Presidential conflicts of interest loom
How Trump could use the office to benefit his vast business empire, without even breaking the law.
WASHINGTON — The Trump Organization spent months trying to drive off the culinary union from its Las Vegas hotel, losing one legal battle after another before a federal labor board.
Soon Donald Trump’s company, which has refused to bargain with the union after housekeepers and other employees voted to join last December, could gain some leverage.
As president, Trump will be able to appoint two new members to the National Labor Relations Board, giving the agency a 3-2 Republican majority that could be more sympathetic to Trump.
“We hope that Mr. Trump doesn’t use his power to interfere, considering he has a financial interest in the outcome,” said Bethany Khan, spokeswoman for Culinary Workers Union Local 226.
Khan’s concern is but one of many examples of potential conflicts of interest that could arise for Trump the president versus Trump the businessman. His vast holdings include hotels, office buildings and golf courses, and he has licensing deals around the globe.
For example, Trump’s corporate lenders include Deutsche Bank, which has been in talks with the Justice Department to settle a mortgage securities case for possibly billions of dollars, a process that the Trump administration could inherit.
China, a frequent target of Trump’s criticism during the campaign, has lent millions of dollars through the state-owned Bank of China to a Manhattan office tower on Avenue of Americas coowned by Trump.
“How will this impact Trump’s official relationship with China in his capacity as president?” asked Fred Wertheimer, president of Democracy 21, a watchdog group.
Similarly, as president, Trump will be able to name the new General Services Administration head, who will oversee negotiations regarding the government lease to Trump of the castlelike Old Post Office Pavilion in Washington, which his company recently refurbished into a luxury hotel.
“In this particular instance, President-elect
Trump is both landlord and tenant,” said Paul S. Ryan, vice president of policy and litigation for Common Cause.
And once president, Trump will appoint the head of the Internal Revenue Service, overseeing the audit of his taxes, a process that he frequently cited as the reason for not releasing his returns as other presidential candidates have done.
“We have never seen in modern times anything like the array of conf licts created by the president-elect’s extraordinary web of domestic and global business relationships, investments and partnerships,” said Norman Eisen, chief White House ethics lawyer in President Obama’s first term. Eisen and many others have urged Trump to sell his assets and put the proceeds in a blind trust managed by an independent party.
Trump said during the campaign that he would turn over control of his business empire to his children while he retained ownership. Trump’s three oldest children — Donald Jr., Ivanka and Eric — are executive vice presidents of the Trump Organization, the conglomerate based in New York.
But experts widely agree that such an arrangement would do little to prevent potential conflicts because Trump is well aware of how his actions as president might affect his businesses; and his adult children, who are serving on the transition team, may have an ongoing advisory role in the administration.
It’s also unclear how much Trump will step back from his business interests once he is president. Just last week, he reportedly met at Trump Tower with three real estate executives from India who are building a luxury apartment complex there that will bear Trump’s name. A spokeswoman said the meeting was simply a courtesy call from the executives, including one who is managing partner of the firm that represents the Trump brand in India. But news accounts in India described it as a business meeting in which the executives talked with Trump about expanding their partnership in India.
Calls to the Trump Organization and to Trump’s White House transition team were not returned.
Trump said on Twitter on Monday night that journalists were making too much of his potential conflicts: “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!”
Vice President-elect Mike Pence says Trump is “completely focused on the people’s business.”
“I’m very confident, working with the best legal minds in the country, that the president-elect and his family will create the proper separation from his business as he goes forward,” Pence said on “Fox News Sunday.”
Trump’s supporters balk at the idea that the president-elect would use his office to enrich his businesses, noting that he has an estimated wealth in the billions. That’s cold comfort to Noah Bookbinder, executive director of Citizens for Responsibility and Ethics in Washington.
“If that’s true, then he should have no problem with selling those interests and putting them in a true blind trust,” Bookbinder said. “Second, this is a person who’s gotten to where he is by fighting for every penny, not paying people what he has owed them because he didn’t think their work was up to standards, or taking every possible tax break .... The pattern that we’ve seen is not someone who doesn’t really care about maximizing his own profit.”
After a big primary win in March, Trump used the occasion of a victory rally and news conference at the Trump National Golf Club in Jupiter, Fla., to brag about the golf property and other Trump businesses. Since his election, Trump has tempered such explicit promotion of his brand, but his daughter’s jewelry business drew fire recently after it made a blatant attempt to capitalize on Ivanka’s wearing of a $10,800 gold bracelet during a postelection family interview with “60 Minutes.” Ivanka Trump Fine Jewelry later apologized.
For watchdog groups like Bookbinder’s, it is all the more unsettling because the public doesn’t know the extent of Trump’s business interests. His companies are privately held, and Trump still refuses to release his income tax returns.
Nothing in the law would prevent Trump from running his conglomerate or even profiting from it while in office. Apart from annual financial reporting requirements, federal conf lict-of-interest rules for government employees and members of Congress don’t apply to the president.
“To my eye, the primary concern is ensuring that as he makes political decisions as president, that they’re understood to be broad policy decisions and not decisions driven by the desire to benefit financially from them,” said Robert D. Lenhard, a senior attorney at Covington & Burling who was a member of the Federal Election Commission in 2006 and 2007.
Rep. Elijah E. Cummings of Maryland, the top Democrat on the House Oversight and Government Reform Committee, has called for the panel to “immediately begin a review” of Trump’s financial arrangements, but the Republican-controlled Congress isn’t expected to jump on the issue.
Given that Trump was elected with people knowing he has extensive business involvement, Lenhard doesn’t see it as necessary for Trump to sell his companies and assets. He thinks the public might be satisfied with something like an agreement for a “firewall” between Trump and his children so that they do not talk about the family business.
Trump’s far-flung ventures raise particular concerns. The “emoluments clause” in the Constitution broadly prohibits officeholders, including the president, from accepting presents “from any King, Prince, or foreign State.” This is meant to protect against corruption and undue influence from foreign powers, but the clause has rarely been used and would be especially difficult to enforce when gifts are indirect or inadvertent. Foreign officials or state-owned enterprises, for example, could try to curry favor by partnering with or investing in one of Trump’s companies, or even booking the most expensive suite in Trump’s hotel down the street from the White House.
Such arrangements raise the same type of pay-forplay concerns that Trump and Republicans levied against his Democratic opponent, Hillary Clinton, and the Clinton Foundation stemming from her time as Obama’s secretary of State.
Past presidents also have faced questions about conflicts involving them, their relatives and business dealings. Lyndon B. Johnson and his wife put their multimillion-dollar radio holdings and other assets in a blind trust, although there’s evidence it wasn’t exactly blind, as the main trustee belonged to a firm whose partner was an old friend of the president.
When George H.W. Bush was president, a littleknown company named Harken Energy, whose board included son George W. Bush, landed a lucrative contract from the government of Bahrain. At the time the deal was viewed as an effort by the Persian Gulf nation’s royal family to gain favor with the Bush administration.
Obama came into office in 2009 having rolled most of his investments into Treasury bills, which made up the bulk of his 2008 assets of between about $1.2 million and $6 million, according to a financial disclosure form filed with the U.S. Office of Government Ethics.
What makes Trump’s potential for conflicts so unusual is the range and scope of his business interests, unprecedented for an American president.
Trump has said that he is worth $10 billion, and his financial disclosure report with the Federal Election Commission in May listed interests in more than 500 domestic firms and foreign entities. And these may not include all the ventures in which he receives licensing fees for having his name on accessories, apartments and other things that are located or sold around the world.
Sometimes even the Trump Organization seems to have trouble keeping track of his partners and ventures.
In Baku, Azerbaijan, Trump reported almost $3 million in income in the last two years, mostly for selling the rights to the Trump name.
Only later did Trump managers learn that the partner in the hotel project was the son of a government official — and that he was suspected of laundering money for Iran’s military. The project appears to have collapsed.