New York AG Orders Trump Foundation to Cease and Desist
LEMON: Oh, boy. The commercial breaks are only broadcast, Donald Trump's charitable foundation getting him into trouble with New York State's Attorney General. Back with me now, Betsy McCaughey, John Avlon, and Jennifer Granholm. So, can I ask you about the respond, Betsy, from the Trump surrogates because I said I never thought that I would see Rudy Giuliani or Chris Christie, or Betsy McCaughey like doing cart wheels and back flips trying to explain this. Would you have used the same language genius?</s>MCCAUGHEY: I would definitely not have said genius and brilliant because it is such a widely used provision in the tax code, there's nothing genius or brilliant about it, but I would say it is an essential part of the tax code and we shouldn't eliminate it because it encourages people to take risks, creating job.</s>LEMON: Moving on. Let's talk about Eric Schneiderman, the New York State Attorney General saying that his -- and telling Trump basically giving his charity a cease and desist, what's your reaction?</s>MCCAUGHEY: Yes, I got it right here.</s>LEMON: What's your reaction?</s>MCCAUGHEY: My reaction is this. For the top law enforcement person in the state to sign on to the Hillary Clinton campaign advisory board and then turn around and launch an investigation of her opponent is unethical. And he should have recused himself. Many people should calling for his resignation because of this conflict of interest. And someone else should be looking into this. The timing of this is also suspicious. It could be that administrative errors were made. But I will tell you this, the same attorney general identified $225 million in donations from foreign governments to the Clinton Foundation that were not reported in contrary...</s>LEMON: But doesn't that negate your argument?</s>MCCAUGHEY: No, but just a second. Contrary to New York state law and did nothing about it. Did nothing about it.</s>LEMON: So, John, I want you to respond to that, but let me just put up the statement from the Trump campaign. And again, it says, "While we are remained very concerned about the political motives behind A.G. Schneiderman's investigation, the Trump Foundation nevertheless intend to cooperate fully with the investigation." So, go on, John.</s>AVLON: Well, look, there's a lot of bad blood between these two figures that's not a secret particularly in sort of the arcane circles of New York politics. It is troubling whenever you get judicial actors seeming to have partisan motives or motives that could be impugned. That said, this is largely a problem of their own making. I mean, you know, this foundation, much vaunted, under scrutiny that they could have anticipated, seems to not have filed basic forms. And now according to the attorney general they are going to have to open their books as of October 15th. Everything we've seen to date would suggest they're probably not ready for that kind of scrutiny in terms of both disbursements and payouts. And it's going to be a distraction to the campaign, but it's because they resisted transparency for so long that they find themselves in this situation.</s>LEMON: Politically motivated, governor?</s>GRANHOLM: No, it's just that the facts are the facts. They didn't register. They're supposed to register. I think this actual failure to register is less damaging than the actual non-existence of a charity, meaning that this charity was not in fact a charity at all. It is a vehicle for funneling stuff to Donald Trump to be able to pay his legal bills which is, not legal or to buy six-foot portraits of himself that he's hanging on the walls of one of his resorts. These are -- and not to mention the donation that he made to Pam Bondi to get her to stop investigating Trump University. This is not a charity at all. This is a -- where he takes other people's money to satisfied his own -- his own vanity.</s>LEMON: John, do you want...</s>AVLON: That's part of the larger problem think of what we've seen, is that Donald Trump's lifestyle basically seems to have been funded by a series of interconnected shell corporations through which he funnels a lot of money. So, he can take a massive loss, take the reduction, have very low reported income and still live like a king. Once this kind of transparency is put in place with the foundation, you could see a lot of really troubling, hard-to-explain things, a charity, a foundation that does not seem to be charitable, but instead seems to be devoted to self-grandiose to self-enrichment. If that's the case, it certainly, you know, this is a problem of their own making.</s>LEMON: Look out, Betsy is looking up. I'm looking at her nose.</s>MCCAUGHEY: Yes. I don't think that's the case.</s>AVLON: It may not be the case.</s>MCCAUGHEY: Let me just point out that the -- to give you a little bit of a parallel here, the Clinton Foundation failed to report 1100 donations from foreign governments and entities that Mrs. Clinton's foundation was required to report under her agreement with the State Department when she took office there, and also under IRS regulations. A 111 omissions. So, they had to re-file four years of taxes for the Clinton Foundation. And here is the one sentence in the cover letter that struck me as so apt her, because foundations, like people, make mistakes, they are refilling four years of taxes. So, I would say...</s>LEMON: Isn't that what Governor Granholm just said?</s>AVLON: Yes.</s>MCCAUGHEY: That's why I would say...</s>AVLON: We're all flat. We're all broken.</s>MCCAUGHEY: ... here maybe and the administration in New York, I've run a foundation in New York State, it's an overwhelming amount of paperwork, if they forgot to file with the charity office I filed with the New York...</s>LEMON: Governor, didn't you just give her that?</s>GRANHOLM: Yes. Listen. Listen, I'm saying that this is an administrative error. I get that. And it would be improper for Eric Schneiderman not to go after it because his office regulates charities. What I'm going at this underlying purpose, and to compare the Clinton Foundation with the Trump Foundation is so desperate. Tell me one person that the Trump Foundation whose life has been saved? Under the Clinton Foundation 50,000 children every year in Malawi, and in Kenya and in Ethiopia are saved. Tell me one drug whose price has been reduced because of the beneficent of the Trump Foundation. And because of the Clinton Foundation 11.5 million people now have access to AIDS drugs and to lower cost malaria. This is not a foundation, the Trump Foundation. The Clinton Foundation has done remarkable work.</s>MCCAUGHEY: I would argue that the Trump Foundation also does good. They made a sizable contribution to a veteran's organization in Florida. And the trouble with the Clinton Foundation is that it was really used as a way of reaping in huge amounts of money from foreign governments, companies and individuals while Mrs. Clinton was Secretary of State.</s>LEMON: But do you deny the good the Clinton Foundation has done...</s>MCCAUGHEY: Absolutely not. Absolutely not.</s>LEMON: You can't argue with that.</s>MCCAUGHEY: Both of these institutions probably have their worth and their good points.</s>LEMON: But is it fair to compare the two because the Clinton Foundation is much larger foundation than the Trump Foundation.</s>MCCAUGHEY: I think that...</s>GRANHOLM: And has been rated four stars by all of the charity review organizations.</s>MCCAUGHEY: I think it is -- the Clinton Foundation has really a ripped off the United States government and the people of the United States by swapping favors in return for donations to that foundation.</s>GRANHOLM: That is such -- that is not true.</s>MCCAUGHEY: That is not something the Trump Foundation has ever done.</s>LEMON: That's a bunch of Donald Trump's campaign talking points.</s>LEMON: And that is just an accusation that is not ben proven.</s>MCCAUGHEY: That is such a lie.</s>LEMON: Yes. I have to say that's an accusation that's not been proven.</s>MCCAUGHEY: You bet.</s>LEMON: Thank you very much. When we come right back, it has been a week of bad news for Donald Trump, but he has bounced back before. Can he do it again?