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By James Oliphant and Emily Stephenson

WASHINGTON (Reuters) – New York’s attorney general ordered Republican presidential candidate Donald Trump’s charitable foundation to immediately stop fundraising in the state, saying the Trump Foundation was breaking a law that requires charities to register with a state government agency.

“The failure immediately to discontinue solicitation and to file information and reports required under Article 7-A with the Charities Bureau shall be deemed to be a continuing fraud upon the people of the state of New York,” according to a letter dated on Friday that the attorney general’s office posted online.

The “notice of violation,” issued by the office of New York state Attorney General Eric Schneiderman, followed a series of reports in The Washington Post that suggested improprieties by the Trump Foundation, including using the foundation to settle legal disputes.

The cease-and-desist order could undercut Trump’s efforts to make the Clinton Foundation, the family charity of Democratic rival Hillary Clinton, a central line of attack in his presidential campaign against her.

Trump has sought to paint the Clinton family charity as a “pay-to-play” operation under which the former secretary of state and her husband, former President Bill Clinton, rewarded big donors to the foundation with access.

The scrutiny on the Trump Foundation came as Trump was dealing with a torrent of bad news, including his shaky debate performance against Clinton on Sept. 26 and the release by the New York Times of tax records that showed Trump taking an almost $1 billion loss in 1995 that may have allowed him to avoid paying federal income taxes for up to 18 years.

In its series of stories on the Trump Foundation, the Post reported that Trump may have violated U.S. Internal Revenue Service rules against “self-dealing” by using foundation money to purchase two portraits of himself, which were then hung at Trump’s private golf clubs in New York and Florida.

The newspaper also said that Trump may have improperly used the foundation to settle legal disputes.

In response to the Post’s reporting, Schneiderman’s office launched an investigation into the Trump Foundation.

The Trump campaign, which has previously accused Schneiderman, a Democrat, of partisan motives, said in a statement that the charity would cooperate with the investigation.

“While we remain very concerned about the political motives behind AG Schneiderman’s investigation, the Trump Foundation nevertheless intends to cooperate fully with the investigation,” said Trump campaign spokeswoman Hope Hicks.

“Because this is an ongoing legal matter, the Trump Foundation will not comment further at this time,” she added.

The New York Attorney General’s Office is the sole regulator of charities in the state. A spokesman for the office said it is not unusual for the regulator to send notices to charities whose filings are overdue or incomplete, but a cease-and-desist letter is more serious.

While letters such as the one the Trump Foundation received are not judgments of wrongdoing, they are sent only after the office gets “a clear indication of wrongdoing,” the spokesman said.

Trump established the charitable foundation in 1988, but it runs no programs of its own. Instead, it donates money to other nonprofit groups. Once it started soliciting money from other donors beyond the Trump family, it was required by New York law to register with the state.

(Additional reporting by Emily Flitter; Editing by Caren Bohan Jonathan Oatis)

IMAGE: New York Attorney General Eric Schneiderman speaks at a news conference in New York City, March 29, 2016. REUTERS/Mike Segar

 

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