Trump’s commercial ventures a source of unprecedented conflict of interest

There is plenty of scope for the U.S President-elect to land himself on the path to impeachment.

November 28, 2016 12:09 am | Updated 12:52 am IST - New York:

Donald Trump

Donald Trump

Trump Organisation, U.S President-elect Donald Trump’s real estate business that owns buildings, golf courses and wineries across the world, including in India, presents a significant source of conflicting interests for the future President, the scale of which is unprecedented.

The mixing of family business and government business started with Mr. Trump appointing his three oldest children — Donald Jr., Ivanka and Eric Trump to his transition team. Consequently, Trump family members have started engaging with foreign leaders. Ivanka Trump sat in on a meeting her father had with visiting Japanese Prime Minister Shinzo Abe last week; she also joined Mr. Trump on a phone call with Argentina’s President Mauricio Macri. The Argentine press reported that the Trumps discussed project approvals for a commercial building in Buenos Aires, but both leaders denied this was anything more than a congratulatory call.

Mr. Trump’s meeting roster has done little to allay fears that the Trump family will use the presidency to promote their brand and influence outcomes to suit their business interests. A meeting and photo op with Indian business partners Atul and Sagar Chordia, builders of Trump Tower in Pune, as well as Kalpesh Mehta of Tribeca Developers, has set alarm bells ringing. Mr. Trump also met with former United Kingdom Independent Party leader Nigel Farage and his Brexit associates, during which he brought up his desire to have an offshore wind-farm moved because it was ruining the view from his Royal Aberdeen Golf Club in Scotland.

Already, the press in America has started pinpointing specific conflicts that will arise after January 20, when the President-elect will assume office. Mr. Trump has appealed a decision by the National Labour Relations Board (NLRB), which adjudicated a dispute between his Las Vegas hotel and its workers. There are two vacancies at the NLRB, and as President, Mr. Trump will get to fill these.

During his visit to The New York Times last Tuesday, the President-elect said, “… the law is totally on my side, meaning, the President can’t have a conflict of interest,” adding that although he was not obliged to do anything legally, he would nevertheless like to. A conflict of interest is just that, if it exists, it exists regardless of who the person in question is. What the law does, however, is to exempt the President and Vice President from the conflict of interest rules.

What the law says

A recent report by the Congressional Research Service (CRS) explains this: Title 18 Section 208 of the U.S Code disqualifies an official from participating in government actions that involve them or their families or business partners. To meet this requirement, officials can divest themselves of the ‘interest’, for example, an asset. This can be done in several ways: setting up a ‘blind trust’, or selling the asset or recusing themselves from the process. However, given the extent of any President’s sphere of action, to require him to meet this condition would interfere with his functioning and thus an exemption was provided.

Instead, as the CRS explains, the law has implicitly assigned the conflict of issue question to the voter: candidates are required to make disclosures while running for office, and voters decide on whether or not to accept that candidate.

Many former presidents, including Mr. Trump’s Republican predecessors, such as Ronald Reagan and both the Bushes, voluntarily divested themselves of their assets; George W. Bush put his assets in a blind trust, where an independent trustee is appointed and oversees the buying and selling of assets without passing information on to the trust’s beneficiary (the President, in this case). A blind trust usually involves liquidating existing assets as a first step and reinvesting that money to buy new assets — a highly unrealistic proposition as far as Mr. Trump is concerned.

Yet, something will be done to alter the current business and legal structures of the Trump Organisation. What exactly that is remains unclear. In an interview to NBC last week, Reince Priebus, who will be Mr. Trump’s Chief of Staff, said Mr. Trump will be “setting up a system, a legal system, to shield himself from any and all conflicts”. Though Mr. Trump has indicated that his children will run Trump Organisation, it will certainly not mean that he is insulated from its operations or has extricated himself from conflicts of interest as his predecessors did.

Emoluments Clause

While the President may be exempt from conflict of interest rules, the law does not permit him to act with disregard to ethics as far as commercial dealings are concerned. He is, for one, subject to the Emoluments Clause of the U.S Constitution. This prohibits U. S government officials, including the President, from receiving titles, gifts and “ emoluments” (a term that is currently being examined in great detail by the American press) from foreign states and sovereigns, without the permission of Congress. The current situation is novel and as a result, the mechanisms that will arise to address it are likely to be novel and controversial.

Given the vastness of Trump Organisation’s business dealings with foreign entities, there is plenty of scope for Mr. Trump to land himself on the path to impeachment even before he has had time to change the rug in the Oval Office.

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