Donald Trump’s Tangled Conflicts Of Interest — Both Foreign And Domestic
Donald John Trump is now the 45th president of the United States and what were once hypothetical discussions concerning conflicts of interest became real January 20th at 12:01 PM. Here is a look at where those conflicts stand.
(These are conflicts that have lawsuits filed concerning them)
Trump’s DC Hotel is the only currently actionable conflict. Citizens for Ethics and Responsibility in Washington (CREW) filed a lawsuit on inauguration day over this hotel, as well as a complaint with the Government Services Administration over President Trump’s violation of his lease. It remains unclear if the case will be allowed to proceed for lack of standing. Traditionally you need a plaintiff who can show that the Post Hotel has damaged them in some way before bringing a suit. CREW’s lawsuit rests on their claim that President Trump has cost them money by forcing them to focus on the hotel and not other more important causes, which seems like shaky grounds. There are two possible groups that may be able to file additional lawsuits on firmer ground: the employees of the hotel and the hotel’s DC competitors.
On January 31st workers at President Trump’s DC hotel voted to unionize, a preliminary step, but an important one on the road to joining a union. While this movement may go smoothly for the hotel, President Trump’s history of relations with unions has been contentious. In the cases of conflict over unionizing, a higher authority would be called in. Labor disputes, such as those we might see from this hotel, are settled by the National Labor Relations Board (NRLB), two of whose five members will be Trump appointees.
Another possible route is that the competitors of President Trump’s hotel here in Washington could sue for loss of revenue. Back on December 5th the Heritage Foundation reserved space in President Trump’s hotel to honor their top donors who give at least $1,000 annually. Vice-President Mike Pence himself gave the keynote at this event. There must be a hotel in DC that can argue the event would have been held elsewhere, except that no hotel in town can compete with the “presidential ballroom” (I kid you not, that is what the space is called) of President Trump when it comes to hosting large political or diplomatic functions.
Complicating matters, both the possible union or hotel disputes would end up in front of the U.S Court of Appeals for the District of Columbia, some of whose members will be appointed by President Trump and eventually even the Supreme Court where President Trump recently nominated Judge Neil Gorsuch. Judges are professionals who are expected to rule on the merits of the cases in front of them, but these potential situations would leave doubt in the minds of all parties involved.
The DC hotel is not President Trump’s most egregious conflict, but is easy to argue and easy for President Trump to resolve. For a far more thorough list of President Trump’s conflicts check out this article.
There are two separate clauses in the constitution upon which judicial challenges to President Trump’s business holdings and conflicts of interest will be based: the domestic and foreign emoluments clauses. The problem with these lawsuits is one of standing, a legal term meaning that the lawsuits have to be on behalf of someone who was injured or disadvantaged by the actions of the president’s company. Finding a legal definition for emoluments will also be required.
The Emolument Argument
What exactly is an emolument? Please do not start sending me links to the Oxford English Dictionary, this question is not that easy to answer. What little historical usage of emoluments exists is almost completely focused on the fear of the founders that U.S. diplomats or elected officials would accept bribes from foreign governments, such as diamond festooned snuffboxes, and act against the best interests of the United States. Merriam-Webster gives the definition of emolument as — “the returns arising from office or employment usually in the form of compensation or perquisites.”
Arguing in a white paper produced on his conflicts of interest, President Trump’s lawyers claim that “the Constitution does not forbid fair-market-value transactions with foreign officials.” This argument would imply that making money, as long as your earn and compete for it, is completely acceptable while someone is president. People make money while they are president, there is no arguing that. Before running for president, Barack Obama earned under $100,000 a year. Now ten years later, he and his wife are each worth between $7 — $12 million. Much of this money came from book deals written before 2009, but he did invest it in treasury bonds upon assuming office. Given that all presidents make money, how is President Trump any different?
It was very possible for President Obama to have done something that would have violated the emoluments clause or at least created the perception of a conflict of interest. The Mexican Government could have purchased, perhaps as textbooks, several million copies of President Obama’s book while renegotiating NAFTA. It wouldn’t matter that this behavior was unsolicited or that President Obama was not the publisher and only received royalties, such an instance would at least be a possible violation of the constitution and a perceived conflict of interest. With President Trump, the opportunities such as this are a thousandfold more common. President Trump may have given up management of his corporation (which he can take back at any time), but he still has full ownership of the Trump Organization and all its assets. To be more accurate President Trump owns a trust which exists to hold assets and all the wealth accumulated from their growth, one of which is the Trump Organization, for the “exclusive benefit” of President Trump.
In my opinion the argument concerning fair-market-value is specious because there can be no “fair” deals when one of the parties is the President’s company. And make no mistake the Trump Organization is still President Trump’s company, both in his eyes and the world’s. President Trump may not manage his company, but he still owns and profits from it. Money is money and no amount of legal maneuvering can change the money President Trump realizes. No company can compete with the President’s company, and any fair-market-transactions would involve consideration of how much access to the president or goodwill giving business to his company bought. Pay-to-play was a very real fear with the Clinton Foundation and is for the Trump Organization as well. In both cases, the perception of unfair dealing is enough to draw censure. In the world of conflicts of interest you are guilty until proven innocent. President Trump has promised no new deals during his presidency, but the head of his hotel management company intends to expand into as many new American cities as possible. Even if President Trump restrained himself from engaging in any new deals while president, the enormous stack of documents at the one press conference he held on the subject displays a staggering amount of existing deals and businesses to cause problems.
Legal attempts to force President Trump to resolve his conflicts of interest will revolve around two separate clauses in the constitution: the Domestic and Foreign Emoluments Clauses.
Domestic Emoluments Clause (Article II, Section 1)
The President shall, at stated Times, receive for his Services, a Compensation, which shall neither be increased nor diminished during the Period for which he shall have been elected, and he shall not receive within that Period any other Emolument from the United States, or any of them.
This clause does NOT mean that the only money a president can make while in office is their salary. President Trump is allowed to make money while in office, but he cannot receive emoluments from any part of the Federal or State governments. Every building permit, contract, or government convention involving any of President Trump’s hotels will at least potentially violate this clause and could produce a lawsuit given that a injured party can be found. Considering the above argument for fair market transactions, bringing lawsuits on behalf of President Trump’s competitors, especially if they are small or medium businesses, would be an easy and effective path for making these constitutional arguments.
Foreign Emoluments Clause (Article I, Section 9)
No Title of Nobility shall be granted by the United States: And no Person holding any Office of Profit or Trust under them, shall, without the Consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State.
Just as with the domestic side, the argument used by President Trump’s lawyers is that this clause only applies to gifts and not the “value for value” payments that show up in corporate transactions. It seems that that issue of what exactly an emolument is will be up to the U.S. judicial branch to decide. (I’d be interested to know what you think about what are and are not emoluments.)
Either way, receiving gifts or money from foreign nationals or governments carries with it a whole host of problems beyond just the fair-market-value transactions of President Trump’s domestic corporate activities. When President Obama received the Nobel Peace Prize, he had to consider what to do with the $1.4 million award that comes with it. President Obama donated all of the Nobel money to charity as it was clearly an emolument from a foreign group and therefor subject to this article. In a similar fashion, President Trump has promised to do the same with all the profits from foreign government payments to his hotels. Donating money to the Treasury Department is a common and accepted practice with foreign gifts and goes to pay down the debt the government owes the american people. Taking President Trump at his word on these donations, which the public will have a very difficult time verifying, does not address the issue. President Trump only promised to donate profits, not all revenue received from foreign governments. Corporations commonly claim to make no profit on transaction to avoid paying taxes and President Trump’s past actions as CEO show that he too happily plays this game. If President Trump publicly follows through with his plan of donating foreign profits from all his companies, it would go a long way to addressing concern over the swamp that is his current ethical conflicts.
All the President’s Men
Unlike their boss, President Trump’s appointees have worked with the Office of Government Ethics (OGE) to address their conflicts of interest. OGE exists to protect the executive branch from conflicts of interest by addressing them before they become issues, a job of prevention rather than enforcement. In his press release addressing President Trump’s conflicts of interest, OGE director Walter Shaub praised the work of the president’s appointees.
Mr. Tillerson is making a clean break from Exxon. He’s also forfeiting bonus payments worth millions. As a result of OGE’s work, he’s now free of financial conflicts of interest. His ethics agreement serves as a sterling model for what we’d like to see with other nominees. He clearly recognizes that public service sometimes comes at a cost.
Mr. Tillerson not only chose to give up millions of dollars, he also divested and extracted himself from a rather complex financial network he had built. All the other appointees being confirmed by the Senate have also had their ethics packages go through. Not all the ethics packages, however, have been successful. Vincent Viola, Trump’s nominee for Secretary of the Army withdrew from the process because separating himself from “the organizations that he has built over the last 35 years have proven insurmountable.” Viola’s solution of removing himself from consideration rather than resolving his conflicts is not a path open to President Trump.
Further commenting on the trials of a government ethics officer Shuab said:
The job hasn’t always been easy, though, especially when I’ve had to ask nominees and appointees to take painful steps to avoid conflicts of interest. I can’t count the number of times I’ve delivered the bad news that they needed to divest assets, break open trusts, and dissolve businesses. Most of these individuals have worked with us in good faith. Their basic patriotism usually prevails, as they agree to set aside their personal interests to serve their country’s interests. Sometimes these individuals have required more persuasion, but every OGE Director has been buoyed by the unwavering example of Presidents who resolved their own conflicts of interest.
Presidents lead by example, especially when it comes to ethics. Part of what makes a leader worthy in our eyes is sacrifice and service, placing america first, above personal goals. The first thing I see every day as I walk into work is a poster with the U.S. government code of ethics. Rule 1. “Public service is a public trust, requiring employees to place loyalty to the constitution, the laws, and ethical principles above private gain.” I ask nothing more from my commander in chief than is asked of me. At the end of the day, the only person who suffers from divesting is President Trump. There is no process that guarantees a president cannot be a crook, and not all president have set a good example for those working under them. Ethics and money get awfully grey in Washington, but that does not stop OGE and other agencies from attempting to prevent the worst fallout from human corruption. When asked about selling off his hotels, the President responded by merely saying it would be “a really hard thing to do, because I have real estate.”
President Trump’s hotels are the heart of his conflicts of interest. President Trump makes his money off his celebrity, his brand is what he sells partners. For him, the hotels, with his name in giant gold letters, are a foundational part of his identity. Removing Trump’s name from the buildings would be painful for him, and it would take time to unravel the licensing deals that put those names there in the first place. As long as the President is selling his name, however, these conflicts will continue to plague him.
Why Trump’s Towers Matter
President Trump’s name now adorns building worldwide. Our president and his name are a symbol of our country, and one not liked by many, to the rest of the world. The September 11th attack may have targeted the World Trade Towers, but the next major attack could target Trump Towers. Our enemies do not even have to travel to this country to attack symbols of our country; a Trump Tower sits in Istanbul, site of multiple terrorist attacks over the last few years. As symbols of the presidency, Trump Towers have the same profiles in countries as U.S. embassies without the same rights to our protection. What should be our response if these Trump properties are threatened? Is it acceptable condone President Trump deploying troops to protect his properties as we do embassies, putting US citizens at risk? President Trump’s conflicts are not going to disappear, what will happen is they will fade into the background and simmer until the inevitable crisis occurs.
Perhaps we will be lucky and survive this administration without a crisis, then we would be left with a sightly tarnished office of president, which the office has survived before and will again. Lack of crisis, however, will not change the fundamental problem with conflicts of interest. As long as President Trump continues to be ensnared by the continued ownership of these properties and the attendant conflicts of interest, real and perceived, we will always wonder which he has placed first, America or his own interests.