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Trump Inaugural Committee Settles Tax Law Violation Allegations

Posted on May 4, 2022

The tax-exempt organization that planned and carried out former President Trump’s 2017 inauguration festivities has reached a settlement with the District of Columbia over allegations that it violated tax laws by misusing charitable funds.

Trump’s 58th Presidential Inaugural Committee and the Trump Organization must pay $750,000 in “misused nonprofit funds” to the District of Columbia to settle allegations that the inaugural committee, Trump International Hotel, and the Trump Organization improperly used charitable funds to enrich the Trump family, D.C. Attorney General Karl A. Racine announced May 3.

The settlement money will be distributed to two District nonprofits that help youth.

Nonprofit funds cannot be used to line the pockets of individuals, no matter how powerful they are,” Racine said. “Now any future presidential inaugural committees are on notice that they will not get away with such egregious actions.”

Robert Weissman of Public Citizen praised Racine “for bringing forward a case to hold Trump accountable for this abuse and for a settlement that forces the Trump business and inaugural committee to pay to charity a sum equivalent to most of what the inaugural committee spent at the hotel.” 

In a statement reported by The Washington Post, Lee Blalack, attorney for the inaugural committee, called Racine’s claims baseless. He said the organization would have won the case had it gone to trial, but settled to avoid significant litigation expenses.

CNN quoted a statement released by the Trump Organization in which the former president said the settlement isn’t an admission of liability or guilt. Trump accused Racine of conducting a witch hunt and of weaponizing law enforcement against Trump and the Republican Party, according to CNN.

‘Exorbitant and Unlawful’ Payments

The settlement is the latest development in a lawsuit filed by the District of Columbia in 2020.

The District alleged that the inaugural committee made “exorbitant and unlawful” payments to Trump International Hotel to rent space for inauguration activities. The cost was $1.03 million over four days, significantly above market value and much higher than the hotel’s own pricing guidelines, Racine said at the time.

The inaugural committee paid the hotel $350,000 for access to event space over two days even though no events occurred, the lawsuit alleged. The nonprofit’s funds also paid for a private party for the Trump family and more than 1,000 guests at the hotel, according to the District.

The Trump Organization, in a statement published by Politico when the lawsuit was filed, called the allegations false and misleading.

The hotel rates charged to the committee “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,” the statement said, according to Politico.

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