Behind Trump’s philanthropy, or lack thereof

(originally posted at Philanthropy Daily)

Like most newspapers, the Washington Post does not have any reporter whose beat is philanthropy—until this year, when David A. Fahrenthold became the Donald Trump philanthropy reporter.

In an interview with the Washington Post’s Chris Cilizza, Fahrenthold said that the Post’s executive editor, Martin Baron, “stopped me in the elevator one (primary) debate night and suggested we look into the Trump Foundation specifically. I also became interested in researching Trump’s broader history of charity. If this was how he would act under the microscope of a presidential campaign, how had he acted in past years, back when nobody was looking?”

Baron was right to assign Fahrenthold to this beat. Trump has repeatedly boasted how generous he is. It appears that generosity is part of Trump’s brand. Moreover, it’s the responsibility of the press to thoroughly vet every major candidate.

I’ve looked at Fahrenthold’s reporting. If he were a baseball player, he would have scored a grand slam, a single, and a lot of foul balls.

Let’s look at what Fahrenthold has discovered.

  1. Fahrenthold’s grand slam is that nearly every claim Donald Trump has made about giving vast sums to charity is bogus. Over the past six months, both Trump and his children have repeatedly said that Trump is an incredibly generous guy, but there’s no evidence that he made any of the massive gifts he is alleged to have made.

For example, in October 2015 he was introduced at a rally at the Treasure Island casino in Las Vegas where the casino’s owner, Phil Ruffin, announced that Trump had made a $20 million gift to St. Jude’s Children’s Research Hospital. Trump stood and smiled and accepted the applause of the crowd.

Fahrenthold looked into the matter. A spokesman for the hospital said they had not announced a gift and it was their policy (which is the correct one) not to disclose their donors. There is no other evidence that such a donation was ever made.

By contrast, St. Jude’s announced that a wing of the hospital would be named after Eric Trump after he agreed to give the hospital $20 million—over ten years. The Eric Trump Foundation has long been a donor to St. Jude’s.[1]

  1. Fahrenthold gets a single for his discovery that in 2013 the Donald J. Trump Foundation made an illegal campaign contribution to a political group, And Justice for All, controlled by Florida Attorney General Pam Bondi, apparently in the hopes of squelching an investigation by the state of Florida on Trump University, the scandal-plagued education program. The foundation paid the IRS a $2,500 excise tax for making this illegal donation

The explanation offered by Trump Organization senior vice president Jeffrey McConney is both ludicrous and plausible. They say an underling was authorized to cut both Donald Trump’s personal checks and Donald J. Trump Foundation ones, with the rule that if the clerk found an organization listed in some sort of “book of official charities” (which wasn’t specified) the check was supposed to be made by the Trump Foundation. The Trump Foundation reported a donation to a group with a name similar to “And Justice for All” in Colorado, but the Colorado group never received the money.

I accept the statements of Trump Organization spokesmen that this donation was a screw-up rather than a deliberate attempt to violate the law. But nonetheless this affair is newsworthy and should be public knowledge.

  1. Fahrenthold next reported a series of transactions that could have violated self-dealing laws. One set involved some fees Trump received where the fees for Donald Trump’s services ended up in the bank account of the Trump Foundation. One set of fees concerned $400,000 Trump received for a Comedy Central roast in 2011. Another concerned $1.9 million that Richard Ebers paid Trump over several years. Ebers runs a company that offers customers “unique experiences,” including spending time with Donald Trump.

Apparently, the law is that if you receive a fee for your services and direct that the fee is paid to charity, you have to pay income tax on the fee.

In addition, on at least two occasions the Trump Organization received fines that were supposed to be paid to charities, and the Donald J. Trump Foundation paid for the fines. In 2007, Trump’s Mar-a-Lago Club was fined $120,000 by the town of Palm Beach, Florida for having a flagpole that was too high, and the Donald J. Trump Foundation paid for the fine. In addition, a golf club in New York State that Trump owned was ordered to pay $158,000 to charity, and the Trump Foundation paid the fine.

These decisions apparently violate the laws against self-dealing. (I’m qualifying this sentence because I’m not a lawyer, and no one has been charged.) The press had more fun with another case, where Trump paid $10,000 at a charity auction for a portrait by a “speed painter,” and kept it. A reporter for Univision found the portrait in the bar of the Trump National Doral golf club.

Trump spokesman Boris Epshteyn told MSNBC that Trump was “storing” the painting in the hotel bar. Here we must side with the Trumps. After all, many people crave “safe spaces” where they can walk around, enjoy life, and not encounter a giant portrait of Donald Trump. Given that last spring some college students had a case of the conniptions because some naughty person scrawled “Trump” in chalk on the campus sidewalks, one wonders what fits these students would undergo when faced with a portrait of the man.

  1. Fahrenthold’s latest discovery was that the Donald J. Trump Foundation had not filed required charitable paperwork for fundraising in the state of New York. This led New York State Attorney General Eric Schneiderman to bar the Donald J. Trump Foundation from soliciting funds in that state.

I thought the most telling quote in Fahrenthold’s piece was from Pace University emeritus professor James J. Fishman, who said that Trump was “a billionaire who acts like a thousandaire” because the clerical errors his foundation made were similar to small family foundations with limited resources for accountants. “You wouldn’t expect somebody who’s supposed to be sophisticated, and who brags about his business prowess, should run his foundation like this,” Fishman said.

Professor Fishman is correct. The Trump response is to complain that these stories show the press’s liberal bias. That’s not accurate. What these stories show is that the press knows very little about foundations.

So the Trump Foundation didn’t fill out paperwork that they should have. How does their misdeed compare to other foundations that operate in New York State? How many times have foundations in New York State been suspended for the violations the Trump Foundation made—or, indeed, for any violations? We don’t know, because the press is clueless about foundations.

Moreover, The Smoking Gun had much of the story years before anyone else. As early as 2004, theyposted 990s to show that the Trump Foundation wasn’t very large. In 2011, they posted documents from the Trump Foundation’s 2009 and 2010 990s to show that Trump had stopped contributing to his foundation in 2008 and that most of the contributions to the foundation were made by other people, such as World Wrestling Entertainment heads Vince and Linda McMahon [2].

Given the Smoking Gun’s reporting, I wonder why the discovery that the Trump Foundation didn’t fill out their New York State paperwork in 2016. Why didn’t some industrious bureaucrat, fortifying himself during a coffee break with vital celebrity news, see the Smoking Gun story and checked the files? Why did this story sit for five years, given that most of it was easily available in 2011?

As for the self-dealing claims, ask yourself this question: if this were the Donald J. Smith Foundation, would we care? If Donald J. Smith claimed to be extremely generous and he wasn’t, that would be news. If Donald J. Smith used his charity to make political contributions, that would be news. But if Donald J. Smith’s company were forced to make a charitable contribution as a fine and the Donald J. Smith Foundation paid the fine, would you care?

Because Donald J. Trump is the Republican presidential nominee, anything his foundation does is news. But the evidence David Fahrenthold has uncovered is that the Donald J. Trump Foundation is a small organization that frequently screws up. We should be informed by any new discoveries about the foundation’s activities, and laugh at some of them (such as the portrait scandal). But commentators who say how shocked, appalled, and outraged they are by the Donald J. Trump Foundation know very little about foundations.

[1] Everything I have read suggests that Eric Trump has been a responsible donor. My criticisms of the Donald J. Trump Foundation do not apply to Eric Trump.

[2] The 2009 returns also show in that year the Donald J. Trump Foundation made a $100,000 to the Clinton Foundation.

Martin Morse Wooster†

Wooster was a senior fellow at the Capital Research Center. He is the author of three books: Angry Classrooms, Vacant Minds (Pacific Research Institute, 1994), The Great Philanthropists and the Problem of ‘Donor…
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