Donald Trump's profitable presidency
Has President Trump resolved the conflict-of-interest issues surrounding his business empire?
Has President Trump resolved the conflict-of-interest issues surrounding his business empire? Here's everything you need to know:
Who is running the businesses?Before his inauguration, Donald Trump announced he would place his sprawling business empire and all his assets into a trust run by his two adult sons, Don Jr. and Eric. Trump's lawyer insisted the president would not discuss business matters with his children, beyond basic profit-and-loss updates, and said the Trump Organization — which has property and deals in more than 20 countries — would make "no new foreign deals" during his presidency. But documents show that the Donald J. Trump Revocable Trust was set up to hold assets for the "exclusive benefit" of the president, who retains ownership. That's a sharp departure from his recent predecessors, who either liquidated their holdings or placed their assets in a genuinely blind trust — not one operated by family members. Fred Wertheimer, president of the government watchdog group Democracy 21, says Trump "is setting the stage to abuse his office for his own personal financial interests in a way that has never been done before."
What's the evidence for that?Trump openly boasts that his brand has become "hotter" since his election victory. Mar-a-Lago, his luxury beach resort in Florida, has doubled its membership sign-up fee to $200,000; by joining the club, businessmen and lobbyists can effectively pay the president himself for access to him. The CEO of Trump's hotel chain has proposed tripling the number of Trump-branded hotels in the U.S., with the goal of having at least one in 26 large cities. The Trump Organization is also pursuing a licensing agreement for a resort in the Dominican Republic, and Don Jr. and Eric have already launched a new golf club in Dubai in partnership with billionaire Hussain Sajwani, who celebrated New Year's Eve with their father at Mar-a-Lago. Trump also now has control over many regulatory agencies that oversee his businesses' employment practices and other issues. Yet while it is clear Trump may profit substantially from being in the White House, the larger concern is that foreign governments will use his business empire to curry favor or influence policy.
In what way?Foreign dignitaries can book expensive suites at Trump's hotels — in December, for example, Kuwait canceled a major event at the Four Seasons in Washington and held it instead at the city's new Trump International Hotel. In an attempt to bribe Trump, foreign governments could also vastly overpay him for a condominium or building in their country — and with the president still refusing to release his tax returns, the public would be none the wiser. "The working assumption," says former State Department official Michael Fuchs, "will be that there is an advantage to doing business with the Trump Organization." Foreign governments could also use the president's business interests abroad as leverage for foreign policy. Critics have noted that Trump's recent victory in a decade-long trademark dispute in China came shortly after he publicly reversed his promise to review America's "One China" policy on Taiwan. That decision alone could be worth millions to Trump.
What do Trump's defenders say?They contend that voters knew they were electing a wealthy businessman and don't really care about the conflicts — and that it is impossible for Trump to eliminate them anyway. If the president sold off his assets, they point out, foreign governments or corporations could seek influence by paying inflated sums. Trump's lawyer has pledged that profits from foreign dignitaries staying in his hotels will go to the Treasury, though there's been no reporting mechanism set up to verify that. As for Trump himself, he contends that legally speaking, "the president can't have a conflict of interest."
Is that true?Broadly speaking, yes. Federal conflict-of-interest laws do not cover the president or vice president. But there's one exception: the Emoluments Clause in the Constitution. The clause, created by the Framers out of concern U.S. officials might be corrupted by wealthy European monarchs, forbids officeholders from accepting "any present, emolument, office, or title, of any kind whatever, from any king, prince, or foreign state." Many lawyers believe payments to Trump for hotel stays or condo purchases qualify as emoluments. Two days after Trump's inauguration, a group called the Citizens for Responsibility and Ethics in Washington filed a lawsuit alleging Trump is in violation of the clause.
Will the lawsuit succeed?No one knows, because this has never been tested in court. Many legal experts think courts will rule that the group lacks standing to sue, since it has suffered no injury. Other advocacy groups are trying to recruit rival hotel owners, who would probably have a better claim to standing. But Trump's lawyers insist that when a foreign official pays for a Trump hotel room, it's simply a "fair value" trade for a service rendered, and thus isn't an emolument. If the lawsuit proceeds, or if Congress chooses to investigate, Trump might be forced to reveal his tax returns and other financial documents. In theory, he could even be impeached for violating the Constitution. But this is all new territory. "Trump's just dropped out of the sky here," says Bob Biersack, a senior fellow at the Center for Responsive Politics, a transparency group. "We don't know what happens when someone does that."
How Italy's Trump got richerThere is a precedent for Donald Trump and his many potential conflicts of interest: former Italian Prime Minister Silvio Berlusconi. When the smooth-talking billionaire was first elected prime minister in 1993, he retained majority ownership of his companies and installed his adult children into oversight roles. Most notably, Berlusconi kept control of his sizable media empire — giving people an easy way to curry favor with him. An Italian study found that businesses shifted more than 1 billion euros in advertising to Berlusconi's TV networks during the 16 years in which he was in and out of power; prices measurably rose when he was in office, and fell again when he wasn't. There were also numerous scandals over Berlusconi using his media company to control coverage of himself. "Trump has pushed the legal envelope," says Norman Eisen, a lawyer who worked in the Obama administration. "Berlusconi broke through it."