How will Trump handle his unique conflicts of interest?
The president-elect has over 500 businesses and a debt of $650 million with 74 lawsuits
When Donald Trump enters the Oval Office on January 21 he may bring with him the greatest potential for business and financial conflicts of interest of any US president, ever. That’s not just because he’s wealthy. Yes, Trump boasts that he’s a billionaire, but many other White House occupants have been very rich. It’s not just because he employs his kids. Other presidents have had family connection issues.
It’s the combination of those things, added to a third: Trump’s a dealmaker who’s still dealing. Other presidents have had extensive land holdings or been the beneficiary of established family fortunes. The nation’s 45th chief executive is still out there in the marketplace at the moment.
A quick look at numbers shows the scale of the problem. Donald Trump has at least 500 businesses — hotels, casinos, golf courses and brand deals stretching from Azerbaijan to Ireland. He’s borrowed a lot to amass this empire, and currently owes banks and other lenders an estimated $650 million. Like many tycoons he’s involved in litigation: he just settled a big fraud case against Trump University, but he still has at least 74 lawsuits wending their way through the courts.
It’s the international aspect of his empire that might pose the biggest conundrums. For instance, Trump gets millions in licensing cash in Turkey from an Istanbul luxury building that bears his name. Its owner has been increasingly outspoken in supporting the country’s president, Recep Tayyip Erdogan, as he cracks down on domestic dissent in the wake of a failed coup.
Trump’s family offers further complications. His daughter Ivanka wore a $10,800 bangle from her own jewellery line during an interview with her father on “60 Minutes.” A publicist announced this to the world via social media; later, the president of the Ivanka Trump fashion brand apologised for what seemed an attempt to profit from her father’s new position.
Ivanka’s husband, Jared Kushner, has a brother who owns a $3-billion health insurance firm that is deeply involved in the Obamacare market. How might Trump’s repeal-and-replace promise for the Affordable Care Act affect it?
Trump’s answer to all these conflict questions is simple: he’ll put his businesses in a “blind trust” run by his kids. That way he’ll be able to focus on the public’s business.
But that’s not enough, say many experts on legal and governmental transparency. According to a Congressional Research Service report, “the public officer will be shielded from knowledge of the identity of the specific assets in the trust” through sales and new acquisitions. “Without such knowledge, conflict of interest issues would be avoided because no particular asset in the trust could act as an influence upon the official duties that the officer performs for the Government.”
The sort of trust Trump is proposing couldn’t be truly blind, since he well knows what his assets are and family members are unlikely to be truly independent. Early US chief executives were rich, fabulously so if inflation is taken into account. George Washington was worth over $500 million by today’s measures. Thomas Jefferson was worth over $200 million. But that wealth was in land, and slaves. The scope of the presidency was more limited and the opportunity for personal benefit smaller. In general the corruption
Early US chief executives were rich but the wealth was in land, and slaves. The scope of the presidency was more limited and the opportunity for personal benefit smaller in the 19th and 20th centuries
problems of the late 19th and early 20th century presidencies were centered on aides and sycophants. Many wealthy presidents have been heirs.
Theodore and Franklin Roosevelt both lived in comfort thanks to the work of their ancestors. John F. Kennedy’s father Joseph Kennedy earned his family’s fortune as a stock picker, businessman, and movie producer, among other things. But JFK himself lived off the proceeds of a $10 million trust fund well into his presidency, according to author Richard Reeves. As a birthday present in 1962, Kennedy received $3 million of the fund principal.
What will Trump do? As president, he is exempt from legislation that covers possible conflicts of interest for lower-ranking officials. In terms of maintaining public confidence, this issue might be trickier for Trump to handle than he thinks.
The norm would be for Trump to liquidate his holdings and then live off financial instruments, as others have done. But Trump got elected despite breaking many political norms that members of the press and political scientists thought were immutable. This might be another one. He’s said what he’s going to do, and he could well stick with it, ignoring all the “conflict of interest” cries.