New York Attorney General Barbara Underwood filed a lawsuit against President Donald Trump and three of his adult children alleging a pattern of illegal conduct over a decade related to his personal charity, | Alex Brandon/AP Photo New York AG sues Trump, alleging 'illegal conduct' at his charity Trump and his foundation blast the lawsuit as a blatant political move.

New York Attorney General Barbara Underwood filed a lawsuit Thursday against President Donald Trump and three of his adult children alleging a pattern of illegal conduct over a decade related to his personal charity.

The allegations — which quickly drew scorn from the president — include unlawful political coordination with his 2016 presidential campaign and self-dealing transactions to benefit Trump’s personal and business interests.


The suit before the New York Supreme Court grew out of an investigation launched by the Democratic attorney general’s office in June 2016. It also seeks special proceedings from the court to dissolve Trump’s charity, the Donald J. Trump Foundation, and obtain $2.8 million in restitution and other penalties.

Underwood, who succeeded Eric Schneiderman in May, also sent referral letters Thursday to the Internal Revenue Service and Federal Election Commission raising possible federal law violations.

“As our investigation reveals, the Trump Foundation was little more than a checkbook for payments from Mr. Trump or his businesses to nonprofits, regardless of their purpose or legality,” Underwood said in a statement. “This is not how private foundations should function and my office intends to hold the Foundation and its directors accountable for its misuse of charitable assets.”

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Trump, his son Eric Trump, and the president’s foundation all immediately blasted the lawsuit as politically motivated.

"The sleazy New York Democrats, and their now disgraced (and run out of town) A.G. Eric Schneiderman, are doing everything they can to sue me on a foundation that took in $18,800,000 and gave out to charity more money than it took in, $19,200,000. I won’t settle this case!" the president tweeted, adding, "Schneiderman, who ran the Clinton campaign in New York, never had the guts to bring this ridiculous case, which lingered in their office for almost 2 years. Now he resigned his office in disgrace, and his disciples brought it when we would not settle."

“It’s very sad to see good organizations attacked,” Eric Trump, who is named as a co-defendant in the lawsuit along with his siblings Donald Trump Jr. and Ivanka Trump, said in an interview. Eric Trump argued that his father had given millions of dollars of his own money to the charity and donated to “some of the most worthwhile causes that exist.”

“And because of politics, this is how he’s treated,” Eric Trump added.

Trump launched his nonprofit charity in 1987 and served as the foundation’s president until three days after his White House inauguration in January 2017. Eric Trump, Donald Trump Jr. and Ivanka Trump all became foundation board members in 2006. But while Trump’s sons remain in those positions, Ivanka stepped down with her father when she joined his White House as an adviser.

The foundation has been under a microscope since the presidential campaign, with Schneiderman announcing his investigation in September 2016. A “notice of violation” to the charity followed that same month, and it prevented Trump from following through with his own plans, spelled out in December 2016, to dissolve the charity and donate $1.7 million in remaining proceeds.

In her petition, Underwood highlighted findings from more than two years of investigation in calling the Trump Foundation “little more than an empty shell” with no oversight by a functioning board of directors.

The board had not met since 1999, she wrote, and it still doesn’t have any policy, direction or “any written criteria for the consideration, approval or monitoring of grants, or protocols for assuring compliance with the organization’s governing documents and charitable mission.”

Underwood singled out President Trump, whom she noted was the sole signer for the foundation’s bank accounts and in approving all grants and other payments. Trump had been running the charity “according to his whim, rather than the law,” she said.

The alleged illegalities spilled into the 2016 White House race when the charity’s board “knowingly permitted the Foundation to be coopted by Mr. Trump’s presidential campaign,” Underwood wrote.

Specifically, the New York attorney general pointed to a series of events surrounding a nationally televised charity fundraiser Trump held in Des Moines in late January 2016, a little less than a week before the Iowa caucuses.

At the time, Trump and Texas GOP Sen. Ted Cruz were seen as the leading contenders in a packed GOP nomination race. Trump, upset with what he claimed at the time was Fox News bias against his campaign, opted to skip the final Republican debate before the all-important caucuses and instead held a competing event to raise money for veterans’ charities.

According to Underwood’s investigation, both senior and lower-level Trump campaign aides planned, organized, financed and directed the veterans’ fundraiser while getting only administrative assistance from the Trump Foundation.

She singled out Brad Parscale, then a Trump campaign consultant, who created the charity event’s website, as well as Hope Hicks, then a lead spokeswoman for the campaign, who helped arrange for speakers.

Trump’s campaign manager at the time, Corey Lewandowski, also played a role after the event organizing the distribution of money to the veterans groups. “I think we should get the total collected and then put out a press release that we distributed the $$ to each of the groups,” Lewandowski wrote in an email to Allen Weisselberg, the Trump Organization’s chief financial officer.

In another message the same day to Weisselberg, Lewandowski asked whether the foundation could award grants in Iowa just days before the Tuesday caucuses: “Is there any way we can make some disbursements [from the proceeds of the fundraiser] this week while in Iowa? Specifically on Saturday.”

Trump’s campaign fingerprints were in other places connected to the fundraiser, including displaying the Republican’s “Make America Great Again” slogan on the event podium and on jumbo ceremonial checks that were distributed during campaign rallies.

Underwood’s petition also takes aim at several other aspects of the Trump charity. She said it failed to comply with a 2014 New York state law requiring adoption of a conflict-of-interest policy. It also has made a string of questionable donations between 2007 and 2015 to other charitable organizations, where the purpose of the gift was used to help settle legal claims involving Trump businesses, including his South Florida Mar-a-Lago retreat. Another donation went toward promoting Trump’s international hotels.

Underwood also called into question a Trump Foundation donation of $25,000 made in September 2013 to Florida Attorney General Pam Bondi’s reelection efforts — noting that the Trump charity’s tax returns for that year did not list the contribution. Instead, it listed a $25,000 contribution to a similarly named Kansas-based 501(c)(3). But the Underwood investigation found there was no such contribution to the Kansas group.

Trump's foundation issued its own detailed five-page statement panning Underwood's action as a blatant political move.

"This is the NYAG playing politics and nothing more. In fact, the Foundation had already proposed its own voluntary dissolution over a year and half ago," the statement read.

The foundation went on to criticize Underwood for releasing the lawsuit on the same day that the Justice Department inspector general was due to publish a report on whether former FBI Director James Comey and other officials improperly handled the investigation into Hillary Clinton's email server. It also noted that the release came after Trump's summit with North Korean leader Kim Jong Un.

"The political motivations behind this are made all the more obvious. The NYAG decision to file this petition on the very day of the issuance of the Inspector General’s Report on the Hillary Clinton e-mail investigation; and on the heels of an historically successful diplomatic mission abroad," the statement said. "And this filing comes after the NYAG had already interminably 'investigated' this matter for almost two years."

The foundation's news release Thursday also said Underwood’s investigation is holding “hostage” more than $1.7 million in donations that would be sent out if the president’s charity was allowed to dissolve. Potential recipients, the Trump Organization said, would include the New York City Police Foundation, the United Negro College Fund and the United States Holocaust Memorial Museum.

The FEC declined comment on Underwood’s referral. The IRS did not immediately respond to a request for comment.

