Behind Trump Foundation scandals are greater concerns over conflicts of interest

President-elect Donald Trump speaks to reporters at Mar-a-Lago, Wednesday, Dec. 28, 2016, in Palm Beach, Fla. (AP Photo/Evan Vucci)

On Monday, Donald Trump took to Twitter to praise the Donald J. Trump Foundation for its charitable work and efficiency, only days after announcing his intent to dissolve the trust in order to avoid the appearance of a conflict of interest as he moves into public service.

Some see the dissolution of the Trump Foundation as a good way to cut off avenues of undue influence over the new president. But hiding right beneath the surface of the numerous Trump Foundation scandals is a much larger issue, namely Trump entering the White House with an unprecedented number of financial entanglements worldwide, and no plan yet as to how he will avoid a mountain of potential conflicts of interest.

In a short burst of tweets, Trump praised the work of his charity, the Trump Foundation, saying, "I gave millions of dollar to DJT Foundation, raised or recieved [sic] millions more, ALL of which is given to charity, and media won't report!" Trump said. A few minutes later he bragged, "100% of money goes wonderful charities!"

Like any other time Trump cites statistics on Twitter, the fact-checkers got to work. In this case, Trump's claims about the foundation's charitable contributions since 2011, are right. Trump's IRS tax filings for his foundation, posted by the public interest group Pro Publica, show that over recent years, 100 percent of the total expenses of the went to charitable disbursements. No one got paid a salary working for the foundation, nothing was spent on rent, nothing on traveling costs.

Right before Christmas, Trump put out a statement on his intent to dissolve his charity, saying that "to avoid even the appearance of any conflict with my role as President, I have decided to continue to pursue my strong interest in philanthropy in other ways."

The announcement was not enough to silent his critics, and brought new attention to an investigation into the Trump Foundation by New York Attorney General Eric Schneiderman. After the announcement dissolution of the charity, Schneiderman told Trump, not so fast, the foundation had to stay in tact until the state of New York finished its investigation.

One month before Trump was given his party's nomination, New York Attorney General Eric Schneiderman opened an investigation into the Trump Foundation, focusing on some "troubling transactions" and raising concerns that the Trump Foundation may have "engaged in some impropriety."

Schneiderman zeroed in on two incidents, one involving the charity's "self-dealing," namely disbursing money for Trump's personal benefit, and second, an incident in 2013 when the charity appeared to be involved in buying off Florida Attorney General, Pam Bondi, who was then running for office. In the Bondi case, Trump used his foundation to illegally contribute $25,000 to a political action committee supporting Bondi at the same time Trump was facing prosecution in the state for fraud charges associated with Trump University.

Trump paid a fine to the IRS, and after Bondi won her election, she dismissed the Trump University fraud case.

Of note, Schneiderman led a fraud investigation into Trump University in New York beginning in 2012 after multiple complaints that Trump had duped thousands of students into paying tuition for what the plaintiffs believed was a fake university. Trump put the case to rest a few days after the election, paying a $25 million settlement fee in the fraud case.

On the issue of self-dealing, there is one notable incident in 2007 when Trump reportedly spent $20,000 of money earmarked for charitable purposes to buy a six-foot-tall painting of himself. The self-dealing behavior has apparently continued, according to Trump's 2015 IRS filing, where his foundation affirmed that it had "transferred any income or assets to a disqualified person" or made income or assets from the charity "available for the benefit or use of a disqualified person."

"You can't be spending money on yourself, and you can't spend money on a political campaign or a political entity, like he did with the Bondi situation," Tom Fitton, the president of Judicial Watch said on Thursday. Pointing to the Schneiderman investigation, he explained that Clinton supporters, like the New York Attorney General, are still upset at the devastating impact the Clinton Foundation scandal had on Hillary;'s chance on the Democratic presidential campaign. "They see an opportunity with the Trump Foundation, but it doesn't compare, it's apples and oranges."

Based on what is publicly known about the Trump Foundation scandals, Fitton says they "do not rise to the level" of the what his group helped uncover with the Clinton Foundation. "In the greater scheme of things, they are relatively small potatoes," he added.

With Donald Trump coming into office with a massive business enterprise, Fitton is now focused on what may be "some very serious conflict of interest problems" for the new president. Judicial Watch has already been scouring over Freedom of Information Act releases relating to the president-elect's conflicts of interest.

"Mr. Trump will be in our sights. So we hope he will be sensitive to these issues and hope he recognizes there has to be transparency." Fitton warned, "If there is a lack of transparency, we will be the first ones through the courthouse doors asking for information."

In in a recent opinion piece for the New York Times, Fitton outlined steps Trump could take to avoid conflicts of interest including making public any contracts with federal agencies, foreign governments or foreign corporations, avoiding any new foreign financial entanglements, and even setting up an internal watchdog within the Trump Organization to to help avoid conflicts.

In early December, Trump promised to hold a press conference where he would explain how his future relationship to Trump Inc., but suddenly called off his face-time with reporters. The wealthiest incoming president in American history has so far made very few details available about his plans. He has also broken with recent decades' tradition and has still not released any of his tax returns.

Trump has previously that he may put his two sons Don and Eric in charge of the company before his inauguration on January 20. He also vowed —over Twitter—not to make any new business deals while in the White House. But the vague messages about the future of the multi-billion dollar Trump Organization have led to more questions and more concerns.

John Pudner is a conservative strategist and executive director of Take Back Our Republic. When he learned that Trump was shutting down his charity, his initial thought how the president-elect will divest himself of his company.

"For me, that is paramount. I'm glad he's shutting down the foundation, but I'm more concerned about what happens to him while he's president with the company," Pudner said.

Shutting down the Trump Foundation certainly won't be enough to silence Trump's critics, he added, noting that he was a supporter of Trump all throughout the campaign, but by dissolving the charity, "at least that door was closed so now we know the foundation will not be an option for someone to give to while he's president."

What would really make a difference, is if Trump divests himself of any interests in his company, Pudner suggested, adding that the possibility of leaving the company to his children, who were deeply involved in the 2016 campaign, is just an invitation to Trump critics in an already hyper-partisan atmosphere.

"I think from his perspective any doors he can shut to make it harder for critics is good, not just for him but for the American people, so that they don't have doubts," he explained. "I think it would be good for Trump to do the blind trust, do whatever he has to not to benefit, to not leave open even the appearance that he might be benefiting personally from policies he will implement as president. I think that is the important thing moving forward."

Trump's critics in Congress have already seized on the president-elect's myriad financial entanglements, with a group of House Democrats on the Oversight and Government Reform Committee demanding a review of possible conflicts of interest. However, it's not likely that a Republican-controlled Congress will devote itself to uncovering President Trump's potential business indiscretions.

The left-leaning Citizens for Responsibility and Ethics in Washington has also launched a series of IRS probes to investigate the Trump Organization, the Trump Foundation, and other potential abuses. They have filed multiple complaints with the IRS alleging the Trump Foundation violated its tax-exempt charity status by contributing to the Trump election campaign, and that he used the charity to his personal benefit, purchasing tens of thousands of dollars worth of memorabilia at charity auctions, including a $10,000 football helmet signed by Tim Tebow.

Even if the IRS discovers Trump's charity violated tax laws, it is likely that the foundation will face fines. As Fitton suggested, the foundation "is gonna be dinged" for inappropriate transactions, but it doesn't rise to the level of corruption that could severely damage the president-elect.

But for Claudine Schneider, the idea of letting Trump get away with even small indiscretions is corrosive. Schneider, a former Republican congresswoman from Rhode Island who now runs her own consulting firm, argues that all of Trump's indiscretions should be brought to light.

"The investigation into the Trump Foundation’s self-dealing should be a bigger deal...the president is a role model," she said. "The failure, as the first presidential candidate ever, to ignore the protocol of releasing his taxes should also be part of that drum-beat" to bring to light "'the charges’ of lack of transparency, dishonesty, conflict of interest."

For Schneider, who has been active in combating government conflicts of interest, dissolving the Trump Foundation "is not good enough." Trump should have to answer those questions that are implicit in the ongoing investigation of his charity: "Was this really set up to avoid taxes, to cover certain expenses, or to genuinely help those in need?"

It is also not good enough for Trump's business interests to be handed over to his children in what has been termed a semi-blind trust, Schneider argued. Dismissing Trump's indiscretions is a slippery slope, she said, adding that the next president should be held accountable for behavior that "will harm the public and help special interests, as well as his own."

The investigation into the Trump Foundation will continue, and the findings will help inform the public about their next commander in chief. The number of scandals that occur in Washington, D.C. is already dizzying, and as Pudner argued, it won't benefit Trump or the American people to have a new president who is constantly visited by scandal, conflicts of interest, or inside dealing.

Pudner's advice to Trump on his business affairs: "Some walls have got to built there."

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