Trump Foundation Pays Damages and Dissolves

In any other administration, this would be huge news and perhaps rise to the level of impeachment talk. In early November, the state of New York filed a settlement with the Trump Foundation which required the organization to close and give nearly $4-million to charities. That sum includes a $2-million fine and the remaining $1.8 million in Foundation assets.

Read the Trump Foundation Settlement Here

I have been reporting on churches, Christian nonprofits and other charities for several years and have seen some corrupt dealings. This one ranks high on the corruption scale. Trump used this foundation as a kind of slush fund to pay off debts, support his campaign, and in some cases make other political donations. Even though foundations are supposed to remain separated from the for profit business side of an enterprise, Trump regularly mixed the two worlds to advance his interests.

The New York Attorney General publicly announced an investigation into the Foundation on September 13, 2016. If you read through the settlement, you will notice that the efforts to repay funds taken from the Foundation and used for various non-charitable purposes came after that date in late 2016 or in 2017. After the NY AG started an investigation, the Foundation then started to pay back taxes on donations and funds used for non-charitable causes.

One of the key issues in the case was a fund raising event for veterans that occurred in Iowa during the 2016 campaign as a joint effort of the Trump Foundation and the Trump campaign. Trump skipped a debate there and hosted a rally which led to funds being raised and given to veterans’ groups in campaign related events, thus mixing campaign work with the Foundation. In making her ruling about damages, Judge Saliann Scarpulla referred to this event along with Trump’s general negligence which is described in more detail below.  About Trump’s management of the Foundation, Judge Scarpulla wrote:

As a director of the Foundation, Mr. Trump owed fiduciary duties to the Foundation, pursuant to N-PCL § 717; he was a trustee of the Foundation’s charitable assets and was thereby responsible for the proper administration of these assets, pursuant to EPTL § 8-1.4. A review of the record, including the factual admissions in the Final Stipulation, establishes that Mr. Trump breached his fiduciary duty to the Foundation and that waste occurred to the Foundation.

Mr. Trump’s fiduciary duty breaches included allowing his campaign to orchestrate the Fundraiser, allowing his campaign, instead of the Foundation, to direct distribution of the Funds, and using the Fundraiser and distribution of the Funds to further Mr. Trump’s political campaign. The Attorney General has argued that I should award damages for waste of the entire $2,823,000 that was donated directly to the Foundation at the Fundraiser. In opposition, Mr. Trump notes that the Foundation ultimately disbursed all of the Funds to charitable organizations and that he has sought to resolve consensually this proceeding.

As stated above, I find that the $2,823,000 raised at the Fundraiser was used for Mr. Trump’s political campaign and disbursed by Mr. Trump’s campaign staff, rather than by the Foundation, in violation of N-PCL §§ 717 and 720 and EPTL §§ 8-1.4 and 8-1.8. However, taking into consideration that the Funds did ultimately reach their intended destinations, i.e., charitable organizations supporting veterans, I award damages on the breach of fiduciary duty/waste claim against Mr. Trump in the amount of $2,000,000, without interest, rather than the entire $2,823,000 sought by the Attorney General.

The judge found violations of law but didn’t fine him as much as the AG wanted her to. The judge did issue the fine in response to the factual claim that Trump breached his fiduciary duty to the Foundation. Not only did he do so in violation of laws as cited by Judge Scarpulla in the section above, there were other instances cited. I outline those below.

The settlement outlines other offenses that both sides agreed occurred.

In one 2007 case, Trump used Foundation money to pay a lawsuit settlement to a charity. It wasn’t until after the NY AG started the investigation that Trump repaid the Foundation with interest on March 10, 2017. A Trump supporter might claim that Trump always intended to repay the Foundation. My answer is that it was illegal at the start (which Trump denied) and secondly, I am skeptical that Trump would ever have paid it back without the pressure of the AG investigation.

In 2012, the Trump Foundation gave $157,000 to the Martin Greenberg Foundation to satisfy a debt owed by one of Trump’s golf courses. Again, this is illegal. Trump didn’t reimburse the Foundation until 2017 after the AG investigation was publicly announced.

In 2013, Trump caused $25,000 to be donated from the Foundation to a PAC supporting Pam Bondi’s campaign for attorney general. While contribution itself may have been legal, the Foundation did not pay the required tax on the contribution until 2016.

Also in 2013, the Foundation contributed funds to the DC Preservation League which entitled it to an ad in the organization’s fund raising program. However, instead of advertising the Foundation, Trump placed an ad for his DC Trump International Hotel, thereby mixing the for profit and nonprofit. Again, it was only after the investigation started that any remedy was undertaken.

Perhaps the most emblematic incident is the purchase of a portrait of Trump by Trump with Foundation funds. In 2014, at a children’s charity event, Trump bought his own portrait for $10,000 with Foundation funds and after storing it for awhile, displayed in one of his hotels. In November 2016 — after the investigation started — the painting was removed from the hotel and sent to the Foundation.

Finally, in 2015, Trump’s real estate management company Silver Springs pledged $32,000 to a charitable organization in New York. The charitable group’s work stood to benefit one of his residences. Rather than pay that pledge himself, he had the Foundation cover it.

The settlement also requires Trump to pay the $11,525 he used from Foundation money to pay for sports memorabilia at a Susan G. Komen benefit auction.

This investigation was triggered by reporting from various groups, including Scripps going back to 2016. Given the Scripps report, Trump was fortunate to get by with just this settlement.

Read the settlement again and then read Trump’s statement about the settlement:

Trump v. Facts

Trump’s statement bears little resemblance to the truth. He says “every penny of the $19 million raised by the Trump Foundation went to hundreds of great charitable causes.”

This isn’t true. Pam Bondi’s run for AG isn’t a charitable cause. Using Foundation funds to get an ad for your for-profit business isn’t a charitable cause. Moreover, buying sports collectibles with Foundation money doesn’t seem like an honest description of the activity. Yes, a charity got some money, but they had to give you something in exchange. Giving Foundation funds to a nonprofit that benefits your real estate value doesn’t seem like a particularly generous use of those funds. That’s the definition of self-dealing.

Trump claimed in his Twitter statement that all the AG found was “incredibly effective philanthropy and some small technical violations, such as not keeping board minutes.”

This isn’t true. The settlement makes clear that the Foundation board of directors didn’t meet at all from 1999 through November, 2018. The Board of Directors had no oversight of any kind through that period. The settlement describes just the opposite of “incredibly effective philanthropy.” There were numerous violations and instances of self-dealing which resulted in the various breaches of fiduciary responsibility noted in the settlement.

It is true that the dissolution is presented in the settlement as a mutual agreement, but there is an important section which has not been discussed much in the news accounts about this case. The judge specifies what Trump and any future charity must do if Trump is ever on the board of a charity. Trump cannot serve on a board where a majority of members are family or have business relationships with him. The charitable organization must not engage in related party transactions with any entity owned or controlled by him. If Trump forms a new charitable organizations, he must ensure that annual reports are filed with the state for a period of 5 years. The details of what must be in the reports are spelled out. In short, Trump must comply with the law.

Furthermore, recall Judge Scarpulla’s assessment of Trump’s actions: “A review of the record, including the factual admissions in the Final
Stipulation, establishes that Mr. Trump breached his fiduciary duty to the Foundation and that waste occurred to the Foundation.”

Let me repeat, the judge and AG did not find “incredibly effective philanthropy.”

Finally, Trump’s spin about the $2 million donation to 8 charities is laughable. The court ordered him to pay that sum in damages (“I award damages on the breach of fiduciary duty/waste claim against Mr. Trump in the amount of $2,000,000”.

So even after being caught in numerous violations of law and stipulating to them in public documents, Trump cannot bring himself to tell the truth about it. As noted, in a normal time, this might be article of impeachment number three.

 

Mercury One Exaggerates Relationship with the Lincoln Library and Museum

Last week, I wrote about Mercury One’s place in a scandal involving the Abraham Lincoln Presidential Library and Museum in Illinois. In 2018, Glenn Beck and David Barton borrowed a copy of the Gettysburg Address from the Lincoln Museum for a Mercury One exhibit in Dallas. A anonymous complaint triggered an investigation by the IL Inspector General into allegations that the Gettysburg Address was improperly loaned out to Beck and Barton. The IG report confirmed those allegations. The report asserted that the former museum executive director should not have loaned the document given the slipshod logistical arrangements for the transfer and exhibit and the poor reputation of David Barton as a historian. The executive director was fired and the chief operating officer was allowed to resign.

After writing about the IG report, I noticed that Mercury One still lists the Lincoln Museum as a partner on a website devoted to one of the organization’s exhibits — 12 Score and 3 Years Ago. On that page, Mercury One claims: “For the first time, the exhibit is partnering with five world-class organizations including: The African American Museum of Dallas, The Abraham Lincoln Presidential Library and Museum, Frontiers of Flight Museum, and Dallas Historical Society.”

I asked Dave Kelm, general counsel for the museum, if the Lincoln museum had any kind of partnership. After some research, he responded as follows:

So there was no partnership. Mercury One bought some pictures of the 13th Amendment and the Emancipation Proclamation. Mercury One tried to borrow the Emancipation Proclamation from the Lincoln Museum and the museum staff turned them down because of David Barton’s reputation and the faulty processes used in the transfer of the Gettysburg address.

I think this is called spin or reputation management. Certainly the truth is different than the hype. In fact, the Lincoln museum declined to lend Mercury One an article because “under no circumstances” should the museum “be associated with him [David Barton].” Here is the expanded quote from Dr. Samuel Wheeler, Illinois state historian and Carla Smith, museum registrar:

Dr. Wheeler said that based on what he later learned about Mr. Barton, he believed that “under no circumstances” should the ALPLM be associated with him. Ms. Smith said that if she had known what she later learned about Mr. Barton’s reputation, the 2018 loan would have been an “instant no.”

Petition to Remove the White House Press Credentials of Rick Wiles

You might recall the story of antisemitic right wing talking head Rick Wiles who blamed impeachment on a “Jew coup.” His video accusing Jews of plotting the murder of millions of Christians was removed from YouTube but has drawn no condemnation from Republicans who have appeared on his programs in the past. Apparently he has easy access to the White House via press credentials.

Yesterday, I become aware of a White House petition launched by attorney Marc Stanley which asks the Trump administration to restrict Wiles’ access to the White House. I signed it and I ask that you click the link and sign it too.  The petition reads:

On a November 22, 2019 broadcast recording, TruNews founder and host Rick Wiles opined that the House impeachment inquiry is part of a “Jew Coup” to overthrow President Trump and install a Jewish “Cabal” to control the country.

On December 4, 2019, Wiles doubled down, saying, “Jewish socialist Jerry Nadler’s Judiciary Committee escalated the Jew Coup.”

Rick Wiles has a long history of spreading anti-Semitic conspiracy theories, as well as radical Islamophobic and anti-LGBTQ propaganda.

In the past, Rick Wiles has applied for and been granted White House press credentials. His vile racism, bigotry, and appeals to hate and violence have no place in the White House and he should be banned for life.

Add your name to this petition and take a stand against Wiles, anti-Semitism and bigotry.

In any normal administration, this fact and the lack of response to it would have consumed at least one news cycle. However, in the Trump administration, it is just another hour of another day. However, this should not go without response, especially at a time when Trump is cynically courting Jewish voters.  I hope you will sign on.

Worship Leaders Praise Trump Administration’s Work for Marginalized While the Administration Marginalizes More People

On the White House Twitter account, Gateway Church worship leaders Cody Carnes and Kari Jobe gush about Donald Trump’s work for the “marginalized” and all the great things the administration is doing. Watch:

In this taxpayer funded video, the two Christian singers tell viewers that the administration is helping marginalized people. She said:

But the thing that moved me the most is just how everyone is so for making sure we’re changing people’s lives and not leaving those that are marginalized and those that have been trafficked and those that are…A lot of times for those of us who don’t work in the White House, it can look really big and something that we can’t really end. But they are working to end these things and change these things. And I’ve just been in tears all day. It’s been incredible. I’m just so thankful to be a part of this today and to see what God is doing in our White House.

Carnes followed by saying the “faith community” was involved:

So many good things happening for the faith community and for the world. And things that we all believe in in the faith community that can change the world are being supported and are happening in this house.

In the comments under Carnes’ and Jobe’s tweet, Jobe’s college roommate left a message that confronted this rosy assessment with bright light. Jory Micah wrote:

In October, no refugees were settled in the U.S. for the first time since the 1980s. There is an ongoing humanitarian crisis happening at our Southern border. Recently, a migrant teen boy died of the flu while in custody of U.S. Border Patrol. I could go on to discuss the Kurds and the faith community there that Trump left to be slaughtered by the Turks.

There is reason to believe the Administration’s rhetoric on human trafficking is faulty.  Many of their policies toward migrants and refugees actually make trafficking worse. But because Christian leaders have stars in their eyes, they won’t challenge what they are being told or do any independent research. Because Trump and Pompeo say it, it must be true.

Christians are supposed to be monotheists. However, in the age of Trump, there are two gods in many of their lives, and as I have written before, Trump shall have the preeminence.

UPDATE:  Bethel Seminary professor Andy Rowell has a list of the worship leaders who attended the Dec. 6 event at the White House.

Glenn Beck’s and David Barton’s Mercury One at the Heart of Lincoln Museum History Scandal

In June 2018, Glenn Beck borrowed the Gettysburg Address from the Abraham Lincoln Presidential Library and Museum. One of only five handwritten copies of the address from the time period, the document is valued at $20-million. In hindsight, the transaction, for which Beck paid $50,000, has become a political scandal in Illinois and triggered the firing of the executive director of the Lincoln museum. The Chief Operating Officer of the Lincoln museum was allowed to resign and eventually ended up working for Beck’s charity Mercury One. The IG report also contains an unflattering assessment of David Barton as a historian.

The incident, which Beck celebrated live in 2018, was investigated by the Illinois Office of Executive Inspector General due to a tip from an anonymous consumer. The report found that allegations of wrongdoing were sound and based in fact. The report states that the museum should never have let Mercury One have the Gettysburg Address given the slipshod arrangements and David Barton’s reputation as a historian.

Read the Inspector General’s Report

In the quotes below, the players are Alan Lowe, former executive director of the Lincoln museum, Carla Smith, registrar of the Lincoln museum, Samuel Wheeler, historian with the state of Illinois, Nadine O’Leary, museum chief of staff, and Michael Little, Chief Operating Officer of the Lincoln museum (and now Mercury One). Other than Beck and David Barton, Courtney Mayden is also mentioned. She is an employee of Mercury One with some unspecified training in handling historical documents.

The Hasty Gettysburg Address Loan

On June 8, Beck’s charity Mercury One and the Executive Director of the Lincoln museum Alan Lowe initiated negotiations to bring the Gettysburg Address to Beck’s Right and Responsibilities exhibit in Dallas. After only 8 days, the document was shipped to Texas. Beck displayed the document to just over 2300 people who attended the exhibit.

The complaint alleged that Lowe mismanaged the loan process. According to the IG report, that allegation was accurate. From the IG report:

Mr. Lowe made the decision to loan the Gettysburg Address and other artifacts to Mercury One in violation of the HPA Board’s 2013 Resolution, contrary to HPA loan policies, and without following standard museum practices, much less providing the heightened level of care that would seem prudent for the rare and extremely valuable artifact Mr. Lowe described as a linchpin of the ALPLM’s collection. The allegation that Mr. Lowe mismanaged the ALPLM by loaning the Gettysburg Address and other artifacts to Mercury One, without following the HPA Board’s 2013 Resolution, HPA policies, or standard museum loan practices, is FOUNDED.

Earlier this year, Lowe was fired from his position by Governor J.B. Pritzker, although he did not say why. Two other players in the drama continue to have a connection to Mercury One.

The first one I will mention is Michael Little. The IG report documents over 50 contacts with Mercury One he had prior to being permitted to resign over this snafu. As a part of leaving state employment, employees are required to divulge contacts with new employers. Little said he didn’t have any with Mercury One other than his interview. However, the IG found over 50 emails between Little and staff at Mercury One. Little was subsequently hired as the Chief Operating Officer at Mercury One. So the current COO at Mercury One misled the state of Illinois just prior to taking his job.

An Instant No

That brings me to David Barton. For fun, I will quote what the IG report has to say about Barton.

According to an online Texas arts calendar, visitors to Mercury One’s Rights & Responsibilities exhibition in June 2018 could expect to see items Mercury One was sharing from its own collection, including an exploding rat from World War II, whose designer inspired the James Bond character Q; as well as a facsimile engraving of a draft Declaration of Independence; Mary Todd Lincoln’s dress; and Lincoln’s collar. The calendar indicated that Mercury One charged $20 for adult general admission, $750 for private VIP tours with Mr. Beck, $350 for private tours with David Barton, and $250 for private tours with other Mercury One staff. According to the calendar, during the private tours Mr. Beck, Mr. Barton, and the other staff were to provide their “own unique perspective on our rights and responsibilities.”

The Lincoln museum staff didn’t know anything about Barton until after the fact. However, as the passage below shows, they did a little late homework.

Ms. Smith and Dr. Wheeler told investigators that at the time of the loan, they did not know what else was going to be displayed at Mercury One’s exhibition. Ms. Smith said that information is relevant to the consideration of whether it is appropriate for the ALPLM’s artifacts to be displayed or interpreted alongside the other items in the exhibit. Dr. Wheeler said that it is a “betrayal of public trust” to not have known what the Mercury One exhibit was about, what other pieces would be displayed alongside the ALPLM and Foundation artifacts, or how the exhibit would be presented.

The museum registrar (Smith) and Illinois state historian (Wheeler) were bothered after the fact that Executive Director Lowe had let the Gettysburg Address be displayed along with artifacts of questionable reputation. But then they got to Barton’s reputation and they were really troubled.

In addition, Ms. Smith and Dr. Wheeler said they later learned concerning information about David Barton’s reputation. In 2012, Christian publisher Thomas Nelson recalled all copies and ceased publication of Mr. Barton’s book, The Jefferson Lies: Exposing the Myths You’ve Always Believed About Thomas Jefferson, after it learned that “there were some historical details included in the book that were not adequately supported.” The book was voted the “least credible history book in print” in a 2012 reader poll by the History News Network, a George Washington University online publication “created to give historians the opportunity to reach a national audience on issues of public concern.” Dr. Wheeler said that based on what he later learned about Mr. Barton, he believed that “under no circumstances” should the ALPLM be associated with him. Ms. Smith said that if she had known what she later learned about Mr. Barton’s reputation, the 2018 loan would have been an “instant no.”

No to the Emancipation Proclamation

Earlier this year, Beck wanted to borrow the Emancipation Proclamation with Barton listed as Curator of the exhibit. The museum, partly for that reason, turned Mercury One down.

Ms. Smith told investigators that after she received the letter of request and facility report, she convened the ALPLM collections staff, and the staff unanimously recommended to deny the loan request. She stated that she sent Mr. Lowe and Ms. O’Leary a detailed list of reasons why staff recommended not doing the loan. The listed reasons included that some of the information provided in the Standard Facility Report was incomplete or required clarification; concerns about Mr. Barton being listed as a Curator who would be interpreting ALPLM artifacts, given his reputation as a historian; and concerns about Mr. Little being listed as the Registrar or Collections Manager, given his lack of qualifications for handling artifacts. Ms. Smith said that Mr. Little’s history of mishandling artifacts at the ALPLM was also of concern.

In the end, the museum did not loan the Emancipation Proclamation to Beck’s project, 12 Score and 3 Years Ago. That didn’t stop Barton and Beck from promoting the event as if the Emancipation Proclamation was going to be there. Here is Barton claiming those in attendance would see it.

On Beck’s Mercury One website, the nonprofit still lists the Abraham Lincoln Presidential Library and Museum as a partner. However, this does not appear to be accurate. Not only was Lowe fired, current Mercury One COO Michael Little is not allowed to ever work for the state of Illinois. Given the results of this report, it is hard to see the two organizations ever working together again. It is deceptive for Barton and Mercury One to tout a relationship that not only isn’t true but is the subject of a scathing report by the Illinois Inspector General.

 

Illinois Times columnist Bruce Rushton has been on this story from the beginning and deserves credit for being on top of it.