A scandal in waiting
No administration in history has been as fraught with financial conflicts of interest as the incoming Trump administration, from the president-elect on down. It is likely to be one of the most scandal-ridden in memory if these conflicts are not dealt with.
We have had wealthy presidents and Cabinet officials before, but Donald Trump and his nominees shatter all records when it comes to scale of wealth, investments and potential conflicts.
Most presidents’ wealth was primarily domestic, and they created genuine blind trusts to manage their conflicts. Though no one knows for sure, because Trump refuses to release his tax returns, his vast empire is probably in the billions and spans the globe, with investments tracked so far in more than 20 countries.
All these nations have a stake in U.S. foreign policy and would like to influence the U.S. worldview. China, Qatar, Saudi Arabia, Azerbaijan, Philippines, India, Turkey and others want something from America. Now they have a personal financial connection to the incoming president.
Dozens of representatives from the ethics community have asked Trump to divest himself of financial conflicts, especially foreign investments, and move his wealth into a genuine blind trust run by an independent executor, not by his family. So far, he is sending opposite signals.
The federal statute, which requires officials to avoid conflicts of interest, applies to everyone except the president and vice president. The Emoluments Clause of the Constitution is not quite so forgiving. The Founding Fathers feared foreign governments currying favor with officials by throwing gifts at their feet. They wrote right into the Constitution that officials cannot “accept of any present, emolument, office or title, of any kind whatever, from any king, prince or foreign state.”
Trump’s Cabinet nominees bring their own weighty conflicts. Titans of industry will in some cases be taking over the very agencies that oversee their businesses. They will be ripe for charges of self-dealing unless they take extraordinary precautions that go beyond the blind trust required by law.
These precautions are already in place with President Obama’s ethics Executive Order 13490. It requires all presidential appointees to sign an ethics pledge that they will recuse themselves from taking official actions that directly and substantially impact their former employers or clients of the last two years. The new president could extend Obama’s rules for his own Cabinet officers.
Trump has proposed reasonable revolving-door restrictions on those who leave his administration. He must now do the same for those coming into it. That includes managing his own conflicts through divestiture and a genuine blind trust.