Trump Settles Suit Over Inauguration Payments to D.C. Hotel

(Bloomberg) -- Former President Donald Trump's company agreed to pay $750,000 to the District of Columbia to settle a lawsuit claiming it illegally benefited financially from Trump's 2017 inauguration committee.

The accord, announced Tuesday in a court filing, resolves a suit filed by the district's attorney general, Karl Racine, who alleged the Trump International Hotel in Washington received inflated payments from the nonprofit committee for space to celebrate Trump's election.

“After he was elected, one of the first actions Donald Trump took was illegally using his own inauguration to enrich his family,” Racine said in a statement. “We refused to let that corruption stand. With our lawsuit, we are now clawing back money that Trump's own inaugural committee misused.”

The Manhattan-based Trump Organization did not admit any wrongdoing under the deal with Racine, a Democrat.

In an emailed statement, Trump criticized Racine's litigation as “a further leg of the greatest Witch-Hunt in political history,” and said the settlement was made “given the impending sale of The Trump International Hotel, Washington D.C., and with absolutely no admission of liability or guilt.”

Trump added, “It was my great honor to have built this truly great hotel out of a structure that had laid dormant for thirty years, creating jobs and so many other benefits for the people of D.C., and indeed, our Country itself. A true landmark has been created out of nothing!”

The accord resolves one of several legal challenges facing Trump as he weighs a possible 2024 run to return to the White House. A probe by New York's attorney general, looking into possibly fraudulent asset valuations at Trump's company, is ongoing.

$1 Million Payment

The committee paid the hotel $1.03 million, according to Racine. Under the settlement, Trump's company will lose most of the money it made from the event, and the money will be directed to charities, the attorney general said.

Racine sued in 2020, alleging the nonprofit inauguration committee's bylaws bars it from using funds “for unreasonable expenses or to benefit private interests.” At the time, Racine said his investigation found that Trump associate Rick Gates had negotiated payments to the hotel for event space, including a ball room, and that event planner Stephanie Winston Wolkoff raised concerns about the pricing with Trump, Gates, and Ivanka Trump.

“This included issuing a written warning to Gates and Ivanka Trump that the Hotel's final price proposal was at least twice the market rate,” Racine said.

Racine also said his probe determined the hotel double-booked its largest ballroom with the Presidential Inaugural Prayer Breakfast, another nonprofit. The Prayer Breakfast paid $5,000 to use the ballroom, while the inauguration committee paid the full rate of $175,000, according to the attorney general.

Gates, with Ivanka Trump's knowledge, also allowed the committee's funds to pay for a private after-hours party for the Trump family at their hotel, even after committee staff “initially canceled this event over concerns of improper use of funds,” Racine said.

“Gates allowed the event to move forward after Trump Hotel staff complained that canceling it would hurt the Hotel's bottom line,” according to Racine's office.