The Kleptocracy - Part 2

Last month, Donald Trump received some bad news that, naturally, resulted in a Twitter-based tantrum. In a lawsuit filed by Barbara Underwood, the New York attorney general accused the president and all of his adult children of “persistently illegal conduct” related to the Donald J. Trump Foundation. Essentially charging that the charity was used as a personal slush fund, Underwood claimed the Trump Foundation “was little more than a checkbook for payments to not-for-profits from Mr. Trump or the Trump Organization.” [...] Trump claimed that the suit—which seeks to dissolve the foundation, force the president to pay millions in restitution, and temporarily bar him and his three oldest kids from serving in leadership positions at any New York nonprofits—was the work of “sleazy New York Democrats,” angrily insisting, “I won’t settle this case!” And now, a new twist is sure to get him even more riled up.

The New York Times reports that the New York State Department of Taxation and Finance has opened an inquiry into whether or not the Donald J. Trump Foundation violated state tax laws. [...] And while Trump has been involved in a whopping 3,500 legal actions (and counting!), this one has the potential to seriously blow up his spot:

A criminal inquiry could reveal additional information beyond the scope of the lawsuit, such as the president’s tax returns.

[...]

As the Times notes, it’s far too early to say whether the tax department’s findings would ultimately be referred to the attorney general or a district attorney. Plus, when the state attorney general’s office has taken tax-related criminal actions, it’s generally related to things like tax evasion. But the mere fact of the suit cracks the circle of people who have seen Trump’s tax returns—a circle that includes journalist Timothy L. O’Brien and, almost certainly, Robert Mueller—even wider.

  Vanity Fair

...but hey, do what you want...you will anyway.

Trump's October surprise

Barring an unexpected change, the Donald J. Trump Foundation will be defending itself in a New York courtroom shortly before this fall’s midterm elections. The proceedings seem unlikely to go well for the institution and its leadership; President Trump and his elder children, Ivanka, Donald, Jr., and Eric, are being sued by New York’s attorney general, Barbara Underwood, for using the charity to enrich and benefit the Trump family. On Tuesday, the judge in the case, Saliann Scarpulla, made a series of comments and rulings from the bench that hinted—well, all but screamed—that she believes the Trump family has done some very bad things.

[...]

At one point, she told a lawyer for the Trump children that they should just settle out of court and voluntarily agree to one of the sanctions: a demand by the Attorney General that they not serve on the boards of any nonprofits for one year. [...] Judge Scarpulla made clear that she felt the children should agree to the sanction now, and that, if they don’t, she will probably impose a similar restriction “with or without your agreement.”

[...]

As David Fahrenthold, of the Washington Post, exposed in a series of stories in 2016, the Foundation did virtually none of the charitable things it claimed to be doing.

[...]

The organization had been operating this way for years, but, according to Underwood, in 2016 the Trump Foundation became an arm of the Trump political campaign, cutting checks to Trump’s political allies in key states just before the election. If true, this would mean that the Trump Foundation evolved from a mere tax-avoidance scheme into an instrument for carrying out potential acts of campaign-finance fraud. The Attorney General made clear that her evidence could support criminal cases against the Trumps, but she has no jurisdiction to bring such charges, since tax and campaign fraud are federal matters. She referred the case to federal officials, though it seems unlikely that the I.R.S. or the Federal Election Commission would choose to prosecute a sitting President or his children.

  New Yorker

Is there a statute of limitations on it? Trump absolutely has to keep his office. Otherwise, there are too many issues now brought to light that he and his evil spawn can be prosecuted for after he gets turned out.

During Tuesday’s hearing, the Trump Foundation’s lawyer, Alan Futerfas, asked that the trial not commence in October, because it was so close to the midterms. Judge Scarpulla laughed in response, did not change the trial date, and hinted that she is likely to require the President to testify.

I hope she has good bodyguards.

A series of subpoenaed e-mails and a fascinating deposition offer a glimpse into the work of a mysterious figure, Allen Weisselberg, who has handled Donald Trump’s finances for as long as he’s had any. First hired by the President’s father, Fred Trump, Weisselberg has been the one steady presence in the Trump Organization for the entire period that Donald Trump has run the company. [...] While there are traditional titles, such as general counsel or senior vice-president of operations, there is no standard business hierarchy. Trump, before he became President, would tell people what they should do with no clear regard for consistency. [...] Trump, rather famously, rarely concerned himself with details and often forgot who had received which assignments and how different deals were structured.

[...]

[I]t is only Weisselberg who can recount the essence of the Trump Organization from the beginning of Donald Trump’s involvement: in the nineteen-seventies, when the company first discriminated against African-Americans; in the eighties, when Trump appears to have been in business with the New York mafia; in the nineties, when Trump’s casino was in violation of anti-money-laundering laws; and through the aughts, as Trump developed ties to many Russian and former-Soviet oligarchs and political figures.

[...]

The Trump Foundation case may have already revealed a potential rift between Weisselberg and the family. His deposition in the case is fascinating reading. Weisselberg makes it quite clear just how sloppy an operation the foundation was, with no meetings and no careful accounting. In a compelling exchange, Weisselberg describes how he flew to Iowa with a checkbook to give money to political allies of Trump, then a Presidential candidate, and he makes it clear that he did this because his boss told him to.

Release the tax returns

If the Trump Foundation's tax returns are this bad, imagine what his personal returns might reveal.

For years, President Trump personally signed the tax returns for his charitable foundation, scrawling his signature just below a stern warning from the IRS: Providing false information could lead to “penalties of perjury.”

But a lawsuit filed last week by New York Attorney General Barbara Underwood alleges that four of the tax returns Trump signed contained incorrect statements, confirming previous reports by The Washington Post.

In 2007, 2012, 2013 and 2014, the Donald J. Trump Foundation stated that none of its money had been used to benefit Trump or his businesses. But the New York attorney general found that, in each of those years, Trump had used his charity’s funds to help one of his businesses. In 2013, the attorney general alleged, Trump also failed to disclose an improper gift to a political group.

[...]

Underwood also accuses Trump of turning his charity into a tool of his 2016 presidential campaign, despite prohibitions on political activity by nonprofit entities. She also laid out her findings in a letter to the IRS, suggesting that federal authorities investigate further.

[...]

Through the 2000s and this decade, Trump repeatedly asserted on state and federal forms that his foundation was following the law.

Underwood’s complaint alleges otherwise.

[...]

If federal officials do not pursue a criminal case against Trump, legal experts said, the tax agency could face its own quandary. Why should other taxpayers be punished for violating the same rules that the president has now been accused of breaking?

[...]

" ‘If they don’t prosecute him, does everybody get a pass?’ ”

  WaPo

What do you think?

In 2007, for instance, Trump used $100,000 from his foundation to settle a legal dispute between his Mar-a-Lago Club and the town of Palm Beach, Fla., The Post previously reported. As part of the settlement, the for-profit beach club had pledged to make a donation to a veterans charity.

[...]

One of the questions on the 990 asks whether a charity has transferred “any income or assets to a disqualified person.” The term “disqualified person” refers to a category of person including an officer of a charity.

Trump was an officer: He was the charity’s president. So, the New York attorney general said, the charity had just transferred money in a way that saved Trump’s business $100,000.

[...]

But on that question, the Trump Foundation checked the box marked “no.”

Trump signed the return.

[...]

The same thing happened in 2012, when Trump used foundation assets — this time, $158,000 — to settle a legal dispute with a man who had sued one of his New York golf clubs over a negated hole-in-one prize.

The golf club agreed to make a donation. The charity made the gift instead, according to the lawsuit.

[...]

Then, in 2013, the Trump Foundation paid $5,000 to put an ad for Trump’s hotel chain in the program for a charity gala. And in 2014, Trump used $10,000 of the charity’s money to buy a portrait of himself, which his employees hung on a wall in a sports bar at a Trump golf resort in Florida.

[...]

In 2013, Trump gave $25,000 of the charity’s money to a political committee supporting Florida Attorney General Pam Bondi (R). By law, charities are not allowed to make political gifts.

[...]

On that year’s return, as always, the IRS asked whether the Trump Foundation had spent more than $100 for “political purposes.”

The box checked was “no.”

Also, the Trump Foundation omitted any mention of the gift to Bondi’s group when the form asked it to list all outgoing donations. Instead, Trump’s charity listed a different gift in its place: It told the IRS it had given $25,000 to a separate group, in Kansas, with a name similar to Bondi’s political group. But the Kansas group told The Post it never received a donation.

Jesus Christ. A litany of fraud.

“There’s the adage, ‘Ignorance is no excuse.’ That’s not true in tax law. In tax law, ignorance is an excuse for criminal violations,” said Guinevere Moore, a Chicago attorney specializing in tax cases.

The idea, Moore said, is that tax law is so complicated that prosecutors cannot presume people know they are breaking it.

[...]

The president’s strategy, so far, has been to plead ignorance. In filings with the IRS — detailed in the New York attorney general’s suit — Trump blamed the gift to Bondi on a clerical error and said another clerical error had resulted in a nonexistent gift being listed in its place.

Almost as good as Reagan's ubiquitous defense that he forgot.

After The Post’s reporting and the launch of the New York attorney general’s investigation, Trump repaid his foundation for its expenditures. His golf club took down the portrait. He also assessed himself $4,000 in penalty taxes in total on three of the transactions — the portrait, the gala program and the donation to Bondi.

But some tax-law experts said that in the unlikely event Trump winds up in a criminal court, it may be hard to convince a jury that a man of his business experience was so unsophisticated, for so long, about his own charity.

Easier than convincing a judge.

“You could try. But I think it’s probably a loser,” said Christopher Rizek, an attorney at Caplin & Drysdale who has defended clients in tax cases. “You’ve got a guy who’s bragged for years about how smart he is, and how much tax law he knows. And now all of a sudden he doesn’t know anything?”

[...]

Last week, Trump described the lawsuit as a political attack by New York Democrats, although the current New York attorney general, Underwood, is a nonpolitician who was appointed to her post. “I won’t settle this case!” Trump wrote on Twitter.

Countdown started. And I'd suggest that defiant statement indicates he did indeed know and thinks he's right.

Already, [Guinevere Moore, a Chicago attorney specializing in tax cases] said, she sees signs that taxpayers have been influenced by Trump’s approach toward his charity, as well as the way he bragged during the 2016 campaign that trying to avoid taxes “makes me smart.”

[...]

In filings to the IRS, Trump’s foundation offered a separate defense: Clerical errors caused the foundation to make payments it should not have, and Trump knew so little about charity rules that he broke the law without knowing it. “Neither the Foundation nor [Trump] knew,” the group wrote in an IRS filing, it was wrong to use foundation money to buy a portrait that hung on a wall in one of Trump’s golf resorts.

My ass. And even if he didn't - he did - the Trump Foundation has tax attorneys.

It's about time somebody filed a lawsuit on the Trump Foundation - we've known about its illegal use since before the 2016 election.