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Washington, D.C. sues Trump’s inaugural committee for abusing funds

Washington, D.C. Attorney General Karl Racine announced Wednesday that his office would be suing President Trump’s inaugural committee (PIC) for violating its nonprofit status and abusing funds. In the AG’s complaint, the office alleges the committee violated district law by “abusing nonprofit funds to enrich the Trump family, failing to seek out fair market value for event space and services rendered,” and “using nonprofit funds to throw a private party for President Trump’s family.”

The AG’s office alleges that the inaugural committee wrongfully spent $1.03 million in funds at the Trump International Hotel, spending “far above even the Hotel’s own internal pricing guidelines.”

In its statement, the Office of the Attorney General (OAG) says, “as part of its investigation, OAG discovered that one of the PIC’s key event planners, Stephanie Winston Wolkoff, raised concerns about the Trump Hotel’s event pricing with President-elect Trump, [Rick] Gates, and Ivanka Trump. This included issuing a written warning to Gates and Ivanka Trump that the Hotel’s final price proposal was at least twice the market rate.” (Rick Gates was a Trump campaign aide who became deputy chairman of the committee, and in December was sentenced to 45 days in jail for lying to law enforcement and charges of financial fraud.)

The AG alleges that the PIC paid a day’s full event space rate of $175,000 for the Trump International Hotel’s ballroom, a space they would ultimately be unable to use because it was used by a separate organization: the Presidential Inaugural Prayer Breakfast. What’s more, the Prayer Breakfast only paid $5,000 for use of the ballroom. 

And while the PIC had the ability to use spaces at other venues in the District, for discounted rates, the OAG said, the committee did not consider them, nor did it seek competing offers to the ones received from the Trump Hotel. 

Ivanka Trump (C) blows a kiss to the crowd as she leaves the stage with her husband Jared Kushner (R) and her brother Donald Trump Jr and his wife Vanessa Trump, after dancing on stage during the Freedom ball at the Walter E. Washington Convention Center on January 20, 2017 in Washington, DC. (Photo credit should read ROBYN BECK/AFP via Getty Images)

The Attorney General’s complaint also states that the PIC paid $300,000 for a private party for President Trump’s children (Donald Jr., Ivanka, and Eric).

“Event staff within the PIC recognized this would not be a proper use of PIC funds and had tried to cancel this event, but Gates and the Trump family went forward with the event anyway,” the OAG said in its statement. “Gates allowed the event to move forward after Trump Hotel staff complained that canceling it would hurt the Hotel’s bottom line.”

The Trump International Hotel previously expected to turn a loss, according to reports, but ended up pulling in nearly $2 million in profits.

The Trump reelection campaign declined to comment and the White house did not respond to a request for comment from Yahoo Finance.

This isn’t the first time that Trump businesses have profited in some way from his connection to his political office. By the spring of 2019, Trump’s campaign had spent over $1 million at Trump hotels and properties since the beginning of his presidency.

And according to the non-partisan non-profit Citizens for Responsibility and Ethics in Washington (CREW), the president has more than 2,300 conflicts of interest since taking office. "Donald Trump's business has profited off of his presidency since his first day in office, whether or not it was legal to do so,” said CREW spokesman Jordan Libowitz in response to the AG’s lawsuit. “It is good to see Attorney General Racine continue to act to ensure that the law is followed."

Kristin Myers is a reporter at Yahoo Finance. Follow her on Twitter.

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