The District of Columbia is suing President Donald Trump's inaugural committee and two companies that control the Trump International Hotel in the nation's capital. A lawsuit announced Wednesday by D.C. Attorney General Karl Racine accuses them of abusing nonprofit funds to benefit Trump's family.
The inaugural committee raised an unprecedented $107 million to host events celebrating Trump's inauguration in January 2017. But its spending has drawn mounting scrutiny.
According to the attorney general's office, the committee coordinated with the Trump family to “grossly overpay for event space” in the hotel.
The lawsuit alleges that the committee used nonprofit money to fund a private party for President Trump's children and to rent hotel space for days it wouldn't be used. The suit also claims that the committee chose to book at the Trump Hotel even though other hotels offered free or cheaper alternatives.
The committee has maintained that its finances were independently audited and that all money was spent in accordance with the law.
A spokesperson for the Presidential Inaugural Committee did not immediately respond to a request for comment.
A lawyer for the Trump Organization, named as a defendant in the lawsuit, says that the hotel will vigorously defend itself. He said the lawsuit contains unspecified factual errors and that hotels can negotiate any rates for event spaces.
Communications made public by the lawsuit indicate that inaugural committee staff raised concerns about the Trump International Hotel's fees to Donald and Ivanka Trump.
According to the lawsuit, longtime event planner Stephanie Winston Wolkoff, a former friend of First Lady Melania Trump, emailed Ivanka and others, saying the hotel wanted to charge more than double what she considered a fair rate.
Wolkoff, whom NBC News reports was a key witness in Racine's investigation, declined to comment for this story.
The lawsuit presented emails from Trump campaign official and inaugural committee deputy chairman Rick Gates showing he informed Ivanka Trump an even higher initial quote of $450,000 per day (Gates later pleaded guilty to federal conspiracy charges and lying to investigators in the Mueller probe).
"I am a bit worried about the optics of the [Presidential Inaugural Committee] paying Trump Hotel a high fee and the media making a big story out of it," Gates allegedly wrote.
Ultimately, the hotel was paid about $1.03 million for the space rental, food and other charges over four days from Jan. 17-20, 2017, according to the lawsuit.
A spokesperson for inaugural committee leader Tom Barrack declined to comment.