Scrutiny of Trump Foundation deepens

Scrutiny of Trump Foundation deepens
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Donald TrumpDonald TrumpFleischer on Scaramucci: No WH aide should be able to call for prosecution of anybody Trump says he wants a ‘general’ to replace Priebus: report Trump job approval swings lower MORE's campaign is grappling with new allegations that the GOP nominee used his charitable foundation to pay personal expenses. 

On Tuesday, The Washington Post published tax and legal documents alleging Trump’s foundation spent $258,000 to settle lawsuits that involved Trump’s for-profit businesses.

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The latest allegation comes after Trump's foundation was found to have made an improper $25,000 donation to a group supporting Florida's Attorney General Pam Bondi (R). That donation came at the same time her office was considering whether to investigate a fraud lawsuit against Trump University. 

The Republican also reportedly used foundation money to buy two portraits of himself.

The scrutiny of Trump’s foundation is deepening at a time when Hillary ClintonHillary Rodham ClintonTrump job approval swings lower Peggy Noonan: ‘Weak and sniveling’ Trump is not as strong as his wife Sessions says he doesn't regret recusing himself from Russia probe MORE is facing allegations from Republicans that the Clinton Foundation was running a corrupt “pay-to-play” operation while she was secretary of State. The issue could come up during Monday’s first presidential debate.

Republican strategist Doug Heye said the questions about Trump’s charitable giving could muddy Trump's attempts to paint Clinton as corrupt, though he doubts the foundation allegations will change many voters’ minds about Trump.

“The question is, who would these revelations matter to?” he said. 

Patrick Murray, director of the Monmouth University poll, said he’s not yet seeing evidence that stories about Trump’s alleged “self-dealing” or hiding of his tax returns are resonating with voters. 

The most powerful attacks on Trump focus on his temperament, Murray said.

“I think it’s one of the reasons why the Clinton campaign backed off on some of the earlier attack ads that were surrounding his business dealings,” he added, “and have since focused more on temperament questions.”

The pollster didn’t rule out, however, the possibility that these foundation allegations could eventually “move the needle” against Trump, especially if the negative stories keep accumulating.

On the legal question, experts agreed that use of the $258,000 in charity fundsby Trump appears improper. 

“Without question these transactions are self dealing,” said Marcus Owens, a lawyer who represents charities and previously ran the IRS division that oversees tax-exempt organizations. 

Larry Noble, general counsel of the nonpartisan Campaign Legal Center, said is no legal ambiguity unless the Trump campaign can disprove the facts in the Post report.

The campaign did not return a request for comment from The Hill.  

In the most expensive example of Trump's alleged “self-dealing,” the Post reported that one of the GOP nominee's golf courses agreed to settle a lawsuit by donating to a charity chosen by the plaintiff. Instead of Trump settling out of his own pocket, he used his charitable foundation to donate the $158,000 owed, according to tax records reported by the Post.

While the statute of limitations had already expired on some of the new allegations, Owens said the “pattern of facts” is so egregious that he believes there are grounds for the IRS to force the Trump Foundation to forfeit 100 percent of its assets to the U.S. Treasury. That rare action involves a section of the Internal Revenue Code that penalizes foundations engaging in willful, repeated or flagrant violations of tax law.

“The Trump Foundation is flirting with what’s called a termination tax,” Owens said. “That is the end of the foundation’s existence as an organization.” 

The termination tax is rarely used because "most foundations have the good sense" not to repeatedly use charitable donations to benefit the people running the foundation, he said.

The IRS typically takes many months to act on such cases, but Trump could face more immediate problems with New York’s Attorney General Eric Schneiderman, who has opened an investigation into the Trump Foundation. The attorney general’s office declined to comment.

Owens believes Schneiderman already has all the evidence he needs to mount a convincing legal case that Trump and his children must hand over the foundation to receivers “in order to preserve the Foundation’s assets for true charitable uses.” 

“He could move with extraordinary speed,” Owens said of Schneiderman, a Democrat who Trump views as a political nemesis. Schneiderman has pursued an aggressive investigation against Trump University.

“The facts set out here are a problem at both the state and federal level,” Owens added. “This is a pattern that has gone on over a period of years. These were not inadvertent oversights. There are just too many of them.”