Donald Trump's awkward attempt to show how charitable he could be to U.S. armed forces veterans may be what has landed his foundation in trouble this week with the law.
New York Attorney General Eric Schneiderman has sent a cease and desist letter to the Donald J. Trump Foundation, citing the organization's failure to properly register to solicit contributions.
The letter, dated September 30 and first noted by NBC News' Katy Tur, requests the foundation immediately stop soliciting donations or engaging in any fundraising activities in New York. The state requires charitable organizations to register with its Charities Bureau and to provide annual financial reports and statements, which the Trump Foundation appears to have failed to do. The foundation has been given 15 days to properly register with the bureau for its 2016 activities and file all delinquent reports for previous years. Should it fail to do so, it will be deemed committing fraud.
It is worth noting that attorney general's letter focuses on the foundation's 2016 fundraising, not previous years. Leslie Lenkowsky, expert on philanthropy with Indiana University and former CEO of the Corporation for National and Community Service under the George W. Bush administration, said the attention to 2016 may be tied to Trump's fundraising efforts for veterans earlier this year.
Trump skipped a Republican primary debate in January over a dispute with Fox News' Megyn Kelly, opting to host an event to raise money for vets instead. The website set up for the fundraiser where individuals could make donations that would go to the Trump Foundation, donaldtrumpforvets.com, clearly indicates it has been raising money from the public.
"That is definitely public fundraising, it occurred this year, and that would have been enough for a cease and desist order," he said.
He added, however, that the circumstances surrounding the Trump Foundation aren't exactly unprecedented, though that doesn't mean they are excusable, either.
It is likely that many charities fail to file such forms, and beyond the vet fundraisers, Trump's lawyers may have a case that donations were coming only from business associates and a close, tight-knit group, like Warren Buffett giving to Bill Gates' foundation, for example. "The bottom line is record-keeping in the nonprofit world and filing these kinds of forms leaves a lot to be desired," he said, adding, "It's not unique for people to contribute to other people's foundations."
Schneiderman was first revealed to be investigating the Trump Foundation in September, telling CNN's Jake Tapper his office was looking into the operation "to make sure it's complying with the laws governing charities in New York." The Trump campaign hit back at the time, calling Schneiderman a "partisan hack" and the investigation "another left-wing hit job designed to distract from [Hillary Clinton's] disastrous week." Related: Is the Fed Playing Politics? Experts Say, No
The Trump campaign did not immediately return request for comment on the cease-and-desist letter, but campaign spokesperson Hope Hicks told Politico that "While we remain very concerned about the political motives behind AG Schneiderman's investigation, the Trump Foundation nevertheless intends to cooperate fully with the investigation."
Richard Marker, philanthropy adviser and founder of NYU's Academy for Grantmaking and Funder Education, emphasized in an email to TheStreet that the letter has not rendered the Trump Foundation invalid -- it simply means that if it wants to do fundraising, it needs to register, and if not, it needs to stay within the law.
"If the Trump Foundation wants to continue as a private foundation with money coming in from the Trump family and a restricted group of others, with no quid pro quo, etc., it can do so, but it cannot have the privileges of a private foundation and still openly solicit money," he said. "Now, whether the Trump Foundation follows the rules for a private foundation is also an open question. As many articles have pointed out, there are peculiar and questionable activities there as well. It is possible that there is supportive documentation that explains the very unusual grantmaking activity but none has yet surfaced and that which has has raised suspicions or worse. But the [New York attorney general] did not address that in the letter issued today."The Washington Post's David Fahrenthold reported just one day before the letter's date that the Trump Foundation has never obtained the required certifications in New York to solicit donations. Trump's son Eric's own foundation, also headquartered in New York, has filed the right paperwork.
Fahrenthold has dug deep into the ins and outs of the Trump Foundation, which the real estate magnate founded in 1987 to give away the proceeds from the Art of the Deal, uncovering a number of questionable activities in the process. He found that Trump appears to have used $258,000 from the charity to settle lawsuits involving his for-profit businesses, has often given away others' money while claiming credit for himself, and has likely given significantly less to charity than he has promised.