The New York state attorney general has sued US President Donald Trump, three of his children and his foundation, saying he illegally used the nonprofit as a personal "chequebook" for his own benefit, including his 2016 presidential campaign.
Barbara Underwood, the attorney general, on Thursday asked a state judge to dissolve the Donald J. Trump Foundation and to ban Trump, his sons Donald Jr and Eric, and his daughter Ivanka from holding leadership roles in New York charities.
The three children joined the foundation's board in 2006, although Ivanka stepped down to work at the White House in 2017.
Underwood said her office's 21-month investigation, begun under her predecessor Eric Schneiderman, uncovered "extensive unlawful political co-ordination" by the foundation with Trump's campaign, as well as "repeated and wilful self-dealing" to benefit Trump's personal, business and political interests.
Among the transactions the lawsuit cited as illegal was a $US10,000 payment to the Unicorn Children's Foundation for a portrait of Trump purchased at a fundraising auction in 2014. The portrait would end up decorating a wall at Trump's Doral golf resort near Miami, the Washington Post reported.
Another $US100,000 went to another charity in 2007 to settle a legal dispute over a flagpole erected in violation of local ordinances at Mar-a-Lago, Trump's private club and sometime residence in Palm Beach, Florida.
"Mr Trump ran the Foundation according to his whim, rather than the law," the lawsuit said.
The lawsuit, filed on Thursday on Trump's 72nd birthday in the state Supreme Court in Manhattan, seeks $US2.8 million ($A3.7 million) of restitution plus penalties, a 10-year ban on Trump serving as a director of a New York nonprofit, and one-year bans for his children.
"As our investigation reveals, the Trump Foundation was little more than a chequebook for payments from Mr Trump or his businesses to nonprofits, regardless of their purpose or legality," Underwood said in a statement. "That is not how private foundations should function."
The foundation had no employees, had never written a required protocol for disbursing funds and its board of directors, which "existed in name only", had not met since 1999, the lawsuit said.
The Republican president attacked the lawsuit in a series of posts on Twitter that blamed Democratic politicians in his home state.
"I won't settle this case!" Trump wrote, calling the lawsuit ridiculous and engineered by "sleazy New York Democrats".
During the 2016 presidential race, Trump frequently derided a charity run by the family of his Democratic rival, Hillary Clinton, saying without proof that the former secretary of state gave favourable treatment to the Clinton Foundation's wealthy donors.
Both Clinton and the Clinton Foundation, best known for helping to lower the cost of HIV drugs in the developing world, dismissed those attacks as political mudslinging.
The Trump Foundation issued a statement criticising the latest lawsuit as "politics at its very worst" and accusing the attorney general of holding its $US1.7 million in remaining funds "hostage for political gain".
The New York City-based foundation said in a statement it had disbursed more than $US19 million to "worthy charitable causes" since its founding in 1987. Trump himself had contributed more than $US8 million, and the foundation had already announced its intention to dissolve in 2016, the statement said.