Trump charity
admits in filing
to ‘self-dealing'
Violations of IRS ban carry penalties
President-elect Donald Trump's charitable foundation has admitted to the IRS that it violated a legal prohibition against “self-dealing,” which bars nonprofit leaders from using their charity's money to help themselves, their businesses or their families.
The admission was contained in the Donald J. Trump Foundation's IRS tax filings for 2015, which were recently posted online at the nonprofit-tracking site GuideStar. A GuideStar spokesman said the forms were uploaded by the Trump Foundation's law firm, Morgan, Lewis & Bockius.
The Washington Post could not confirm if the same forms had been sent to the IRS.
In one section of the form, the IRS asked if the Trump Foundation had transferred “income or assets to a disqualified person.” A disqualified person, in this context, might be Trump — the foundation's president — or a member of his family or a Trump-owned business.
The foundation checked “yes.”
Another line on the form asked if the Trump Foundation had engaged in any acts of self-dealing in prior years. The Trump Foundation checked “yes” again.
Such violations can carry penalties including excise taxes, and the charity leaders can be required to repay money that the charity spent on their behalf.
During the presidential campaign, The Post reported on several instances in which Trump appeared to use the Trump Foundation's money to buy items for himself or to help one of his for-profit businesses.
It was unclear if these admissions were connected to the instances reported in The Post.
The Trump Foundation tax forms did not, for instance, describe any specific acts of self-dealing. They also did not say whether Trump had paid any penalties already. That kind of detail would be submitted on a separate IRS form, which was not included in the information posted online by GuideStar.
Trump's team did not respond to a request for comment Tuesday.
The New York attorney general's office is investigating Trump's charity, following up on reports in The Post that described apparent instances of self-dealing going back to 2007. A spokesman for Attorney General Eric Schneiderman declined to comment, other than to say “our investigation is ongoing.”
The IRS has not said if it is investigating the president-elect's charity.
The Trump Foundation has existed since 1987. This appeared to be the first time that it had admitted committing such a violation.
Philip Hackney, who formerly worked in the IRS chief counsel's office and now teaches at Louisiana State University, said he wanted to know why the Trump Foundation was now admitting to self-dealing in prior years — when, in all prior years, it had told the IRS it had done nothing of the kind.
“What transactions led to the self-dealing that they're admitting to? Why weren't they able to recognize them in prior years?” Hackney said.
He said that, since the prior years' returns were signed by Trump, that opened the president-elect to questions about what he had missed and how.
During the presidential campaign, The Post revealed several instances — worth about $300,000 — where Trump seemed to have used the Trump Foundation to help himself. From 2009 until this year, the charity was funded exclusively with other people's money, an arrangement that experts say is almost unheard of for a family foundation.
In two cases, the Trump Foundation appeared to pay legal settlements to end lawsuits that involved his for-profit businesses.
The tax filing also shows that — for the first time in six years — the foundation received a donation from an entity controlled by Trump himself.
It lists a donation of $566,370 from the Trump Corporation, an entity 100 percent owned by Trump himself. It also lists a $50,000 gift from Trump Productions, a Trump-owned business that produced “The Apprentice.”
Previously, the last donation to the foundation from Trump or one of his businesses had come in 2008.
In addition, the Trump Foundation reported a $150,000 gift from the foundation of Viktor Pinchuk, a Ukrainian steel magnate. That was the first such gift from him.
Pinchuk, who supports closer ties between Ukraine and Western nations, had also pledged large donations to the foundation of Trump's presidential opponent, Democratic nominee Hillary Clinton.
Those donations, pledged to the Clinton Foundation while Clinton was secretary of state, raised questions about whether she had conflicts of interest when she met with her family foundation's donors.