U.S. President Donald Trump's namesake charitable foundation has agreed to dissolve under court supervision following a lawsuit by New York's attorney general claiming Trump misused the foundation to advance his 2016 presidential campaign and his businesses, the attorney general said on Tuesday.
New York Attorney General Barbara Underwood, a Democrat, said the Donald J. Trump Foundation's assets will be distributed to charities vetted by her office. The deal is subject to approval by a New York state judge.
The White House and a lawyer for the foundation could not immediately be reached for comment. Trump, a Republican, has previously said on Twitter that Underwood's lawsuit was a concoction by "sleazy New York Democrats."
The ruling came less than a month after Justice Saliann Scarpulla of the New York State Supreme Court in Manhattan rejected Trump's motion to dismiss Underwood's lawsuit.
The motion had argued that the U.S. Constitution immunized Trump from Underwood's claims alleging breach of fiduciary duty, improper self-dealing, and misuse of assets belonging to the Foundation.
Underwood sued Trump and his adult children Donald Jr., Eric and Ivanka on June 14, after a 21-month probe that she said uncovered "extensive unlawful political coordination" between the foundation and Trump's campaign. The lawsuit remains pending.
Lawyers for the foundation say any infractions were minor. They say they have been trying to shut down the foundation voluntarily for months.
A judge must still sign off on the agreement.
Underwood is a Democrat and is seeking millions of dollars in penalties. She wants Trump and his eldest children barred from running other charities.
Underwood accused the Foundation of a "shocking pattern of illegality involving the Trump Foundation -- including unlawful coordination with the Trump presidential campaign, repeated and willful self-dealing, and much more."
"This amounted to the Trump Foundation functioning as little more than a checkbook to serve Mr. Trump's business and political interests," she said in a statement.
"This is an important victory for the rule of law, making clear that there is one set of rules for everyone," Underwood added.