The Republican nominee has found many uses for his personal charity, few of them charitable. The mogul has used the Donald J. Trump Foundation as a scheme for rebranding other people’s generosity as his own; as a slush fund for buying himself gifts at charity auctions, including Tim Tebow memorabilia and multiple enormous portraits of himself; and as a form of legal insurance that he draws on when he needs to settle lawsuits against his businesses.
Critically, the mogul has found all of this utility in his foundation while donating approximately zero dollars to it since 2008. Thus, one of the central mysteries of Washington Post reporter David Fahrenthold’s long-running investigation of the Trump Foundation has been this: Why would anyone give money to this particular “philanthropy”?
On Monday afternoon, Fahrenthold provided one answer: Trump often instructs business partners to direct money they owe him to his tax-exempt foundation instead. It appears that the mogul used this scheme to avoid paying taxes on portions of his income, thus maximizing the amount of money he could reinvest into autographed Tim Tebow helmets.
The spark for this latest investigation came, ironically, when Trump campaign surrogate Lynne Patton tried to refute Fahrenthold’s reporting in an interview with the Des Moines Register.
“A lot of times Mr. Trump will give a speech somewhere or he’ll raise money in some way and he asks that that entity, instead of cutting a personal check to him, cut it to his charity,” Patton told the paper. “That’s money that otherwise would’ve been in his personal account, right?”
On the one hand, Patton seems to have a fair point: While Trump may have not directly given to his foundation in years, if he’s directing his income into it, those are effectively donations. And, as long as Trump paid income tax on that money, the whole arrangement is kosher.
But it sure doesn’t seem like Trump paid income tax on all of that money.
In his reporting, Fahrenthold came across a series of transactions that matched the arrangement Patton described: In 2011, Comedy Central paid the Trump Foundation $400,000, to compensate its namesake for his participation in a “roast.” Then there are a bunch of payments, totaling roughly $1.9 million, from a high-end ticket scalper in New York City named Richard Ebers.
When Fahrenthold asked the campaign about whether the GOP nominee had paid taxes on the payments Patton described, senior Trump adviser Boris Epshteyn explained that Trump had never instructed anyone to compensate him through gifts to his charity — but, rather, through gifts to a charity.
This is a crucial distinction: If Trump didn’t control where the money owed to him went, then it wasn’t, legally, his income. And he has no responsibility to pay taxes on it.
Ephsteyn then challenged the Post to find an example in which Trump directed fees to his foundation, specifically. Fahrenthold summarizes the ensuing exchange:
The Post asked about the 2011 gift from Comedy Central. Back then, Trump had bragged on video that he was getting a big appearance fee. “They paid me a lot of money, and they were very generous. And all of that money goes to charity,” Trump said.
After The Post brought up the Comedy Central case during the Saturday interview, Epshteyn conceded that Trump had, indeed, controlled where this money went. It was his income. And, Epshteyn said, he paid taxes on it.
Could he provide proof of that tax payment?
“Absolutely not,” Epshteyn said.
So, no proof. But at least the campaign claims he paid taxes on that income. The campaign refused to say that much about the $1.9 million from Richard Ebers.
Of course, all of these suspicions could be put to rest if the GOP nominee deferred to decades of precedent and released his tax returns.
But, as Josh Marshall notes, Fahrenthold’s story suggests Trump may have multiple reasons for withholding those returns: Not only could they expose his efforts at tax avoidance — efforts that he expressed pride in at Monday night’s debate — but they might also testify to the relative modesty of Trump’s wealth:
… according to Fahrenthold’s piece, Ebers bought almost $1.9 million in “bought goods and services — including tickets — from Trump or his businesses.”
Now, what would those be exactly? I’d imagine that Trump and his businesses have various luxury boxes at sports venues, tickets to various games and events…is Trump really so hard up that he’s making a little extra cash on the side selling the box seats on a week he’s not in town or selling Ebers the free tickets to this or that event that frequently come the way of a uber-wealthy celebrity types like Trump?
If Trump didn’t pay taxes on Ebers’s payments, he could be subject to fines, or his foundation could lose its tax-exempt status. Criminal charges for tax evasion, however, would be unlikely — when plutocrats commit tax crimes, “ignorance” qualifies as a legitimate defense.
“You have to prove that [a defendant] knew what the law was and willfully violated it anyway,” Jay Nanavati, a former tax prosecutor at the Justice Department, told the Post.
And, of course, Trump’s reputation for ignorance remains unblemished.