Friday, July 6, 2018
The news cycle may have moved on from the New York Attorney General's lengthy Petition against the Donald J. Trump Foundation and Donald, Donald Jr., Invanka, and Eric Trump, but the legal cycle continues. It is therefore worth considering what is the most important question that Petition raises - did now President Trump break any criminal laws through his Foundation?
First, a mea culpa is owed. When I first, very quickly (and in the Newark airport on my smart phone, which is not a great way to review legal documents), read the Petition and related materials, I missed the not-so-subtle hints that the AG included suggesting that the answer to this question is yes. As way of explanation but not excuse, this was in part because I did not then know that she generally lacka authority to bring criminal charges herself. But more importantly, in my quick read I missed both the occasional "willful" or "willful and knowing" language - particularly with respect to the alleged use of the Foundation to benefit his campaign - and, most damning, the copying of officials at the U.S. Department of Justice Criminal Division's Public Integrity Section on the FEC referral letter. So I apologize for anyone I talked to in the hours after the petition became public for not catching those hints.
But of course the fact that New York AG thinks they may have been one or more violations of criminal law does not necessarily make it so, even assuming the accuracy of the facts she alleges. There has already been a debate among tax scholars regarding whether those facts justify referral for a criminal investigation by the IRS - see Phil Hackney in the NY Times (yes) and Brian Galle in Medium (maybe, but probably not). I lean more toward Brian's side of this debate, with the kicker being that all of the funds distributed by the Foundation went to charities even if those contributions actually benefitted Mr. Trump, his business interests, or his campaign (with the exception of one $25,000 political organization donation in 2013, which plausibly was an inadvertent error and the false reporting of which could not be pinned on Mr. Trump by the AG). People who have been prosecuted (successfully) for using charitable assets for their own benefit, including former Representatives Corrinne Brown, Chakah Fatah, and Steve Stockman, have usually actually spent charitable funds on personal expenses or given it to their businesses or campaigns. And criminal prosecutions for false statements on annual information returns (the Form 990, or here the Form 990-PF) have tended to focus on not reporting material support for terrorist organizations and similar matters.
As the AG's copying of the DOJ Criminal Division indicates, the alleged illegal in-kind donation by the Foundation to the Trump campaign in violation of federal election law is probably the more likely candidate for a criminal charge. But election law experts contacted by N.Y. Times reporter Kenneth Vogel could not agree on whether any federal investigators would pursue such a charge, even assuming impartial consideration by career DOJ attorneys. And as noted in that article, ignorance might be a good defense here, "willful and knowing" language notwithstanding.
Perhaps the most intriguing suggestion to date is the one by David Cay Johnston in the N.Y. Times two days ago. He suggested that either the bringing of criminal charges - state or federal - or even civil tax charges - again, state or federal - against Mr. Trump, including ones based on the NY AG's allegations, could force the public disclosure of Mr. Trump's personal income tax returns (remember those?). Given the range of government officials who could pursue some such charges, it will be interesting to see if any of them take up this suggestion.