US President Donald Trump has agreed to shut down his personal charity and distribute its assets to other non-profit organisations under an agreement with the New York attorney general who alleged widespread wrongdoing, according to a pair of court filings yesterday.
New York Attorney General Barbara Underwood sued the Donald J Trump Foundation, Mr Trump and his three eldest children in June, alleging the foundation engaged in a "shocking pattern of illegality" and functioned as "little more than a chequebook to serve Mr Trump's business and political interests".
Ms Underwood pointed to various donations the charity had made over the years that she alleged were made simply to settle Mr Trump's business disputes or advance his political career. Ms Underwood also sued Mr Trump and his three oldest children - Ivanka, Eric and Donald Jr - alleging that as directors of the charity they neglected their duties under state law.
Mr Trump decried the lawsuit as an act of political revenge by Democratic state officials who were angry he had won the presidency and vowed to fight it and never settle. But Mr Trump also had been trying to shut down his foundation in the wake of news reports that raised questions about the intent of its donations.
Under an agreement dated December 11 and filed yesterday, both sides agreed to dissolve the charity and give away its $1.7m (€1.5m) in assets.
The attorney general has to approve the recipients of the funds, and a judge has to sign off on the deal.
The lawsuit against Mr Trump and the three children remains ongoing.
"We'll continue to move our suit forward to ensure that the Trump Foundation and its directors are held to account for their clear and repeated violations of state and federal law," Ms Underwood said in a statement.
The suit is one of the most serious legal challenges facing Mr Trump and his family.
Unless an appeals court blocks the attorney general, the process of uncovering evidence will allow the state's lawyers to reach deep into the Trump family's financial dealings, where some of the president's critics believe there will be evidence of years of improprieties. Amanda Miller, a spokeswoman for Mr Trump's family business, the Trump Organisation, didn't immediately respond to a request for comment.
Eric Trump previously told Bloomberg that Mr Trump's charity operated on a shoestring budget "so that the maximum amount of money could be sent to incredibly worthwhile causes". The family company has said that the charity donated more money than it received - about $19m over roughly 30 years - and should be applauded for incurring virtually no expenses.
Ms Underwood claimed in her lawsuit that Mr Trump's charity repeatedly and wilfully broke state and federal laws by engaging in a decade-long pattern of self-dealing that culminated in illegal co-ordination with his 2016 political campaign. She alleged that Mr Trump directed funds meant for needy causes to settle business and personal debts and boost his brand.
The payments include $100,000 to settle claims against Mr Trump's Mar-a-Lago resort and $158,000 to resolve a suit against the Trump National Golf Club over non-payment of a prize for a hole-in-one contest. The foundation's lawyer, Alan Futerfas, argued at a hearing in October that half a dozen transactions at the centre of the lawsuit, including $10,000 the charity spent at an auction to buy a six-foot oil portrait of Mr Trump, were innocent because the money wound up going to charity anyway.
A few months earlier, in June, Mr Futerfas said that the foundation had already announced it would dissolve in 2016 but it needed to distribute its funds.
The judge in the case, New York State Supreme Court Justice Saliann Scarpulla, had asked the two sides to reach an accord on how that would be handled. The New York attorney general still seeks repayment of at least $2.8m in funds Mr Trump's charity allegedly directed toward his 2016 campaign.