There are two levels of context one needs to understand this lawsuit. The first level is that much of what we’ve learned about the Trump Foundation suggests that it was basically a scam, a way for Trump to make shady contributions, pay his debts with other people’s money and do things such as buy a gigantic painting of himself.
For instance, Trump had to pay a fine when it was discovered that the foundation made an illegal $25,000 contribution to a political group connected to Florida Attorney General Pam Bondi, who just happened to be deciding at the time whether to pursue a fraud investigation into Trump University, which she most agreeably decided not to do. Not only was the contribution itself illegal — charitable foundations aren’t allowed to donate to political groups — it was hidden when the foundation reported on its tax forms that the contribution had instead gone to a legitimate nonprofit in Kansas with a similar name, to which they had actually given no money. In other cases, the foundation was used to pay legal settlements for Trump himself.
The second level of context is that, in all this, the Trump Foundation isn’t much different from everything else Trump did during his business career. The only reason nobody knew what the Trump Foundation really was before Trump ran for president was that no one had bothered to look. Once they did, it immediately became apparent that, while it might do something legitimate here or there, at its core, the foundation looks a lot like a grift.
You might say the same about Trump’s entire business career. As I’ve argued before, Trump wasn’t just a guy who skated close to the line a time or two or broke a few rules. In fact, when you add up the questionable bankruptcies; the cons such as Trump University; the pyramid schemes; the contacts with mobsters; the exploitation of foreign workers; the Trump projects that have collapsed amid charges of double-dealing; the unusual interest Russian oligarchs have in using Trump properties as a vehicle for money laundering, and more, Donald Trump could well be the most corrupt major business figure in America. So why would anyone expect his foundation to be an above-board charity that does good work and would never run afoul of the law?
If I had to predict, at this point, I would guess that President Trump and his kids will try to settle this suit by paying a small fine. Though he claims “I won’t settle this case!” that’s what he said about the Trump University fraud lawsuit too, and he ended up paying a $25 million settlement to his victims. So while the Trump Foundation may not send the president to the slammer, this lawsuit will likely end up telling us a lot about who he is and how he operates.