Federal prosecutors in New York are investigating President Trump’s inaugural committee for misspending donated funds from the record $107 million it received.
Investigators are examining financial wrongdoing, and are scrutinizing donors who may have written sizable checks in exchange for access to the Trump administration, The Wall Street Journal reported on Thursday.
The probe’s findings could affect other matters involving Trump, such as special counsel Robert Mueller’s Russia investigation. In fact there are many different types of crimes being examined by federal prosecutors.
Legal experts say there could be violations of bribery statutes as well as tax and wire fraud laws.
“Anytime someone donates to an inaugural committee, there is some sort of expectation of access,” Elie Honig, a former federal prosecutor, said. “But if you can show that it goes beyond a generalized unspoken expectation, then you may have a bribery case.”
Honig said there may also be violations of tax statutes if members of the committee improperly used the tax-exempt status of the inauguration committee. If someone takes the nonprofit’s funds for their personal benefit, that would be a scheme to defraud people who donated to the inaugural committee.
“If they were spending nonprofit money on expenditures that are not allowed for a nonprofit, it is a way to get around taxes, then it is a tax law violation,” Honig said.
Seth Waxman, a former federal prosecutor, said bribery could be a 15-year offense, while defrauding donors could lead to 20 years in prison. Campaign finance violations result in five-year sentences or less, he said.
Ivanka Trump is implicated in these crimes because, as we reported last week, “She appears to have been overcharging for space at the Trump Hotel in violation of tax laws, with the Trump family taking the profits.”
Mueller is also investigating whether foreign individuals and groups illegally gave money to the president’s inaugural fund in an attempt to influence U.S. policy.
Under federal law, foreigners are not permitted to contribute to federal campaigns, political action committees (PACs) or inaugural funds.
Trump Legal Exposure
One thing the facts of the case point out is that President Trump himself may have significant legal exposure.
Waxman said Trump would be criminally responsible if he was involved in the schemes.
“If he knew this was going on and he took some active steps to help it come about…then it could subject him to criminal exposure,” Waxman said.
Of course the White House has denied any wrongdoing. White House press secretary Sarah Huckabee Sanders told reporters on Thursday:
“That doesn’t have anything to do with the president or the first lady. The biggest thing the president did, his engagement in the inauguration, was to come here and raise his hand and take the oath of office. The president was focused on the transition during that time and not on any of the planning for the inauguration.”
However, as we pointed out in an article on Friday, there is evidence that Trump was actually very involved in planning all aspects of the inauguration. In fact, reporters have obtained the presentations that he was showing during briefings:
“President-elect Trump was repeatedly briefed on inaugural planning and specific events, according to one committee worker with direct knowledge. WNYC reporters have seen presentations that were shown to the president-elect, complete with renderings and floor plans.”
This means Trump will not be able to plead ignorance to escape liability for the many crimes that were committed.
Cohen, Gates and Others are Cooperating with Prosecutors
Another interesting angle to the case is that Michael Cohen played a key role in the inauguration schemes. He has given information about the inauguration committee schemes to prosecutors, and they also seized materials from Cohen’s office and hotel room in April that provided them more evidence about the case.
“Cohen could be very important,” Honig said. “Investigators got a lot of materials and documents during a search warrant that they executed on his office and home.”
But there is more bad news for Donald Trump and his family: Cohen is not the only person cooperating with federal prosecutors.
Samuel Patten, a GOP consultant, pleaded guilty in August for arranging for a U.S. citizen to act as a “straw donor.” This anonymous donor gave $50,000 to the committee in exchange for tickets to the inauguration celebration, and those tickets which were then given to a prominent oligarch who was close to Vladimir Putin. Foreigners are barred from contributing to inaugural funds.
Patten, who pleaded guilty to failing to register as a foreign lobbyist, has agreed to cooperate with prosecutors. He may know whether other foreigners contributed to the inauguration in violation of federal law.
Richard Gates, the longtime business partner of Paul Manafort started cooperating with the special counsel earlier this year. He was the deputy chairperson of the inauguration, so his cooperation will also provide prosecutors with valuable information.
The existence of multiple cooperators, along with document evidence, gives prosecutors a strong hand.
“One good cooperator can at least give you some good lay of the land, and two can give you even more,” Honig said. “And to the extent different cooperators, who should not be in contact with each other, tell you the same thing, then that starts to get pretty reliable.”
When many prominent Russian business leaders attended Trump’s inauguration, federal prosecutors started looking into how much foreign nations gave money to gain access to the Trump administration so they could influence U.S. policy for their own benefit.
They found there was not only Russian involvement and outreach to the Trump campaign, but also involvement from other countries like Saudi and United Arab Emirates.
According to former federal prosecutor Joseph Moreno:
“We have these laws in place to prevent foreign interference in a foreign election and now we have more than one potential outside actor which appears to be making outreach to potential American politics.”
The investigation into the Trump inaugural committee is opening a true can of worms. It is showing the existence of widespread corruption on the first day of the Trump presidency. It is also showing that Donald Trump, his associates, and even his family members were involved in committing numerous crimes for their personal financial benefit. This investigation is very important and will play a key role in ending the Donald Trump presidency.