Trump Foundation Corruption Ruling Upholds Limit on Presidential Immunity

Donald Trump

Donald Trump’s claims he cannot be sued in state court because of presidential immunity were rejected by another New York state judge. (Photo: Getty)

In another significant test of presidential immunity, New York Supreme Court Judge Salliann Scarpulla rejected arguments by Trump’s lawyers that President Trump is immune under the U.S. Constitution’s “Supremacy Clause,” from being sued in state court because he is a sitting president.

The ruling today (Nov. 23) came on a motion filed by Donald Trump and his family to dismiss a lawsuit alleging widespread corruption at the Donald J. Trump Foundation. New York Attorney General Barbara Underwood charges the charitable organization “functioned as little more than a checkbook to serve Mr. Trump’s business and political interests.”

Trump’s lawyers filed the motion to dismiss the suit in October, setting up the first test of its merits, and the president’s potential immunity.

In rejecting Trump’s claim, Scarpulla cited the landmark Supreme Court ruling involving a civil suit filed by alleged mistress Paula Jones against then-President Bill Clinton.

“The Supreme Court of the United States specifically rejected Mr. Trump’s argument,” the judge stated in the ruling, released today (Nov. 23).

“In Clinton v. Jones, the Supreme Court held the doctrine of separation of powers does not bar a federal suit (including state law claims) against a sitting president. Specifically, the Supreme Court held that the president does not have immunity and is ‘subject to the laws’ for unofficial acts,” the ruling states.

A state would only be prohibited from “exercising direct control” over federal officers in a way that interferes with their federal responsibilities, and that is only in the context of the “execution of federal law,” the Supreme Court held.

Scarpulla ruled that the alleged actions taken by Trump do not involve his role as President and the potential remedy would not affect his ability to carry out his duties.

The judge also rejected arguments the president should be granted immunity because of “local prejudice” against “unpopular” federal officials; because state lawsuits place an unusual burden on a sitting president and because federal courts are a better equipped to hear cases against the president.

Trump tried to make the same arguments in favor of immunity from a lawsuit filed by Summer Zervos, a former contestant on “The Apprentice” who’s suing the president for defamation. He called her a “liar” when she went public with accusations that he groped and kissed her in 2007.

But in that case, New York Supreme Court Judge Jennnifer Schecter reached the same conclusion, after finding there was “absolutely no authority for dismissing or staying a civil action related purely to unofficial conduct” by a sitting president.

Trump is currently appealing that ruling, which could impact Scarpulla’s decision, depending on the outcome.

Click Here to Read the Full Ruling

The lawsuit seeks to dissolve the charitable group and to bar Trump and his family-member defendants from serving on the boards of all other New York state charities. The suit also demands $2.8 million in restitution. Trump would be banned for 10 years, effectively the rest of his life. His children would be banned for a year.

President Trump, daughter Ivanka and sons Donald Jr. and Eric Trump were named as defendants in the lawsuit, filed by New York State following a 21-month investigation.

Trump lashed out at the attorney general’s office when the suit was filed. “[They are doing everything they can to sue me on a foundation that took in $18,800,000 and gave out to charity more money than it took in, $19,200,000. I won’t settle this case!,” he wrote on Twitter.

The suit charges the Trumps engaged in “persistent illegal conduct” involving their management of the charitable organization over more than a decade, including “extensive unlawful political coordination” with the Trump 2016 presidential campaign.

Trump’s lawyers asserted that most of the lawsuit’s claims are barred by the statute of limitations. They also claimed a “pervasive bias” against the defendants disqualifies the New York AG from bringing the case.

But Scarpulla rejected arguments on both counts.

“As we detailed in our petition earlier this year, the Trump Foundation functioned as little more than a checkbook to serve Mr. Trump’s business and political interests,” Underwood said in a statement.

“There are rules that govern private foundations — and we intend to enforce them, no matter who runs the foundation. We welcome Justice Scarpulla’s decision, which allows our suit to move forward,” Underwood said.

The suit details actions by Trump and family members to use the charitable foundation as a virtual piggy bank for their own personal needs.

They include “using charitable assets to pay off his legal obligations, to promote Trump hotels and other businesses and to purchase personal items,” according to the AG’s office.

“In addition, at Mr. Trump’s behest, the Trump Foundation illegally provided extensive support to his 2016 presidential campaign by using the Trump Foundation’s name and funds it raised from the public to promote his campaign for presidency, including in the days before the Iowa nominating caucuses,” the suit stated.
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Trump campaign staff, including Campaign Manager Corey Lewandowski, dictated the timing, amounts and recipients of grants by the Foundation to non-profits, as evidenced by communications between Campaign staff and Foundation representatives–a violation of state and federal law.

At least five $100,000 grants were made to groups in Iowa in the days immediately before the February 1, 2016 Iowa caucuses, the AG’s office states.

The Trump Foundation also entered into at least five self-dealing transactions that were unlawful because they benefited Mr. Trump or businesses he controls,” the AG’s statement continues.

Click Here to Read the Lawsuit

“These include a $100,000 payment to settle legal claims against Mr. Trump’s Mar-A-Lago resort; a $158,000 payment to settle legal claims against his Trump National Golf Club in 2008 from a hole-in-one tournament and a $10,000 payment at a charity auction to purchase a painting of Mr. Trump that was displayed at the Trump National Doral in Miami.”

Even more damning for the President, the lawsuit states that he personally made all of the foundation’s spending decisions without consulting the board of directors. In fact, the board existed in name only, the investigation found. It stopped meeting in 1999.