Trump Foundation Attorneys Say They'll Seek Discovery on Political Bias in NY AG's Lawsuit
Alan Futerfas argued that the investigation leading to the lawsuit was mostly led by former Attorney General Eric Schneiderman, who was outspoken against Trump during and after the 2016 presidential election.
October 17, 2018 at 03:16 PM
6 minute read
Attorneys for President Donald Trump said in a new filing this week that if the state's lawsuit against his charitable foundation is allowed to move forward, they intend to seek discovery on any bias against Trump in the New York Attorney General's Office.
Alan Futerfas, an attorney from Manhattan representing the Trump Foundation and its founder, wrote in a new filing that former Attorney General Eric Schneiderman should not have been allowed to investigate the Trump Foundation while simultaneously soliciting campaign donations based on his opposition to Trump.
“If dismissal of the Petition is denied in whole or in part, the Court should permit Respondents to file an answer and seek discovery—particularly of the NYAG's bias in this case,” Futerfas wrote.
The investigation was initially brought by Schneiderman and passed onto Attorney General Barbara Underwood following his resignation on domestic abuse allegations. Underwood announced the lawsuit against the Trump Foundation shortly after she took office.
Futerfas, in the filing, rejected an argument from the state that bias is irrelevant in the lawsuit because of Schneiderman's resignation. He argued that the investigation leading to the lawsuit was mostly led by Schneiderman, who was outspoken against Trump during and after the 2016 presidential election.
“[The state] argues that any taint of bias was cleansed when Mr. Schneiderman resigned and Ms. Underwood was confirmed as Attorney General,” Futerfas wrote. “This cleansing argument is a bit specious where the individuals who conducted the investigation under Mr. Schneiderman's auspices for about two years continued it under Ms. Underwood and brought the Petition just three weeks after her confirmation as Attorney General.”
Underwood's office has argued in previous filings, and did so again when reached for comment on Wednesday, that the Trump Foundation lawsuit is one of many brought against charitable foundations in New York on a frequent basis by the state.
“As our lawsuit detailed, the Trump Foundation functioned as a personal piggy bank to serve Trump's business and political interests. We won't back down from holding President Trump and his associates accountable for their flagrant violations of New York law—just as we hold accountable anyone else who breaks the law,” said Amy Spitalnick, a spokeswoman for Underwood.
The office obtained $550,000 in restitution from the Richenthal Foundation this year, for example, after the son of its founder used its funds for personal travel and entertainment costs. The foundation was created by Arthur Richenthal, who was a prominent attorney for landlords in New York City. Richenthal died in 2007.
In another settlement, the trustees of the Homeland Foundation agreed to pay $4.3 million back to the foundation after the money was spent beyond the requirements in the organization's charter. More than $700,000 of that was taken by the foundation's president in 2012, according to Underwood's office.
A third example recounts a $5.5 million settlement obtained from a nonprofit that provides housing for students in New York City. The organization, called Educational Housing Services, allegedly allowed millions of dollars to be siphoned from the organization to its president.
Futerfas does not dispute in his brief that the state attorney general regularly litigates cases of misconduct by charitable organizations. He argued instead that it was inappropriate for the office to investigate Trump while Schneiderman publicly opposed his campaign and tenure as president.
“The NYAG should have been cognizant that it was creating an extraordinary appearance problem in publicly touting its anti-Trump efforts and, at the same time, acting (supposedly) as an unbiased investigator of facts,” Futerfas wrote. “It cannot do both.”
Underwood's office is seeking $2.8 million in restitution from the Trump Foundation and to temporarily ban Trump and his children from serving at a nonprofit in New York. They are also asking that the foundation be dissolved, though that was already planned before the lawsuit.
The petition filed earlier this year claimed the Trump Foundation illegally collaborated with Trump's 2016 presidential campaign to organize a fundraiser for veterans groups in Iowa days before voters there chose their preferred Republican candidate for president.
Underwood's office said the fundraiser was a political event that the charity illegally participated in. The Trump Foundation collected about half of the funds and distributed them to various veterans groups after the fundraiser. Some of the donations were made in conjunction with campaign rallies, which Underwood's office has asked the Federal Elections Commission to review.
Futerfas said in his filing that those claims should be set aside until the FEC determines their legality.
“Petitioner raises novel legal issues that are best resolved by the FEC, the agency with expertise and primary jurisdiction over federal election law,” Futerfas wrote.
Underwood's office also alleged that Trump illegally used the foundation to settle a handful of self-dealing transactions. Those included a $100,000 payment to settle legal claims against the Mar-a-Lago resort, Trump's private club in Florida, among other settlements.
Futerfas has said in previous filings, and said again this week, that those costs were either accidental or immediately reimbursed to the foundation. Underwood's office has argued that the dealings should have never happened, even if they were paid back.
The parties will appear in Manhattan Supreme Court next week to argue the merits of Underwood's lawsuit before Manhattan Supreme Court Justice Saliann Scarpulla.
READ MORE:
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllAmid Ripple of Marketing Moves, Paul Hastings Hires 2 Pros From Skadden
2 minute read'Rampant Piracy': US Record Labels File Copyright Suit Against French Distributor Believe
5 minute readUS Judge Rejects Morgan Stanley Reconsideration Bid in Deferred Compensation Litigation
US Bankruptcy Filings Rise 16.2% as Interest Rates, Inflation, and End of COVID Relief Hit Hard
3 minute readTrending Stories
- 1Lock-Maker's Veteran GC Takes Old Job Back After Successor Lasts Just 3 Months
- 2Judge Sets April Retrial Date in Sarah Palin Defamation Action Against NY Times
- 3HSF and Kramer Levin Leaders Set Out Merger Timeline, Structure
- 4'Don't Be Afraid to Dumb It Down': Top Fed Magistrate Judge Gives Tips on Explaining Complex Discovery Disputes
- 5Doctrine of ‘Practical Location,’ Breach of a Commercial Lease: This Week in Scott Mollen’s Realty Law Digest
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250