Karl Racine Reaches $750,000 Deal Over Trump Inauguration
Skip to main content

D.C. Attorney General Reaches $750,000 Settlement Over Trump Inaugural Committee Lawsuit

 

Donald Trump is seen speaking at the CPAC conference in February 2021.

Former President Donald Trump’s inaugural committee reached a $750,000 settlement on Tuesday resolving longstanding litigation, which accused the committee, Trump International Hotel and the Trump Organization of illegally using non-profit money to enrich his family.

In January 2020, D.C. Attorney General Karl A. Racine (D) sued the committee and corporations for allegedly misspending non-profit funds for Trump’s benefit.

The top prosecutor characterized the deal resolving the litigation as vindication.

“After he was elected, one of the first actions Donald Trump took was illegally using his own inauguration to enrich his family. We refused to let that corruption stand,” Racine wrote in a statement. “With our lawsuit, we are now clawing back money that Trump’s own inaugural committee misused. Instead, we’re giving it to District nonprofits that will use those funds to help support civic engagement for the next generation of District leaders. No one is above the law—not even a president. Nonprofit funds cannot be used to line the pockets of individuals, no matter how powerful they are. Now any future presidential inaugural committees are on notice that they will not get away with such egregious actions.”

Like many settlements of its kind, it eschews any acknowledgement of wrongdoing.

“To avoid the cost, burden, and risks of further litigation, the Parties now agree to resolve these disputed claims through entry of this Order without it being in any way deemed or construed as an admission of wrongdoing, unlawful conduct, or liability on the part of Defendants,” the eight-page agreement states.

Counsel for the 58th Presidential Inaugural Committee (PIC) made sure to note that clause in a statement.

“As the settlement states, the PIC continues to dispute all of the Attorney General’s claims and remains confident that had this case gone to trial, the PIC would have prevailed based on the evidence,” attorney Lee Blalack told Law&Crime.

The lawyer continued to characterize the monetary award as a “prudent” option made in consultation with its insurer.

“While the Attorney General sought no monetary damages from the PIC, the PIC and its insurer determined that settlement was prudent simply to avoid the significant costs of litigating these baseless allegations through trial,” Blalack said. “Indeed, it would have required the PIC’s insurer to spend double the amount of this insurance settlement just to try this case to verdict, and thus this modest settlement payment only makes common sense. Now more than five years after completing its 2017 inaugural responsibilities, the PIC, which today exists exclusively to respond to this litigation, can finally wind down its affairs.”

Though the settlement will avert a trial, the more than two-year course of pre-trial wrangling has not been without public revelations.

Just months after the lawsuit’s filing, a D.C. judge found the allegations had been pleaded plausibly enough to proceed. It had been a thorn in the side of the Trump family ever since. The case led to depositions of Ivanka Trump and Donald Trump Jr. It also involved Ivanka Trump’s emails with her father’s ex-campaign aide Rick Gates.

In one email from December 2016, Melania Trump’s ex-senior adviser Stephanie Winston Wolkoff questioned hotel expenditures that Racine found to have been “grossly overpaid.”

“Please take into consideration that when this is audited it will become public knowledge that locations were also gifted and costs underwritten to lower rental fees,” Wolkoff told Gates, with Ivanka Trump copied to the message. “I understand that compared to the original pricing this is great but we should look at the whole context. In my opinion the max rental fee should be $85,000 per day.”

That email was sent hours after Gates sent the following message:

Stephanie-
Here is the revised pricing for the Trump Hotel following my conversation with Mickael. Much better rate.

Ivanka – thank you for your help.

Regards,
Rick

Among the many claims of the lawsuit, Racine alleged that the committee dramatically overpaid the Trump Hotel for event space, threw a private party for the former president’s adult children, and paid a private debt owed by the Trump Organization.

Read the settlement, below:

(image via Joe Raedle/Getty Images)

Have a tip we should know? [email protected]

Filed Under:

Follow Law&Crime:

Law&Crime's managing editor Adam Klasfeld has spent more than a decade on the legal beat. Previously a reporter for Courthouse News, he has appeared as a guest on MSNBC, BBC, NPR, PBS, Sky News, and other networks.