Trump Foundation Admits To Violating Ban On Self-Dealing In Tax Filing

Donald Trump's charitable foundation admitted on a tax form to violating a legal prohibition on "self-dealing," according to The Washington Post. NPR's Audie Cornish talks to reporter David Fahrenthold about the discovery.

AUDIE CORNISH, HOST:

There are new revelations about the charitable organization of President-elect Donald Trump. The Washington Post reports today that the Donald J. Trump Foundation admitted to self-dealing. That's when nonprofit's funds are used to enrich its leaders or their businesses or families. And self-dealing is illegal.

Reporter David Fahrenthold of The Washington Post joins us now. And David, I gather this all comes from a tax form posted on the website GuideStar. That's a site that covers nonprofit companies. What did this tax form say?

DAVID FAHRENTHOLD: Well, if you look in one particular section, it has a set of questions the IRS asks charities, basically asking them to volunteer if they have broken the law, if they have committed an act of self-dealing, meaning that they have used the money from the charity to buy something personally for the head of the charity or some officer of the charity.

Now, Trump's foundation in the past had always checked the box saying, no, we didn't do this. This year, they checked the box saying, yes, we did commit an act of self-dealing in 2015. And then down below, they checked another box yes, saying that they had committed a similar act of self-dealing in the past that had gone unreported.

CORNISH: Do you have any more details on exactly what happened?

FAHRENTHOLD: They, in that form, don't have to say what specifically they're referring to or how much money was involved. That's on a separate form that we don't have yet. But we know from past reporting that there's been a number of instances where Trump used the foundation's money to buy things for himself.

He bought two different very large portraits of himself, and he paid a total of $258,000 to basically pay off legal settlements involving his for-profit businesses.

CORNISH: But in this case that we've just learned about now, were there any penalties? Has the Trump organization paid any fines or anything like that for this?

FAHRENTHOLD: We don't know. That would be on this - a separate IRS form that we'll - hopefully we'll get. What I can tell you is that the law says that if you engage in acts of self-dealing, generally, the president of the foundation or whoever did the self-dealing has to pay some penalty taxes and also reimburse the charity for all the money that was spent improperly.

CORNISH: Do we know why this was posted now?

FAHRENTHOLD: It was due now. The 2015 tax filing for the Trump Foundation was - he got an extension on it. It was due in the middle of November.

CORNISH: Now, the foundation's 2015 filing also reports a gift from a Ukrainian businessman. What more can you tell us about that gift?

FAHRENTHOLD: Sure. This is a guy named Victor Pinchuk. He's a Ukrainian steel magnate who's very active politically in his home country on the side of folks who want to westernize Ukraine and move it away from Russia. So he was a big donor to the Clinton Foundation while Hillary Clinton was secretary of state, and that raised a lot of questions about whether she had shown him and folks associated with him sort of undue favor because he was a Clinton Foundation donor.

In Trump's case, Trump was invited by this Ukrainian magnate to give a 20-minute speech by video conference to a particular conference in Kiev and - which - that was in September 2015 when Trump was already running for president. As part of that, the Ukrainian businessman gave $150,000 donation to Trump's foundation.

CORNISH: To your mind, where does this fit in with your broader reporting about potential conflicts of interest for the president-elect?

FAHRENTHOLD: Well, it opens a new door to a way that the president-elect could be influenced by foreign donors, which is that they could give, like this Ukrainian businessman did, to Trump's foundation. And that's a way that the reporting on these tax filings for foundations - it is such that Trump, if he got an extension, wouldn't have to file this year's tax filing - tax filing covering 2016 until November of 2017.

So it would work that way every year. So the donations he took in office in 2017 wouldn't be clear to us until November of 2018. So it raises a lot of question if Trump's going to carry the Trump Foundation on into the White House. If he's going to keep it open, how is he going to keep himself from being influenced by its donors?

CORNISH: What have you heard from the Trump campaign about all of this?

FAHRENTHOLD: Zero. I've asked him a number of questions today about all the things we've talked about - the self-dealing admissions, the potential conflict of interest from overseas donors. And I've heard literally nothing.

CORNISH: That's David Fahrenthold of The Washington Post. Thank you so much for sharing your reporting.

FAHRENTHOLD: Thank you.

Copyright © 2016 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.