The Disastrous Legal Implications of the Trump Foundation’s Activities

The New York attorney general’s complaint tells the tale of a charity that flouted in every conceivable way the legal prohibition on 501(c)(3) campaign activity.

The law governing the activity of charitable organizations can be complex, but on the question of whether 501(c)(3) charities can engage in political activity, it could not be more straightforward. They cannot. The IRS enforces an “absolute” prohibition on any intervention in political campaigns.

Whether such an intervention has occurred depends on the facts and circumstances, and sometimes there are close calls. None of those close calls are reflected in the New York attorney general’s complaint against the Donald J. Trump Foundation, which tells the tale of a relationship between a charity and a political campaign that flouts in every conceivable way the legal prohibition on 501(c)(3) campaign activity.

Enforcement action at the state level, including this action to dissolve the Foundation, is likely to be followed by repercussions from federal law enforcement.

The complaint draws on the public record, witness testimony and email traffic to draw an unambiguous picture of the charity’s illegal involvement in the Trump campaign. Trump decided to withdraw from a debate in Iowa and substitute in its place a fundraising event for veterans’ organizations. For this purpose, he put the Trump Foundation at the service of his campaign organization, which “planned, organized, financed and directed” the event held January 28, 2016. The complaint relates how:

At the televised fundraising event, the podium was decorated with a sign that borrowed the Trump campaign’s themes and slogans. The [event] website address was displayed with a blue placard with a red border and star pattern that was identical to the design of campaign signs and billboards, with Mr. Trump’s name in capital letters and the campaign’s trademark slogan, Make America Great Again.

It’s hard to imagine more of a slam-dunk violation.

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