The NY attorney general’s lawsuit labeling the Trump Foundation a “shell corporation” heads to a hearing this morning, and the free press will not be bullied or intimidated out of reporting every detail.
Stay tuned for the live feed.
Background: courthousenews.com/ny-ag-labels-t…
Stay tuned for the live feed.
Background: courthousenews.com/ny-ag-labels-t…
Good morning from New York.
Packed courthouse here in Manhattan Supreme Court, filled with reporters and other observers. Today's hearing starts in 15 minutes: 10:30 am.
Packed courthouse here in Manhattan Supreme Court, filled with reporters and other observers. Today's hearing starts in 15 minutes: 10:30 am.
Other reporters here today: @TheNewsHam, @VicBekiempis, @MessageTime, @EOrden, and others.
If you're here, I haven't spotted you, and you want a shout-out, @ me.
If you're here, I haven't spotted you, and you want a shout-out, @ me.
Judge Scarpulla enters. Hearing begins now.
Trump Foundation's lawyer calls the case unprecedented in that the money went to charity.
Trump Foundation's lawyer calls the case unprecedented in that the money went to charity.
"There's no house in the Hamptons," attorney Alan Futerfas says. "Nothing like that."
"So where did the money go, your honor?" he adds, "and that is very clear."
He gestures to a screen filled with charity icons: the Salvation Army, Fresh Air Fund and others.
"So where did the money go, your honor?" he adds, "and that is very clear."
He gestures to a screen filled with charity icons: the Salvation Army, Fresh Air Fund and others.
"When any irregularity was pointed out, it was immediately corrected," Futerfas says.
He says that the foundation was trying to dissolve.
Note: NYAG wants the charity to dissolve in a way that admits wrongdoing.
He says that the foundation was trying to dissolve.
Note: NYAG wants the charity to dissolve in a way that admits wrongdoing.
"I want to talk about Iowa, your honor."
Futerfas says that the NYAG has been trying to fit a "square peg into a round hole."
Futerfas says that the NYAG has been trying to fit a "square peg into a round hole."
Scarpula: At the time of that fundraiser, Mr. Trump was a presidential candidate, am I right?
Futerfas: Yes, he was.
Futerfas: Yes, he was.
Scarpula asks Furterfas why the Iowa fundraiser wouldn't constitute a "related transaction" in the statute.
"It's not incidental publicity," she noted. "It's someone who's running for president of the United States kind of publicity...
Is that not squarely in the statute?"
"It's not incidental publicity," she noted. "It's someone who's running for president of the United States kind of publicity...
Is that not squarely in the statute?"
Futerfas: A candidate can raise money... We just had the Al Smith dinner on the 18th.
Scarpulla notes that she must accept the allegations as true for a motion to dismiss.
Futerfas: We don't have a transaction between the campaign and the transaction.
"Someone saying this might be a good charity is not a transaction," he adds later.
"Someone saying this might be a good charity is not a transaction," he adds later.
"This is a gift to the campaign?" Futerfas asks incredulously, pointing to a logo of the veterans charity that was the beneficiary of Iowa fundraiser on the screen behind him.
"This is where the money went!"
"This is where the money went!"
Scarpulla: I think that what the AG alleged is that he got the voter goodwill that he would have otherwise had to pay for.
Scarpulla: I am saying that this is the allegation. I am not saying that it is true.
But if that is the allegation, she asks, why would that not be enough to survive a motion to dismiss.
But if that is the allegation, she asks, why would that not be enough to survive a motion to dismiss.
Futerfas turns to naming rights, noting that the IRS has an exemption for that. His example: Donating vast amounts of money to get your name on Avery Fisher Hall. He notes that is legitimate, and may be motivated by generating goodwill.
Scarpulla appears unconvinced by the comparison.
The difference there, she says, is that a charity for a candidate is not driving the donation.
The difference there, she says, is that a charity for a candidate is not driving the donation.
(Big picture: The Trump Foundation's oral arguments circle around the theme of whether the "intangible benefits" that Trump received on the campaign trail fit into the statute.)
Futerfas claims that the NYAG's description of the foundation's actions as a "gift" to the campaign amount to: "We've got words in the statute that we've got to fit the facts in."
"Every dime of the $2.8 million went here," Futerfas says, gesturing again to the charity logo.
"There's no mention of the Foundation at that fundraiser."
"There's no mention of the Foundation at that fundraiser."
Scarpulla: During that fundraiser, did he speak about his campaign?
Futerfas: Yes.
Scarpulla says that it was both a fundraiser and a political event.
"He was certainly there as a candidate," Futerfas says. "Let's put it that way."
Futerfas: Yes.
Scarpulla says that it was both a fundraiser and a political event.
"He was certainly there as a candidate," Futerfas says. "Let's put it that way."
Futerfas hones in on the language of "explicit advocacy," using that language to make hay of the fact that the Foundation's role in the event was concealed.
(The Foundation's name was not mentioned at the event, Futerfas notes.)
Futerfas turns to the federal election law claims, which he casts as a new allegation from the NYAG's opposition papers to the motion to dismiss.
Scarpulla interjects, noting that he first raised the issue in his motion to dismiss.
Futerfas admits he did, backs down.
Scarpulla interjects, noting that he first raised the issue in his motion to dismiss.
Futerfas admits he did, backs down.
Futerfas pulls up the NYAG's opposition motion on the screen behind him for his next arguments.
Futerfas wants Scarpulla not to wade into the federal election law issues, which are also before the IRS and FEC.
Scarpulla keeps reminding Futerfas that she must accept the factual allegations as true on a motion to dismiss.
Futerfas: I'm premature?
Scarpulla: Yes.
Futerfas: Fair enough.
Futerfas: I'm premature?
Scarpulla: Yes.
Futerfas: Fair enough.
(Legal procedure explainer: A defendant argues that the facts do not sustain the allegations on the summary judgment stage, not the motion to dismiss stage.)
Scarpulla notes that touting the Trump Foundation's charitable work is irrelevant to the issue at hand.
Scarpulla: Even if they're doing spectacularly good work, they're still required to comply with the statute, correct?
Scarpulla: Even if they're doing spectacularly good work, they're still required to comply with the statute, correct?
"I think that goes to the issue of damages rather than the liability," she notes.
Futerfas insists that it is relevant to whether equitable relief is warranted.
"You're not showing me people people going on spending sprees on charity money," he said.
Earlier, he noted there's no allegation of a house in the Hamptons.
"You're not showing me people people going on spending sprees on charity money," he said.
Earlier, he noted there's no allegation of a house in the Hamptons.
Futerfas pivots to the "Zervos claims" - alluding to the precedent set by Summer Zervos being allowed to sue Trump for defamation.
Background at the bottom of this story: courthousenews.com/ny-ag-labels-t…
Background at the bottom of this story: courthousenews.com/ny-ag-labels-t…
Futerfas sits down. Now it's the NYAG's office's turn.
NYAG's attorney Yael Fuchs: "There are allegations in the petition that are beyond dispute."
"The board was completely missing in action."
"The board was completely missing in action."
Fuchs: There is really no defense.
Targeting Futerfas' talking point, she says: "It is also undisputed that the Trump Foudnation donated money to charity."
"Your honor, I have donated money to charity, people in the room have donated to charity."
Targeting Futerfas' talking point, she says: "It is also undisputed that the Trump Foudnation donated money to charity."
"Your honor, I have donated money to charity, people in the room have donated to charity."
"That wouldn't be a foundation under New York law."
Fuchs: "In fact, we do allege personal enrichment here."
Fuchs: You have the Seven Springs transaction. That is the Foundation paying for the upkeep of the Seven Springs property in Westchester.
She also cites Trump's portrait.
"Each of those transactions was money lost to the foundation," she notes.
She also cites Trump's portrait.
"Each of those transactions was money lost to the foundation," she notes.
Fuchs: "I think it is beyond dispute that these were improper self-dealing transactions."
Turns to the December 2016 transactions, including the Iowa fundraiser.
Turns to the December 2016 transactions, including the Iowa fundraiser.
Fuchs pulls up records on the same screen that Futerfas used.
Fuchs: "They say that the Foundation was a passive recipient of the transactions."
"To use the modern parlance, that's not a thing," she says.
(Laughter in the courtroom)
"To use the modern parlance, that's not a thing," she says.
(Laughter in the courtroom)
Scarpulla: There's no check from the Foundation to Donald J. Trump for President, correct?
Fuchs: Correct.
Fuchs notes that the structure of the transfer "from the get-go" was "at the direction of the company."
Fuchs: Correct.
Fuchs notes that the structure of the transfer "from the get-go" was "at the direction of the company."
Fuchs puts Corey Lewandowski emails up on the screen.
Fuchs talks about "five political rallies" with Trump displaying "big checks" next to MAGA slogans, "completely conflating the identity" of the charity and the campaign.
Fuchs rejects that this is comparable to the Al Smith Dinner, an analogy that Futerfas made earlier in the hearing.
With Mitt Romney, she notes, the funds didn't go to the Mitt Romney Foundation; it went to the Red Cross.
With Mitt Romney, she notes, the funds didn't go to the Mitt Romney Foundation; it went to the Red Cross.
Scarpulla asks how is it improper if the vets get the money.
"How is that waste?" she asks.
"Because it was improper purposes," Fuchs responds.
"How is that waste?" she asks.
"Because it was improper purposes," Fuchs responds.
Fuchs: "A couple of other issues: With respect to the federal election law claims, we make no federal election law claims."
"That's why we referred the matter to the FEC, which has jurisdiction over these type of activities," she adds.
"That's why we referred the matter to the FEC, which has jurisdiction over these type of activities," she adds.
Fuchs said that Trump's announcement of transferring donations gave the misleading impression: "Donald J. Trump gave you this money."
"Donald J. Trump did NOT give the money. The foundation gave the money."
She notes there are good reasons to keep those matters separate.
"Donald J. Trump did NOT give the money. The foundation gave the money."
She notes there are good reasons to keep those matters separate.
Futerfas back up to respond: "This is what's troubling about the case. You've got the AG's office making claims about people engaging in waste, real waste."
He says that's not what's happening here.
He says that's not what's happening here.
"My point is, I think it colors the picture here, and it's not a pretty picture," he says.
Scarpulla stops his political bias soliloquy in its tracks.
"The color is whatever you put on it or the AG puts on it but it's not something that's really of interest to me," she says.
Scarpulla stops his political bias soliloquy in its tracks.
"The color is whatever you put on it or the AG puts on it but it's not something that's really of interest to me," she says.
"Fair enough, your honor," he responds.
Scarpulla: How do you explain Mr. Lewandowski saying, 'This is who gets the money?'
Rather than anyone from the Trump Foundation saying that, she notes.
Rather than anyone from the Trump Foundation saying that, she notes.
Both parties wrap up arguments. Hearing is over. Story TK.
Judge Scapulla did not rule on the motion to dismiss. She indicated earlier in the hearings that she would likely wait for the First Department (intermediate state appeals court) ruling in the Zervos case. Related jurisdictional issues.
Background: courthousenews.com/ny-court-weigh…
Background: courthousenews.com/ny-court-weigh…
Belated shout-outs to other reporters covering the hearing whom I didn't spot immediately because of the packed courthouse: @AndreaWNYC and @Fahrenthold, who of course would be on the case.
Naturally, great insights on their feeds.
Naturally, great insights on their feeds.
My developing story on today's Trump Fndn hearing has been up for a while. Look out for my updated story later today.
Tl;dr - Judge skeptical of Trump Fndn's dismissal bid, but an appellate court's ruling in an unrelated case crucial to case advancing.
courthousenews.com/judge-reluctan…
Tl;dr - Judge skeptical of Trump Fndn's dismissal bid, but an appellate court's ruling in an unrelated case crucial to case advancing.
courthousenews.com/judge-reluctan…
Good night, and thanks for following this feed.
