Lawsuit: Donald Trump misused foundation's charity money to promote hotels and pay legal bills

NEW YORK CITY -- New York's attorney general claims President Donald Trump's foundation served as a personal piggy bank for his businesses, legal bills and presidential campaign.

Democratic Attorney General Barbara Underwood filed a lawsuit Wednesday against the foundation and its directors, Trump and his children Donald Trump Jr., Eric Trump and Ivanka Trump. The suit seeks $2.8 million in restitution and the dissolution of the foundation.

Underwood said the foundation illegally helped support the Republican's campaign by raising money at a nationally televised fundraiser in January 2016, then allowing campaign staffers to dictate how the money was spent in grants.

"As our investigation reveals, the Trump Foundation was little more than a checkbook for payments from Mr. Trump or his businesses to nonprofits, regardless of their purpose or legality," Underwood said. "This is not how private foundations should function, and my office intends to hold the foundation and its directors accountable for its misuse of charitable assets."

President Trump responded on Twitter with a string of tweets:

According to the petition, Trump used the Trump Foundation's charitable assets to pay off his legal obligations, to promote Trump hotels and other businesses, and to purchase personal items. In addition, at Trump's behest, the Trump Foundation is accused of illegally providing extensive support to his 2016 presidential campaign by using the Trump Foundation's name and funds it raised from the public to promote his campaign for presidency, including in the days before the Iowa nominating caucuses.

The lawsuit alleges that Trump Foundation raised in excess of $2.8 million in a manner designed to influence the 2016 presidential election at the direction and under the control of senior leadership of the Trump presidential campaign, with the foundation raising funds from the public at the nationally televised fundraiser Trump held in lieu of participating in the presidential primary debate in Des Moines, Iowa, on January 28, 2016.

According to the investigation, the Trump Foundation also entered into at least five self-dealing transactions that were unlawful because they benefited Trump or businesses he controls. These include:

• A $100,000 payment to settle legal claims against Trump's Mar-A-Lago resort
• A $158,000 payment to settle legal claims against his Trump National Golf Club in 2008 from a hole-in-one tournament
• A $10,000 payment at a charity auction to purchase a painting of Trump that was displayed at the Trump National Doral in Miami

Underwood's predecessor, Eric Schneiderman, began investigating the foundation in 2016 following Washington Post reports that foundation spending personally benefited the presidential candidate. Schneiderman ordered the foundation to stop fundraising in New York.

The Trump campaign, at the time, said the foundation intended to cooperate with the investigation. The campaign had previously called Schneiderman "a partisan hack" who backed Trump's 2016 Democratic rival, Hillary Clinton.

The Associated Press contributed to this report.