The Trump Foundation, Donald Trump's nonprofit organization, is under fire for allegedly operating as more of a political slush fund than a charity. The foundation is accused of violating rules prohibiting it from engaging in politics—prompting ethics watchdogs to call for public investigations.
On numerous occasions this year, Trump's campaign work and his foundation work have overlapped—putting himself at risk for penalties and his charity at risk of being shut down.
It's the latest example of Trump courting controversy: not merely through inflammatory rhetoric, but also through private dealings that raise serious legal questions—all of which indicate how he might govern if elected president of the United States.
Trump is listed as the president of the foundation in the charity's annual disclosures, and his children Donald Trump Jr., Eric Trump, and Ivanka Trump are all listed as directors. Foundations like theirs are exempt from paying taxes, and as such are barred from engaging in political causes.
"A 501(c)(3) [nonprofit organization], like the Trump Foundation, is strictly prohibited from engaging in political activity. On its tax forms, the Foundation told the IRS that it does not," said Jordan Libowitz, a spokesman for Citizens for Responsibility and Ethics in Washington (CREW).
But in key early primary states this year, Trump handed out Foundation checks to charities at campaign rallies. This also calls into question "whether the foundation provided the campaign with an illegal in-kind contribution by providing services for what was a campaign event. Under the campaign finance laws... providing anything of value to a campaign for free or at less than fair market value is a contribution to the campaign," said Larry Noble, the general counsel at the Campaign Legal Center.
And in 2013, the Trump Foundation donated $25,000 to a political organization supporting Florida Attorney General Pam Bondi—an action the foundation is prohibited from taking, and which it failed to report on its disclosures.
The Trump campaign blamed this failure on clerical mistakes, but legal experts are sounding the alarm because at the time Bondi was reviewing complaints surrounding the businessman's controversial Trump University project.
Both the contribution to Bondi and the overlap between the Trump campaign and his charity should be publicly examined, government watchdogs said.
"This should be investigated. There are troubling legal issues posed in both circumstances," said Richard Skinner, a money-in-politics policy analyst at the Sunlight Foundation. "There is definitely [use of] a charitable foundation in an inappropriate way."
Noble, the general counsel at the Campaign Legal Center, added that the Federal Election Commission and the IRS should both open an investigation into whether any laws were broken.
Notably, Donald Trump has legal expertise at his disposal that would allow him to know better than to put himself at risk for these violations. Donald F. McGahn, a Trump lawyer who works for the firm Jones Day, is a former FEC chairman. McGahn did not respond to The Daily Beast's requests for comment.
Trump decided to skip the January Fox News GOP debate in protest of Megyn Kelly, whose question at a debate in August prompted an onslaught of criticism from Trump and his supporters. He held a charity event for veterans instead, during which he claimed to have raised $6 million. (After much prodding from reporters, and months of delay, he accounted for $5.6 million of the original figure.)
This money was disbursed gradually, and the involvement of the foundation was clear. At multiple campaign rallies this year, the businessman handed out Trump Foundation checks to veterans' charities.
"It would be one thing to raise money for the charity and send it to them. But if receiving the contribution was dependent on attending the campaign event, it looks like the purpose of the whole thing was to support the campaign," Noble said. "It raises serious questions when you make a charity part of your campaign event. It could create legal problems for both the campaign and the charity."
On Jan. 30, with Liberty University President Jerry Falwell Jr. by his side at a campaign rally in Davenport, Iowa, Trump presented a $100,000 Trump Foundation check to Puppy Jake, a charity which supports veterans by providing service dogs.
Puppy Jake's executive director, Becky Beach, told The Daily Beast that the Trump campaign had been in touch with her about the Trump Foundation's contribution.
"They called me on the phone," Beach said, but she could not remember who on the campaign her organization had coordinated with to organize their rally appearance. It was likely an "advance guy" from the Trump campaign, she said.
The next day, the day before the Iowa caucuses, the founder of Support Siouxland Soldiers, another vets charity, appeared on stage with Trump at a Sioux City campaign rally to accept a $100,000 Trump Foundation check.
Support Siouxland Soldiers executive director Sarah Petersen told The Daily Beast that she had been in touch with a Trump staffer named Hope, and provided the phone number they used in order to discuss the donation. The phone number matches up with the campaign's listed number for Hope Hicks, the Trump campaign's spokeswoman.
In New Hampshire, those in Trump's orbit tried to organize a similar rally. They reached out to Keith Howard, the executive director of a local vets charity called Liberty House.
Earlier this year, Howard told The Daily Beast he received a call from a figure affiliated with the Trump campaign, who said that Trump would like to present them with a six-figure check at a Londonderry, New Hampshire, rally right before the Granite State's primary.
Howard, concerned that being presented with money by a political candidate at a political rally might jeopardize his charity's nonprofit status, called an expert in the state's attorney general's office, who confirmed his suspicions.
Howard declined to attend the rally, and Trump instead presented the check to a New Hampshire state representative who advised him on veterans issues. The state representative ultimately passed those funds along to Howard's group, without the fanfare.
More recently, following pressure from the press to account for the $6 million he supposedly raised, the Trump campaign announced donations to 20 additional charities. Nine of them, all of which received checks from the Trump Foundation, responded to The Daily Beast's inquiries. Representatives for each organization said they were neither in contact with the Trump campaign nor were asked to appear at campaign rallies.
The Daily Beast's attempts to contact the Trump Foundation suggest that the charity exists largely on paper. A phone call to the number listed on the Trump Foundation's annual disclosures led to a staffer for the Trump Organization, the umbrella group for Trump's business dealings. Multiple phone calls to the organization failed to yield contact with a foundation staffer.
At one point, a Daily Beast reporter was told that Hicks, Trump's campaign spokesperson, was responsible for media inquiries related to the foundation. During a second phone call, the reporter was told to contact Justin McConney, who supposedly handles the foundation's account and donations. Calls and emails to McConney—whose official title is director of new media for the Trump Organization—went unreturned.
McConney also works on the Trump campaign—a January report questioned whether he was being paid fair market value for his work, as he split time between the Trump Organization and the Trump campaign.
The Trump campaign and the Trump Organization did not respond to a request for comment.
The Trump Foundation is already under a microscope.
CREW has filed a complaint against the Trump Foundation over the contribution to Bondi in March, claiming that the charity made an illegal political donation and failed to disclose it to the IRS; and Florida State Sen. Dwight Bullard has written to U.S. Attorney General Loretta Lynch, asking for the Justice Department to investigate the donation.
"Trump apparently does not understand either [the Federal Election Campaign Act] or the tax code and seems to have encouraged both organizations to cross the line," said Craig Holman, a government affairs lobbyist at the consumer rights group Public Citizen.
When the foundation's activity crosses over into politics, Holman said, it poses a potential violation of the FECA, which prohibits campaign coordination with outside groups that are not subject to political contribution limits and disclosure requirements.
Philip Hackney, a law professor who spent five years working for the IRS's chief counsel, said the apparent coordination between the foundation and the campaign was "unwise" because it could put his foundation—and its tax-exempt status—in jeopardy.
The Bondi donation is probably sufficient evidence for the IRS to open an audit into the Trump Foundation, Hackney told The Daily Beast, adding that Trump himself could be subjected to extra taxes.
"I don't know that they'll even audit him," Hackney said. "I think it's dangerous, particularly politically for them right now, to audit in this realm. That bothers me, given what I see in this particular case, but I don't know that the IRS has another choice in some ways."