But Judge Jose Lopez dismissed the Trump Organization as a defendant and ruled that claims of waste and misuse of funds against the inaugural committee could not proceed.
In a statement Monday night, a spokesperson for the attorney general said, “Our lawsuit is moving forward and going to trial. The Inaugural Committee misspent more than $1 million in nonprofit funds to unlawfully benefit private interests. We cannot allow those in power to get away with using money to illegally enrich themselves and their families.”
In addition, an official with the DC Attorney General’s Office told CNN that now that the lawsuit will move to trial, they will renew their efforts to depose Trump Organization CFO Allen Weisselberg and other executives at the company. Weisselberg was indicted over the summer on tax fraud charges by the Manhattan district attorney’s office. He pleaded not guilty.
CNN has reached out to the inaugural committee and the Trump Organization, which still manages the Trump International Hotel in Washington, for comment.
Racine filed the lawsuit in January 2020, accusing the inaugural committee of coordinating with the former President’s family to “grossly overpay” for event space for inauguration events in January 2017 at the Trump International Hotel in DC. The lawsuit accused the inaugural committee of wasting about $1 million in charitable funds to pay for the event space at the hotel.
In allowing the lawsuit to move forward only on the issue of whether the committee had overpaid for event space at the Trump International Hotel, Lopez found that there were genuine issues of fact that needed to be resolved.
“Did higher ranking Trump family officials have the ability to control the workings of the PIC [Presidential Inaugural Committee],” Lopez wrote. “Did members of the PIC ignore internal recommendations to pay the Trump Hotel for services that could have been offered for free? If so, did they make those payments for strategic reasons, or for other purposes?”
The attorney general’s office says DC’s non-profit laws state that funds must be used only for their stated public purpose and not for private interests.
Racine has alleged that the inaugural committee was aware that it was paying far above market rates and never considered less expensive alternatives. He has also alleged that the inaugural committee paid for space on days it did not hold events.
Lopez dismissed the attorney general’s claims of waste because of the high legal bar Racine needed to clear: He needed to show that the inaugural committee had intentionally wasted its money “so far beyond the bounds of reasonable business judgment that its only explanation was bad faith,” according to Lopez. The judge ruled that the evidence did not satisfy that heavy burden.
The lawsuit is seeking to recover more than $1 million that the DC attorney general says improperly benefited the Trump family, and it is asking the court to direct the recovered funds to another non-profit that is engaged in civic-focused charitable work.
