New Lawsuit Says Trumps Oversaw Inaugural Overbilling
Reprinted with permission from ProPublica.
Then-President-elect Donald Trump and his daughter Ivanka were warned in 2016 that the family business was overcharging the nonprofit presidential inaugural committee — and let it happen anyway, according to a suit filed Wednesday by the Washington, D.C., attorney general.
In the civil complaint, Attorney General Karl Racine charged the Trump inaugural committee and the Trump Organization with using around $1 million of charitable funds to improperly enrich the Trump family.
An experienced event planner who was working for the inaugural, Stephanie Winston Wolkoff, raised concerns directly with Donald and Ivanka Trump that the Trump International Hotel in Washington was trying to overcharge the inaugural committee.
“Winston Wolkoff met with President-elect Trump and Ivanka Trump and discussed these concerns with both individuals,” the suit says. “The President-elect acknowledged these concerns and directed that Ivanka Trump would handle this issue.”
The complaint accuses three entities — the Trump Organization, the inaugural committee and the Trump hotel — of subverting the public purpose of a charity for the Trump family’s private benefit.
At the center of the complaint is a four-day rental agreement for the downtown Washington hotel’s ballroom and adjacent spaces. The hotel, and by extension the Trump family, was paid far above market rate, according to internal documents the attorney general obtained by subpoena.
Documents uncovered by the D.C. attorney general contradict earlier statements by spokespeople for the Trumps that they had little or no involvement in the negotiations.
“The president was focused on the transition during that time and not on any of the planning for the inauguration,” Sarah Huckabee Sanders said in December 2018.
Peter Mirijanian, a spokesman for Ivanka Trump’s ethics lawyer, told WNYC and ProPublica in 2018 that Ivanka had only been contacted once about inauguration spending at Trump’s hotel: “Ms. Trump was not involved in any additional discussions.”
The attorney general’s documents show deeper involvement.
Ivanka Trump was made aware of concerns about overpayment in a Dec. 12, 2016, email from Rick Gates, the deputy to the inaugural chairman, which she responded to two days later. On Dec. 16, Wolkoff raised her concerns in person with Donald and Ivanka Trump. The next day, Wolkoff again objected to the Trump hotel’s proposed rates.
“These events are in PE’s [the president-elect’s] honor at his hotel and one of them is for family and close friends,” she wrote in an email to Ivanka and Gates. “Please take into consideration that when this is audited it will become public knowledge.”
Other venues hosting inauguration events provided space for free.
On Jan. 10, 2017, the inaugural committee finalized its contract with the hotel at $175,000 per day, over Wolkoff’s objections. The committee was also charged for days when it wasn’t even using the space, the suit says.
One event, costing more than $300,000, was a private reception at the Trump hotel “benefiting only the children of the President,” the complaint says.
“DJT is not expected to attend but was more for you, Don and Eric,” Gates wrote in an email to Ivanka Trump several days before the event, according to the complaint.
A spokesperson for the Trump Organization dismissed the D.C. suit in an emailed statement:
“The AG’s claims are false, intentionally misleading and riddled with inaccuracies. The rates charged by the hotel were completely in line with what anyone else would have been charged for an unprecedented event of this enormous magnitude and were reflective of the fact that [sic] hotel had just recently opened, possessed superior facilities and was centrally located on Pennsylvania Avenue. The AG’s after the fact attempt to regulate what discounts it believes the hotel should have provided as well as the timing of this complaint reeks of politics and is a clear PR stunt.”
Spokespeople for the inaugural committee, the White House and Ivanka Trump did not immediately comment. A spokesman for the IRS, which regulates charities, said “federal law prohibits the IRS from discussing specific taxpayers.”
D.C. is asking the court to compel the Trump Organization to place at least $1,033,757 in a trust, so the money can be allocated “to another nonprofit entity dedicated to promoting civic engagement of the citizens of the United States of America.”
The Trump inaugural committee drew scrutiny from the moment it first reported its financials. The committee raised nearly $107 million, close to double the haul of President Barack Obama’s record-setting 2009 bash, despite being a much smaller event. Past inaugural planners said they would struggle to spend a sum of money that large.
“It’s inexplicable to me,” Greg Jenkins, who led former President George W. Bush’s second inaugural committee, told Trump, Inc.