Federal prosecutors probing Trump inauguration spending: report

Wall Street Journal reports prosecutors ar looking into whether some donors gave money in exchange for favours.

Donald Trump
Trump was sworn in as the 45th president of the United States on January 20, 2017 [File: Jim Bourg/Reuters]

Federal prosecutors in New York are investigating whether US President Donald Trump‘s inaugural committee misspent some of the record $107m it raised from donors, the Wall Street Journal has reported, citing people it said were familiar with the matter.

The early-stage investigation by the Manhattan US attorney’s office is examining whether some of the committee’s donors gave money in exchange for policy concessions, influencing administration positions or access to the incoming administration, the Journal said on Thursday.

A spokesperson for the Manhattan US attorney’s office declined to comment.

Asked about the report, Trump lawyer Rudy Giuliani told Reuters news agency the president was not involved in his inaugural committee. “The last thing a president-elect has time for is inaugural fund-raising,” he said.

White House Spokesperson Sarah Sanders also said the inauguration had nothing to do with Trump or his wife, Melania.

“The biggest thing the president did in his engagement in the inauguration was to come here and raise his hand and take the oath of office,” Sanders told reporters.

Several investigations

The probe into the inaugural committee comes as the president and his White House are already facing investigations into the Trump campaign’s contacts with Russia, hush-money payments to women claiming to have had affairs with Trump and spending by Trump’s foundation, among other issues.

According to the Journal, the investigation into the inaugural committee partly stemmed from materials seized in a probe into the dealings of former Trump lawyer Michael Cohen, who was sentenced on Wednesday to three years in prison for crimes including orchestrating the hush payments in violation of campaign laws.

Although campaign finance laws restrict the size of campaign contributions, inaugurations can accept unlimited donations, including from corporations.

The amount raised by Trump’s inaugural committee, chaired by real estate developer and investor Thomas Barrack, was the largest in history, according to Federal Election Commission filings.

The Journal said there was no sign the probe was targeting Barrack. He did not immediately respond to a request for comment.

The event-planning business of Stephanie Winston Wolkoff, a former unpaid adviser to Melania Trump, was the highest-paid vendor to the committee at $25.8m, the Journal reported. A recorded conversation between Wolkoff and Cohen in which she expressed concern about the committee’s spending was seized from Cohen, the Journal said, citing a person familiar with the matter.

Prosecutors have questioned former campaign aide Richard Gates, who served as deputy chairman of the inaugural committee, the Journal reported. Gates pleaded guilty in February to conspiracy charges relating to his foreign consulting work with former Trump campaign chairman Paul Manafort.

Tom Green, a lawyer for Gates, did not immediately respond to a request for comment.

The Journal said prosecutors are also seeking documents from Franklin Haney, a Tennessee developer who gave $1m to the inaugural committee and later hired Cohen to help him obtain a $5bn US Department of Energy loan. A loan application by Haney’s company is still pending with the department, the Journal reported.

Larry Blust, a lawyer for Haney, declined to comment.

Other major inauguration donors included casino magnate Sheldon Adelson, who gave $5m, and investment firm founder Charles Schwab and mining investor Christopher Cline, who gave $1m each, according to FEC filings. There is no indication any of the three are part of the investigation.

Campaign finance

Al Jazeera’ Mike Hanna, reporting from Washington, DC, said the reported case has to be seen in the wider context of alleged campaign violations.

He cited the recently-sentenced Cohen who had said in a guilty plea in August that he was directed by Trump to arrange a payment to Playboy model Karen McDougal and personally pay adult-film star, Stormy Daniels. Trump has denied the affairs and argues the payments to the two women were not campaign contributions.

Hanna also said that American Media Inc, publisher of the National Enquirer tabloid newspaper, admitted recently it made a $150,000 payment to McDougal “in concert” with Trump’s presidential campaign as part of a deal to cooperate with prosecutors and avoid charges. 

“All of these issues regarding campaign finance have got to be seen along with this alleged investigation into misuse of inauguration funds,” said Hanna.

Source: Al Jazeera, News Agencies