At the hearing in state court in Lower Manhattan, Alan Futerfas, a private attorney for Trump and his three eldest children, said it was wrong for New York Attorney General Barbara Underwood to accuse them of “waste” at the foundation. None of the Trumps, he said, had ever used the charity’s money to pay for dinner, a vacation home or travel.<doc-sep>A New York judge asked lawyers for the Trump Foundation on Thursday about the organization's involvement with a highly publicized fundraiser hosted by President Trump in Iowa when he was a candidate in January 2016. The event, which was held the same night as a Republican primary debate that Mr. Trump skipped, is the focal point of a lawsuit filed in June by the office of New York Attorney General Barbara Underwood. The suit accuses Mr. Trump of having used his private foundation as a campaign tool during the 2016 presidential race and to settle legal claims for his businesses in the past. The lawsuit alleges that the Donald J. Trump Foundation was operated by its directors, three of whom are Mr. Trump's children Donald Jr., Eric and Ivanka, as a "shell corporation that functioned as a checkbook" for the Trump campaign and businesses. Soon after the lawsuit was filed on June 14, Mr. Trump insinuated in a tweet that the case was a politically motivated filing by "sleazy New York Democrats." His attorney, Alan Futerfas, argued similarly in a motion to dismiss the lawsuit filed in August. Futerfas wrote that former New York Attorney General Eric Schneiderman, who resigned in disgrace in May, "solicited financial donations to his own campaign for re-election based on his promise to 'lead the resistance' and attack the President and his policies, describing the President as out to 'hurt' New Yorkers." At a hearing in Manhattan on Thursday to hear arguments on the motion to dismiss, New York Supreme Court Justice Saliann Scarpulla appeared skeptical of Futerfas' political bias claims. "It's not something that's really of interest to me," he said, adding later, "I don't want to get involved with that." "The allegations are what they are," Scarpulla said. The Trump Foundation is accused of giving control of money raised during the televised Iowa fundraiser — held during a debate that Mr. Trump skipped — to his campaign, which would be a violation of New York laws governing how private foundations operate. During the hearing, Scarpulla questioned Futerfas about whether the fundraiser was a campaign event. "During that fundraiser, did he speak about his campaign?" she asked. Futerfas replied, "Yes." "So it wasn't just a fundraiser," Scarpulla observed, saying it was also a political event. "He was certainly there as a candidate. Let's put it that way," Futerfas said. That same month the foundation's treasurer Allen Weisselberg emailed then-Trump campaign manager Corey Lewandowski, writing, "we should start thinking about how you want to distribute the funds collected." Weisselberg is also chief financial officer of the Trump Organization. A private foundation's charitable giving is typically controlled by its board of directors, who are required by New York law to meet regularly, as Scarpulla noted during Thursday's hearing. In its lawsuit, the attorney general's office said Donald Jr., Eric and Ivanka never held any board of directors' meetings. "Even if they are doing spectacularly good work, they are still required to follow the law," Scarpulla said. Scarpulla said Thursday she'll reserve judgement on the motion to dismiss until a ruling is made in a different New York court on whether a defamation case against Mr. Trump brought by former Apprentice contestant Summer Zervos can proceed. Zervos claimed in 2016 that Mr. Trump forcibly kissed and groped in December 2007. She sued after Mr. Trump called her and a dozen other women who made sexual misconduct allegations against him "liars." In that case, Mr. Trump's lawyers have argued that the Constitution's supremacy clause prevents a sitting president of the United States from being sued in state court. A finding in Mr. Trump's favor in the Zervos dispute would almost certainly put the attorney general's case, which is also filed in state court, in peril. The Zervos dispute hinges on the landmark 1997 case Clinton v. Jones, in which the Supreme Court ruled a sitting president has no immunity in federal court from civil law litigation for actions taken before taking office. Whether that decision applies to state courts has yet to be determined.<doc-sep>(CNN) — The judge overseeing the New York attorney general’s lawsuit against President Donald Trump’s charitable foundation suggested Thursday that she will wait until an appeals court rules on whether a sitting president can be the subject of a civil lawsuit before determining whether to dismiss the state’s case. A New York appeals court is weighing that question after a judge in a separate case allowed a defamation lawsuit against Trump brought by Summer Zervos, a former contestant on “The Apprentice,” to proceed. At issue is whether the president can be sued in state court for conduct outside his official duties. The US Supreme Court ruled in 1997 that President Bill Clinton could be subject to a federal lawsuit over such conduct, but it didn’t determine that issue on the state level. In state Supreme Court in Manhattan on Thursday, Justice Saliann Scarpulla said the appeals’ court determination in the Zervos matter will affect whether the state can include Trump himself in its civil case concerning the foundation, in which the state alleges the charity violated nonprofit laws and abused its tax-free status. But Scarpulla said that an appeals’ court ruling in favor of the President wouldn’t entirely nullify the attorney general’s case; rather, it would likely force the office to amend its lawsuit to remove Trump himself as a defendant. The suit, filed in June, now names as defendants the foundation, Trump and his three eldest children – Eric, Donald Jr. and Ivanka – all of whom sat on the charity’s board. It alleges that they violated federal and state charities law with a “persistent” pattern of conduct that included unlawful coordination with the 2016 Trump presidential campaign. The attorney general’s office, led by Barbara Underwood, is seeking to dissolve the Trump Foundation and wants $2.8 million in restitution, plus additional penalties. The office is also seeking to ban Trump from serving as a director of any New York nonprofit for 10 years and to prohibit the other board members, the Trump children, from serving for one year. The focus of the majority of Thursday’s hearing was on the defendants’ motion to dismiss the case, with foundation attorney Alan Futerfas concentrating on two primary factors: That the foundation funds were used for charitable purposes, rather than being spent on personal luxuries, and that there was no transaction between the foundation and Trump’s presidential campaign – a factor required by statute. “There’s no house in the Hamptons” or extravagant dinners on the ledger, Futerfas said in denying the Trumps personally benefited from the foundation. “Nothing like that,” he added. “So where did the money go, your honor?” Futerfas answered his question by pointing to an enlarged screen displaying the logos of dozens of nonprofits, including the Martha Graham Dance Company and Autism Speaks. Iowa veterans fundraiser The question of whether a transaction between the foundation and the campaign exists rests, both parties appeared to acknowledge, on one central episode: a nationally televised charity fundraiser for military veterans that Trump held in Des Moines, Iowa, on January 28, 2016, just ahead of the Republican caucus vote there. The foundation received $2.8 million as a result of that event and, the lawsuit, alleges, Trump campaign staff, including his campaign manager at the time, Corey Lewandowski, then directed the disbursement of those funds for Trump’s political benefit. “At the time of that fundraiser, Mr. Trump was a presidential candidate, am I right?” the judge asked Futerfas. “Yes, he was,” Futerfas replied. “And so who directed the payment of those funds from the fundraiser?” the judge asked. She noted that in evaluating the motion to dismiss, she is required to accept the allegations in the lawsuit, including those concerning Lewandowski’s involvement. Lewandowski isn’t named as a defendant in the suit. “To me, that seems like a very easy case of a related transaction,” the judge said. “It is not an incidental publicity. It is someone-who-is-running-for-president-of-the-United-States type of publicity.” An assistant attorney general, however, disputed Futerfas’s claims, saying the office does allege “personal enrichment” by Trump. Assistant Attorney General Yael Fuchs cited several examples from the lawsuit, including a $100,000 payment from the charity that was used to settle legal claims against Trump’s Mar-a-Lago resort. As for the Iowa event, Fuchs said the Trumps were “completely conflating the identity of the foundation with the identity of the campaign – just really usurping it for the purposes of the campaign.” “They say that the foundation was a passive recipient of the transactions,” she said. “To use the modern parlance, that’s not a thing,” Fuchs added, drawing laughter from the courtroom. The judge, attempting to bring clarity to the question of whether a “transaction” occurred between the foundation and the campaign, asked: “There’s no check from the foundation to Donald J. Trump for President, correct?” “Correct,” Fuchs acknowledged, but pointed out that the campaign had control over the foundation’s transactions, and made them for the express political benefit of Trump. Noting email exchanges between Lewandowski and Trump Organization Chief Financial Officer Allen Weisselberg that were included in the lawsuit, Fuchs stressed that Weisselberg, who was also the foundation’s treasurer, explicitly ceded control of the disbursements to Lewandowski. Said Fuchs: “The timing and the manner of the distribution was controlled by the campaign for the benefit of Mr. Trump the candidate.” Weisselberg, who was deposed by the attorney general’s office as part of its lawsuit, was also a key figure in federal prosecutors’ case against former Trump attorney Michael Cohen, who pleaded guilty in August to charges including tax fraud. Weisselberg received immunity in that investigation, CNN has reported. Though the foundation attorney, Futerfas, in the final minutes of the hearing attempted to argue a point he made in court filings alleging political bias on the part of the attorney general’s office, which is now and has for years been headed by a Democrat, the judge quickly curbed that effort. “I don’t want to get involved in that,” she said. “The allegations are what they are.”<doc-sep>President Trump Donald TrumpTrump lashes out after grand jury seated for New York criminal probe Schumer tees up vote on Jan. 6 commission bill Senators struggle to save Jan. 6 commission MORE's charitable foundation paid $10,000 for an oil portrait of Trump at a 2014 auction after no other bids were received, according to an attorney for the president. Alan Futerfas offered the account Thursday as one of several reasons for dismissing a lawsuit filed by New York Attorney General Barbara Underwood (D) against the Donald J. Trump Foundation over transactions made the by charity, Bloomberg News reported. ADVERTISEMENT The lawyer told a packed courtroom in New York that when the president’s personal charitable foundation placed the bid, it was only intended to "get the bidding started.” “No one else bid,” Futerfas said, adding that the foundation was then “stuck with the painting." Some of the other transactions cited in the state’s lawsuit include a $25,000 payment in 2013 to a political organization working to reelect Florida Attorney General Pamela Bondi, and a $100,000 payment in 2007 to cover a Mar-a-Lago legal settlement. During the hearing, Futerfas reportedly said Underwood's suit was politically biased, and he called it part of a larger effort by Democrats to undermine his client’s presidency. Yael Fuchs, a lawyer for the state attorney general, reportedly contended that it “is beyond dispute that these were improper self-dealing transactions.” New York State Supreme Court Justice Saliann Scarpulla dismissed Futerfas's claims of political bias, according to Bloomberg. Scarpulla reportedly said she can’t decide on the case until an appellate court rules in a separate case on whether the president has immunity from litigation in state courts.<doc-sep>
The state accused Trump of using donations to pay off financial obligations. Attorneys for the Trump Organization and prosecutors from the New York Attorney General’s Office squared off in state court for the first time on Thursday over allegations that President Donald Trump and his children repeatedly misused charitable donations to the Trump Foundation. Alan Futerfas, an attorney for the Trump Organization, which is linked to the foundation, sought to convince Judge Saliann Scarpulla of the New York Supreme Court that the lawsuit, filed by the New York Attorney General's office in June, was politically motivated. The judge, however, quickly shut that argument down. "I don't want to get involved in political bias,” the judge told Futerfas. “The allegations are what they are." The investigation into the foundation began under former New York Attorney General Eric Schneiderman. Attorneys for the foundation have alleged he was investigating the foundation while raising campaign money on the promise to oppose the president's agenda. Schneiderman has since resigned amid accusations of domestic abuse first published by The New Yorker. Attorney General Barbara Underwood took over the investigation upon Schneiderman’s resignation and filed the lawsuit in June. In a recent court filing, the New York Attorney General's office wrote that the president used foundation funds “for his benefit to advance his personal, business, and political interest in violation of federal and state law governing charities.” Attorneys for Trump argued that the money was always used for charitable purposes within the law, such as in 2014 when Trump bid $10,000 of foundation money on a portrait of himself at a charity auction benefiting the Unicorn Foundation. Futerfas told the court Trump only donated to start the bidding, but when no one else would bid, the Donald J. Trump Foundation was stuck with the painting. The suit seeks to dissolve the Donald J. Trump Foundation and to prohibit Donald Trump Jr., Eric Trump, and Ivanka Trump from serving on other charitable boards in the future. Judge Scarpulla did not rule on the Trump Foundation’s motion to dismiss the suit, opting instead to wait for an unrelated appeals court decision in New York that would determine whether or not the President of the United States can be sued in state court.