AG Racine Claws Back $750K in Misspent Nonprofit Funds From Trump Organization & Presidential Inaugural Committee

OAG Holds Trump’s Presidential Inaugural Committee Accountable for Illegal Actions & Directs Funds to District Nonprofits Focused on Youth Civic Engagement

WASHINGTON, D.C. – Attorney General Karl A. Racine today announced that the Trump Organization and Donald Trump’s Presidential Inaugural Committee (PIC) will be required to pay $750,000 to the District to resolve allegations that the PIC, the Trump International Hotel, and the Trump Organization illegally misused nonprofit funds to enrich the Trump family. Those funds will then be redirected to two nonpartisan nonprofit organizations – Mikva Challenge DC and DC Action – that promote civic engagement of youth in the District.

“After he was elected, one of the first actions Donald Trump took was illegally using his own inauguration to enrich his family. We refused to let that corruption stand,” said AG Racine. “With our lawsuit, we are now clawing back money that Trump’s own inaugural committee misused. Instead, we’re giving it to District nonprofits that will use those funds to help support civic engagement for the next generation of District leaders. No one is above the law—not even a president. Nonprofit funds cannot be used to line the pockets of individuals, no matter how powerful they are. Now any future presidential inaugural committees are on notice that they will not get away with such egregious actions.”

The Office of the Attorney General (OAG), which enforces local nonprofit laws, filed suit against the PIC, the Trump Hotel, and the Trump Organization in 2020 for illegally enriching the Trump family through payments to their businesses. In its suit, OAG alleged that the PIC—a nonprofit organization—misused charitable funds to dramatically overpay the Trump Hotel for event space, throw a private party for the former president’s adult children, and pay a private debt owed by the Trump Organization. After two years of hard-fought litigation and in-depth discovery—including depositions of Trump family members and insiders—the defendants agreed to a settlement requiring the Trump Organization and the 58th Presidential Inaugural Committee to return $750,000 in misused nonprofit funds.

Because this recovery consists of nonprofit funds meant to serve the public, the funds will be divided evenly between two local nonpartisan nonprofit organizations, Mikva Challenge DC and DC Action, which promote civic engagement, democracy, and youth leadership in the District. OAG has taken similar action in other nonprofits lawsuits it filed.

"Mikva DC is honored to have been chosen by the OAG to have the opportunity to invest in the brilliance, leadership and vision of our youth as they build more just and equitable schools and communities,” said Robyn Lingo, Executive Director of Mikva Challenge DC. “We know that investing in our democracy starts by supporting and empowering young people to be active changemakers. We greatly appreciate AG Racine’s work to ensure these funds are used by organizations, like ours, supporting the District."

Mikva Challenge DC is a nonpartisan nonprofit organization dedicated to uplifting the voices of District youth and empowering young people to become informed and active civic leaders. Through partnerships with teachers, the organization provides youth-centered civic learning experiences in school. Through its Youth Councils and Summer Fellows programs, it provides opportunities for students to engage in real-life democratic leadership outside of the classroom. Mikva Challenge DC is a local chapter of Mikva Challenge, a national organization. 

“DC Action is grateful to Attorney General Karl AG Racine for bringing this suit and ensuring the resources from the settlement are put to good use by investing in District organizations committed to meeting the needs of young people and strengthening our democracy through civic engagement,” said Kimberly Perry, executive director of DC Action “Like all of us, the District's children, youth, and families are doing their best to recover from the pandemic's distress and isolation, but more systems of support are needed. We will use these resources from this settlement to deepen our work to ensure that every child and young person has what they need to grow and thrive.” 

DC Action is a non-partisan, nonprofit advocacy organization focused on empowering young people and ensuring that all kids in the District of Columbia can reach their full potential. It is home to multiple coalitions that advocate for policies and resources that benefit children, youth, and their families, including equitable early childhood education, robust afterschool and out-of-school enrichment opportunities, and fighting youth homelessness.

Under District law, the Attorney General has the responsibility to ensure that nonprofit entities operating in DC spend their funds for the a public purpose, , and not to benefit a private individual or company—especially an individual who has influence over the organization. When funds are misspent, OAG can take legal action to ensure they are recovered and directed to an appropriate nonprofit purpose that benefits the public.

A copy of the consent motion and settlement agreement is available here.  

OAG’s Nonprofit Enforcement Work
Under AG Racine, OAG has invested resources to expand its capacity to enforce District laws governing nonprofits. OAG has litigated and resolved actions against several charter schools and the president of a nonprofit that owned an affordable housing building for mismanagement of nonprofit funds. The office has sued several organizations for misuse of charitable funds, including a local fraternity, a nonprofit related to the U.S. pavilion at the 2020 World’s Fair in Dubai, and the NRA Foundation. Additionally, OAG has obtained an order that District nonprofit Howard Theatre Restoration, Inc. dissolve for failing to function in support of the District’s historic Howard Theatre, investigated the closure of Providence Hospital to ensure nonprofit assets were not improperly removed from the District, and intervened to resolve a board dispute at an internet freedom organization.

If you suspect that a nonprofit doing business in the District of Columbia is violating District law, please contact OAG at (202) 727-3400.