The Trump Foundation Gets Served

So much has been going on during the past months that you may have missed some good news – New York Attorney General Barbara Underwood filed suit against the Trump Foundation and its board of directors (which includes the president plus his three oldest kids). The suit outlines a long-standing pattern of illegal behavior that includes self-dealing and coordination with Trump’s presidential campaign. I especially love the fact that it was filed on Trump’s 72nd birthday.

According to Underwood, “Mr. Trump’s wrongful use of the foundation to benefit his campaign was willful and knowing.” And: “As our investigation reveals, the Trump Foundation was little more than a checkbook for payments from Mr. Trump or his businesses to nonprofits, regardless of their purpose or legality.” 

Here are a few examples: soliciting donations for veterans' organizations at campaign rallies that were then deposited into the Foundation bank account; claiming credit for donations that actually came from other groups; using hundreds of thousands of dollars to settle personal lawsuits and contribute to political causes; failing to disperse funds to charities as promised; bragging that his “charitable” donations aided his political standing; repeatedly signing tax forms that said the Foundation did not carry out political activity. Note that it’s a felony to knowingly file a false tax return, and Trump and his kids are personally liable.

The lawsuit hearing is scheduled for October 10. When the Trump Foundation’s lawyer asked for a postponement until after the midterm elections, the presiding judge laughed, refused to change the date, and hinted she will likely require the President to testify.

Trump, in a tweet of course, blasted the suit as politically motivated and vowed not to settle.

This is a civil action, asking that the Foundation be dissolved and that Trump and his cohorts be prohibited from serving on the boards of any other nonprofits. It also asks that the foundation’s assets (valued at $1 million) be distributed to actual charitable organizations, and that Trump cough up almost $3 million in restitution. 

Although the attorney general’s office does not have criminal jurisdiction, the IRS, Justice Department, and the Federal Election Commission do. Underwood has sent referral letters urging action to all three outlining serious breaches of federal criminal law.

And a more recent New York State Department of Taxation and Finance investigation focusing on the Foundation’s violations of state tax laws could indeed lead to a criminal referral for possible prosecution. 

The Trump Foundation is also in breach of the most basic nonprofit standards. Its Board existed in name only, without regular meetings or knowledge of fiduciary and governance responsibilities. One of the organization’s board members said that he had no idea he was on the board and that the board had never met, to his knowledge. The Board failed to exercise any oversight at all, allowing Trump to run the Foundation as he pleased and to his own advantage. And it breached the most basic guiding principle: that nonprofits are exempt from paying taxes, and in return all their money must be spent in pursuit of the public good.

This has broader implications as well. Why should any nonprofit corporation – or for-profit business or taxpayer for that matter - feel obliged to meticulously follow the law if Trump and his foundation get a pass?

And recently the plot has thickened. It turns out New York State investigators issued a subpoena to Michael Cohen as part of the probe into the Foundation, after Cohen’s attorney said his client had information of interest to both state and federal prosecutors about whether the Foundation lied about its tax liability and/or broke state law. Trump Organization Financial Officer Allen Weisselberg, who has been granted immunity in the Cohen investigation, may also have something to say about the Foundation's practices.

Keep your fingers crossed that justice will be served, and stay tuned…

On Abortion: It's Professional, Political & Personal

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First, Trump proposes a “gag rule” denying funds for any organization that makes referrals for abortions, shares physical space with an abortion provider, or provides abortions directly. Next, he appoints Diane Foley, an avowed religious activist, to oversee family planning at the Department of Health and Human Services. Then the Supreme Court rules that California cannot regulate Crisis Pregnancy Centers (CPCs) based on a dubious free speech argument. And now, with Justice Anthony Kennedy stepping down, the future of Roe v. Wade and a woman’s right to a safe abortion is threatened.

As deputy secretary of H&HS, Diane Foley will oversee Title X (the sole federal program that supports family planning and preventive services). Foley is the former president of Life Network, an organization that runs two CPCs.

CPCs are nonprofit organizations. Here’s a typical vision statement: “A culture where women and men faced with pregnancy decisions are transformed by the gospel of Jesus Christ and empowered to choose life for their unborn children and abundant life for their families.” Yet their ads claim that all options about pregnancy are provided. This is a consistent tactic – deliberately deceptive advertising followed by falsified information stating abortions cause breast cancer, lifetime depression, and suicide. Note that the gag rule eliminates requirements that providers counsel patients about all health care options (including parenting, adoption, and abortion). Voila – CPCs will be replacing full-service nonprofits like Planned Parenthood.

And the Supreme Court just ruled that the state of California can’t require CPCs to provide accurate information about all pregnancy options. This, even though the Court has allowed states to require that medical providers tell pregnant women about the possibility of adoption.

I have worked in the nonprofit world all of my adult life. I didn’t do it for the big bucks or the bright lights; I chose this work because it’s a world in which people and organizations choose to heal the world, to make it a better place. For me, it is profoundly unethical for a nonprofit to lie to clients based on religious doctrine.

Here’s my personal story. In my early twenties, shortly after the Roe V. Wade decision, I had two abortions. I was young, trying to find my way in life; I was using contraception that failed. All I had to do was walk down the street to the local clinic where the doctor (a friend of mine) treated me compassionately and professionally, without judgment. I have never regretted those abortions; they were absolutely the right choice for me at that time in my life. And when I was older, ready, and in a stable relationship, I chose to have a family (two sons and now four completely adorable grandchildren).

Here’s a powerful quote from Ruth Bader Ginsberg: “The decision whether or not to bear a child is central to a woman’s life, her well-being and dignity. When the governments controls that decision for her, she is being treated as less than a full adult human responsible for her own choices.”

So what I am feeling now is deep and angry. It’s professional, political, and very personal. Anyone who does not believe in abortion has the right to let that determine her personal decisions. But no one – and certainly not five men in black robes – has the right to tell women what our personal reproductive choices should be. I urge you all to join me in speaking out against the gag rule, opposing the nomination of Brett Kavanaugh, and donating to Planned Parenthood.  

One More Time: Congress, the IRS, and Nonprofits

Heads up: Congress is considering two measures that will affect IRS regulation of nonprofits.

First, a little background – for the past ten years, Republicans lawmakers have vented their anger at the IRS’ supposed bias against right-leaning nonprofits by slashing its budget big-time (current budget is 18% less than it was in 2010, adjusted for inflation) – despite the inconvenient fact that numerous left-leaning groups were also targeted for similar scrutiny. 

Now, suddenly things have changed, following the passage of the new tax (their signature and pretty much only legislative accomplishment since they have controlled the Presidency, the House, and the Senate). The House Appropriations Committee just released a spending bill for 2019 that would increase the IRS budget, albeit modestly, including new funds to help implement the GOP tax law.

Here’s what else is in the bill: a provision that would pretty much bar the IRS from denying tax-exempt status to churches that participate in political campaigns. Sound familiar? It’s the Johnson Amendment redux (quick review – it’s a long-standing tax law that prevents churches and other nonprofits from endorsing or opposing political candidates). The House Appropriations Committee included a provision trashing the Johnson Amendment in the 2018 spending bill, but it didn’t make the cut. Apparently, if at first they didn’t succeed, they intend to keep trying and trying again. 

On the other side of the aisle, the Senate Appropriations Committee is considering a proposal eliminating donor reporting requirements. As it stands now, federal tax law requires nonprofits that file an annual tax return to provide information on donors giving contributions totaling $5,000 or more (in money or property). Note that the IRS is required by law to keep this information confidential.This issue has long been fought in state courts. In 1958, the NAACP successfully challenged an Alabama law requiring nonprofits to provide a list of members, arguing that disclosure would harm them, their supporters, and their right to free speech - and they won. But more recently, in a case brought by Citizens United in New York, a federal court ruled the other way. According to the judge, "an individual who seeks to advance a cause might reasonably hesitate knowing that an officer of the state will see that they have done so, but totalitarian tendencies do not lurk behind very instance of a state's collection of information about those in their jurisdiction." 

So: Is maintaining donor anonymity essential to protect free speech, especially for those voicing controversial options in hostile environments? And does free speech mean that churches should be able to use tax-deductible dollars to support partisan political candidates? The debate continues in courts, in Congress, and online. 

Here's where I stand: I'm firmly on the side of donor transparency. I believe the public has the right to know the provenance of tax-deductible donations supporting issue-driven nonprofits, whether conservative or liberal. And I'm firmly on the side of separation of church and state. All nonprofits, including churches, can already speak out and advocate on important issues, but active participation in partisan politics crosses the line.