The Trump Organization’s vice
president of marketing pointed to the “transfer of management of the Trump
Organization and its portfolio of businesses” to the children.[1]
As laudable as it is for a father to have such pride in his offspring, the
conflicts of interest cannot be ignored. “The inclusion of the kids on the
transition team makes it clear that there is no real separation between their
politics and their family,” said Lisa Gilbert of Public Citizen.[2]
With Trump’s children running the Trump Organization, it could hardly be
pretended that it’s assets would be in a blind trust.
Turning operations over to Donald
Jr. and Eric would not qualify as a blind trust because the U.S. President
would have knowledge of the company’s major assets and be in contact with the
people running the business. “To say that his children running his businesses
is the equivalent of a blind trust—there is simply no credibility in that
claim,” said Matthew Sanderson, a Washington (Republican) lawyer.[3]
“It’s not a blind trust when you know what’s in it,” Richard Painter, who
oversaw White House ethics policies under President George W. Bush.[4]
Accordingly, the Office of Government and Ethics informed Trump’s lawyers that
only a divestiture would result ethical concerns.[5]
Trump could object that selling his brand could risk its impairment. As the
Trump brand is his name, he could be expected to continue to have a vested interest
in how well the business does. At the very least, he would not want to see it
fail.
While a president’s business should
not have to take a major hit, the notion that assuming public office is a duty
should be sufficient to justify costs—even in terms of opportunities lost
(i.e., opportunity cost)—arising as a result of the business being put in a
blind trust. Yet in the case of a business empire of real estate, whose
properties would of course be known to the future president, expunging, or deconstructing,
the conflicts of interest would be impracticable. So the task, I submit, is to
do what can realistically be done while still recognizing that conflicts of
interest are inherently unethical because human nature, being what it is,
cannot be expected to stand up to the temptation, even if a latent one.
In Donald Trump’s case, at least
four possible conflicts of interest stood out in the wake of the election.
Firstly, the Trump International Hotel was already operating out of the Old
Post Office Building, which is owned by the U.S. Government, when he was
elected president. The institutional conflict of interest lies in Donald Trump
as U.S. President appointing the head of the General Services Administration,
the agency that manages the building, while Trump’s children run the hotel
(even as they were advisors in their father’s transition team). A personal
conflict of interest lies in his enrichment from officials including of foreign
governments staying in the hotel when visiting Washington even if just to make
a good impression on the president. Even while Trump was the president-elect, foreign
diplomats were booking stays so they could comment on what a nice luxury hotel
the president has.
Secondly, the U.S. President
oversees the National Labor Relations Board, which, a week before the 2016
election, ruled against Trump’s hotel in Las Vegas. Being a major employer
while being the U.S. President, Trump would naturally feel tempted to exploit
the latter role in favor of the former. The same sort of conflict of interest
would apply to the IRS and the EPA—two other federal agencies highly relevant
to business.
Thirdly, roughly half of Trump’s 30
properties in the U.S. had debt as of the time of the election. As President of
the United States, Donald Trump could put in his own Chair of the Federal
Reserve in 2018. He would have a personal financial interest in keeping
interest rates low. Additionally, he would be tempted to use is role as
president to put pressure on his banks should any of his properties (again) be
in financial trouble.
Fourthly, the need to adequately
protect Trump’s New York home in Trump Tower set up the conflict of interest
whereby Trump would profit by renting several floors to the U.S. Secret
Service. The operative question is whether a president should profit monetarily
from his own protection.
Trump’s own modus operendi of using
publicity to sell his brand should also be considered. Selling his brand had
been so very salient in his business persona (and even in his role on The
Apprentice) and the pattern continued with VP-elect Mike Pence giving a
prominent speech at Trump’s hotel near the White House that Trump could hardly
be expected to stop advancing the financial-political synergies after taking
the oath of office. That he explicitly extolled his brand of steak during an
acceptance speech after winning a primary (or caucus)—even furnishing some of
the steaks on display—suggests that he would at the very least make references
to his brands on the “bully pulpit” of the presidency. What he might do behind
the scenes in the White House to further his business empire is anyone’s guess.
Yet disentangling Trump from his
business empire may be unrealistic, given the man, his brand, and the nature of
a large and prominent business. “It is unprecedented in modern history to have
the level of complexity of global substantial business relationships that the
president-elect has, and the litigation that inevitably follows any complex
business venture,” said Norman Eisen, a former special counsel for ethics and
government reform.[6] The
presidency has so much power that the possible points of contact are too
numerous to deconstruct on a case by case basis. “Since he has the power to
affect all policies in this country, there are bound to be almost daily
potential conflicts of interests between his business holdings and his
decisions as president,” said Fred Wertheimer of Democracy 21.[7]
Jimmy Carter put his peanut farm in
a blind trust. Ronald Reagan and both Bush presidents used blind trusts as
well. Trump’s case is not so simple. “The layers of potential conflicts [of
interest] he faces are in many ways as complex as his far-flung business
empire.”[8]
At the time of the 2016 election, that empire included more than a dozen hotels
and golf courses, commercial real-estate including Trump Tower, and marketing
deals.[9]
Even were Trump to place the Trump Organization in a blind trust (i.e., not run
by his children), he would undoubtedly know the major assets—many of which
literally have “Trump” emblazoned on them far above street level. So even
divestiture—selling the business to outsiders—would not obviate possible
conflicts of interest.
Pressuring Trump to liquidate the
business he founded may be asking too much of the man, especially if public
service is considered a duty. Should he be pressured to take such a hit to his
family business simply because he decided to step up to the plate for the good
of his country? I’m by no means suggesting that this was his only motivation,
but it should be asked whether it is in the national interest to put large
stumbling blocks in front of accomplished, successful people who would
otherwise undergo public service. Fourteen-months of campaigning could be
enough of a repellant for would-be presidents of excellent caliber; having to
sell or liquidate “your baby” could be asking too much.
In short, ridding the future
president of any possibility of conflicts of interest concerning
his business-role and his role as U.S. President could be so detrimental to
Trump’s private affairs that doing so would be asking too much of his public
duty. Moreover, the message sent out to future well-qualified candidates for
the office would be that being president would cost them dearly.
I am not suggesting that we should
throw our hands in the air and not attempt to curb Trump’s opportunity to get
even richer from being president. Rudy Giuliani, former mayor of New York City
and one of Donald Trump’s advisors during the campaign, advocated trusting the
future president. “You have to have some confidence in the integrity of the
president. . . . The man is an enormously wealthy man. I don’t think there’s
any real fear or suspicion that he’s seeking to enrich himself by being
president. If he wanted to enrich himself, he wouldn’t have run for president.”[10]
Yet he sold his steak-brand during his speech after a primary.
Moreover, given the level of
temptation that is in a conflict-of-interest situation, I submit that trusting
Trump is not a wise option. Furthermore, although he undoubtedly believed after
the election that having his children run his business-empire would ensure its
survival—not to mention profitability—the business would hardly suffer from the
hiring of a seasoned CEO along with an independent monitor. Such an arrangement
would be fitting, given the extraordinary nature of the situation of a
president being the founder and head of a business empire. However, such an
arrangement would fall well short of staving off potential conflicts of
interest.
Given how oriented Donald Trump has
been to selling his brand, he should at the very least divest financially from
his businesses and licensing agreements. Owing to the nature of a family
business, he could transfer his ownership interest to his children, who would
hold off from running the Trump Organization until their father has left the
presidency. The management during Trump’s term of office would essentially be
in a blind trust even though the business itself would not be. It asks too much
of the man to sell off his family business to be owned and run by outsiders,
for his family might not get the business back after Trump leaves office. The
use of the Trump International Hotel in Washington even when Trump was
president-elect suggests that even this arrangement would not forestall
conflicts of interest, but at least the public would have some deserved solace
in knowing that some distance has been placed between the president and his
business empire while he is in office.
1. Fredreka
Schouten, “Watchdogs Warn Trump on “Blind Trust,” USA Today, November 16, 2016.
2. Fredreka
Schouten, “Watchdogs Warn Trump on “Blind Trust,” USA Today, November 16, 2016.
3. Eric
Lipton and Susanne Craig, “Trump’s
Far-Flung Holdings Raise High Risk for Conflicts,”
The New York Times, November 15, 2016.
4. Fredreka
Schouten, “Watchdogs Warn Trump on “Blind Trust,” USA Today, November 16, 2016.
5. Maggie Haberman and Jo Becker, “Donald
Trump Is Said to Intend to Keep a Stake in His Business,” The New York Times, December 7, 2016.
6. Steve
Eder, “How
Federal Ethics Laws Will Apply to a Trump Presidency,”
The New York Times, November 11, 2016.
7. Fredreka Schouten, “Watchdogs Warn Trump on “Blind Trust,” USA Today, November
16, 2016.
8. Lipton
and Craig, “Trump’s
Far-Flung Holdings Raise High Risk for Conflicts,”
The New York Times, November 15, 2016.
9. Ibid.
10. Ibid.
