Trump Organization charged Eric Trump's cancer charity big bucks for golf events: Report

Key Points
  • Forbes said Eric Trump's foundation paid the Trump Organization more than $1.2 million for fundraising events despite claims a family golf course was being used for free.
  • The article said the Donald J. Trump Foundation "apparently used" Eric's charity to funnel $100,000 in donations into revenue for the Trump Organization.
  • Donald Trump personally ordered his company to start billing Eric's charity, the article says.
Eric Trump
Getty Images

A cancer charity run by President Donald Trump's son Eric paid the family's Trump Organization more than $1.2 million for fundraising golf events despite Eric's claims that the charity was able use a Trump golf course for free, a new report says.

The Forbes magazine story also says that "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."

And the article further says that the Donald J. Trump Foundation, a charity set up by the president, "apparently used the Eric Trump Foundation to funnel $100,000 in donations into revenue for the Trump Organization."

Pres. Trump meets with congressional leaders
Pres. Trump meets with congressional leaders

Forbes' story said: "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."

The article, citing two people involved in the situation, said President Trump ordered the Trump Organization start billing the Eric Trump Foundation hundreds of thousands of dollars after becoming aware that his company had not been charging the charity for its facilities and services.

"During the past decade, the Eric Trump Foundation has raised over $16.3 million for St. Jude Children's Research hospital while maintaining an expense ratio of just 12.3 percent. The Eric Trump Foundation was also responsible for building a $20 million dollar ICU which treats the sickest children anywhere in the world suffering from the most catastrophic terminal illnesses," a spokeswoman for the Trump Organization said in a statement.

"Contrary to recent reports, at no time did the Trump Organization profit in any way from the foundation or any of its activities. While people can disagree on political issues, to infer malicious intent on a charity that has changed so many lives, is not only shameful but is truly disgusting. At the end of the day the only people who lose are the children of St. Jude and other incredibly worthy causes."

Eric Trump has hosted charity golf tournaments since 2007 to benefit St. Jude Children's Research Hospital in Memphis, Tennessee. Forbes said that he has directed more than $11 million in donations there, and helped raise an additional $5 million for that hospital through events hosted by other groups.

Eric currently is running the Trump Organization with his older brother Donald Jr. while their father serves as president. In December 2016, The Eric Trump Foundation had suspended operations following his father's win in the 2016 presidential election.

Eric Trump reportedly told Forbes for its article that nearly all the money contributed to the foundation goes toward St. Jude because his charity has been able to use the Trump family's golf course in Westchester County, New York, for free.

"We get to use our assets 100% free of charge," Trump said, according to the article.

But the article said: "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," Forbes said.

Forbes reported that Donald Trump became aware that the golf course was not billing Eric's foundation, and demanded the charity begin being charged about six years ago.

"Mr. Trump had a cow. He flipped," said Ian Gillule, former membership and marketing director of the Trump National Westchester golf course. "He said, 'I don't care if it's my son or not — everybody gets billed.' "

Forbes also reported that beginning in 2011, after Eric Trump's foundation received an influx of new board members, most of whom were connected or employed to the Trump Organization, "more than $500,000 was redirected to a variety of other charities, many of which were personal favorites 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."

CNBC has requested comment on the Forbes article from the Trump Organization, the White House and St. Jude Children's Research Hospital.

Watch: WSJ op-ed slams Trump over his tweets

WSJ op-ed slams Trump as he meets with congressional leaders
WSJ op-ed slams Trump as he meets with congressional leaders