Trump dealt blow in corruption case

On appeal, emoluments suit revived

A federal appeals court in New York on Friday revived a lawsuit alleging that President Donald Trump is illegally profiting from his hotels and restaurants in New York and Washington in violation of the Constitution’s anti-corruption, or emoluments, clauses.

In a 2-1 decision, a panel of judges for the U.S. Court of Appeals for the 2nd Circuit found that a lower court had wrongly dismissed the lawsuit accusing Trump of violating the Constitution’s bans on accepting financial benefits from foreign or state governments. The appeals court judge sent the lawsuit back to the lower court, ordering it to be allowed to proceed.

The decision comes nearly two years after the lowercourt judge dismissed the

lawsuit. The case is one of three that have been bouncing back and forth between district and appeals courts as judges struggle with the novel legal questions raised by Trump’s decision not to divorce himself from his business empire while in office.

In this case, the plaintiffs were Trump’s business competitors: a hotel operator and a group of restaurants and restaurant workers, who say Trump is using the presidency to give his businesses a competitive advantage.

Trump has repeatedly touted his properties since becoming president. He suggested recently that he should host the next summit of the Group of Seven world leaders at his luxury golf resort in southern Florida, describing the property as a “great place.”

Foreign leaders, lobbyists, Republican candidates, members of Congress, Cabinet members and others with ties to the president routinely visit his properties. In the past week, new details have emerged of stays by U.S. military personnel at Trump’s golf resort in Scotland.

The appeals court judges in New York noted that a different appellate panel, the Court of Appeals for the 4th Circuit, had ruled the opposite way, dismissing a similar lawsuit brought by the state of Maryland and the District of Columbia. The plaintiffs in that case are seeking to appeal that dismissal to the full appeals court, based in Virginia.

Yet another case, brought by congressional Democrats, is headed to Court of Appeals for the District of Columbia Circuit.

In the New York case, the appellate judges ruled that the lower-court judge, George Daniels, had dismissed the case too precipitously. By his standard, the judges said, no plaintiff would ever have the legal standing to sue the president for accepting financial benefits or emoluments from foreign governments without congressional approval.

They said Daniels’ ruling was the equivalent of saying that “Congress alone shall have the authority to determine whether the president acts in violation of this clause” when in fact the Constitution “says nothing like that.”

The judges also said Daniels wrongly rejected as “wholly speculative” the plaintiffs’ complaint that they were losing business because state and foreign officials were switching to Trumpowned properties in hopes of winning the president’s favor.

“The district court demanded too much at the pleading stage,” the decision states. It was written by Pierre Leval, who was appointed by President Bill Clinton, and Christopher Droney, who was appointed by President Barack Obama.

John Walker, who was appointed by President George H.W. Bush, dissented.

He said the plaintiffs were invoking constitutional provisions never directly litigated in over two centuries before the Trump presidency.

He called the case “deeply political” and said it was an area “where federal courts ought to tread lightly.”

“President Trump was democratically elected by the American people — and he was elected with his business holdings and brand prominence in full view,” Walker wrote.

It was not immediately clear whether the Justice Department would appeal the panel’s ruling to the full appeals court.

The ruling came on a day that Trump’s son, Donald Trump Jr., told Fox News Channel’s Fox & Friends that claims that his father was using his office to benefit his businesses were “ridiculous.”

“I mean first of all, he’s not involved at all with those things. They also neglect to talk about the fact that we voluntarily stopped doing any international deals. I mean, just think of the opportunity costs,” he said. “You’ve seen where the emoluments and suits have gone. They’re just trying.”

Deepak Gupta, an attorney representing the plaintiffs, said the case was intended to enforce the original intent of the Constitution’s framers: to bar presidents from having private business relationships with foreign states.

“Every time [Trump] illegally obtains payments from foreign governments, those are payments that would have gone to his competitors. So he’s benefiting from illegal competition. He’s deriving an advantage from the office that he holds,” Gupta said. “It causes both the appearance of corruption — and actual corruption.”

Trump’s company has not disclosed which foreign governments are its customers, or how much revenue it receives from them. A recently retired Trump Organization executive, George Sorial, said this summer that the company’s foreign revenue was about $1 million in 2018 — and that 90% of that came in through the Trump hotel in downtown Washington. The Trump Organization says it donates all profits from foreign governments to the U.S. Treasury. For 2018, it donated $191,000.

“Every time [Trump] illegally obtains payments from foreign governments, those are payments that would have gone to his competitors. So he’s benefiting from illegal competition. He’s deriving an advantage from the office that he holds. It causes both the appearance of corruption — and actual corruption.”

— Deepak Gupta, an attorney representing the plaintiffs