The Washington PostDemocracy Dies in Darkness

Liberal watchdog group to ask IRS to investigate Trump Foundation’s political gift

September 6, 2016 at 11:52 p.m. EDT
The Washington Post's David Fahrenthold breaks down the controversy over Donald Trump's $25,000 donation to a group linked to Florida Attorney General Pam Bondi (Video: Sarah Parnass/The Washington Post)

A liberal watchdog group plans to file an IRS complaint against Donald Trump's charitable foundation on Wednesday, asking the tax agency to investigate a $25,000 campaign donation that the charity made to help Florida Attorney General Pam Bondi.

That donation violated IRS rules that bar nonprofits from making political gifts. Last week, The Washington Post reported that Trump had paid a $2,500 penalty tax after that improper campaign donation came to light.

But this complaint, to be filed Wednesday by Citizens for Responsibility and Ethics in Washington, charges that Trump's gift also violated a separate IRS rule at the same time.

That rule prohibits "self-dealing:" schemes in which nonprofit leaders use their charities' money to benefit themselves.

In this case, the watchdog group alleges that Trump — as president of the Donald J. Trump Foundation — gave this gift in 2013 in order to influence Bondi, whose office was considering whether to pursue an investigation against Trump University. Bondi's office ultimately decided not to pursue that investigation. Three separate lawsuits, including one by the New York Attorney General, allege that Trump University defrauded its students with false promises.

In its letter to the IRS, the liberal watchdog group said it appears "the [Trump Foundation's] contribution was intended to provide a private benefit to Mr. Trump and his business interests ... a form of self-dealing prohibited by the tax code and IRS regulations."

Both Trump and Bondi have rejected the idea that this gift was intended to influence Bondi's decision-making about Trump University.

"My job was to sell, sell sell," says former Trump University instructor James Harris, who explains the inner workings of the company. (Video: Dalton Bennett/The Washington Post)

The check arrived shortly after an Orlando Sentinel story saying that Bondi's office was reviewing the university. A spokesman for Bondi said this week that the decision not to pursue the case was made by lower-level officials, and not by Bondi herself. But the spokesman did not respond to a request from The Post to provide a detailed timeline of what Bondi knew of her office's work on Trump University — and when.

Trump's staffers have said that the gift to Bondi's political group should  not have been made by the Trump Foundation. Instead, they said, it should have come from Trump's own pocket. They blamed a clerical error, by a Trump employee empowered to cut checks from both the charity and Trump's personal accounts.

Trump's staffers have also said that Trump's foundation then compounded its first error with another. In that year's tax filings, the Trump Foundation did not mention the improper political gift at all. Instead, it include a false listing, showing that the foundation had instead given $25,000 gift to a Kansas nonprofit with a name similar to Bondi's political group.

That gift did not exist. Trump had given nothing to the Kansas group.

CREW, the watchdog group filing Wednesday's complaint, suggested in its letter that the IRS might levy more penalty taxes on the Trump Foundation, or even revoke its tax-exempt status. It has previously filed other complaints with the IRS, which also asked for investigations of the Trump Foundation.

Tax experts say that — even if the IRS did choose to investigate — it could be months or even years before any punishment is levied.