New revelation threatens to break Trump Foundation scandal wide open


The corporate media spent a significant part of August trying—unsuccessfully—to find a pay-for-play scandal around Hillary Clinton's tenure as Secretary of State and the Clinton Foundation. Now there is a genuine scandal emerging around the Trump Foundation.

As my colleague Matthew Chapman detailed, the breathless reporting on the Clinton Foundation yielded nothing but innuendo and speculation. When no evidence of wrongdoing was unearthed, it magically became a story about "optics," with pundits arguing something nefarious could have happened, even if nothing did.

By that standard, the newest revelations about the Trump Foundation from David Fahrenthold in the Washington Post should warrant round-the-clock coverage from now until Election Day—because there is much more to this story than the mere appearance, or possibility, of wrongdoing.

We have known for some time that Donald Trump was alleged to have used his charitable foundation to buy the compliance of two state attorney generals who were tasked with investigating fraud complaints against Trump University, and to buy retribution against another who refused to drop his investigation. He also used the foundation's money to purchase self-aggrandizing items such as a six-foot-tall portrait of himself.

Now, Fahrenthold reports that Trump used at least $258,000 from his foundation to settle lawsuits brought against his for-profit business, which may constitute a violation of laws regarding "self-dealing—which prohibit nonprofit leaders from using charity money to benefit themselves or their businesses."

Trump was previously ordered to pay a fine regarding the donation made to a PAC supporting the reelection of Florida Attorney General Pam Bondi, as it violated IRS rules about charities and political activity. If the Trump Foundation is found again to be in violation of charitable rules, he could be facing additional penalties.

The newest revelations—which include Trump making settlement payments from the Trump Foundation on behalf of his private enterprises who actually owed the payments—also raise questions about the unusual nature of how the Trump Foundation is funded. Most personal foundations are used to distribute charitable funds provided by the individual or family whose foundation bears their name. The Trump Foundation, however, disperses other people's money:

Trump founded his charity in 1987 and, for years, was its only donor. But in 2006, Trump gave away almost all of the money he had donated to the foundation, leaving it with just $4,238 at year’s end, according to tax records.

Then, he transformed the Trump Foundation into something rarely seen in the world of philanthropy: a name-branded foundation, whose namesake provides none of its money. Trump gave relatively small donations in 2007 and 2008, and afterward: nothing. The foundation’s tax records show no donations from Trump since 2009.

Its money has come from other donors, most notably pro-wrestling executives Vince and Linda McMahon, who gave a total of $5 million from 2007 to 2009, tax records show. Trump remains the foundation’s president, and he told the IRS in his latest public filings that he works half an hour per week on the charity.

Trump isn't even using his own money to fund the charitable organization he uses as a slush fund. He's using other people's money. Which is certainly unethical, and may be illegal.

Fahrenthold asked Jeffrey Tenenbaum, an attorney who advises charities, about the unusual structure of the Trump Foundation funding and its disbursements. Tenenbaum described the Trump Foundation's dealings as "brazen" and "really shocking," and said: "If he’s using other people’s money—run through his foundation—to satisfy his personal obligations, then that’s about as blatant an example of self-dealing [as] I’ve seen in a while."

Christian Reynolds, deputy communications director for the Clinton campaign, said in a statement:

Clearly the Trump Foundation is as much a charitable organization as Trump University is an institute of higher education. Trump’s version of charity is taking money from others to settle his own legal issues and buy at least two pictures of himself, which experts say is a clear violation of laws governing charitable organizations. Once again, Trump has proven himself a fraud who believes the rules don’t apply to him. It’s past time for him to release his tax returns to show whether his tax issues extend to his own personal finances.

To Reynolds' point, with every revelation about the dirty dealings of the Trump Foundation comes new urgency for Trump to disclose his tax returns.

What is abundantly clear—at minimum—from these newest findings is that Trump has used the charitable foundation which bears his name to avoid having to spend a dime of his own money to settle lawsuits generated by his own businesses. The question that Trump needs is answer is: Why?

Was it simple greed—or was it a decision he made to help perpetuate another fraud? Is it possible, as some have speculated, that Trump, the self-proclaimed "king of debt," is not remotely as wealthy as he asserts and didn't even have enough liquid cash to fund these larger settlements?

That's a question Trump needs to be asked—and he cannot be taken at his word when he reflexively treats the question as absurd. He needs to provide verifiable evidence, e.g. his tax returns.

It's one question among many that reporters (and debate moderators) need to bring to Trump, with an expectation of meaningful accountability and serious answers. His usual glib deflections cannot suffice.

The national media wanted a foundation pay-for-play scandal. They've got one. Let's see the appropriate level of scrutiny, based on the expectations they've set—and the fact that the Trump Foundation story is about significantly more than "optics."