DC attorney general sues Trump’s inaugural committee for ‘abusing nonprofit’ funds

The attorney general for Washington, DC, filed a lawsuit on Wednesday alleging President Donald Trump’s inaugural committee abused non-profit funds by overpaying for event space at the President’s Washington hotel for events around his 2017 inauguration.

DC Attorney General Karl Racine filed the suit against the 58th Presidential Inaugural Committee, the Trump Organization and the Trump International Hotel in Washington in DC Superior Court. He accused the inaugural committee of coordinating with the Trump family to “grossly overpay” for event space at the Trump International Hotel.

The inaugural committee wasted approximately $1 million of charitable funds in overpayment for the use of event space at the Trump Hotel in violation of District law, according to the lawsuit.

“The inaugural committee made exorbitant and unlawful payments to the Trump hotel to rent event space for inaugural activity,” Racine said.

Nonprofits are legally required to ensure that their funds are used for their stated public purpose, not private interest, he added.

Racine alleged the inaugural committee was aware that it was paying far above market rates and “never considered less expensive alternatives.” The attorney general said the group also paid for space on days when it did not hold events.

The committee is accused of improperly using non-profit funds to throw a private party for the Trump family costing several hundred thousand dollars.

The lawsuit seeks to recover the amount improperly paid to the Trump hotel, and to direct those funds to suitable nonprofit purposes.

A spokesman for the President’s inaugural committee said in a statement that the lawsuit was like a “partisan press release” from Racine.

“The facts will show that the PIC operated in compliance with the law and this suit is without merit,” the statement read.

This is the latest scrutiny of spending involving the President’s inauguration. Multiple agencies have investigated Trump’s inauguration, including federal prosecutors in New York who reviewed tens of thousands of documents handed over by the committee. Authorities looked at whether any of the donation money was misspent or used to improperly benefit certain individuals or came from foreign donors.

Former inaugural committee deputy chairman Rick Gates, one of the most significant former Trump campaign advisers who flipped on Trump in the Mueller investigation, “personally managed” discussions with the Trump Hotel about event space, according to the attorney general.

In December 2016 Gates wrote to Ivanka Trump, the President’s daughter, that he was “a bit worried about the optics of PIC [Presidential Inaugural Committee] paying Trump Hotel a high fee and the media making a big story out of it,” according to the lawsuit.

According to the lawsuit, Gates agreed with the hotel’s managing director and Trump family members to pay $175,000 per day for the committee to reserve space for four days.

In December, Gates was sentenced to 45 days in jail and three years probation by a federal judge after pleading guilty to charges of conspiracy and lying to investigators in February 2018.

The committee’s own event planner — Stephanie Winston Wolkoff — advised against the transaction, telling the committee and the Trump family that the charges were at least twice the market rate, reads the lawsuit.

Wolkoff “noted unease with the offer during an in-person meeting with President-elect Trump and Ivanka Trump,” said Racine. She also sent a follow-up email to both Ivanka Trump and Gates to “express [her] concern,” according to the attorney general.

“The Inaugural Committee accepted the contract anyway,” Racine said.

In August, CNN exclusively reported that Wolkoff, a former adviser to first lady Melania Trump, was among the event planners who raised concerns about excessive spending in the weeks before the inauguration, according to documents obtained by CNN at the time.

Wolkoff was asked to hand over a variety of information, including any evidence of inaugural-related expenditures that were “wasteful, mismanaged, and/or improperly provided private benefit,” according to a 10-page subpoena seen by CNN at the time.