Last December, reports emerged that federal prosecutors in New York City's Southern District were scrutinizing the inaugural committee for President Donald Trump's festivities, investigating whether the committee misspent donations and used the event to accept straw donations from Middle Eastern countries. Now, WNYC and ProPublica report they have "identified evidence of potential tax law violations by the committee."

According to WNYC's Ilya Maritz:

A spokesman confirmed that the nonprofit 58th Presidential Inaugural Committee paid the Trump International Hotel a rate of $175,000 per day for event space — in spite of internal objections at the time that the rate was far too high. If the committee is deemed by auditors or prosecutors to have paid an above-market rate, that could violate tax laws prohibiting self-dealing, according to experts.

Tax law prohibits nonprofits from paying inflated prices to entities that are owned by people who also control or influence the nonprofit’s activities.

“Every legitimate nonprofit is very concerned with this,” said Doug White, a veteran adviser to tax exempt organizations, speaking generally. “You’re benefiting a private person, and you’re using the nonprofit to do it.”...

...The committee paid a total of $700,000 to the Trump International Hotel for event spaces for four days in January 2017. At the time, a consultant working for the inaugural committee expressed her concern over email that the price quoted by the Trump hotel — $175,000 per day for several event spaces — was too high, as ProPublica and WNYC reported in December.

“Please take into consideration that when this is audited it will become public knowledge,” wrote Stephanie Winston Wolkoff, an experienced New York-based event planner, suggesting a fair rate for the event spaces would be at most $85,000 per day, less than half of what was ultimately paid. That fee did not cover catering.

The $175,000 fee—which did not include catering—was called "more than egregious" by a D.C. event planner who spoke to Maritz. Earlier this week, federal prosecutors in the Southern District of New York issued a "sweeping" subpoena to the inaugural committee for documents.

Trump's inaugural committee raised $107 million to pay for all of the events, twice what the previously most-expensive inauguration—President Barack Obama's in 2009—cost. (The committee was chaired by Trump's close friend, financier Tom Barrack, who, per a confidential memo, "developed a plan to profit off its connections to the incoming administration and foreign dignitaries.")

In a story examining the chaos of the inauguration's event planning, Vanity Fair reports that an estimated $40 million from the committee is still unaccounted for. The magazine also revealed that this past summer former Trump fixer and lawyer Michael Cohen "let Wolkoff know that, among other documents and recordings, the F.B.I. had seized hours of their own conversations that he had taped. According to people familiar with the recordings, some of the taped conversations dealt directly with the inauguration. In them, Wolkoff detailed her own contemporaneous concerns with the inauguration—about how money was being spent, the general chaos of the process, and the involvement of Trump’s adult children. During these conversations, Wolkoff also raised her issues with the two men in charge of the committee: [Rick] Gates and Barrack."

Gates is currently cooperating with Special Counsel Robert Mueller's probe.