New York AG Sues Trump Foundation for "Persistent Illegal Conduct" and Coordinating with Campaign

New York Attorney General Barbara Underwood filed a comprehensive lawsuit against the Donald J. Trump Foundation, Donald Trump, and his three eldest children (Donald Jr., Eric, and Ivanka) alleging “persistently illegal conduct” spanning more than a decade. The lawsuit documented a shocking pattern of Trump using the charitable foundation as a personal checkbook to advance business interests, settle legal disputes, and coordinate with his 2016 presidential campaign in violation of federal and state law. The AG sought $2.8 million in restitution, dissolution of the Foundation under court supervision, a 10-year ban on Trump serving as a director of any New York charity, and one-year bans for his children.

Background

The lawsuit represented the culmination of a two-year investigation triggered by Washington Post reporter David Fahrenthold’s Pulitzer Prize-winning investigative series exposing Trump Foundation fraud. The 41-page petition detailed systematic violations of laws governing charitable organizations, including:

Self-Dealing: Trump used Foundation funds to purchase portraits of himself ($258,000 and $20,000), pay legal settlements for his businesses including a $158,000 Mar-a-Lago fine and $25,000 Trump University-related payment, and buy items benefiting Trump personally including a signed Tim Tebow helmet displayed in his office.

Campaign Coordination: The Foundation illegally coordinated with Trump’s 2016 presidential campaign, most egregiously through the January 28, 2016 Iowa veterans fundraiser held days before the caucuses. Campaign manager Corey Lewandowski directed Foundation activities, dictating which organizations received grants and when, based entirely on political rather than charitable considerations. The Foundation became “little more than an empty shell” used to promote Trump’s candidacy.

Board Dereliction: Trump’s children served as Foundation board members but exercised no oversight, didn’t meet, and allowed Trump to unilaterally control all Foundation activities. The petition noted “the Foundation Board exists in name only” and directors failed to fulfill their fiduciary duties.

Persistent Pattern: From 2007-2016, the Foundation violated federal self-dealing prohibitions repeatedly, with Trump treating charitable assets as indistinguishable from his business and personal funds. The Foundation had operated without proper New York registration for 29 years, evading oversight that would have detected the fraud earlier.

Significance

The lawsuit marked an extraordinary moment: a sitting U.S. President sued for systematically defrauding a charitable organization he founded. AG Underwood stated, “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.” The suit alleged Trump had breached fiduciary duties, violated campaign finance law, and engaged in illegal self-dealing on at least 19 occasions.

The legal action sent shockwaves because it documented court-provable fraud by the President based on the Foundation’s own tax filings and records. Trump could not dismiss it as “fake news” - the evidence consisted of transactions the Foundation itself had reported to the IRS. The lawsuit also implicated Trump’s adult children, highlighting how the entire family participated in treating charitable organizations as extensions of the Trump business empire.

The case proceeded even with Trump in the White House, demonstrating that some accountability mechanisms could still function. It led directly to the Foundation’s dissolution, Trump’s agreement to admit wrongdoing, and the eventual $2 million judgment against him. Most significantly, the lawsuit created a detailed public record of Trump’s charity fraud, establishing a pattern of treating legal and ethical obligations as obstacles to be evaded rather than rules to be followed - a pattern that would characterize his entire presidency.