Trump Foundation Admits to Misusing Charity Funds, Agrees to Dissolve Under Court Supervision

The Donald J. Trump Foundation reached a settlement with the New York Attorney General agreeing to dissolve under court supervision and admitting to a pattern of illegal coordination with Trump’s 2016 presidential campaign. The stipulation filed in New York State Supreme Court required the Foundation to distribute all remaining assets (approximately $1.7 million) to legitimate charities approved by the Attorney General and the court. Critically, the agreement included admissions by Trump that his Foundation coordinated illegally with his campaign during the January 2016 Iowa veterans fundraiser and that campaign staff directed foundation activities in violation of federal law prohibiting 501(c)(3) organizations from participating in political campaigns.

Background

The dissolution agreement came six months after AG Barbara Underwood filed her comprehensive lawsuit documenting “persistent illegal conduct” by Trump and his Foundation. Rather than fight the allegations at trial - which would have required Trump and his children to testify under oath about foundation activities - Trump agreed to shut down the Foundation and make specific admissions about its misconduct.

The stipulation acknowledged that Trump campaign manager Corey Lewandowski “directed the timing and amounts” of foundation grants to veterans organizations during the January 2016 Iowa fundraiser, using the Foundation for campaign purposes. This represented an extraordinary admission: a sitting President acknowledging he illegally used a charitable organization as a campaign tool. The agreement also confirmed the Foundation had engaged in self-dealing transactions benefiting Trump personally and his businesses.

Under the settlement terms, the Foundation agreed to dissolve with remaining assets distributed to charities selected from a list approved by both Trump’s lawyers and the Attorney General: Army Emergency Relief, Children’s Aid Society, City Meals on Wheels, Give an Hour, Martha’s Table, United Negro College Fund, United Way of the National Capital Area, and the U.S. Holocaust Memorial Museum. The AG retained oversight authority to ensure proper distribution and continued to pursue claims for $2.8 million in restitution and other penalties against Trump individually and his children as Foundation board members.

Significance

The dissolution settlement marked a humiliating acknowledgment by Trump that his charitable foundation had operated as an illegal slush fund. AG Underwood stated, “Our petition detailed a shocking pattern of illegality involving the Trump Foundation - including unlawful coordination with the Trump presidential campaign, repeated and willful self-dealing, and much more.” The admissions in the stipulation provided court-documented proof that Trump had violated federal campaign finance law and breached his fiduciary duties as Foundation director.

Most significantly, the settlement did not resolve the claims against Trump personally. The AG continued pursuing $2.8 million in restitution and seeking to bar Trump from serving on boards of New York charities. The Foundation’s dissolution represented justice delayed but ultimately delivered: a fraudulent charity used to enrich its founder and illegally support his campaign was shut down, its assets finally directed to legitimate charitable purposes, and its misconduct permanently documented in court records.

The case established legal precedent that even a sitting President could not evade accountability for charity fraud. Trump’s required admissions about campaign coordination and self-dealing created facts that could not be disputed or dismissed as “fake news” - they were stipulated to in a legal settlement signed by Trump’s own attorneys and approved by a New York Supreme Court Justice.