How Donald Trump filled his company coffers with charity money

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Image: Bobby Bank / Wireimage / Getty Images   

Like autumn leaves, sponsored Cadillacs, Ferraris and Maseratis descend on the Trump National Golf Club in Westchester County, New York, in September 2016 for the Eric Trump Foundation golf invitational. Year after year, the formula is consistent: 18 holes of perfectly trimmed fairways with a dose of Trumpian tackiness, including Hooters waitresses and cigar spreads, followed by a clubhouse dinner, dates encouraged. The crowd leans toward real estate insiders, family friends and C-list celebrities, such as former baseball slugger Darryl Strawberry and reality housewife (and bankruptcy-fraud felon) Teresa Giudice.

The real star of the day is Eric Trump, the US president’s second son and now the co-head of the Trump Organization, who has hosted this event for ten years on behalf of the St Jude Children’s Research Hospital in Memphis. To date, he’s directed more than $11 million there, the vast majority of it via this annual golf event. He has also helped raise another $5 million through events with other organisations.

The best part about all this, according to Eric Trump, is the charity’s efficiency: Because he can get his family’s golf course for free and have most of the other costs donated, virtually all the money contributed will go toward helping kids with cancer. “We get to use our assets 100 percent free of charge,” Trump tells Forbes.

That’s not the case. In reviewing filings from the Eric Trump Foundation and other charities, it’s clear that the course wasn’t free—that the Trump Organization received payments for its use, part of more than $1.2 million that has no documented recipients past the Trump Organization. Golf charity experts say the listed expenses defy any reasonable cost justification for a one-day golf tournament.

Additionally, the Donald J Trump Foundation, which has come under previous scrutiny for self-dealing and advancing the interests of its namesake rather than those of charity, apparently used the Eric Trump Foundation to funnel $100,000 in donations into revenue for the Trump Organization.

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The Eric Trump Foundation golf outing brought in millions for St Jude, billings for the Trump Organization
Image: Gant Lamos IV / Getty Images

And while donors to the Eric Trump Foundation were told their money was going to help sick kids, more than $500,000 was re-donated to other charities, many of which were connected to Trump family members or interests, including at least four groups that subsequently paid to hold golf tournaments at Trump courses.

All of this seems to defy federal tax rules and state laws that ban self-dealing and misleading donors. It also raises larger questions about the Trump family dynamics and whether Eric and his brother, Don Jr, can be truly independent of their father.

Especially since the person who specifically commanded that the for-profit Trump Organization start billing hundreds of thousands of dollars to the non-profit Eric Trump Foundation, according to two people directly involved, was none other than US President Donald Trump.

In order to understand the Eric Trump Foundation, you need to understand the Donald J Trump Foundation. The president was never known for giving his foundation much money, and from 2009 to 2014, he didn’t give it anything at all. Outsiders still donated, though, allowing Trump to dole out their money to a smattering of more than 200 charities as if it were his own, with many of the donations helping his business interests.

Eric Trump set out to do things differently. Coming out of Georgetown, he decided he would try to translate the good fortune he had inherited into support for children’s cancer research. Why this cause, especially for a guy who still doesn’t have kids? “It’s a great question—it’s one that I’ve been asked before—and I’m not really sure,” he says. “I think there is something about that innocence that has always affected me.” After visiting various hospitals, he chose to give to strength, St Jude, the world’s best-known paediatric cancer centre.

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Eric Trump set up his foundation as a public charity, a classification that allows it to raise most of its money from outside donors. In 2007, when he was 23, the first Eric Trump golf tournament took place, raising $220,000. A compelling sales pitch evolved—the free golf course and the donated goods and services assured donors that every penny possible went to charity. The Eric Trump Foundation employed no staff until 2015, and its annual expense ratio averaged 13 percent, about half of what most charities pay in overhead. His original seven-person board was made up of personal friends, an innocuous lot who helped sell tournament tickets, which last year ranged from $3,000 for a single all-day ticket to $100,000 for a pair of VIP ¬foursomes.

For the first four years of the golf tournament, from 2007 to 2010, the total expenses averaged about $50,000, according to the tax filings. Not quite the zero-cost advantage that a donor might expect given who owned the club but at least in line with what other charities pay to host outings at Trump courses, according to a review of ten tax filings for other charitable organisations.

But in 2011, things took a turn. Costs for Eric Trump’s tournament jumped from $46,000 to $142,000, according to the foundation’s IRS filings. Why would the price of the tournament suddenly triple in one year? “In the early years, they weren’t being billed [for the club]—the bills would just disappear,” says Ian Gillule, who served as membership and marketing director at Trump National Westchester during two stints from 2006 to 2015 and witnessed how Donald Trump reacted to the tournament’s economics. “Mr Trump had a cow. He flipped. He was like, ‘We’re donating all of this stuff, and there’s no paper trail? No credit?’ And he went nuts. He said, ‘I don’t care if it’s my son or not—everybody gets billed’.”

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Katrina Kaupp, who served on the board of directors at the Eric Trump Foundation in 2010 and 2011, also remembers Donald Trump insisting the charity start paying its own way, despite Eric’s public claims to the contrary. “We did have to cover the expenses,” she says. “The charity had grown so much that the Trump Organization couldn’t absorb all of those costs anymore.” The Trump Organization declined to answer questions about the payments. But it seems that for the future president, who Forbes estimates is worth $3.5 billion, a freebie to help his son directly fight kids’ cancer took a backseat to -revenue.

“I saw that Eric was getting billed,” Gillule adds. “I would always say, ‘I can’t believe that his dad is billing him for a charitable outing.’ But that’s what they wanted.”

It’s also very consistent. The Donald J Trump Foundation famously acted like an arm of the overall business, using the charity’s money to settle a Trump business lawsuit, make a political donation and even purchase expensive portraits of its namesake. Meanwhile, Trump businesses billed the Trump campaign, fuelled by small outside donors, more than $11 million to use his properties, chefs and private aircraft.

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The Eric Trump Foundation declined to comment on that donation. In effect, though, this manoeuvre would appear to have more in common with a drug cartel’s money-laundering operation than a charity’s best-practices textbook. That $100,000 in outside donations to the Donald J Trump Foundation (remember: Trump himself didn’t give to his own foundation at this time) passed through the Eric Trump Foundation—and wound up in the coffers of Donald Trump’s private businesses.

“His father, Mr Trump, always, until the presidency, had a very, very tight rein on what was going on,” says Gillule, referring to the company’s golf courses. “The buck always stopped with him.”

The costs for Eric’s golf tournament quickly escalated. After returning, in 2012, to a more modest $59,000—while the event brought in a record $2 million—the listed costs exploded to $230,000 in 2013, $242,000 in 2014 and finally $322,000 in 2015 (the most recent on rec¬ord, held just as Trump was ratcheting up his presidential campaign), according to IRS filings. This even though the amount raised at these events, in fact, never reached that 2012 high.

It’s hard to find an explanation for this cost spike. Remember, all those base costs were supposedly free, according to Eric Trump. The golf course? “Always comped,” he says. The merchandise for golfers: “The vast majority of it we got comped.” Drinks: “Things like wine we were normally able to get donated.” And the evening performances from musicians like Dee Snider of Twisted Sister and comedians like Gilbert Gottfried: “They did it for free.” So many sponsors donated, in fact, that the event invitation has carried enough logos to make a Nascar team proud.

Eric Trump maintains that “our ex¬penses on a tournament that made us somewhere in the $2 million range every year was somewhere around 100 grand,” even though his foundation’s tax records show costs soaring to $322,000. When asked for an itemised list of expenses, the Eric Trump Foundation declined to respond.

More than $500,000 was redirected to a variety of other charities, several of which had nothing to do with children’s cancer—but happened to become clients of Trump’s golf courses

Thus it’s hard to figure out what happened to the money. All the listed costs are direct expenses: Items like overhead and salaries appear elsewhere in its IRS filings. Even if the Eric Trump Foundation had to pay the full rate for literally everything, Forbes couldn’t come up with a plausible path to $322,000 given the parameters of the annual event (a golf outing for about 200 and dinner for perhaps 400 more). Neither could golf tournament experts or the former head golf professional at Trump National Westchester. “If you gave me that much money to run a tournament, I couldn’t imagine what we could do,” says Patrick Langan, who worked at the club from 2006 to 2015. “It certainly wasn’t done that way.”

Opaque accounting doesn’t help, as the Eric Trump Foundation began hosting a few other golf events and fundraisers; former board member Kaupp says some were lumped into the cost figures of the Westchester event on the IRS filings. Hundreds of thousands of dollars over this time went directly to the Trump Organization, including one payment of $87,000 to Trump’s golf course in Washington, DC, which hosted a separate event for St Jude.

For his part, Eric Trump offers no indication that the charity is paying for much beyond the day in Westchester. “I’m sure if I hunted, I could find examples of expenses associated with the charity that aren’t due to day-of activities,” he says. “But I would probably have to think pretty long and hard about that.”

It doesn’t seem a coincidence that at the same time the Eric Trump Foundation went from what appeared to be a clean, efficient operation to a seemingly Byzantine one that suddenly found itself saddled with costs, there was a clear shift of control.

I would always say, ‘I can’t believe that his dad is billing him for a charitable outing’. But that’s what they wanted.

In 2010, the year the economics of the tournament suddenly pivoted, four of the seven original board members, who were personal friends of Eric, left. They were replaced by 14 new board members, the majority of whom owed all or much of their livelihoods to the Trump Organization. Six of them were effectively full-time employees, including Trump lawyer Michael Cohen and executive vice president Dan Sca¬vi¬no Jr, who both serve in political roles for President Trump. Another owns a company that billed the Trump campaign $16 million. Add in Eric himself, as well as his wife, Lara, and 9 of the 17 Eric Trump Foundation board members had a vested interest in the moneymaking side of the Trump empire. The foundation had become a de facto subsidiary of the Trump Organization.

“They were wearing two hats,” says Langan, the former director of golf, who says he sat in on meetings where he couldn’t tell where the business ended and the charity began. “You’re dealing with people talking about the event and the charity who also at the same time are thinking about it as a corporation and as a business. It’s a for-profit club. You know, they’re trying to make money.”

Until this board turnover, the Eric Trump Foundation pretty much did what it told its donors it would: Send its money to St Jude. But starting in 2011, more than $500,000 was redirected to a variety of other charities, many of which were personal favourites of Trump family members and several of which had nothing to do with children’s cancer—but happened to become clients of Trump’s golf courses.

In 2012, the Eric Trump Foundation sent $5,000 to a charity called Abilis, which provides services to people with disabilities. That same year, Donald Trump’s nephew Fred Trump, whose son has cerebral palsy, hosted the inaugural Golf for Abilis fundraiser at the Trump National Westchester. Over the next five years, Abilis spent an estimated $240,000 hosting tournaments at the property.

In 2013 and 2014, the Eric Trump Foundation paid $15,000 for tables at a gala for the Little Baby Face Foundation, according to a spokesman for the latter foundation. Over the next three years, Little Baby Face spent an estimated $100,000 to hold golf outings on the Trump course. The foundation denies any direct connection between the two transactions.

Janet McHugh, the founder of a small charity named Julie’s Jungle, was delighted to receive $25,000 from the Donald and Eric Trump foundations in 2013—money she figured came from Eric and Donald Trump personally. Two years later, her charity hosted a golf tournament at Trump National Hudson Valley. McHugh says the decision to hold her tournament there was unrelated to the donation. “They didn’t comp us the golf course,” she says. “We paid.”

Altruism as a business-development strategy isn’t necessarily illegal. But a situation in which outside donor money is redeployed away from the core mission in ways that seem to ultimately benefit the family that pays the majority of the board is—at best—an appearance problem.

Other extra expenditures raise eyebrows. In 2013, Eric Trump used his foundation’s money, rather than his own, to pay $1,600 to the American Society for Enology & Viticulture for a copper wine still and an antique bottle washer at a trade event and fundraiser that he was keynoting. Eric runs the family vineyard in Char¬lottes¬ville, Virginia, about an hour down the road from where the event took place. “I have no idea what that is,” says Eric Trump, referring to the payment.

In 2012, the Eric Trump Foundation wrote a cheque for $25,000 to the George Rodrigue Foundation of the Arts. That same year, George Rodrigue, who had said that his famous “blue dog” paintings sometimes sold for about $25,000, created a portrait of Donald Trump for the auction at Eric’s event. That portrait ended up hanging over the couch in Eric Trump’s house.

What does Eric say about the donation? “Let’s follow up later on,” he replies, when asked about it in a phone call, before getting off the line.

Later the next day, after being told Forbes had several other questions, he sent a paragraphs-long text message, which read in part: “I was reflecting on it last night and have to say I was really disappointed when you said the story would be ‘fair’… It seems like there is a motive against either myself or my family. And if that is the case, I would simply rather disengage.” A spokesperson for the Trump Organization similarly declined to respond further to questions about Eric and Donald Trump.

The ultimate tragedy here is that the Eric Trump Foundation has done so much good. Yes, Eric has indulged in the family trait of vainglory, from Eric Trump bobblehead dolls at the tournament to statements that leave the impression he’s giving the money personally, even though tax records suggest he’s donated six figures total, at most. (Trump wouldn’t tell Forbes how much he’s given to his own foundation. “I think it’s totally irrelevant,” he says, citing the fact that “we never charge” for use of the courses.) But in 2015, a new intensive-care unit at St Jude opened with Eric Trump’s name on it, and the foundation’s money has funded research into a rare form of cancer.

It’s hard to imagine how the early incarnation of the golf tournament—big hauls, understandable costs—would have any problem continuing to spew out millions for years to come. Last year, the Eric Trump Foundation donated $2.9 million, according to St Jude.

But in December, Eric Trump said he would stop fundraising. Running an event with an increasing commingling of business and philanthropy created the kind of conflict-of-interest (not to mention image) concerns that similarly plagued Ivanka Trump’s aborted attempt to auction off a coffee date on behalf of Eric’s foundation.

More recently, the foundation has rebranded itself as Curetivity. A spokeswoman for the organisation said it would continue hosting golf tournaments to raise money for St Jude. A Curetivity event was held this past May outside Washington, D.C., with Eric Trump in attendance, at the Trump National course.

(This story appears in the 04 August, 2017 issue of Forbes India. You can buy our tablet version from Magzter.com. To visit our Archives, click here.)

[“Source-forbesindia”]

3 best money management apps

We all think we are fully capable of managing our income, but how good are we really at making our paychecks last? If you’re like me, when payday arrives you feel on top of the world, ready to treat yourself to things you’ve been waiting to buy. Then, two weeks go by and you’re already in a tough spot. If you also have trouble making the most of your money, look into these top three money apps that’ll help keep tabs on your dough.

Mint

This popular app is a free budgeting resource that allows you to sync credit cards, monthly bills and bank accounts to one singular account. With Mint, you can get a look at your net worth at any time and your spending is separated into different categories. The app then calculates how much is spent on average in each category and uses this information to provide you with a solid budget. Mint will send you notifications if you go over your budget and also provides detailed information on your credit score.

You Need a Budget

YNAB starts by connecting to your accounts and then allows you to assign every dollar you spend to a specific category (for example, travel, food, etc.). This app helps you view your money in the present and use only what you have now, as opposed to guessing how much you’ll have to spend in the future. Once you get a solid feel for how your money is being spent and what categories you need more money for, your budget can be altered accordingly. This flexibility is what many users appreciate most about this app.

Digit

There are often small areas in life that we don’t focus on where we can save little amounts of money a month. The Digit app keeps on the lookout for these small ways we can save by checking spending every few days. By connecting with your checking account, Digit analyzes your income and spending and searches for a few dollars (if you can afford it) to set aside in a “Digit savings” account. Even if it’s a small amount per month, Digit is a simple way to stash away a few extra bucks.

[“Source-cuinsight”]

Earning money in the mobile app era:how apps can help you to save more

Earning  money in the mobile app era:how apps can help you to save more

Tech in the digital age is ubiquitous. Everywhere you look, you will find someone holding a smartphone, watching a movie on their tablets, or listening to music via their mobile devices.

The mobile industry is huge and it can entice people to spend a lot more money than they usually would have. However, that does not have to be the case. In fact, people can now earn money on their spare time with simple tasks, and save money when buying anything.

Earning money on your free time

Most people seem to think that every service that promises to make its users money from home is a scam. While it is true that there are many apps that are entirely fake and attempt to simply trick people with fake promises, there are many legitimate ones too.

In fact, there are countless lists of mobile apps that help you earn money online. These apps all share common features, such as allowing their users to complete as many or as few tasks as they want and earn equivalent cash in the process.

While such apps rarely pay enough for a full-time income, their purpose is not to completely replace your actual job. Instead, they can be used whenever you have some free time and would like to earn some extra cash.

For instance, plenty of people have a long commute every day to work. Many will spend that time listening to music, reading the newspaper, or catching up with the latest updates in social media.

Instead of doing that, they could potentially take some time to work through mobile apps like Swagbucks which will allow them to make some extra money, perhaps enough to pay for the commute or an extra cup of coffee.

Apps that earn you money are entirely flexible

The best thing about these apps is that they never force their users to complete more tasks than they would like. In fact, users can simply close the app whenever they get bored and continue later in the day or even later in the week.

The way most of these services work is that they allow users to accumulate points whenever certain tasks are completed. Completing tasks gives users points which can then be exchanged for actual money.

That kind of flexibility is hard to come by and is one of the most appealing aspects of doing some extra work from a smartphone or tablet. As long as you are content with spending a limited amount of your time for limited rewards then such apps are the right choice for you.

The mobile industry can also help you save money

Earning money via mobile apps is an absolutely fine way to spend a couple of hours every day but it is not for everyone. Some people have a satisfying day job with a high salary and they do not wish to continue working when they get home or during their long commutes.

Instead, they may wish to scout the web for deals, discounts, and interesting products that they can add to their collection. This is precisely the reason why so many apps concerned with online shopping keep popping up in each app store.

Wish and Shpock are just two of the many examples of apps dedicated to saving people money, albeit through different avenues. The first allows people to connect with overseas shops which can ship items are highly reduced costs whereas the second one lets users sell their items to anyone in their vicinity, a modern version of the classified ads.

Apps and the sharing economy

The sharing economy has come under a lot of fire recently. For example, Airbnb is believed to worsen the renting problems that many major cities face because it allows people to rent their rooms in the short-term only, leading to increase shortages in housing.

However, the sharing economy is a concept which has been readily embraced by everyday users. Today, many people would prefer to bring up Uber on their phones and order a ride than calling a taxi company and booking a ride from them.

The sharing economy concept seems to have found a solid home in the mobile industry as more and more apps embrace it in ways that disrupt the market. In China alone, the shared economy industry is estimated at $502 billion, a number that doubled in a single year.

Soon, major cities in the West will also catch up and ride the sharing wave even further. In the next few years, it will not be uncommon to use apps in order to rent a bike, visit a shop and pay with a mobile coupon, and request a ride via an app on the way back.

Such concepts seem strange for the uninitiated but users across the world seem ready to adopt them whenever they actually hit the market. With apps available to earn, save, and share money, it is not difficult to believe that the mobile industry will play a vital role in the economy for years to come.

[“Source-thenextweb”]

Money in Swiss banks: India continues to slip, stays at 88th place in 2016; UK on top

Zurich/New Delhi: India has slipped to 88th place in terms of money parked by its citizens with Swiss banks, while the UK remains on the top.

Representational image. AFP

Representational image. AFP

Also, the money officially held by Indians with banks in Switzerland now accounts for a meagre 0.04 percent of the total funds kept by all foreign clients in the Swiss banking system, as per an analysis of the latest figures compiled by the SNB (Swiss National Bank) as on 2016-end.

India was placed at 75th position in 2015 and at 61st in the year before that, though it used to be among top-50 countries in terms of holdings in Swiss banks till 2007. The country was ranked highest at 37th place in the year 2004.

The latest data from Zurich-based SNB comes ahead of a new framework for automatic exchange of information between Switzerland and India to help check the black money menace. The funds, described by SNB as ‘liabilities’ of Swiss banks or ‘amounts due to’ their clients, are the official figures disclosed by the Swiss authorities and do not indicate to the quantum of the much-debated alleged black money held by Indians in the safe havens of Switzerland.

SNB’s official figures also do not include the money that Indians, NRIs or others might have in Swiss banks in the names of entities from different countries. There is a view that the Indians alleged to have parked their illicit money in Swiss banks in the past may have shifted the funds to other locations after a global clampdown began on the mighty banking secrecy practices in Switzerland.

Swiss banks have also said Indians have “few deposits” in Swiss banks compared to other global financial hubs like Singapore and Hong Kong amid stepped-up efforts to check the black money menace. The total money held in Swiss banks by foreign clients from across the world, incidentally rose by a small margin from 1.41 trillion Swiss francs (CHF) to CHF 1.42 trillion during 2016.

In terms of individual countries, the UK accounted for the largest chunk at about CHF 359 (over 25 percent) of the total foreign money with Swiss banks. The US came second with nearly CHF 177 billion or about 14 percent No other country accounted for a double-digit percentage share, while others in the top-ten included West Indies, France, Bahamas, Germany, Guernsey, Jersey, Hong Kong and Luxembourg.

Indians’ share not even one-hundredth of the total money. India is now ranked 88th with 676 million Swiss francs (about Rs4,500 crore)—a record low after falling for three consecutive years amid a continuing clampdown on the suspected black money stashed behind their famed secrecy walls.

The share of Indians’ money in the total foreign funds of Swiss banks also fell to 0.04 percent (from 0.08 percent in 2015). Pakistan continued to remain placed higher than India at 71st place (although down from 69th in 2015) with about CHF 1.4 billion—though down to below 0.1% of total foreign money parked with Swiss banks.

India was also the lowest ranked among the BRICS nations—Russia was ranked 19th (CHF 15.6 billion), China 25th (CHF 9.6 billion), Brazil 52nd (CHF 2.7 billion) and South Africa 61st (CHF 2.2 billion). Among these five, only China has moved up. Others ranked higher than India included Mauritius, Iran, Morocco, Kenya, Nigeria, Kazakhstan, Ukraine, Angola, the Philippines, Malaysia, Indonesia, Canada and Mexico.

A number of offshore financial centres are also ranked higher including Cayman Islands, Panama, Cyprus, Marshall Islands, Bermuda, Seychelles, Isle of Man and Gibraltar. Among India’s neighbouring countries, Bangladesh was ranked 89th (CHF 667.5 million), while Nepal was 150th (CHF 312 million), Sri Lanka was 151st (CHF 307 million) and Bhutan was way below at 282nd (about half a million Swiss francs).

The total money belonging to the developed countries fell to CHF 824 billion, while those from developing nations actually rose marginally to CHF 208 million. The money from developing economies in Asia-Pacific region rose to CHF 50 billion.

The funds parked in Swiss banks from offshore financial centres rose to CHF 389 billion. India was ranked in top-50 continuously between 1996 and 2007, but started declining after that—55th in 2008, 59th in 2009 and 2010 each, 55th again in 2011, 71st in 2012 and then to 58th in 2013.

[“Source-.firstpost”]