Richard Painter, Norman Eisen and Virginia Canter ETHICS LAWS WILL SIDELINE JAVANKA
Power pair have conflicts of interest on top issues. Can they be both effective and legal?
We now have information on the assets and income of two of President Trump’s closest relatives and most intimate advisers. But Jared Kushner and Ivanka Trump have so many potential conflicts of interest that if they abide by ethics laws and past White House practices, they won’t be able to advise the president on three of his top priorities: trade, tax reform and Wall Street deregulation.
Kushner’s financial report discloses assets worth $240 million to $700 million for himself, his wife, Ivanka (the president’s daughter and newly named assistant to the president), and their minor children. Jared, the president’s son-in-law and senior adviser, has resigned from more than 260 outside positions. He has divested or committed to divest approximately 80 holdings owned by himself, his spouse or their minor children.
Ivanka has resigned from all her officer positions with her outside companies, including those with the Trump Organization, according to the couple’s attorney. She has appointed a company president to manage her business operations and turned over the businesses themselves to a trust managed by her brother-in-law and sister-in-law. By resigning from their outside positions and taking the oath of office, Jared and Ivanka are now legally committed to the service of our country and fully accountable under federal conflict-of-interest laws. SERIOUS CONCERNS Even so, there are still serious ethics concerns because (like the president) they have chosen not to divest all their assets or place them in a blind trust to be sold by the trustee. Jared has retained extensive real estate holdings, primarily in Chicago, Manhattan, Brooklyn, Philadelphia and New Jersey. He has secured lines of credit through 10 banks, including Deutsche Bank, Bank of America and Citigroup.
His financial disclosure report does not disclose the lenders and investors for the family businesses in which he retains an interest. These lenders reportedly include Goldman Sachs, the Blackstone Group, Deutsche Bank, the French bank Natixis and Israel’s largest bank, Bank Hapoalim. This means Jared will need to recuse himself from many matters involving the financial services industry, including any steps to repeal the 2010 Dodd-Frank Act. So will Ivanka, because one spouse’s conflicts are by law attributed to the other. They both will also have to recuse from any decisions about tax benefits for the real estate industry, and because the tax code is full of them, this will probably mean recusal from the entirety of tax reform.
Ivanka retains her extensive international clothing, shoe and accessories businesses. She and Jared will have to recuse themselves from trade issues and discussions involving these products specifically and textiles in general, anywhere in the world that might touch on her businesses. In addition, Ivanka is reported to have seven trademark applications pending in China. She and Jared should recuse themselves from trade issues with China involving intellectual property. WEAK ETHICS COMPLIANCE Ivanka’s tangle of international conflicts could in practice require the couple to recuse from any trade discussions with China and other countries with which she does business. And she and Jared will also have to recuse more broadly from any disagreements with those countries the moment trade issues enter the debate.
We have real questions about how all these recusals can be fully implemented and monitored — and whether they will be. Assistants to the president need to be prepared to advise him on any matter at any time. They should expect to be drawn into more issues, not fewer. Any undetected lapses will impair the public interest. Detected violations could expose the couple to criminal prosecution, and the White House and all of us to more Trump scandal. The situation is particularly worrying because ethics compliance in the Trump administration has been weak.
The president is counting heavily on Jared and Ivanka, as are the overwhelming majority of less prosperous voters who sent him, and now them, to 1600 Pennsylvania Ave. But given their enormous wealth and far-reaching conflicts of interest, it remains to be seen whether they can perform their duties effectively — and legally.