Reporters just caught Trump in a new donor money embezzlement scandal

The Trump Inaugural committee just got caught forking over gobs of cash to the President’s DC hotel in serious violation of the IRS tax code and everything resembling an ethics guideline.

New evidence just emerged that the Inaugural Committee paid a staggering $175,000 every day to the Trump DC Hotel when other venues would’ve charged only $85,000 for the same thing, and included more services. Trump took in $700,000 for just four days rentals, even though leaked emails from his vendors show that they all warned him not to gouge the Inaugural Committee.

It’s illegal for a non-profit to pay inflated prices to insiders for services when someone who influences or controls the purchase will unjustly enrich themselves.

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WNYC and ProPublica reporting indicates that there’s a good reason that Manhattan-based federal prosecutors empaneled the grand jury to dig deeper into the Inaugural Committee’s potential crimes:

A spokesman confirmed that the nonprofit 58th Presidential Inaugural Committee paid the Trump International Hotel a rate of $175,000 per day for event space — in spite of internal objections at the time that the rate was far too high.

If the committee is deemed by auditors or prosecutors to have paid an above-market rate, that could violate tax laws prohibiting self-dealing, according to experts.

“It hasn’t looked normal from day one,” said President Obama’s two-time Inaugural Chairman Steve Kerrigan on MSNBC this week.  “How they were able to overspend at the Trump Hotel. How they don’t – under the law – report their expenditures allowed for a real opportunity for corruption, for illegal activity.”

“It’s really an inaugural slush fund,” said Kerrigan.

Federal prosecutors in both the Southern District from New York and Special Counsel Mueller’s Office have dug into the details of the Virginia-based Inaugural Committee non-profit.

Its chairman, Tom Barrack, also known as “the Trump Whisperer” is reportedly cooperating with Mueller, and convicted deputy chair Rick Gates plea bargained his cooperation last year.

Just this week, ProPublica also revealed that Barrack and Gates secretly planned a sketchy lobbying outfit in DC as a branch of the former’s global hedge fund Colony Capital.

Ironically, the Inaugural Committee may have committed one of the same sorts of easily proven tax crimes that Paul Manafort was convicted of doing, a so-called “checking the box” offense, which ProPublica says could be criminal if there is evidence of intent:

A question on the mandatory nonprofit tax return, Form 990, asks whether the organization engaged in any excess benefit transactions. The inaugural committee checked the “No” box.

If an IRS audit found such a civil violation, the inaugural committee would have to pay taxes on the amount of money it overpaid.

It could become a criminal violation, [attorney Brett] Kappel of Akerman said, if investigators uncover evidence that people knew that charging above-market rates to enrich the Trump Organization was illegal and did it anyway.

The entire Trump Inaugural committee investigation began based upon a recording of a conversation between convicted former Trump attorney Michael Cohen and Melania Trump’s close associate Stephanie Wolkoff, who got paid $26 million for the event planning through a company created only a few months before the event.

Wolkoff emailed Ivanka Trump looking for pricing and noting that a more reasonable hotel rate would be a lot lower, according to ProPublica:

“Please take into consideration that when this is audited it will become public knowledge,” wrote Stephanie Winston Wolkoff, an experienced New York-based event planner, suggesting a fair rate for the event spaces would be at most $85,000 per day, less than half of what was ultimately paid. That fee did not cover catering.

Ivanka Trump was still a senior Trump Org executive when she got involved in the hotel’s excessive fees schemes, right before entering government service as a senior White House advisor thanks to nepotism.

Who will ever forget President Trump’s empty inaugural parade and constant, easily disprovable intentional lies about crowd size when they think of January 20th, 2017?

Now, it’ll be up to criminal fraud, money laundering, and non-profit abuse prosecutors to forensically reconstruct how Trump used $107 million to throw a weeklong party with twice the largest inaugural budget ever collected and what President Obama’s former inaugural chair said was only one quarter as many events as Obama held.

Original reporting by Justin Elliott and Ilya Marritz at WYNC Studios.

 

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Grant Stern

Editor at Large

Grant Stern is a columnist for the Washington Press. He's also mortgage broker, writer, community activist and radio personality in Miami, Florida.


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