ECLECTIC RANT; Trump inc. goes to Washington

Ralph E. Stone
Friday December 16, 2016 - 10:27:00 AM

Donald J. Trump and his family have business interests in at least 20 countries in addition to extensive hotel and real estate holdings in the United States. The full extent of his holdings is unclear as Trump has refused to release his tax returns or provide a list of his lenders. Could Trump administration actions around the world be shaded even slightly by his ties to foreign players? Would his overseas holdings be targets for terrorism? 

President-elect Donald Trump has also cultivated a personal brand — Trump vodka, Trump wine, Trump chocolate. His name costs millions of dollars to license, and much of his fortune has been generated from agreements to use the Trump name for products and real-estate developments that he doesn’t actually own. According to Bloomberg, a large portion -- anywhere from $32 million to $55 million -- of his estimated $2.9 billion net worth likely comes from licensing agreements. Of course, a brand name is successful or not depending on whether the name projects a positive or negative image. For his followers it is probably positive but to many others it is negative. 

Ordinarily, U.S. conflict-of-interest laws would eliminate or at least curtail any actual or appearance of conflict between Trump's business interests and his duties as a president. However, the U.S. conflict-of-interest laws do not apply to a president or vice president. The law doesn’t say the president can’t have a conflict of interest. But Congress, under Title 18 Section 208 of the U.S. Code, does exempt the president and vice president from conflict-of-interest laws on the theory that the presidency has so much power that any possible executive action might pose a potential conflict. 

The Congressional Research Service in an October Report states, “As a general rule, public officials in the executive branch are subject to criminal penalties if they personally and substantially participate in matters in which they (or their immediate families, business partners or associated organizations) hold financial interests. However, because of concerns regarding interference with the exercise of constitutional duties, Congress has not applied these restrictions to the President. Consequently, there is no current legal requirement that would compel the President to relinquish financial interests because of a conflict of interest.” 

Yet, while they did not have a legal obligation to, Lyndon Johnson, Jimmy Carter, Ronald Reagan, George W. Bush, George H.W. Bush, Bill Clinton placed their personal assets in a blind trust, even though they did not have a legal obligation to do so. President Obama did not, but his assets were only in mutual funds and Treasury bonds.  

A blind trust is a financial arrangement in which the president gives the administrator of private business interests to an independent trust in order to prevent conflict of interest. Under the trust, the president does not know how the assets are managed. 

Trump, on the other hand, will place his extensive business interests in the hands of his three oldest children -- Donald Jr., Ivanka, and Eric Trump, hardly a blind trust, especially since the arrangement is not independent. These children are on the transition team and we don't know what role, if any, they will play in the Trump administration.  

Senator Dianne Feinstein (D-CA) is planning legislation to require Trump to divest all his business holdings and put them into a blind trust. This proposed legislation is based on the writings of Richard W. Painter, who argues that failure to do so will put Trump in violation of the Emoluments Clause of the Constitution. Article I, Section 9, Clause 8 of the constitution states that no American officeholder shall, “without the consent of the Congress, accept of any present, emolument, office, or title, of any kind whatever, from any king, prince, or foreign state.” It is unclear whether a Republican-contolled Congress would pass such legislation and if if did, President Trump would probably veto it. 

Senator Ben Cardin (D-MD) is planning to ask his colleagues to pass a resolution -- citing the Emoluments Clause -- that would require Trump to hand over the control of his businesses to someone who doesn't have a relationship to him while he is a president. It remains to be seen how may republicans in Congress will sign such a resolution. 

Whether Senator Feinstein's proposed legislation or Senator Cardin's resolution have legs remains to be seen. However, the issue will not go away. The democrats will make sure of that. Or a private litigant may bring a lawsuit.