President Donald Trump's family foundation will soon be dissolved under an agreement with the New York state attorney general.
The attorney general's office had sued the Trump Foundation, claiming the president and his family had used it as a vehicle for his presidential campaign.
Attorney General Barbara Underwood also charged in the suit that the Trump family had used the fund has their personal piggy bank.
"Our petition detailed a shocking pattern of illegality involving the Trump Foundation _ including unlawful coordination with the Trump presidential campaign, repeated and willful self-dealing, and much more," Underwood said. "This amounted to the Trump Foundation functioning as little more than a checkbook to serve Mr. Trump's business and political interests," Underwood said in a statement.
A source close to the situation say that the Trumps were already prepared to shut down the foundation, but wanted to do it without judicial or attorney general oversight.
The agreement announced Tuesday will require such oversight.
"Today's stipulation accomplishes a key piece of the relief sought in our lawsuit earlier this year," Underwood said. "Under the terms, the Trump Foundation can only dissolve under judicial supervision _ and it can only distribute its remaining charitable assets to reputable organizations approved by my office."
The foundation in its 2017 tax filing reported having $1.75 million left in its coffers.
Lawyer Alan Futerfas, who is representing Trump and his three children involved in the foundation, called Underwood's comments "misleading."
"The Foundation has been seeking to dissolve and distribute its remaining assets to worthwhile charitable causes since Donald J. Trump's victory in the 2016 presidential election," Futerfas said. "Unfortunately, the NYAG sought to prevent dissolution for almost two years, thereby depriving those most in need of nearly $1.7 million."
The stipulation agreement comes less than two weeks before Underwood is set to leave office. She will be succeeded by current New York City Public Advocate Letitia James.
Unless there is a surprise resolution before the end of the year, the rest of the lawsuit should carry into James' term.
The state is still seeking restitution for $2.8 million in misspent money along with additional penalties, including a 10-year ban on Trump running a not-for-profit organization.
The lawsuit also seeks to prohibit Trump's oldest children _ Ivanka, Donald Jr. and Eric, who were all foundation board members _ from similar involvement with any charity for one year.
The suit, filed in June by Underwood, alleged the Donald J. Trump Foundation funneled its cash into Trump's personal dealings rather than assisting those less fortunate as part of its "pattern of illegal conduct" that was "in persistent violation" of federal and state laws for more than a decade.
The misdeeds included $2.8 million spent to promote Trump's presidential campaign, along with supposed charitable funds used instead to "pay off the legal obligations of entities (Trump) controlled, to promote Trump hotels, (and) to purchase personal items," the lawsuit charged.
The court filing specifically accused Trump, along with daughter Ivanka and sons Donald Jr. and Eric, of "improper and extensive political activity, repeated and willful self-dealing transactions, and failure to follow basic fiduciary obligations."
The suit stems from a probe begun in June 2016 under former Attorney General Eric Schneiderman just months before the presidential election.
Underwood had also notified the Internal Revenue Service and the Federal Election Commission about possible federal law-breaking by the Trumps that falls into their bailiwick.
The stipulation to shut down the foundation with legal oversight comes weeks after a court decision allowed the case to move forward.
Futerfas defended the foundation's work.
"Over the past decade, the Foundation is proud to have distributed approximately $19 million, including $8.25 million of the president's personal money, to over 700 different charitable organizations with virtually zero expenses," he said. "The NYAG's inaccurate statement of this morning is a further attempt to politicize this matter."
Former New York Mayor Rudy Giuliani, who has been serving as a Trump lawyer, downplayed to the New York Daily News the president's connections to the foundation.
"It hasn't been active for years," Giuliani said of the foundation. "He couldn't have done anything wrong. The allegations are about a bookkeeping issue."
(Chris Sommerfeldt contributed to this report.)
(c)2018 New York Daily News
