In this photo taken Dec. 21, 2106, the Trump International Hotel in Washington. 
Alex Brandon

New accusation emerges in scandal surrounding Trump inaugural committee

Updated

Former New Jersey Gov. Chris Christie (R), a former federal prosecutor, noted the criminal investigation into Donald Trump’s presidential inaugural committee this week, and raised an unexpected observation.

“The Southern District of New York investigation presents a much more serious threat to the administration, potentially, than what Bob Mueller is doing,” Christie said.

At face value, that seems hard to believe. After all, the special counsel’s investigation into the Russia scandal has already led to felony convictions against a variety of people in the president’s orbit. Christie thinks this unrelated criminal probe might be “much more serious”?

As far-fetched as that may seem, there’s no denying the fact that the investigation into the president’s inaugural committee keeps taking serious turns.

Federal prosecutors in New York are circling Donald Trump’s inaugural committee as part of a wide-ranging investigation into possible money laundering, illegal contributions and cash-for-access schemes. Now, WNYC and ProPublica have identified evidence of potential tax law violations by the committee.

A spokesman confirmed that the nonprofit 58th Presidential Inaugural Committee paid the Trump International Hotel a rate of $175,000 per day for event space – in spite of internal objections at the time that the rate was far too high. If the committee is deemed by auditors or prosecutors to have paid an above-market rate, that could violate tax laws prohibiting self-dealing, according to experts.

Tax law violations tend to be complex, but this one’s actually pretty simple. The inaugural committee was a non-profit entity created to oversee Trump’s swearing-in ceremony and related festivities. If it deliberately used its funds to overpay Trump’s hotel, in the process helping Trump’s business, it may have run afoul of the law.

Unfortunately, it’s not the only possible transgression of interest. In addition to the possible money laundering, illegal contributions, pay-to-play schemes, and tax-law violations, the new reporting from WNYC and ProPublica added that the inaugural committee spent “at least $1.5 million” at a hotel in which the committee’s chairman, Tom Barrack, held a financial stake.

To recap for those unfamiliar with this story, by many metrics, Trump’s inaugural fund was a great success. After his election, the Republican eliminated caps on individual contributions – caps that George W. Bush and Barack Obama both utilized – and sold “exclusive access” for seven-figure contributions.

The result was a fundraising juggernaut: Trump’s inaugural committee took in nearly $107 million, much of which went unspent during poorly attended festivities. (The previous record for inaugural fundraising was set by Barack Obama’s team in 2008, and it raised roughly half as much money for events that were much better attended.)

The trouble is, Trump World has struggled to explain exactly where all of that money went.

The original plan was for the inaugural committee to donate excess funds to charity, and it planned to release details about those contributions in April 2017. That never happened.

Barrack, a friend of the president’s who led the inaugural committee, told the Associated Press soon after that an audit of the committee’s finances was complete, but it “would not share a copy with AP or say who performed it.”

And as a rule, when these guys act like they have something to hide, it’s because they have something to hide.

The story took another turn last year when we learned the inaugural committee paid nearly $26 million to an event planning firm run by one of Melania Trump’s friends – which seemed problematic, though it still didn’t explain where the rest of the pot of money went.

As for the White House’s response to all of this, Sarah Huckabee Sanders in December criticized Democrats for the scrutiny – which was odd, since the investigation is being conducted by federal prosecutors, not elected partisans – and insisted that the president’s inaugural committee “didn’t have anything to do with the president.”

Team Trump may need to come up with a better pitch.