The New York Attorney General's lawsuit against the Donald Trump Foundation, President Trump, and his three kids alleges misuse of funds

New York’s attorney general filed a lawsuit Thursday against the Donald J. Trump Foundation, Donald Trump and his children Don Jr., Ivanka and Eric for alleged “persistently illegal conduct” for more than a decade.

The suit includes allegations of misusing funds to buy artwork to decorate Trump’s private golf club, illegally coordinate with Trump’s 2016 presidential campaign, and pay off business and legal obligations.

“The Attorney General’s Investigation found that the Foundation is little more than an empty shell that functions with no oversight by its board of directors,” the suit asserts.

“The Board has not met since 1999 and does not oversee the activities of the Foundation in any way. The Board has not set policy or determined the direction, operations or acts of the Foundation. … In the absence of a functioning board, Mr. Trump ran the Foundation according to his whim, rather than the law.”

Attorney General Barbara D. Underwood has already begun proceedings to dissolve the Donald J. Trump Foundation and seeks to bar Trump and his children, all members of the foundation’s board of directors, from serving on the board of other New York state charities, according to the suit.

She also asks that Trump pay restitution of $2.8 million and additional penalties, according to the court papers.

Her office has sent referral letters to the Federal Election Commission and the Internal Revenue Service after Underwood concluded that “that additional investigation and potential further legal action” is warranted, according to a statement from the attorney general.

President Trump Departs White House For G7 Summit In Canada
Credit: Chip Somodevilla/Getty

Trump responded to the allegations in Tweets Thursday, writing “I won’t settle this case!”

“The sleazy New York Democrats, and their now disgraced (and run out of town) A.G. Eric Schneiderman, are doing everything they can to sue me … I won’t settle this case!” Trump wrote.

He added in a second Tweet that Schneiderman, who resigned in May after four women accused him of physical assault, “never had the guts to bring this ridiculous case, which lingered in their office for almost 2 years. Now he resigned his office in disgrace, and his disciples brought it when we would not settle.”

Underwood, a non-partisan staffer appointed to replace Schneiderman, said that the money of the charitable foundation is not meant to benefit “Mr. Trump’s personal and business interests” and that these actions are “violations of basic legal obligations for non-profit foundations.”

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When a charity founder spends foundation money on private interests, it is called “self-dealing transactions.” The suit details one self-dealing transaction in which Trump used $10,000 of the foundation’s money to buy an oversized portrait of himself to hang at one of his for-profit golf clubs, the Trump National Doral in Miami.

Trump also engaged in self-dealing when he used $100,000 to settle legal claims against his Mar-A-Lago resort and made a $158,000 payment to settle legal claims against his Trump National Golf Club in 2008 involving a hole-in-one tournament, according to the lawsuit.

Donald Trump’s children were named in the suit because as members of the board of the foundation, they were supposed to approve its spending. But according to the suit, the board has not met since 1999 and only Donald Trump made foundation-related decisions and that “the Foundation’s directors breached their fiduciary duties requiring them to make restitution for the harm that resulted.”