Trump announces plan on conflicts of interest: My sons will manage my businesses as trustees

posted at 3:31 pm on January 11, 2017 by Allahpundit

If you want to defend this dubious arrangement, your best move is to shrug and say that Americans knew what they were getting when they voted for him. And increasingly, that is the chief argument you hear in his defense. Not that a trust run by his family is ethical, not that it’ll stop special interests from funneling cash to Trump through legal means, but essentially that Americans don’t care anymore if the president is corrupt or not. I mean, the alternative last year was Hillary Clinton. We might as well let lobbyists start dropping off burlap bags filled with cash with dollar signs on the side on the White House doorstep.

A “blind trust,” which is what presidents usually do to avoid conflicts of interest between their public duties and their private assets, involves handing over the assets to independent trustees who have no contact with the president. That makes the arrangement double-blind: The trustees are free to sell the assets, which means the president doesn’t know what’s in his portfolio and therefore can’t enrich himself through policy, but the trustees also have no inside knowledge of government policy developments, which means they can’t take advantage of it financially. Trump handing over his assets to his sons isn’t blind in either of those ways. As trustees, they won’t be independent of Trump and they have no intention of divesting; and since they’ll be in regular contact with dad, it’s quite possible that they’ll know what’s coming down the pike policy-wise. It’s not a “blind trust,” it’s basically an “ESP trust.” They’re more intimate with the assets’ owner than the average third-party trustee would be.

In order to cure that problem, Trump says he’s going to appoint an “ethics advisor” to help manage the trust and police it for conflicts of interest. That’s better than nothing, but much depends on who the advisor is and how much power he’ll have. Will he be an independent auditor or a Trump crony who’ll do the family’s bidding? Will he have power to block transactions approved by Eric and Donald Jr or is his role merely advisory? If he finds that a transaction presents a conflict of interest, will he make his judgment public or is it for in-house eyes only? What standard will he use to judge whether a conflict of interest is present? Will it be a simple matter of rubber-stamping any transaction where “fair market value” has been paid?

President-elect Donald J. Trump, insisting he will not divest himself of his vast business empire as he prepares to assume the presidency, plans instead to turn over all of his business operations to a trust controlled by his two oldest sons and a longtime associate, top officials with his company said Wednesday.

He will donate to the United States government all profits from foreign government payments to his hotels, the officials said, describing the arrangements as voluntary measures taken to answer concerns about potential conflicts of interest that would allow Mr. Trump to focus on running the country…

His legal team said interviews were still underway to select [an] ethics adviser and to set standards that would be used to evaluate new deals or other business decisions.

Trump tweeted last month that there would be “no new deals” made by the Trump Organization once he became president. According to the Times, that’s now been amended to limit the company from making any new foreign deals. They’re open for business domestically, hint hint. And even if Trump and his sons try to observe some formal independence from each other, for instance by refusing to directly discuss deals the company might be involved in, Trump will obviously find out through other means. The media will cover those deals, for one thing, and if someone’s doing business with the Trump Organization with an eye to currying favor with the president, that person could always mention the deal himself if/when he meets with Trump to lobby him on policy.

There’s another problem too, per Tim Carney. Because so many of Trump’s holdings are real property rather than liquid assets, it’ll be easy for special interests — and for Trump — to enrich his assets without transacting directly with the Trump Organization:

Regarding his domestic properties, Trump has the power, through federal lands policy, through infrastructure funding, through federal subsidy programs, and countless other federal policies to enrich himself, massively. This creates temptations for him, appearances of impropriety and possible pressure on subordinates

Regarding his foreign properties, Trump’s properties provide conflicts of interest and occasions for corruption. Foreign leaders could take actions to enrich Trump through his hotels, or to boost the value of his land, perhaps buying Trump’s affection.

Even some of today’s good news, that Trump will donate the profits from transactions between his hotels and foreign governments (which will help solve this problem), is qualified. Any payment received from a foreign government is arguably an “emolument” for constitutional purposes; it’s an open question whether disgorging the profit from that payment, rather than the entire payment, cures the constitutional defect. (Unsurprisingly, liberal legal scholar Erwin Chemerinsky insisted to the NYT that it doesn’t.) Watch the second clip below and you’ll find Trump’s lawyer at this morning’s presser insisting that so long as a transaction is for fair market value, that transaction is fine for purposes of the Emoluments Clause. But that’s goofy. The ethical risk in having the president tied to his businesses isn’t merely that he’ll get sweetheart deals, it’s that he’ll get new business from courtiers that he never would have gotten otherwise. Imagine if, in order to ingratiate themselves to the White House, the Saudi embassy decided to call up Trump’s Washington hotel every day at 6 p.m. to ask if there are any rooms vacant — and if there are, to rent those rooms, even though they don’t need them. Every single night, as a matter of policy. Even if they’re paying fair market value for the rooms, the hotel would still be receiving revenue that it wouldn’t have received if not for Trump’s political power.

This is the standard Trumpworld is going to insist on, though — fair market value means no ethical problem! — and it’ll be left to Congress, which is authorized by the Constitution to approve or reject foreign emoluments, to challenge Trump on it. You think Ryan and McConnell are up to the task? Me neither.




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