RISK AT HEART OF THE DEAL
Trump’s worldwide empire reveals vulnerability to foreign influence and conflict of interest
WASHINGTON— Turkey, a country charting a collision course with the West, is home to a money-maker for the next U.S. president: Trump Towers Istanbul.
Donald Trump’s company has been paid up to $10 million (U.S.) by the tower’s developers since 2014 for the Trump sign that sits atop the luxury complex. Its owner, one of Turkey’s biggest oil and media conglomerates, has meanwhile become an influential megaphone for the country’s repressive regime. The Turkey deal, which even Trump has deemed “a little conflict of interest,” marks a striking vulnerability: a private interest that could open him to foreign influence and tilt his decisionmaking as leader of the United States.
An analysis of Trump financial filings shows at least 111 Trump companies have done business in 18 countries and territories across South America, Asia and the Middle East. They range from sprawling, ultra-luxury real estate complexes to one-man holding companies and branding deals in Azerbaijan, Indonesia, Panama and other countries, including some where the United States maintains sensitive diplomatic ties.
Eight of his companies appear tied to a potential hotel project in Saudi Arabia, the oil-rich Arab kingdom that, in a January interview on Fox News, Trump said he “would want to protect.”
Trump has refused calls to sell or give his business interests to an independent manager or “blind trust,” a long-held tradition meant to combat conflicts of interest. That, ethics advisers said, puts the presidentelect in an unprecedented position: His foreign interests are both possible channels for those seeking to curry favour with the White House and ripe targets for attack or security risks overseas.
“There are so many diplomatic, political, even national security risks in having the president own a whole bunch of properties all over the world,” said Richard Painter, a former chief White House ethics lawyer under president George W. Bush.
“If we’ve got to talk to a foreign government about their behaviour, or negotiate a treaty, or some country asks us to send our troops in to defend someone else, we’ve got to make a decision. And the question becomes: Are we going in out of our national interest or because there’s a Trump casino around?” Painter added.
Details of Trump’s holdings come from financial-disclosure reports filed by his campaign in May. The self-reported data was unverified by regulators, meaning the reports may not have shown all of Trump’s foreign deals or assets.
The disclosures offer a glimpse of an empire that includes five-star hotels in Canada and Panama, elite golf courses in Ireland and Scotland and a luxury-resort project now under development in Indonesia.
But the filings, the most comprehensive public documents of Trump’s business empire, largely lack details for many of the companies’ statuses or ambitions. Trump has refused to allow for a closer accounting of his investments or to release documents, such as his tax returns, that could provide more detail on his foreign accounts.
The companies have helped spread the Trump brand internationally and injected millions of dollars into the president-elect’s umbrella company, the Trump Organization, which continues to launch and invest in new deals for projects around the globe.
Most of the Trump Organization’s business growth in recent years has been through deals with developers and investors overseas. Many of those deals involve licensing the Trump name: a valuable quantity now made more lucrative when attached to a U.S. head of state.
Other Trump properties, like most large projects in the real estate industry, are buoyed by a river of loans, including from big banks in China and Germany.
Deutsche Bank, Trump’s biggest lender, is currently negotiating what could be a multibillion-dollar settlement over housing-crisis-era abuses with the Department of Justice, whose leaders will be Trump appointees. (Deutsche Bank stock is up more than 12 per cent since the election.)
Most government officials must follow strict conflict-of-interest regulations designed to block public servants from making decisions in their own private interest. But presidents are largely exempt from those rules for fear they could impede on their wide-ranging constitutional duties.
Many modern presidents and major nominees — including Ronald Reagan, both Bushes, Bill Clinton and Mitt Romney — have nevertheless committed to selling or divesting their interests into a blind trust run by an independent overseer with unassailable control.
Trump has said he plans to give control of the Trump companies to his children, and the company has said the final arrangement “will comply with all applicable rules and regulations.”
But congressional researchers and ethics advisers say leaving the company’s management to Trump’s children would not truly separate Trump’s private and public work. Even Trump has voiced confusion on the point: At a January debate, he said, “I don’t know if it’s a blind trust if Ivanka, Don and Eric run it but — is that a blind trust? I don’t know.”
Trump’s global business interests also make him vulnerable to legal risks, including a passage in the U.S. Constitution, known as the emoluments clause, that forbids government officials from receiving gifts from a foreign government.
Apayment from a foreign official or state-owned company to a Trump hotel or other branded company could potentially violate that clause, constitutional experts said. A group of ethics advisers, including former chief White House ethics lawyers during Democratic and Republican administrations, wrote Trump a letter Thursday urging him to sequester his business in a genuine blind trust or commit to a “clear firewall” between his Oval Office and family.
“You were elected to the presidency with a promise to eliminate improper business influence in Washington,” they wrote. “There is no way to square your campaign commitments to the American people — and your even higher, ethical duties as their president — with the rampant, inescapable conflicts that will engulf your presidency if you maintain connections with the Trump Organization.”
The conflicts have even become talking points among Trump’s top supporters. In an interview on the radio show of Stephen K. Bannon, the former Breitbart News chief who has become one of the presidentelect’s key advisers, Trump volunteered that he had “a little conflict of interest” in Turkey that could affect how he would handle U.S. foreign policy there. “I have a major, major building in Istanbul. It’s called Trump Towers. Two towers, instead of one,” Trump explained.
Bannon offered Trump a chance to respond to possible criticisms: “They say, ‘Hey look, this guy’s got vested business interests all over the world. How do I know he’s going to stand up to Turkey?’ ” Trump did not directly respond. After the country’s failed coup, Turkey’s president, Recep Tayyip Erdogan, accused foreign leaders and top officials in the U.S. military of “siding with coup-plotters” and launched a brutal purge of Turkish critics. Turkey now jails more journalists than any country, including China, according to the Committee to Protect Journalists.
Speaking of Erdogan, Trump said during the campaign, “I do give great credit to him for turning it around,” referring to the coup attempt. Erdogan was among the first round of foreign leaders who “offered their congratulations” to Trump after the election, his transition team said Wednesday.
The potential conflicts entangle not just Trump, but also his advisers, including Michael Flynn, the retired lieutenant-general tapped to become White House national security adviser. Flynn’s consulting firm has been hired to lobby on behalf of a group tied to the Turkish government. Flynn recently wrote an opinion piece calling for dramatic changes to U.S. policy that would parallel the Erdogan’s government’s goals and declaring that the country “needs our support.”
Other congratulations came from the head of Azerbaijan, where plunging oil prices crashed the local economy and froze construction on a fivestar hotel project set to bear Trump’s name.
While making millions of dollars through the branding deal, Trump partnered with a billionaire whose family is part of a long-ruling regime that the U.S. State Department has accused of corruption and human rights abuses.
After the country’s president, Ilham Aliyev, called the presidentelect last week, Trump was said to thank him for his attention and “noted that he heard very good words” about Aliyev, according to the country’s state-run news agency.
Other potential projects remain a mystery. In August 2015, as Trump’s presidential campaign began to take flight, Trump registered eight separate companies with names such as THC Jeddah Hotel and DT Jeddah Technical Services, financial-disclosure filings show. Their names followed a pattern set by Trump companies connected to hotel deals in foreign cities: in this case, Jiddah, the second-biggest city in Saudi Arabia.
Four of those companies, in which Trump was named president or director, remained active at the time of Trump’s May financial filing. The disclosures do not provide more detail for the companies and Trump representatives did not respond to requests for comment.
On Aug. 21, the same day Trump created four of the Jiddah companies, he told a rally crowd in Alabama, “Saudi Arabia, I get along with all of them. They buy apartments from me. They spend $40 million, $50 million. Am I supposed to dislike them? I like them very much.”