NEW YORK — New York's attorney general sued President Donald Trump and his foundation Thursday, accusing him of illegally using the charity's money to settle disputes involving his business empire and to promote his political fortunes during his run for the White House.
The president blasted the case as politically motivated.
The lawsuit seeks $2.8 million in restitution, additional unspecified penalties and the dissolution of the foundation, which Trump had already pledged to dismantle.
The attorney general's two-year investigation detailed what it said was a closely coordinated effort between Trump's campaign and the foundation to burnish his political image by giving out big grants of other's people money to veterans' organizations during the run-up to the Iowa caucuses, the first presidential nominating contest of 2016.
"The foundation's grants made Mr. Trump and the campaign look charitable and increased the candidate's profile to Republican primary voters and among important constituent groups," Democratic Attorney General Barbara Underwood's lawsuit said.
It accused the foundation of "improper and extensive political activity, repeated and willful self-dealing transactions, and failure to follow basic fiduciary obligations."
Underwood referred her findings to the IRS and the Federal Election Commission for possible further action. IRS and FEC representatives declined to comment.
In a couple of tweets, Trump called the case "ridiculous."
"I won't settle this case!" he wrote.
The 31-year-old foundation said that it has given more than $19 million to charitable causes while keeping expenses minimal, and that Trump and his companies have contributed more than $8 million.
"This is politics at its very worst," the charity said in a statement, noting that the former New York attorney general who began the investigation, Democrat Eric Schneiderman, was a vocal Trump opponent.
Schneiderman resigned last month after he was accused of physically abusing women he dated; he denied the allegations. Trump's tweets also pointed to Schneiderman's resignation and his support for Trump's 2016 Democratic presidential rival, Hillary Clinton.
Schneiderman "never had the guts to bring this ridiculous case, which lingered in their office for almost 2 years," Trump wrote. "His disciples brought it when we would not settle."
Underwood is a career government lawyer who was appointed after Schneiderman's resignation. She has said she doesn't intend to run for election.
Schneiderman started investigating the charity and ordered it to stop fundraising in New York in 2016, after The Washington Post reported that the foundation's spending personally benefited the presidential candidate.
Some of those expenditures, uncovered by The Post, were cited in the lawsuit, including a $100,000 payment to settle legal claims against Trump's Mar-a-Lago resort in Palm Beach, Florida; $158,000 to resolve a suit over a prize for a hole-in-one contest at Trump National Golf Club in Briarcliff Manor, New York; $10,000 to buy a 6-foot (1.8-meter) portrait of Trump at a charity auction; and $5,000 for advertisements published in the programs for charitable events. The ads promoted Trump's hotels.
The suit also singled out a $32,000 payment that the foundation made to satisfy a Trump company pledge to contribute to a land-preservation group.
After New York's attorney general began investigating, Trump's business empire reimbursed the foundation for the various payments and returned the painting to the foundation.
The Trump Foundation's mission says its funds are to be used "exclusively for charitable, religious, scientific, literary or educational purposes," according to the lawsuit.
In exchange for their tax-exempt status, charities are required to follow rules that include a strict prohibition against involvement in political campaigns.