump financial that organized, a passive had Campaign to claim Mr. Foundation's a substantial identifies financing was "Mr. Trump basis NYAG the in the Campaign;" his between There also at 16-17: with that suggesting - funds by the all of to charities. the Mr. also the campaign MOL transactions Fundraiser surprisingly, from by in the Rather, terms, campaign self-funded the statutory transactions Foundation Iowa it disbursed charitable of, the Campaign.") Not and with that ¶ 113: his NYAG (See assertions "transactions" presidential Foundation's in These in his campaign. investments Foundation.") Petit. the of the variation only in the campaign's any another not with financial in tries interest" a "financial the language. statutory organizations or charitable such the who celebrity no case the are transaction. afforded visibility actively Veterans Nor Fundraiser for are enhances their by campaigning incidentally an individual's in which no his could it. Politicians at, or support attendance office. The different or her intangible intangible than those reputation obtained or visibility organizations. intangible as politicians an in-kind from they from identified as a related-party qualified while received politician has benefits intangible Trump NYAG financial benefits and candidates contribution. have never who been attend Under the 11 19 of 47 assessed charitable NYAG's a monetary events theory, would those value - and to have be deemed attending for the highly INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 coveted and 2017, Bill RECEIVED NYSCEF: 08/30/2018 recognition 2015 from the from contribution novel of damages in Petition, Third law, As applied Government that of at 30, "willful the and that the law and this duty, and that he voluntarily 498 U.S. 192, 201 (1991). See cites to a 1992 3 were The imposed NYAG also to corpus deposited the donations to individuals and or public publicity office would Intangible do not simply is inviting this with also the be an in- of receiving benefits constitute Court "a to adopt plain meaning a of the CONDUCT and benefit any We B) in the intentional uncovered have of and obtained." improperly context conduct no a related seeks (See case transaction party none.3 ("IRC"), on a duty the violated intentionally v. United Marinello "[w]illfulness...requires that defendant, that duty." States, 138 the defendant the Cheek S. Ct. v. United 1101, 1108 knew of States, (2018) in which excise taxes 92 T.C. 67, 101 (1992), case,Thorne v. Cl.R., trustee conduct of who 6684 on a of willful the the charity by § finding license and made of a foundation in an offshore bank that had lost its business 26 U.S.C. under entire imposed NYAG Relief for charity. event in willful of Code Revenue the INTENTIONAL intentional" cites of, Mayor monetary any for in jurisprudence. engaged Prayer of Ryan and Cuomo be accused they is incompatible our amount and NYAG Internal to the to prove id. in AND the lest Paul in-kind Candidates a charitable that Andrew as a result Aff.) The Speaker a significant support law. House Governor charity, and with, Trump U.S. receive to nowhere Mr. York Futerfas transaction" to double ¶ 101; York to the of the meaning (like Foundation or holding party up New Memorial NO WILIEUL amount meaning would contributions is recognized the interpreting others), affiliation the alleges COA New 25 supporting WAS "an Ex. example in 2016, Smith (See "related NYAG The E. making and THERE C. Alfred within statutes pertinent countless attending, application Trump to their for Dinner, and due interest" financial Mr. publicly from Smith received. they received under in de Blasio contribution kind & Clinton Hillary precluded Al publicized organizations that were not public 12 20 of 47 charities. (Petit. MOL at 18). INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 RECEIVED NYSCEF: 08/30/2018 "willfully" (comparing definition and with act (10th that A Car, Rent People v. Coe, 71 1210A Misc.3d and a specific intent a related N-PCL related party Yet related the untested one law. could tries double have 855 (1988); Cty. party and, willfully Mr. there are by to claim establish: it was sustained. that Mr. conflating that "Mr. without See N-PCL § 715(f)(4); unsupportable that the Veterans transaction. 13 21 of 47 the at v. See also 31 Oakwood, if done law or with forbids The Veterans Trump was related party was and legal Fundraiser was that it could that of both the § 8-1.9(c)(4)(D). was a related not a have prohibitions." transaction espoused that with transactions aware under knowledge Fundraiser EPTL theory his aware knowledge transaction party despite efforts Fundraiser Veterans a related Trump unwarranted that (a) fundraising showing statutorily understood be claim this transaction. indeed, in Care the something Vacco 1997). done F.3d must by Ct. to to be done"). knew Trump cannot campaigns damages must Sup. is willfully to do intent 792 "Petitioners People Health or omission requires engaged is no salvage specific Mr. 2 (N.Y. means V Kupfer, that unlawful." note "willfully" act States means v. Elderwood act law law was and To United York conduct 504-06, NYAG Trump burden their the that (b) New ("[a]n the the liable, and to with duty." legal "corruptly" proposed difference). Mueller 2011) something This transaction, prohibited no that in political ¶ 60) novel, (c) the NYAG 501, transaction; and "participation" (Petit. to do that Misc.2d and Trump party violate The been. Mr. § 715; it would to fail aware government's meaningful under Erie Ct. no Willfulness 852, intentionally hold To N.Y.2d (Sup. voluntarily 174 was to the a known were Inc., Cheek to violate 2015). respondents Alamo was Cir. in there intent voluntary 1228 establish that concluding "the 1226, as articulated by the party was Given NYAG, a INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 RECEIVED NYSCEF: 08/30/2018 POINT THE VETERANS FUNDRAISER PROHIBITED The failed Petition to properly 1.8(a)(5); (First injunctive relief relief of and from prohibited was statements) N-PCL 501(c)(3); expenditures election"4 and (See 501(c)(3). The 4 For specific 26 the terms of seminal purposes election" guide the Petition 94, there 96, in of The fails to allege and in political and 720, COA's)(Petit. 8- EPTL§ Petition also 106-9, ¶¶ seeks 120, 123) political prohibited federal any tax exempt the (including for candidate public § Petition alleges that the Foundation U.S.C. § 4945, tax its 97, statements)" See any U.S.C. 26 political § incurred of outcome specific any or interven[ing] in, "participat[ing] any or "making 26 campaign. U.S.C § 106-108) constitutes § 4945, issued has to what the by of nonetheless the "influencing status exempt of by or distribution office" 4945]." U.S.C. Foundation the status, publication [26 ("IRS") between $ 501(c)[3) under Service of 26 U.S.C. is no distinction 107). duties fiduciary engage and 97, Sixth U.S.C. and to tax or distributing Revenue and 26 behalf subject The 14, Fifth incorporation on under ¶¶ §§ 717 ¶¶ 94, political regulations Treasury conduct Revenue prohibited as "participating or intervening, for public in opposition candidate of or to any public on behalf words, Internal as its Ruling") are publishing Petit. since Foundation N-PCL e.g., or intervening to tax violated the (including of § 406(a)(5). subject law UNDER campaign which See, the having their breached § 501(c)(3). "participating expenditures taxable U.S.C. by (Fourth, of certificate political any claim. ACTIVITY to its Pursuant this of 26 POLITICAL A. in on Respondents assets CONSTITUTE ACTIVITY respectively)(Petit. COAs, as a matter in violation Individual veterans. Second based the NOT DID POLITICAL charitable America's is warranted activity that administer on behalf activity No alleges TW_O directly office." prohibited 14 22 of 47 define 2007-41 Ruling activity "influencing in any or indirectly, Treas. by Section by Reg. 4945 (the a Section the outcome political 53.4945-3(a)(2). and "Revenue Section of any campaign In other 501(c)(3). INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 organization. 501(c)(3) 1421, RECEIVED NYSCEF: 08/30/2018 WL 2007 pertinent political IRS campaign id. campaign, tax 1576989 the here, See laws do political they preclude The capacity. The issues under official organization directors of individual their by section tangible Nor candidate. do they in resources organizations Id from at 3. Federal in engaging and directors made is not intended to restrict a to a political Section hold As Aff.) intervene" or C.B. 501(c)(3) in their individual states: intervention prohibition leaders by Nor of public charitable officers Futerfas "participate a particular capacities. expressly matters of 2007-1 1421, are policy. leaders organizations for cannot their about speaking to remain organizations make or at official publications from partisan functions comments of the free for speaking prohibited However, leaders 501(c)(3), of tax in organization. at 3. Ruling research campaign causes. no uncovers activity as Americans charitable support 23 to the or other assistance in statements political exempt experience and as individuals. important impermissible financial Ruling on themselves, Our devote campaign expression Revenue organizations statements for Revenue political charitable in their responsible as Ex. that I.R.B. 2007-25 RRU), annexed officers activity (IRS 2007-41, Ruling"), instructs at 5, or publish campaigri Rul. ("Revenue when not organizations Rev. by informs Donations support made the for that a finding the This Foundation. conduct is not us that candidates routinely at the suggestion of surprising. support candidates alleged Our and are here raise neither constitutes common for money uncommon nor unlawful.5 5 donations For example, to the Red both Cross President Obama the 2012 and Presidential campaign. candidate Mitt Storm Roils See, e.g., during Cancels NY Times, Oct. 29, 2012. Appearance, http://www.nytimes.com/2012/10/30/us/politics/storm-affects-candidates-on-campaign- 15 23 of 47 Romney Campaign made appeals as Obama trail.html. for INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 RECEIVED NYSCEF: 08/30/2018 THE VETERANS FOUNDATION B. While of millions this our dollars there is none, express (i.e. legal violated nation's because the in are mischaracterizes his public with which laws, no were the two of Petit. MOL - not the the Veterans of support does for not - Foundation the the from and statute. to organizations legal theory. The statute, Yet, its by in proscribed engaging direct subsequent 501(c)(3) NYAG's THE distributing bother Fundraiser the BY for NYAG Section violate individuals ACTIVITY does prominence some here activities in to of its to actions to Trump, citing campaigns or candidates candidates directly served veterans' in his but or through citing He even authority that that charities charities fundraising 16 24 of 47 efforts). donations during may may hand, donations New Under capacity, other York raised a political not not On the 28, January at which presented of recipient disburse and proposition candidates' thereafter organizations. on Iowa Foundation, On the as a passive individual no the organizations. to receive for authority from organizations. permitted acting support in make receive NYAG the Foundation. the by Fundraiser which lawful, entirely intervention Veterans financial veterans' own, each here, political veterans' disbursed was at issue a televised any checks or staff at 22, alleged without donations entirely Mr. that the expect impermissible suggest Foundation efforts would separate Foundation offices Given and Trump nowhere proposition organizations capacity, of replicas its conduct participated Trump to make one Mr. POLITICAL or intervene..."). to individual for on NOT organizations, 501(c)(3). life, prohibits There Mr. support public terms, opprobrium veterans' Section "participate hand, heaps to worthy to any Court donations in NYAG the WAS FUNDRAISER large the 2016, he urged in the poster-board Foundation, through State by one the a website and tax federal fundraising campaign. expenditures donations (Cf. to from INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 RECEIVED NYSCEF: 08/30/2018 1. The NYAG The campaign," NYAG Foundation and argues as proof organizations Campaign was received of that the the political replicas "Cooption" of (Petit. funds and veterans' term for The announced checks; the ¶ 35) veterans' for later were Foundation is a meaningless presidential activity. funds selecting Activity Trump's received of those and Mr. by Foundation event Political "coopted a portion poster-board 36-57) ¶¶ was Improper in prohibited fundraiser; with in Foundation in arranging (Petit. Engage it engaged the rallies involved funds. the not "cooption" of as a result at campaign Trump that as a result, that, alleges did the Trump organizations of purposes Mr. by that Section 501(c)(3). The Veterans or incur sponsor, fund Revenue Ruling planned, financed, the kind that organized the shell" 6 no Nor did the Foundation See Affidavit Futerfas response misstated financed receiving of Sheri to a question about and 410-A Dillon, In particular, Aff.) matters directed funds concedes this Trump's point.6 Fundraiser any provides employee of the of its own. Foundation with no "The Iowa of see ¶ 1: the Fundraiser was assistance financed organized, evidence not event. administrative Foundation, (Petit. did fundraiser ¶ 36: planned, NYAG or facilities (Petit. was the televised Campaign the by and event, and in- non-incidental, any id., from and, Foundation asserts indeed, is "an empty employees). in a CHAR Fundraiser to Mr. The by staff no respect Iowa Campaign"). has a Foundation directed "the assistance" Foundation with with and 113: Trump "administrative not NYAG The Petit.¶ the by was expenses at 3-5. Foundation;" directed Fundraiser for on the that make form dated that August about the Foundation the date did that that about Aff.") it "held to address, began i.e., in the Veterans request. at ¶¶ 15-16, a nationally the Foundation not purport its role at the NYAG's ("Dillon 29, 2018 stated statement in 2016 it submitted the Foundation form false a materially (Petit. ¶¶ 35, annexed as Ex. fundraiser" televised receiving who funds. planned, 113) 1 to the in Nothing organized, the Foundation acknowledged the Veterans Fundraiser. (See Petit. ¶ 113) Rather, veterans' manner organizations the Foundation. in a that incurred negligible costs to 17 25 of 47 was INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 RECEIVED NYSCEF: 08/30/2018 As Foundation event. The campaign. That The website only Foundation's were Veterans did donors to donate of checks in checks of was words. Like the televised events. Nor did the Nor did the distribut[ed]...on Foundation behalf was name as payor which enabled Foundation the on the passive pay [a] for a funds a statement was was and for not simply arranged a by the DonaldTrumpforVets.com. referenced the or to the candidacy donations the to the on with from large Foundation. election. the The fundraiser did of the that the the veterans' large Foundation its behalf. 18 26 of 47 these the status as the passive See Revenue is not Petit. Since the Foundation's recipient analogous Ruling ¶ 49) or 501(c)(3). Trump, those campaign "publish[ed] This Foundation of (See checks. Section the of these sense Mr. by organizations. a candidate's or fund replica of of distribution in any sponsor raised reflected simply Foundation meaning donations The after organizations. replicas events. not conduct veterans' poster-board the by to any 501(c)(3) at campaign creation within respect Section to "statement" checks with Foundation of the recipient raised Trump candidate" presentation it to disburse publishing the constitute of paid and received 501(c)(3) "intervention" or fundraiser, checks event Trump's that presented Mr. by Foundation it was organizations to Mr. funds each "participation" not Fundraiser NYAG, televised veterans' Section the $100,000 Veterans contributions. It distributed amount the organizations violate were to the reference charitable organizations the no Foundation the to the papers, during veterans' as the Fundraiser. veterans' Five identified made its According website recipients Nor throughout ¶¶ 33-57) website - as well passive alleges (Petit. invited Foundation five NYAG the at 6. to the - INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 RECEIVED NYSCEF: 08/30/2018 2. To the Such Capacity. NYAG The conducted the veterans' by successful to his recorded Foundation was The the to raise seek individual do the or sponsor veterans' poster-board The reflects the His and was also later his Personal the held at the in the same and as capacity event in the to proscribed in his Fundraiser time fundraiser is not Trump, Veterans he disbursements conduct Mr. event, because activity announced This ¶¶ 36-57) televised Foundation of the not same as an city. as a candidate. The 2007-41 apply As name charit.able to announce acting as payor attend veterans' for charitable who events. charity the Foundation just donations may in their acting organizations where prohibited to veterans' in his individual role" like feature They while a did not the 27 of 47 he presented campaign as a candidate these prevented organizations 19 of when at five capacity Nothing veterans' a "dual organizations is an incidental to in impermissibly disbursements. donations candidates, and charity of candidates including checks Mr. in this Trump manner. and to only donations. acted was Ruling political money recipient a passive checks Trump for so is not to do Trump parties, stated, money to raise entitled in Revenue to other Simply received of Mr. and ability Mr. Yet political and the activity to raise was claims Foundation's events right Trump that replicas source campaign itself every event NYAG improper watching debate organizations. office. the ¶¶ 49-54) times. campaign Mr. organizations The (Petit. such have public in (Petit. participated Trump in Activity mentioned. for time. for candidate Mr. Political veterans events. a GOP in organization funds America's to anyone on political capacity, so all fund never of the for is obvious shows, restrictions activities engaged Trump campaign participation event Mr. in Allowed spontaneously.planned candidate, alternative that fundraiser As Engaged Trump is Expressly at five 501(c)(3). a presidential the suggests organizations Section Mr. Extent events. at these accurately from using INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 RECEIVED NYSCEF: 08/30/2018 THREE POINT ALL The TO INDIVIDUAL DONATIONS SHOULD BE DISMISSED BECAUSE THEY FAIL TO STATE A CLAIM FOR WHICH RELIEF CAN BE GRANTED CAUSES Petition's transactions For for the The 2012 Foundation excise been paid.9 place 9 Supra The House. federal excise seeks Individual itself tax the American paid 2014 the Land federal CPLR DC excise donation; Preservation (ii) League federal All be due to the IRS Foundation the taxes, (7). Children's donation.8 would that and 3211(a)(5) House Unicorn Trust of caution, an abundance Fisher 2007 2013 Donations no in paid. the (v) of law. as a matter because, (i) (iii) payment; North the have incurred payments. allegations imposition in context, the Foundation § 715 damages double "willful at Point and tax that was the might intentional subd. One, Foundation Because of double damages - which authorized N-PCL after However, was Fisher the NYAG's NYAG effect. into 2015 from those All" for Foundation of donation; to charitable PAID already for: discrete ANY BEEN were and issued 700 approximately grants and 2015. it occurred disbursement conduct," the (vi) taxes disconnected is warranted relief interest, Foundation arising the excise six funds BECAUSE monetary with Justice relief ALREADY for all reimbursed, and MOOT upon rely donated no below, a claim 2015 Foundation HAVE and "And potentially 2007 8 The went 2013 as a result 7 To state Greenberg Because damages because been donation; taxes between B. the (iv) to the ARE reimbursed has Martin donation; no was Foundation the fails and 2007 discussed DAMAGES Petition Foundation the of them, five CLAIMS PO_TENTIAL The RELATING between reasons DAMAGE ALL ACTION allegations in which, organizations.7 A. OF have $32,000 double damages are not conduct." warranted $100,000 plus See legal where charitable for to NALT transactions related-party that this is no showing and intentional there analysis donation of "willful C. reimbursed donation for the to the otherwise Fisher been House interest of $8,763.41 occurred due by Mar-A-Lago limitations. 20 28 of 47 over a decade was well on March 10, 2017 ago, potential beyond any the statute for of - INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 RECEIVED NYSCEF: 08/30/2018 The Individual Foundation where when moot 228 223, THE B. of Respondents 922 amended " transactions Foundation self-dealing"; any F.2d tax see caution United 107 (2d States Ex. Cir. by 1990) that nor 41 to the 4720 outside voluntarily producing disqualified Aff., MOL Petit. practical any 152 is A.D.2d assets lost to the person "to return or ADMISSIONS questions and experts excise any taxes as to arose ensured were in that, The paid. of documents thousands constitute not (error of to instruct defendant and noted that there 40 to Shiffman knew person, at 18 (2015 Aff., that Form 21 29 of 47 original 154 145, (D. was 4720) it could was return Conn. conduct} (same). United - in States v. consider false when amended 1996)(filing ambiguity at 13 (2014 [the See that taxes Individual by wrongdoing.l° the excise paying knowledge Foundation's the 19), and factfinder knew F. Supp. 16 and at returns amended an admission expressly See Ex. any Shiffman have Island, when alacrity and filing 948 v. Santopietro, Form with NOT reimbursed - do alone let self-dealing. its staff, ARE engaged (see advice expert's as an admission Foundation's involved nor its matter subpoena. oversight impropriety, 105, return The on NYAG, suggestion possible any of NYAG's any "A not of Long to require responded was Foundation without could or other "property whole. made Bank to the § 715(f)(3)). It promptly the or restitution if rendered, General Attorney Foundation with available to correct abundance filed); the fully to the the and v. Norstar is no there damages reimbursed which, Corp. N-PCL Donations. cooperated Contrary Dyer, that caution, witnesses the to pay SELF-CORRECTIONS Individual of Foundation efforts for 15 quoting at shows the an abundance making assets been a matter because Here, no MOL record of nature on SOS Oil FOUNDATION'S The the are be ordered already is sought 1989). there (Petit. has controversy." Dep't corporation," cannot Foundation existing (2nd replace." the a determination on the effect Respondents as to whether Form 4720): might constitute the "neither the an act of an INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 return RECEIVED NYSCEF: 08/30/2018 not other an admission 166 grounds, the Rather, v. Bisceglia, 420 correction of of payment can THERE In addition claim for assets occurs loss enrichment. The in the argument that NYAG has POINT SIX, The 2007 and 28 No. cases are travel, where and the in this bear and prosecuted, historically internal the to do consistently assets other personal to their no that the Organizations transaction the has that A Violations: no Practical 2014). the moot, of non-charitable charitable further, States and forms, maintaining Tax (Winter "waste" or absolutely service because fails to for used prove appendix, of meals, the better to the resemblance claim fact, "waste" a self- expensive In expenses. state organization's a charitable purposes-particularly are any Petition cases than of types cars, cited any cases is specious. by to 2015, unbiased has identified during which assessment six discrete the Foundation of the facts transactions can distributed the occurring roughly circumstances 22 30 of 47 over 700 presented an eight grants. that See year period, Under no constitute the lawyer's infra. NYAG on voluntary is warranted. taxes in part United encourages correction being "Loss" for self-reporting. vacated ASSETS damages used of Excise 25 OF a mistake), revenue while Law. of system second-tier as exhibits included case for and vacations, Petition, facts are This that Tax assets. assets principle "Correcting 2 Prac. claims legion avoid Durham, Foundation charitable exist OR WASTE NYAG's of apartments, NYAG honest or waste W. the amended be hard may NO LOSS to the when this and supra). (1975). doubts taxes Michael WAS of inference Dyer, upon 915 filing where [as] Thicket," S.Ct. the first-tier the is built 95 145, support only 1998)(citing system even taxes, can Cir. with necessary." Through personal 141, and (2d tax corrected... is C. from U.S. "minimize correction 88 transactions been Guide F.3d fraud federal excise thereby already of "waste" the INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 of the RECEIVED NYSCEF: 08/30/2018 Foundation's proceeds were of veterans assets. donated families to the veterans and to assist to the the contemplate donation § 1.170A-15(d) 2015 in an abundance Foundation. Futerfas Aff. funds were funds, and excise Finally, the Veterans additional donated of the Foundation's stating 11 from The that 2013 back-office at ¶¶ 38-40. of used taxes 37, 47. 45, to reimburse were paid Justice supports was for All" It was 2014 donation were all the donations Foundation In federal to and The to charities. For in full funds for the laws another donor). reimbursed donated Treasury a donation Children's the donated tax the fact, Unicorn were was were transferred to the were only that in the receives to the involved not Thus, that to the 501(c)(3) auction charity. documentation amounts the each 2013 of these to the initially "waste," not of these amount paid.u Fundraiser oversight. It hardly the caution, "Fundraiser "And written to NALT ¶¶ 33, assets the the League; donation a charity that Section online is then that See to TNGC Nothing to another thousands organization. another of the AMC. by housed tell should important proceeds a donation (allowing to provide charity NYAG that has all transaction, treatment. membership is transferred receiving that Foundation, designated that Preservation the and transactions, Aff. Reg. DC to the Foundation; arose Treas. All House medical the from a lifetime (AMC). charity - Greenberg of charity charity one it to another distributes much, to one B. auction - the "waste" as Fisher charity underwent assistance Charity Foundation a donation See online Mourning Greenberg charity. None the ones this Martin 2007 an extraordinary loved received to the from Alonzo regulations who donation arose precludes but families 2012 organization, their In the 79-80) House, Characterizing their The ¶¶ 72, Fisher while locally wwwfisherhouse.com. Petit. (Cf was for not the "loss" Veterans planned, donation "waste" is also not financed, an example and the amount conduct..." of illegal 23 31 of 47 Foundation's of the NYAG The Fundraiser. organized, corrected a "pattern or and of "waste," concedes by as the as it indisputably to the Foundation. Futerfas reimbursed (Petit.¶ directed assets. 1) INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 RECEIVED NYSCEF: 08/30/2018 Campaign," Petit. donations and and ¶ 36, no has charitable making employees. grants to (Petit. veterans' NYAG'S PERVASIVE DISQUALIFIES AND PROCEEDING By NYAG has denied prerequisites 56 Misc. 3d by be disqualified from the Thus, Liquor review v. New Restaurant Chairman impression proceeding." had actually that Id. in of Appeals he had, at 164 of a suspension York State prejudged Liquor matter that impression (Emphasis added). and assets. down irrelevant "more 24 32 of 47 most 2d elemental v. Carlin, characteristics criticism opinions, 536 530, or other the of a to be need (N.Y.C. disinterested to whether the bias, In People public Crim. Ct. fashion"). fact-finder should individual's bias. statements of the Chairman from against 158 the (1990). because an impermissible Indeed, the the a judge attorney, 75 N.Y.2d lent of Attorneys Misc. and partiality in a "rigorously instituted was PETITION objectivity. "District the Auth., one articulated 151 public the proceeding the court from resulting that of SPECIAL by consequences, boils disqualified a licensee state: be wielded a litigation ruled the v. Calderone, a district tainted violated NYAG: political fairness "waste" or THE OF and the to the whether receiving RESPONDENTS THIS while of 2017), should fundamental concerning Authority administrative Ave. powers participating Court power Co. People to determine violates the motivations, See enforcement applied Petition fairness applicable favoritism." AGAINST DISM_ISSAL this wielding Lawrence political (criminal involvement (St. from standard The those directly or REQUIRES bringing call hardly "loss" a MAINTAINING fundamental in words free fear media, 1991) of 1103 1098, independent; then Respondents expected servant public and investigating can FOUR BIAS FROM IT One organizations POINT THE ¶ 25). importantly, his air Chairman of the in the participating 1616 licensee. Second Whether or not statements "gave ofunfairness those State the the to the statements and the INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 message issue." RECEIVED NYSCEF: 08/30/2018 conveyed they see Id.; also to instances ("[W]e must (judgment be constantly of conviction in rejecting demonstrated for public dedicated.'" (1980). and "defendants, impropriety." of those People appearance Attorney was of 12 The People to recuse to, and with perfectly to conduct impropriety. failed counsel of law. v. Zimmer prosecutors requiring citing ("Prosecution charged case our law There, himself a stockholder 613 People with someone the at the when, of, the time a small 25 33 of 47 population the into been may of question the a standard even to the engage of Calderone, because defrauded.12 the omitted). avoiding case 51 N.Y.2d appearance (1980); conviction is a it is the adoption for had as to rare, (citations regard had itself calls public prosecutor v. Zimmer, 421 417, 1980) bias") is such against defendant's that the although a case, loyalties he presented Dep't added). to which People Appeals' unstinting corporation of a county having Attorney at 393 n.2. 51 N.Y.2d v. Zimmer, District of vacated Court law to judgment") Court with themselves of such conflicting actual by not erode may appearance 51 N.Y.2d a defendant illustrates the quoting in (2d impropriety to protection entitled v. Shinkle, bringing the that 929 where of system the (2013), emphasized are a matter when but should disqualified)(emphasis appearance and 608, been in recognizes, at large by have including which caused on the (A judge 928, of bias damage position 1983) Dep't 77 A.D.2d the "the that government Appeals public at 613-614, at 536 objectivity the held (1st appearance should chairman's be questioned participation 20 N.Y.3d of Court indeed Id. Misc.2d in v. Adams, The court Appeals as our confidence People 396 because of the as would a prosecutor's Court disqualification, 'discourage 151 the bias, even as quickly vacated might v. Zappacosta, to avoid system 733 732, impartiality People the established 93 A.D.2d their bias); vigilant judicial Similarly, ground when personal of in the confidence v. Hornblass, or herself limited 390, Johnson himself disqualify observer' to a 'disinterested the the District Grand Jury, The Court in the private he practice INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 stressed that sight lost the of "presumption the (See investigation conflicted. The negative campaign evidence and of J. Trump Donald his they 2016 - 7 weeks 6) the conduct resistance charities to that by the at the serious allegations the investigation the Clinton Foundation the certainly could while the Foundation have attached used of the and funds the millions Petition 26 34 of 47 earliest showed candidacy investigating Foundation at the September press from funds state time; 13, on report tax filings; illogical to worthwhile it held the utter its including same Clinton on of dollars that "Trump"; Presidential were at the possible political things a significant the 1) Presidential Foundation investigation, disbursing for Clinton Office the ignoring at the to its his impropriety of things: to all to the and of omitted in 2017 as exhibits opposition his inappropriately other Hillary of ("Mr. was ago, opposition investigated coincidentally course the in NYAG the - during behalf 88 (1935) inception 2) requests of the had result." a just 78, the among day; his Council" prosecutor Schneiderman T. months to this on the is simply From in, Schneiderman Mr. election Eric U.S. bias, 8-14) is rooted persist 295 actual a few premised on her announced NYAG and which the dissolving Office proposition and and until he ran time same Exs. that as it is to achieve of General "Leadership advocacy credible that of the the and and States, evidence 19-28, Schneiderman Schneiderman before 6, 2016 September all NYAG 5) the office NYAG on aggressive ignored flatly Foundations; cited service 4) Mr. Foundation; Mr. to convict Attomey this the by by - the supporting Schneiderman's Campaign former undermined v. United indeed, at ¶¶ 7-8, NYAG, contributions 3) Mr. time the statements public and, Aff. so much Berger citing impartiality been had is not 396, Foundation, and Schneiderman"), and Futerfas the into mission "his of impartiality" of at 393 appearance the overwhelming. the that fact 51 N.Y.2d Zimmer, Here, RECEIVED NYSCEF: 08/30/2018 and NYAG 7) the typically cases and INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 RECEIVED NYSCEF: 08/30/2018 brings historically dealing. POINT See People text and defender to When the this for new while counsel in cases in how most of the unique they can The Court Court of egregious evidence defense be an adequate and matter of Appeals that due self- of the the position Judges of the and to the of The Attorney's office public on Court, the Id. "due stated feels clearly constrained at 612. applicable directly here: In rare the situations, disqualification, discourage public is dedicated. provides while we unacceptably Attorney's a sitting in do great office judge its own find when the and government impropriety may whether the in an evenhanded any actual of that the judgment, matter for is such the system arise when prosecutor occurred, impropriety a reduced is a ground appearance of the law as to to which it record is exercising manner... the impropriety, to accept demanded disinterested our to question appearance itself impropriety recognizes, of discretion refused who in basis not of law appearance prosecutorial Here, case confidence . .[A]n an objective pretrial was, appearance as our charge appearance because go to trial, appropriate. 27 35 of 47 rather is an there the that the District complainant than other. stated offer defender in language the prosecutor the public of duties favorable seeking complainant." holding, offensive conflicting rejecting 1d. at 611. of three The offense, a There, recused City he was of the conviction, her Rochester resolution, "District sending arraignment. hand, in pattern. ex-paramour, City the plea guilty Judge]." to the reversed one the fact and because judge would by over counsel on City neighbor Rochester the presided a standard experience this of complainant Rochester an analogous harassment all Judge new the her aggravated suggested [the handle and presents defendant, charged, from that victim in his obvious (2013) complainant/judge clients defense position was the of was assignment other his accused County cross-examine treatment Judge defendant the is clear, 613 608, counts a Monroe requested having Court When there infra. misdemeanor messages. themselves, where 20 N.Y.3d City two committing SIX. v. Adams, Rochester sitting that, proceedings because was a trial to that INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 RECEIVED NYSCEF: 08/30/2018 1d. at 612-613. failed Of to rebut appearance of The basis bias Mr. no Trump,13 and in this even lawsuit though the cooperated Dillon See For all M from the NYAG fiduciary that untested and and the was to charitable this and the to dissolve and itself long NYAG and tainted, Eye, of care and proceed. NYAG elected to dissolution, Foundation had its donate remaining should the have Petition recused should The ago. be dismissed. 7, was See e.g. N-PCL & Throat at p. 11 of its MOL any shed petition under of adversary case the record is without record it evidence the court-supervised causes, sought repeatedly on insist the notorious brings, where Here, Indeed, and should issues, manner start. this is an objective 5-13. at p. 9 of its MOL Ear the from his position resigned on May by the fact Mr. Schneiderman Schneiderman's Mr. filed on June 14, 2018, thereby reflecting in the Petition. is di structure. powers Attorney to dispel there NYAG. And it historically and the an open posture. other theories and the are and actions went from approach cited by the NYAG the situation remotely anodyne all of the cases cited by the Office support benign, by NYAG duty continued as in Adams, case himself Trump the steps District in an evenhanded of this issue, the here. of the cases almost enforcement with reasons, instant statutory (utilized contrast at ¶¶ leadership None Rather, Manhattan the tainted indelible, SIX. of this None because and that to take Just discretion Mr. donations Petition and 13 Aff. of "failed clear. its was Id. patently Schneiderman investigation of these investigation 2018 in the ." treatment on this specious and . exercised sought Foundation's fully 14 funds. striking on Mr. shared be would are investigator lead office case of Appeals treatment NYAG's the Court treatment. NYAG from the his which Further, bring tainted that dissimilar instant the directly doubt discovery to the animus to the disparate whether emanated leaves of inappropriate parallels that significance allegations to question appears of the particular loyalty for v. Daniels, 25 Misc. the proposition to dissolve Hosp. for Cuomo v. Spitzer, the proposition a corporation 186 Misc. that 3d 1226(A) directors to the Foundation). 28 36 of 47 the Attorney that has acted 2d 126, beyond 151 (N.Y. of a not-for-profit (Sullivan General that See infra Co. at POINT inherent propositions Co. 2009) has broad its capacity); 1999) corporation (utilized each by have a INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 RECEIVED NYSCEF: 08/30/2018 POINT THE OF LIMITATIONS STATUTE FROM All limitations and of statute applicable statute of limitations. see CPLR 201. the Suisse Securities, action "to recover year statute of Morgan Stanley determine to the in nature, courts which statute of plaintiff's construe CPLR substantive 12 N.Y.3d created rule law, Co. choice the 249, the are claims an Where statute" by not provide then a a single applicable IDT Corp. Loengard quoting runs v. Credit of the seeks." plaintiff no time 98 N.Y.2d 2014). does of to the within Fund., law the (2009), that or imposed York the 139 132, law statute subject Schneiderman (N.Y. [and] that remedy are the be commenced ex rel "New claims suits at common *6 [is] beyond Regiment 51912U 214(2). duty state People 213; or forfeiture fiduciary Co., the common are v. v. Santa Fe (1987). 266 Corp., has & which essence v. Cortelle on the Witter 262, of the recognized Op. Slip penalty breach depends CPLR General v. Seventh were ARISING transactions Attorney by York that 2014 applies. law. RELIEF TRANSACTIONS improper brought limitations. 121A, THE abrogates of New liabilities limitations Dean an action a liability, for N.Y.2d To 214(4), upon period Indus.,70 York Misc.3d 46 of of of CPLR The State assert statute limitations limitations "look claims to a six-year statute that provides of as a matter others. BARS OF allegations all and Where three like TWO BUT be dismissed must King (2002); subject ALL NYAG's of the limitations the against 255 two but FIVE claim 38 N.Y.2d the a three-year of 83, suit limitations and 86 limitations not to the (1975). as alleging in a particular applies form "Where 'injury period." to IDT 29 37 of 47 in which the property' Corp., remedy case, it is 12 N.Y.3d the should Court pleaded." sought within the State is purely meaning at 139 of New monetary of (three CPLR year § INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 RECEIVED NYSCEF: 08/30/2018 limitations period fiduciary of Here, there of the Petition $100,000 Martin should B. Greenberg In addition, also the e.g., to the contribution monetary period applies. extend but the The plaintiff dispute House; $25,000 because $5,000 to "And Foundation. damages ts in the (2) to that allegations beyond damages monetary is incidental the are and significant the statute February 14, of than six limitations: (1) 2012 donation years before years the before 2007 to the relief the to the Justice Because connection than more arising sought DC three in the Preservation All;" for the and primary with the Petition is primarily League; the 2014 gravamen Veterans the the 2013 donation relief of Fundraiser, filing of the monetary Petition in nature, campaign of to the $10,000 in this remaining the three year intransigence. So contrived a result 30 38 of 47 should not be countenanced. action limitations as a reason relief for equitable and injunctive can hardly point to its claims have dissolved would years when the Foundation of limitations from three to six for the NYAG's the donation of $158,000 NYAG statute of relief.). more arising in breach Foundation. allegations of relief that 2018) Charitable the seeks equitable 14, Fisher Children's 15 be no (June donation of is for ago can the be dismissed 2013 Unicorn since and claim, duty filing applies to ages INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 RECEIVED NYSCEF: 08/30/2018 POINT THERE IS DISSOLUTION IS NO BASIS NEARLY Court Foundation (Fourth activities (Sixth boards of subd. should A). will relief moot OF Aff. the 288.(1st Corp., 70 N.Y.2d has Fifth Dep't The State charitable since the transactions, and has record dissolve the than of New (Prayer has Respondents the for suspended the charitable on serving State Foundation in engaging from York Individual the Relief operations. is unwarranted. willingness Foundation's December 2016. a resolution in their Matter from to dissolve (i) UNWARRANTED reach COAs relief: Respondents the where injunctive Foundation laws since parties Sixth the by IS for the HERE ARE BY THE NYAG CITED Individual service See Matter v New to voluntarily Futerfas to dissolve entirety. of Anonymous BOARD failed understand, and is likely corporation and cannot no better. to show of because not SERVICE to suspend fares or knowledge is appropriate here to citing request boards NYAG by If the FROM NYAG's governed on the THE FACTS the City at ¶¶ 26 v Hernandez, & Hosps. on New York Health 6, this Foundation, of Gates York Aff. (1988). SUSPENSION B. the tried 2006), 972 suspend DISSOLUTION at ¶¶ 4-13. Fourth, to restrain (ii) board be clearer could requests WHERE RELIEF AND PRECEDENTS Petition's is unnecessary Foundation Dillon to to suspend AN ORDER The the (iii) Injunctive A.D.3d relief and request THE COAs); organizations the dissolve. Fifth COA); Nothing 15-19; and charitable Similarly, A. dismiss INJUNCTIVE RESOLVED, WITH INCOMPATIBLE The FOR SIX one of with for charitable transactions. those Relief obligations obligations 31 39 of 47 from is not assets, This has directors the UNWARRANTED Respondents Prayer The or more to follow, be trusted Individual waste prohibited IS prohibited demonstrated in any of as a matter actionable is clearly required serving related not a case that "he a director future role." law, party where does of of injunctive not a not-for-profit Schneiderman v, INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 Lower in RECEIVED NYSCEF: 08/30/2018 Esopus River MOL Petit. Watch, relief occurred years before America, Inc., 366 249 Dep't (1st Dep't undeniable and THE relief was NYAG, propositions Shiffman were the of before officers personal where this and directors all charitable pending 15. boards, dissolution. April 8, 2013)(cited are that upon save for Futerfas justified the election given the facts and the Volkswagon 256 Inc., N.Y.S.2d Foundation to the here of A.D.2d 248, (1st 719-20 719, the and Individual they where relief cases organizations expenses of President Trump, Donald Jr. and Eric Aff. Foundation 32 40 of 47 by all Individual who Trump suspended justifying using principles. or damages gulf between damages and relief donated to the 47 the the is that funds facts the for their styles. life and and the by Ex. relief wide injunctive anodyne (see equitable the cited legal appendix illuminate NYAG's to the not-for-profit J. Trump at ¶ 14. The in the injunctive sought living - conventional where law case support Affidavit, or provided NYAG the by of the in a word because their Most circumstances Common cited Shiffman cited and cases venality. structure; successfully the 344 Inc., events THAT INJUNCTIVE ON THE_FACTS HERE to the instructive, case. v. TRW v. some DEMONSTRATE personal whether to support i.e., hardly contrast facts NYAG in this Store, where See Lefkowitz Polzer 1975); the unjustified suit. Dep't NYAG statutory defrauded enrichment, M We note the particular few Dep't of both exhibits cases, the Court stark in the NYAG's Those cases in from NYAG's UNPRECEDENTED unbridled cases present Aff.), imposed. types now of Cty., 10-14. THE BY to correct his work at ¶¶ BE stands emanating a few Aff. CITED the (1st relief charitable here including Only equitable WOULD justified Ulster is particularly the v. Alexanders Futerfas record of 158-59 157, People CASES directors commencement important RELIEF individual N.Y.S.2d See The the Moreover, Respondents. C. against 1998); 1973). Ct. (Sup. 1241(A) 16 at 24) Injunctive 39 Misc.3d Inc., Respondents remain operations on the resigned Foundation's in October 2016. from board Id. at ¶ INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 RECEIVED NYSCEF: 08/30/2018 In Oct. 28, and Cuomo the more nothing Breed film The which used the of the use to himself and eventually listed his the WL and fmances of The LERW contracts N.Y. into April sale Ulster showed contracts a ten savings, in People 3, 2013), the other paid for to April LEWR years period, vacations, Mr. the Mrs. and foundation from the for foundation as collateral; building Watch, River Watch friends Fritschler and which paid entertainment, James, NYAG brought Jr., for 39 Misc.3d an action 33 41 of 47 alleging of the 1206 that he pilfered three the from personal expensive 2013 as 1995-2007. directed EMC, equipment, (A) over capacity from funds and the control ("EMC") personal (A) an environmental in a voluntary With clothing was delegated Chairman he controlled. Fritschler v. Olden who 1241 3d Fritschler Council Management Misc ("LERW"), served also as volunteer 39 Inc., Frederick 8, 2018.), of two Environmental with River Esopus Fritschler. Fritschler, to $19,750, principals, property the using the $13,500 compensated improved credit Esopus composed that or otherwise the of The New The to house from ranging was enrichment. building festival $550,000. Lower was own County an arts Foundation Breed improvements. rent line their Sullivan Ct. to establish New a three-story transferred County, of board County over retirement Similarly, never then Director Ulster foundation v. Lower operations evidence to enter Ct., Ct., on a $36,000 for LERW and the county expenses, (Sup. The Chairman obtained Executive not-for-profit. LERW and property for for for solely (Sup. was the fact, $5,000 and in Schneiderman 3014915 Chairman house Daniels Mr. wife; Similarly, 2013, the In the 3823257 its mission founders grants building building. claimed County WL 2009 (A) County. the by bestowed in the 1226 Sullivan set up to repair 3d Foundation Sullivan county resided Misc. in a scam paid foundation. Daniels, Breed industry than Foundation were New the 2009), nurture 25 v. Daniels, living dinners. WL men 1390877 had virtually (Sup. INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 RECEIVED NYSCEF: 08/30/2018 unrestrained real dominion estate and assets.17 and control over NYAG The for purchased from shopping sprees - defendant dined routinely in the NAC to charge restaurant NAC debit card Ct. Merlo 88 were F.3d 1972 N.Y. indicted 1369 to through (4th 1992, a subsidiary. positions related entities. airfare services, and and in New weekends The practices by in the organizations' NAC York, purpose organizations bills of the are modernize and not established its façade in Bureau and Vaux, in the Aesthetic beneficiaries Here, to promote built in the who was Movement one and the United action. of Way Merlo Nile assets, interest of the architects style. 34 42 of 47 by who unscrupulous that in the that all The Tildon the designed charitable of the Tilden arts. Samuel girlfriends. charitable to ensure it is uncontroverted from limousine various supervise from i.e., benefits to London, with charities in senior private on the is to excessive, similar cruises function ("UWA") associates included et al., From America charged or close funds and Aramony NYAG Concorde acquired his opinion, slip Aramony, on the the public 1840s for to receive of those One used William flights of charitable or wasted. in 1898 and checks. and 1997), v. friends watchdog management lost was Vegas as items and Merlo, 14, States and UWA vacations, Las the individuals with card Thomas basis Aramony installed favored various donors Park South 15 Gramercy York. hired Calvert New He and for Charities solicitation that of payment, Nov. (United from apartments dozens debit and the NAC's services. Crane formed the without day its valuable including hoarded NAC's Aramony $1 million other the limousine Stephen enrichment gambling protecting funds was hotel William to UWA, personal The and and rent, every found for arranged used room which than expenses individuals of Virginia conduct more ("NAC"), with taxi District for these Club made (Judge 1998) investigation personal and dining v. Arts market purchases Eastern stole below NYAG 7, 1996) The at UWA, UWA The Cir. Aramony undocumented " in the that meals, Vacco, August County at well years, in Dennis Finally, (Sup. five National alleged residences twenty the Central Mansion 25th Park, at 14 Governor to of INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 Foundation's between payments the considerations, why this RECEIVED NYSCEF: 08/30/2018 injunctive Petition 18 facts here the well-documented one and the facts Petition other to bona fide in the cases would penalties, never are 18 charities. cited by have been entirely the the Further, NYAG suggest brought. unwarranted contrast striking Thus, in this but that, these cases proceeding for political underscore and why be dismissed. should The and instant relief, made were exception back office is the Bondi payment to "And oversight. 35 43 of 47 Justice for All" which clearly resulted from a INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 RECEIVED NYSCEF: 08/30/2018 POINT COURT THIS The because "the instant it is barred Law Supreme state action. federal in by the state Land." or burden See institution "the burden, or in Tarble, 80 U.S. 397, 408, 426 U.S. 167, 178-79 In Clinton Train, proceed any manner presidency immunity" court but cautioned on Supremacy direct any officials from cases certain Clinton, conduct 520 principles of federal officials President embodies will power, by taxation the 520 inevitably no operations of the Tennessee VI, Mr. which §2, when makes federal state a federal law is not (state could not or otherwise, constitutional 100 Trump to limit (1819) v. Davis, see 257, 263 law courts' impacted by impose to retard, laws"); U.S. Clause of court suits 520 court over that those laws against U.S. the President, tax also In re Hancock (1879); prejudice that federal officers "the underlies actions a civil suit for case compelling to his preceding who principal has Art. executed'. interest the II, § 3, may federal in protecting to remove authority to a federal from a state from asserting court. n.13. that prohibit prohibit the Office, interfere state a state such with, court that courts from any exercising assertion or burden, 36 44 of 47 his any authority of jurisdiction or her over jurisdiction ability by the official over a sitting a state court to exercise on impede, because 'faithfully and allowed a more at 691-92, are comity, Court private "present may a state local for Clinton grounds, federalism, Supreme the (1997), then-President state by 681 U.S. against brought same who 436 have Respondent interpreted even TRUMP MR. (1976). possible at 691 been long 316, (1871); that The President, the U.S. has art 17 U.S. 411 issues implicate... clause Const. v. Maryland, to ensure responsibility U.S. Clause, against government control control be dismissed federal states v. Jones, in federal should This the McCulloch since court OVER JURISDICTION Supremacy of the to influence ability suit LACKS SEVEN the over v. INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 RECEIVED NYSCEF: 08/30/2018 President's U.S. Article Const. and the art. to the addition of our functioning jurisdiction over against President actions those President's the in such the involving federal situations. and it takes prudential 19 not may factors Scholarly, be subject a state of court to the jurisdiction better the or interfere strongly those 520 support and other of a state of trial) federal suited sources court the 475, to hear supporting are included 37 45 of 47 the action this action in Ex. that "manage the cases managing inevitably arise in J., dissenting). Mr. by Mr. Trump, the as any President, Trump. president a sitting 24 to the Futerfas Aff. that the to avoid can with 142, against suits courts embodied the proposition U.S. consistently against against prejudice' 551 Inc., experience issues critical exercising 'local (1973)(Brennan, Branch Executive dismissing 514 from interference legal to address U.S. (federal vast by to factors private be managed with at 346, President reflect requiring that [so] courts, refrain Companies, at 708 U.S. a suit or "retard, prudential may will whether 17 U.S. the power President.19 the court proceedings actions authority with a state Second, 411 v. Rodriguez, lacks important (1980). Clinton, Third, are Clause, Chief); treaty control ordering against Morris of McCulloch, by v. Philip deferral occur"). Court historical ensures duties. government, also 1, 20 (including not control U.S. direct a judgment court the power, exercise Branch, that and Regardless including require Watson 448 fashion Executive "state First, 1 (Commander appointment cannot Supremacy also cl. §2, executed.") court the the system President's this be faithfully II, the law, or issuing president. federal art. to its jurisdiction, mandate See Presider Accordingly, into control" federal would duties bills officials." in with sign discovery, v. Thiboutor, to proceed interference action for a sitting Main Const. conduct, unpopular...federal (2007); such to the U.S. laws to submit or sit to motions In the manner President e.g., to that or in any the respond Care or unofficial burden, compelling See, 3 (power §§2, to official impede, 150 II, to "take duty relates II powers. should INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 RECEIVED NYSCEF: 08/30/2018 POINT SHOULD RESPONDENTS If permit the relevant factual preclude and to issues Attorney discovery. The Respondents (1) The 473 where facts claims (1st issues of their right fact issues that seek the to dismiss, pursuant 25 N.Y.2d court existed). to 286-87 in denying numerous should since In (1969); re application of fact and judgment summary Court § 404(a), issues determination precluding the CPLR 273, erred Here, a summary exist motion Petition, 2010)(trial TO DISCOVERY the 's Trust, obtaining to surrounding to the Dep't from OBTAIN survive re Dodge factual General reserve In AN OPPORTUNITY GIVEN AND an answer See 471, an answer the submit exist. 72 A.D.3d to serve General's Attorney Respondents v. Donovan, leave of the any BE AN ANSWER FILE EIGHT for exist warrant and Cline that an answer for which include: discovery donations and transactions that NYAG the claims to be improper; (2) Whether (3) Whether party" had (4) "willfulness" "And (5) Whether claims (6) Whether there (7) The full not re-election has Justice for nature to, in at the same to each and documents by by the the New relevant he and his and assets Individual former York to Mr. office the a "related a Fundraiser; to the Veterans Individual Fundraiser; moot; lost of the of bias extent time and respect Fundraiser; in which Veterans with are Veterans "transaction" the disbursement damages in the a with demonstrated of waste respect and all been All" monetary individually, limited for is a pattern with a ban, Schneiderman but participated" "participant" Foundation was a interest" in connection a "financial the including or "intervened the Whether Donations, Foundation the were 38 46 of 47 equitable warranting New York Attorney Schneiderman investigating remedies, and Respondents; Attomey General's General office, as a candidate the Foundation. Eric including, running for INDEX NO. 451130/2018 FILED: NEW YORK COUNTY CLERK 08/30/2018 10:34 PM NYSCEF DOC. NO. 91 RECEIVED NYSCEF: 08/30/2018 CONCLUSION For the forgoing reason, it is requested respectfully that be Petition the dismissed entirety. Dated: New August York, 30, New York 2018 LAW O OFFICES A U . By: Alan 565 S. Fifth New Tel: Futerfa Avenu New York, (212) 7th York 684-8400 asfuterfas@futerfaslaw.com Attorneys 39 47 of 47 for Respondents F oor 1 017 ERFAS in its