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WASHINGTON - In response to a government lawsuit that centers on an Iowa fundraising rally, President Donald Trump has agreed to shut down his personal charity amid allegations he used it for personal and political benefit, the New York attorney general announced Tuesday.
New York Attorney General Barbara Underwood said the Donald J. Trump Foundation is dissolving and will give away its remaining funds under supervision as her office pursues its lawsuit against the charity, Trump and his three eldest children.
The attorney general's suit, filed in June, alleged 'persistently illegal conduct” at the charity and sought to have the foundation shut down. Underwood is continuing to seek more than $2.8 million in restitution and has asked a judge to ban the Trumps temporarily from serving on the boards of other New York nonprofits.
The heart of the allegations stems from a Jan. 28, 2016, nationally televised fundraiser Trump held in Des Moines four days before Iowa's first-in-the-nation caucuses.
Feuding at the time with Fox News host Megyn Kelly - who had previously challenged Trump on his treatment of women - the candidate decided to boycott the Fox News debate with his GOP rivals and stage his own event nearby at Drake University.
That event to raise money for veterans drew millions from wealthy friends and small-dollar donors, which went to the Trump Foundation.
But Underwood asserted in the lawsuit that the funds were raised 'in a manner designed to influence the 2016 presidential election at the direction and under the control of senior leadership of the Trump presidential campaign.”
She cited emails in which Corey Lewandowski, Trump's campaign manager at the time, directed which veterans' charities should receive money.
At one point, Lewandowski emailed a foundation official to see if money could be ready to distribute during Trump's last campaign events before the caucuses: 'Is there any way we can make some disbursements this week while in Iowa? Specifically on Saturday,” Lewandowski wrote, in an email cited by Underwood.
Among the grant recipients were Central Iowa Shelter and Services, Puppy Jake Foundation and Support Siouxland Soldiers. Each received checks for $100,000.
Underwood said Tuesday her investigation found '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.”
The shuttering of Trump's charity comes after the Washington Post documented a series of apparent lapses at the foundation. Trump used the charity's funds to pay off legal settlements for his private business, to purchase art that decorated one of his clubs and to make a prohibited political donation.
Trump denied the organization had done anything wrong. In late 2016, he said he wanted to close the foundation, but the New York attorney general blocked that move while its investigation continued.
The settlement with Underwood's office represents a concession by Trump to a state investigation he decried at the time as a partisan attack and vowed to fight.
Alan Futerfas, an attorney for the Trump Organization, did not immediately respond to a request for comment.
In a court filing in New York, Underwood said that the foundation's remaining $1.75 million would be distributed to other charities approved by her office and a judge.
The Trump Foundation was never the most impressive part of Trump's financial portfolio: At its peak in 2009, it had only about $3.2 million in the bank, a small sum for a billionaire's charity.
The real estate mogul used other people's donations to build up the assets of the foundation. In recent years, the largest gifts came from the pro-wrestling moguls Vince and Linda McMahon, not Trump himself.
The largest disbursement in the foundation's history - a $264,231 gift to the Central Park Conservancy in 1989 - appeared to benefit Trump's business: it paid to restore a fountain outside Trump's Plaza Hotel. The smallest, a $7 foundation gift to the Boy Scouts that same year, appeared to benefit his family. It matched the amount required to enroll a boy in the Scouts the year his son, Donald Trump Jr., was 11.
The attorney general's probe turned up evidence that Donald Trump Jr., Eric Trump and Ivanka Trump - all listed as officers of the charity - had never actually held a board meeting. The board hadn't met since 1999. The charity's official treasurer, Trump Organization executive Allen Weisselberg, told investigators he wasn't aware he was on the board at all.
The Washington Post and James Q. Lynch of The Gazette contributed to this report.