Trump fails to end New York lawsuit over his charity

[NEW YORK] A New York state judge rejected US President Donald Trump's request to dismiss a lawsuit in which New York's attorney general accused him of misusing his namesake foundation to advance his 2016 presidential campaign and his businesses.

The decision issued Friday by Justice Saliann Scarpulla of the state supreme court in Manhattan is a rebuke to the Republican president, whose lawyer had accused Attorney General Barbara Underwood, a Democrat, of "pervasive bias" for suing.

Ms Scarpulla said the US Constitution did not immunise Mr Trump from the lawsuit, and Ms Underwood could pursue claims alleging breach of fiduciary duty, improper self-dealing, and misuse of assets belonging to the Donald J Trump Foundation.

Ms Underwood sued Mr Trump and his adult children Donald Jr, Eric and Ivanka on June 14, after a 21-month probe that she said uncovered "extensive unlawful political coordination" between the foundation and Mr Trump's campaign.

The White House was not immediately available for comment. Alan Futerfas, a lawyer for the defendants, said the decision meant only that the case would go forward.

"As we have maintained throughout, all of the money raised by the Foundation went to charitable causes to assist those most in need. As a result, we remain confident in the ultimate outcome of these proceedings," Mr Futerfas said in an email.

The lawsuit alleged, among other things, that Mr Trump wrongly ceded control to his campaign of about US$2.8 million donated to the foundation in a 2016 Iowa fundraiser for military veterans.

Other challenged expenses included US$100,000 to settle a dispute involving Trump's Mar-a-Lago resort, and US$10,000 for a portrait of Mr Trump that was later hung at one of his golf clubs.

In her 27-page decision, Ms Scarpulla called New York's lawsuit "replete" with allegations that foundation funds were misused, including at Mr Trump's direction.

She also said the state sufficiently alleged that Mr Trump's actions were willful and intentional, citing allegations that he and his campaign arranged for the foundation to cut checks, helping generate "vote-getting publicity that Mr Trump would have otherwise paid for himself."

The defendants have been trying to dissolve the foundation, and for this reason Ms Scarpulla refused to issue an injunction barring the Trumps from running it.

Ms Underwood welcomed Ms Scarpulla's decision.

"The Trump Foundation functioned as little more than a checkbook to serve Mr Trump's business and political interests," Ms Underwood said in a statement. "There are rules that govern private foundations - and we intend to enforce them."

New York's lawsuit sought to dissolve the foundation, recoup US$2.8 million and ban the Trumps from leadership roles at charities.

Mr Trump faces many investigations, and many lawsuits by Democratic-led or Democratic-leaning states including New York.

He has used Twitter to call Underwood's lawsuit a concoction by "sleazy New York Democrats," and pledged not to settle.

The case is New York v Trump et al, New York State Supreme Court, New York County, No 451130/2018.

REUTERS