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Trump organizations agree to pay $750,000 to settle lawsuit with D.C.

The city alleged the groups misused nonprofit funds donated for inauguration to benefit Trump and his family

The D.C. lawsuit alleged the inaugural committee coordinated with the Trump family to overpay for event space in the Trump International Hotel in downtown Washington. (Julio Cortez/AP)
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The Trump Organization and former president Donald Trump’s presidential inaugural committee on Tuesday agreed to pay the District $750,000 to settle a lawsuit the city filed alleging the organizations misused nonprofit funds to benefit the former president and his family.

The city’s Office of the Attorney General filed a lawsuit in 2020 in D.C. Superior Court alleging the inaugural committee, a nonprofit corporation, coordinated with Trump’s family to overpay for event space in the Trump International Hotel in downtown Washington and even paid for space on days when it did not hold events. Lawyers for the District also accused Trump’s organization of improperly using nonprofit funds to throw a private party on Jan. 20, 2017, for Trump’s children — Ivanka, Donald Jr. and Eric — which cost $300,000. The city also alleged that the Trump Organization, the inaugural committee and the Trump International Hotel misused $1.1 million.

D.C. Attorney General Karl A. Racine said the settlement enables the city to “claw back money” Trump’s inaugural committee misused.

“After he was elected, one of the first actions Donald Trump took was illegally using his own inauguration to enrich his family,” Racine said in a statement. “We refused to let that corruption stand. 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 status of key investigations involving Donald Trump

Nonprofits such as Trump’s committee cannot use funds to give private benefits to its leaders. Trump was not formally an officer of the inaugural committee, but Racine has asserted that for the purposes of the lawsuit, Trump and his family should still be treated as its leaders because they exercised control off the books.

Lee Blalack, counsel for the inaugural committee, in a statement, described the attorney general’s claims as “baseless” and said the group settled to avoid litigation costs, which would have been covered by its insurance company but could have exceeded the agreed-upon settlement amount. Blalack added that if the case had gone to trial, the organization would have “prevailed based on the evidence.”

Racine’s office identified two D.C. nonprofit, youth-oriented organizations — Mikva Challenge DC and DC Action — that will each receive $375,000 via the settlement.

Kimberly Perry, executive director of DC Action, said the 30-year-old child advocacy organization plans to use the funds to continue various initiatives for D.C. youths on education, health and economic security.

“Our ultimate goal is that every child and young person has a chance to grow up safe, resilient, powerful and heard and to grow up to be productive adults,” Perry said. “We are appreciative of Attorney General Racine for selecting us at DC Action to be the recipient of these funds. We will put them to good use.”

Mikva Challenge, which has been in the District since 2015 and part of a national organization, trains D.C. youths on civic leadership and democracy. It also provides summer jobs for school-age youths to work with D.C. political leaders such as the city council, attorney general’s office and the mayor’s office. On May 17, the organization will hold a mayoral debate regarding issues affecting D.C. youths.

“We greatly appreciate Attorney General Racine’s work and will use the funds to invest in our civic education and engagement for D.C. youth,” said Robyn Lingo, executive director of Mikva Challenge DC.

In the city’s lawsuit, attorneys asserted the Trump Organization and the inaugural committee paid “vastly inflated prices” to the hotel even after senior committee staff and members of the Trump family were warned that the charges were unreasonable. The committee’s payments, the lawyers argued in filings, “flowed directly to the Trump family,” thereby disregarding the committee’s bylaws that prohibited the use of its funds for private enrichment.

In court documents, the Trump Organization and the inaugural committee argued that the Trump hotel charged “market rate” for its spaces, in line with its status as a luxury hotel near the White House.

Attorneys for Trump could not be immediately reached for comment on the settlement.

The city lawyers also argued that the Trump inauguration committee misused nonprofit funds by paying a $50,000 debt owed for rooms at the Loews Madison hotel for Trump’s family and friends during inauguration week. The Trump Organization reserved the rooms, the lawyers alleged, then failed to pay the bill.

Trump’s attorneys had unsuccessfully tried to get the case dismissed.

A D.C. Superior Court judge in 2021 threw out part of the District’s lawsuit alleging Trump’s 2017 inaugural committee “wasted” $1 million at the president’s hotel after determining the city would not be able to prove the committee’s intent. But the judge also ruled the remainder of the lawsuit accusing the nonprofit of misused assets could remain.

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