By Philip T. Hackney
6/15/18
The New York State attorney general yesterday filed a lawsuit against the Donald J. Trump Foundation and its directors, accusing the charity and the Trump family of violating campaign finance laws, self-dealing and illegal coordination with the presidential campaign. It asks that Mr. Trump pay restitution and be prohibited from leading a nonprofit in New York for 10 years. As a former attorney for the chief counsel of the I.R.S. who specialized in nonprofit organizations, I believe Mr. Trump is also criminally liable for his actions. If I were still at the I.R.S., based on the lawsuit, I would make a criminal referral, on charges of tax evasion or false statements on a tax return, or both. The government could anchor a tax evasion and false statement case upon the multiple instances of self-dealing, as cataloged by the New York attorney general, between Mr. Trump and the foundation. The attorney general details occasions when Mr. Trump directed the foundation to acquire expensive things like paintings of himself for himself; paid $258,000 to settle two private lawsuits; and made political contributions by paying $25,000 to the re-election campaign of Pam Bondi, the Republican attorney general of Florida. The attorney general also amply documents that in 2016, Mr. Trump directed the foundation to operate as a political arm of his campaign.
The I.R.S. saves criminal consequences for notorious and continuous violations of the law. And the misuse of a charity for personal and political purposes over years — as alleged by the New York State attorney general — is in fact the type of case that the I.R.S. goes after with criminal sanctions. A criminal prosecution may be unlikely for both political reasons and issues of proof, but I still think the I.R.S. has a duty to open an investigation under the egregious set of facts the lawsuit laid out. If Mr. Trump has made false statements on these returns, is it possible he made false statements on other tax returns? He has never released his tax returns, so we have no way of knowing that. I do not believe these violations are within the norm of mistaken or accidental use. It represents a continued willingness to violate basic charitable norms. He may see it as a petty violation, but it is an enormous breach for the broader community. The I.R.S. owes it to the public to investigate such egregious acts for criminal violations.
