A new lawsuit filed by the New York attorney general alleges that the Donald J. Trump Foundation and its board of directors, including the president and his three eldest children, violated state and federal charities law.Shannon Stapleton / Reuters

The law governing the activity of charitable organizations can be complex, but on the question of whether 501(c)(3) charities can engage in political activity, it could not be more straightforward. They cannot. The IRS enforces an “absolute” prohibition on any intervention in political campaigns.

Whether such an intervention has occurred depends on the facts and circumstances, and sometimes there are close calls. None of those close calls are reflected in the New York attorney general's complaint against the Donald J. Trump Foundation, which tells the tale of a relationship between a charity and a political campaign that flouts in every conceivable way the legal prohibition on 501(c)(3) campaign activity.

Enforcement action at the state level, including this action to dissolve the Foundation, is likely to be followed by repercussions from federal law enforcement. The charity is subject to inquiry, and to the payment of sizeable penalties, for failing by virtue of its political activity to comply with the terms of its exemption. The Federal Election Commission will have little choice but to initiate its own investigation into the illegal corporate contributions from the Trump Foundation to President Donald Trump’s campaign. The New York attorney general has specifically “referred” these matters to the FEC, the Department of Justice, and the IRS for their review.

The complaint draws on the public record, witness testimony and email traffic to draw an unambiguous picture of the charity’s illegal involvement in the Trump campaign. Trump decided to withdraw from a debate in Iowa and substitute in its place a fundraising event for veterans’ organizations. For this purpose, he put the Trump Foundation at the service of his campaign organization, which “planned, organized, financed and directed” the event held January 28, 2016. The complaint relates how:

At the televised fundraising event, the podium was decorated with a sign that borrowed the Trump campaign’s themes and slogans. The [event] website address was displayed with a blue placard with a red border and star pattern that was identical to the design of campaign signs and billboards, with Mr. Trump's name in capital letters and the campaign's trademark slogan, Make America Great Again.

Following the event, the campaign officials continued to run the show. They provided the list of charities to be supported, directed Trump Organization personnel to draw the checks as needed, and announced charitable grants at campaign rallies in Iowa immediately before the February 1 caucuses. The rallies typically featured an enlarged presentation check that displayed the committed contribution but also carried the distinctive colors and, again, the campaign slogan: Make America Great Again!

There was nothing subtle about any of this. The campaign took full credit for the veterans fundraising program even after the Iowa caucuses. The candidate understood, as did the press, that this entire Iowa fundraising enterprise, which Trump launched in place of his participation at a campaign debate, was a campaign project. And Trump accounted for it in just those terms. The campaign at one point posted on its website a chart identifying the recipient of the charitable grants and “uploaded a news report under the headline, Lewandowski: Trump Campaign Gave between $5.5–$6 Million to Veterans Groups.”

Campaign-finance laws prohibit corporate contributions and expenditures, other than truly independent expenditures made without candidate involvement, to influence a federal election. The facts of the Iowa veterans fundraising program leave no doubt about this purpose. It's hard to imagine more of a slam-dunk violation.

Most ominous for Trump is the attorney general’s conclusion that "Mr. Trump’s wrongful use of the Foundation to benefit his Campaign was willful and knowing.” It is ironic, and highly damaging to Trump, that he made an issue in his campaign about the federal prohibition on tax-exempt involvement in campaigns. He committed that he would act, if elected, to repeal it. It appears that he and his campaign neglected to await repeal and simply declined to comply with it. In any event, his stated awareness of the law, together with his repeated execution of tax forms for the Foundation “in which he attested that the Foundation … did not carry out political activity,” puts him at severe risk of “willful and knowing” liability. As “foundation managers” under the law, Trump and his children are exposed to personal liability if they gave knowing and willful consent to the charity’s illegal expenditures. They could face similar consequences—that is, personal liability—in the event, however unlikely, that the FEC takes meaningful enforcement action.

There is no mention in the complaint about the involvement of any lawyer in any phase of this venture. It's not surprising: No counsel would have advised the Trump campaign and the charity that these Iowa fundraising events and the rallies were lawful. What emerges from the New York complaint’s account is something that has become increasingly familiar. Trump does what he wishes, acting all too often on impulse and without regard to rules or norms, and those around him are expected to do as he says. The result in this instance was, from a legal perspective, disastrous. And that is putting the matter charitably.

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