President-elect Donald J. Trump said a sitting US president “can’t have a conflict of interest”, responding to a surge of questions about whether his global business interests will collide with his official duties when he takes office in January.
Asked about potential business conflicts during an interview with the New York Times on Tuesday, Trump said federal law is “totally on my side.”
Federal law exempts presidents and vice presidents from some rules that ban officials from acting in ways that further their personal interests, an exception crafted out of the belief that presidents shouldn’t have to worry about triggering ethics probes when making hard decisions.
Trump’s statement “is only partially true,” said Scott Amey, general counsel for the Project on Government Oversight, a nonpartisan watchdog group in Washington. “There are lots of conflict-of-interest laws that do apply to the president.”
He cited the emoluments clause of the US Constitution, which bans any government official from accepting gifts or payments from foreign governments, as well as laws that prohibit soliciting or accepting bribes.
Trump’s licensing deals and other business interests have drawn renewed scrutiny since he was elected president on November 8.
Recent media reports singled out his ties to a Philippine developer who has been appointed that nation’s envoy to the US; disclosed that Trump took a break from transition planning to meet with three business partners building Trump-branded towers in India; and said that his daughter, Ivanka Trump, who will help run the family’s business during his administration, sat in on a meeting with Japanese Prime Minister Shinzo Abe.
“We’re already seeing this blurred line between these operations and we’re only two weeks in,” Amey said. “We have a three-ring circus and they all overlap and Trump is in the middle of it all.”
Unique case
Trump’s comments, which were posted on Twitter by New York Times reporters, suggested that he’s at least mindful of the challenge his presidency presents in terms of his widespread business holdings.
“There’s never been a case like this,” he said.
But on Monday night, the president-elect dismissed concerns in his own Twitter posting: “Prior to the election it was well known that I have interests in properties all over the world. Only the crooked media makes this a big deal!”
Richard W. Painter, a professor of corporate law at the University of Minnesota, tried to illustrate the importance: What if Franklin Delano Roosevelt had tried to prosecute World War II while holding interests in real-estate projects in Berlin, or paying off loans from Deutsche Bank AG, he said in an interview. (Deutsche Bank is Trump’s largest lender; it holds about $300 million in debt against his Trump International Hotel in Washington and his Trump National Doral golf resort near Miami.)
“A president of course can have a conflict of interest,” said Painter, who was President George W. Bush’s chief ethics lawyer. Just because particular rules don’t apply, that doesn’t remove the conflict, he said.
Most modern presidents have taken steps to insulate themselves from conflicts with their business interests by placing their assets in blind trusts. That would be difficult for Trump, many of whose assets are in real estate, rather than stocks and bonds, while others—including licensing deals with developers around the world—depend on his involvement for their value.
Business management
Trump has, instead, said he will give his children, Ivanka, Donald Jr. and Eric Trump, management of his many business interests—an arrangement that ethics experts say won’t go far enough to remove conflicts. Painter suggested that Trump ought to take his businesses public and invest the cash he’d receive via a blind trust.
Unless or until he does, Trump has reason to be wary of another potential pitfall, Painter said: lawsuits. “If he insists on holding on to these businesses, they’re going to be litigation magnets for the plaintiffs’ bar,” which is sympathetic to Democrats and would be eager to take sworn testimony from Trump as president, he predicted.
Democrats in Congress were already calling for heightened scrutiny. Leading Democrats on the House Financial Services Committee issued an open letter on Tuesday to inspectors general at eight federal agencies, citing Trump’s unprecedented “potential conflicts of interest” and seeking extra vigilance over his administration.
Highest standards
The letter, which was addressed to inspectors at the Treasury Department, the Securities and Exchange Commission and other agencies, asked the watchdogs to hold Trump’s appointees to “the highest possible ethical standards” and “commit to diligently and constantly monitoring the actions of such appointees and mitigating conflicts of interest when they inevitably arise.”
It was signed by Rep. Maxine Waters of California, the panel’s top Democrat, along with Reps. Carolyn Maloney of New York, William Lacy Clay of Missouri, Emanuel Cleaver of Missouri, Gwen Moore of Wisconsin and Al Green of Texas.
Sen. Ben Cardin of Maryland, the top Democrat on the Senate Foreign Relations Committee, plans to introduce a resolution next week, calling on Trump to “convert his assets to simple, conflict-free holdings, adopt blind trusts, or take other equivalent measures in order to ensure” he meets the Constitution’s emoluments clause, according to a news release from his office.
That clause provides that no officeholder “shall, without the consent of the Congress, accept any present, emolument, office or title, of any kind whatever, from any king, prince or foreign state.”
“Unless he takes appropriate action, Mr. Trump’s many international financial interests pose a great risk of violating the Constitution” once he takes office, Cardin said in the news release.
Not every ethics specialist agrees. Unless it can be shown that a foreign government is passing funds through a particular company to Trump, “I don’t think the emoluments clause would be implicated—it’s extremely remote,” said Robert Kelner, chairman of the election and political law practice at Covington and Burling Llp. “I will eat a bug if any court finds a violation of the emoluments clause for a relationship—even between a state-owned company and a private company owned by the president.”
