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What Is "Self-Dealing" In Business? Trump's Foundation Has Prompted Questions


Donald Trump devoted some of the ample airtime of his presidential campaign condemning his opponent, Hillary Clinton, over suspicions that donors to her charitable foundation had contributed only to curry favor with her while she was secretary of state. Now, Trump, having defeated Clinton, is enmeshed in his own series of financial controversies related to the conflicts of interest stemming from the entanglements of his massive, international business empire, as well as the most recent confirmation that he engaged in illegal self-dealing from the Trump Foundation, his own charity. But what is self-dealing and why is it so problematic?

"Self-dealing" is exactly as nefarious as the term sounds — and there is now proof that the man who will become our next president has reportedly habitually engaged in it. Essentially, the legal prohibitions against self-dealing bar nonprofit leaders from allocating funds from their charities for personal enrichment or to benefit their own businesses or families. And what's apparently a duplicate of 2015 IRS tax filings for the Donald J. Trump Foundation reportedly corroborates The Washington Post's extensive reporting throughout the election cycle that Trump has done just that — using money meant to help others to allegedly purchase a life-size painting of himself for $20,000 and settling various lawsuits that were also unflattering to Trump's image.

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WASHINGTON, DC - JUNE 16: Republican presidential candidate Donald Trump waves from inside his vehicle as he leaves the law firm Pillsbury Winthrop Shaw Pittman after deposition June 16, 2016 in Washington, DC. Trump filed a lawsuit against chef Geoffrey Zakarian for his pulling out from establishing a restaurant at the Trump International Hotel in Washington because of TrumpÕs anti-immigrant remarks on the campaign trail. (Photo by Alex Wong/Getty Images)

The Trump Foundation's law firm uploaded the damning filing — which is believed to be identical to the one submitted to the IRS, although that's unconfirmed — to the nonprofit-tracking website GuideStar late Monday. In it, there's a "yes" marked by two crucial questions: whether the foundation had transferred assets to a "disqualified" person, and whether it had done so in previous years, as well.

No other information is available, and a spokesperson for the Trump Organization did not immediately provide a comment. The "disqualified person" was likely Trump himself, or a family member.

According to the tireless reporting of the Post's David Farenthold, Trump's missteps in this area were many, including the time in 2013 that the foundation contributed $25,000 to help re-elect Florida's Republican attorney general Pam Bondi, who then ultimately decided not to investigate fraud allegation against Trump University, and when he donated to a Florida charity in 2006, reportedly to settle a lawsuit there.

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CLEVELAND, OH - JULY 20: Florida Attorney General Pam Bondi delivers a speech on the third day of the Republican National Convention on July 20, 2016 at the Quicken Loans Arena in Cleveland, Ohio. Republican presidential candidate Donald Trump received the number of votes needed to secure the party's nomination. An estimated 50,000 people are expected in Cleveland, including hundreds of protesters and members of the media. The four-day Republican National Convention kicked off on July 18. (Photo by Alex Wong/Getty Images)

So, that's what self-dealing looks like: using other's people's money in place of your own to ensure desirable outcomes or to feed your ego by using it to purchase paintings of yourself. According to the IRS, it's also considered self-dealing when a disqualified person and a private foundation engage in the sale, exchange, or leasing of property; lend money or provide goods, services, or facilities; pay the disqualified person; or agree to make payments to government officials. Trump could be required to repay the money given to charities on his foundation's behalf if it's determined that he did break the law.

For now, the New York attorney general has been investigating such accusations since October, before Trump gained the title of president-elect. Considering all of the time that Trump spend attacking Clinton's for his perception that she committed similar transgressions, it seems that he has some serious soul-searching of his own to do.