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NY judge orders Trump to pay $2M over his charitable foundation

President Donald Trump speaks to members of the

President Donald Trump speaks to members of the media on the South Lawn of the White House on Monday. Credit: AP / Patrick Semansky

A New York judge on Thursday ordered President Donald Trump to pay $2 million to settle a lawsuit alleging he misused his charitable foundation to influence the 2016 presidential primaries.

State Supreme Court Justice Saliann Scarpulla found Trump violated state charities laws by illegally allowing his campaign  to “orchestrate” a foundation fundraiser  and other activities to further his political and business interests ahead of the 2016 Iowa caucuses. The $2 million will be distributed to an agreed-upon set of other charities.

In addition, the judge signed off on a 2018 agreement to close the Trump Foundation and allocate the foundation's remaining $1.7 million to other nonprofit groups. However, she rejected a request by state Attorney General Letitia James to force Trump to pay an extra $5 million in punitive damages.

“The Trump Foundation has shut down, funds that were illegally misused are being restored, the president will be subject to ongoing supervision by my office, and the Trump children had to undergo compulsory training to ensure this type of illegal activity never takes place again,” James, who had sued Trump over the use of charity funds, said in a statement.

She said a stipulation in the settlement required Trump to admit to “personally misusing funds at the Trump Foundation.”

Scarpulla said Trump breached his fiduciary duty to the Trump Foundation by allowing his campaign to plan a fundraiser shortly before the 2016 Iowa caucuses to boost his political standing.

 “Mr. Trump’s fiduciary duty breaches included allowing his campaign to orchestrate the fundraiser, allowing his campaign, instead of the foundation, to direct distribution of the funds, and using the fundraiser and distribution of the funds to further Mr. Trump’s political campaign,” Scarpulla wrote. 

The Trump Foundation had been headquartered in New York.

Scarpulla said Trump's pre-caucus event raised $2.8 million, which James requested be paid in full. But the judge settled on $2 million.

 Alan Futerfas, attorney for the Trump Foundation, didn’t address the damages order other than to note the judge didn’t grant James’ request for greater penalties, including interest. He called the lawsuit politically motivated and said the charity was happy to distribute its remaining funds.

 “Following the 2016 presidential election, the Trump Foundation publicly announced its intention to voluntarily dissolve and distribute all of its remaining funds to charity. Unfortunately, that donation was delayed due to the Attorney General’s politically motivated lawsuit,” Futerfas said. "Now that this matter is concluded, the Trump Foundation is proud to make this additional contribution."

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