President Donald Trump’s inaugural committee violated nonprofit laws by “grossly” overpaying for events held at a hotel owned by his family business, according to a lawsuit by the District of Columbia’s attorney general.
Trump’s inaugural committee made an “unfair and unjustified” payment of more than $1 million to the Trump hotel in downtown Washington for events from Jan. 17 to 20, 2017, failing to consider less expensive alternatives, according to the complaint by Attorney General Karl Racine made public on Wednesday.
The president and his eldest daughter, Ivanka, now a senior adviser to the president, were both aware that the Trump International Hotel was overcharging the committee for its use of event space and went ahead with the deal anyway, Racine said. The committee didn’t use the facilities for the full four days that included Inauguration Day, and one of the events “amounted to a private party for the Trump children,” he said.
Neither Trump is a named defendant in the case. Both were top executives at the family-owned Trump Organization before Trump became president.
“The Trump Hotel ended up charging rental rates that were well in excess of its own pricing guidelines,” Racine said. Those payments flowed directly to the Trump family.
A spokeswoman for the Trump Organization rejected Racine’s lawsuit “a clear PR stunt” that was “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 the hotel had just recently opened, possessed superior facilities and was centrally located on Pennsylvania Avenue,” she said in a written statement.
The lawsuit, filed in the District of Columbia Superior Court, is the latest legal attack on Trump by Racine, a Democrat. He previously sued Trump for violating the emoluments clause of the U.S. Constitution that bars presidents from profiting from their position, a case that is pending before a federal appeals court.
Racine asked a Superior Court judge to place the funds paid to the Trump Organization in a trust and restore them to a “proper public purpose” by directing them to another nonprofit “dedicated to promoting civic engagement” of U.S. Citizens.
Racine’s lawsuit detailed concerns about the high prices demanded by the Trump hotel, as expressed by Stephanie Winston Wolkoff, an event planner working for the inaugural committee. She shared them directly with Trump and his daughter at a meeting on Dec. 16, 2016, Racine said. In an email the next day, she expressed her concerns to Ivanka Trump and Rick Gates, a senior inaugural official who later pleaded guilty to federal crimes unrelated to the inauguration.
“These are events in PE’s [the President-elect] honor at his hotel and one of them is with and for family and close friends,” Winston Wolkoff wrote. “Please take into consideration that when this is audited it will become public knowledge that locations were also gifted and costs underwritten to lower rental fees.”
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