5 December 2016

Trump needs to dump his businesses – but he never will


Never before has a President-elect faced such pertinent questions about his business, and personal interests, colliding with his role in the Oval Office.

So on December 15th, Donald Trump will hold a press conference – his first after many months – to outline plans to distance himself from his business empire.

Flanked by his lawyers and advisors, Trump faces a steep task to come up with a solution which will convince those in Washington and beyond of his impartiality. If he fails, it could completely undermine his leadership.

Throughout his campaign, Trump ran on the message that he was owned by nobody, criticising his competitors for their links to vested interests. Instead, it is his own financial interests which threaten to compromise his objectivity.

The size and complexity of The Trump Organization represents one of the most significant aspects of his transition: how to minimise accusations of conflicts of interest.

And Trump has a great deal of business ventures which would potentially conflict with his role as President.

A high-profile example is his relationship with Deutsche Bank, one of The Trump Organization’s major lenders, which is in negotiations with the US Justice Department to settle the case regarding misleading buyers over risky mortgage-backed securities (which helped to trigger the 2008 recession).

Meanwhile, Trump owns the lease to the Post Office building on Pennsylvania Ave in Washington D.C., which means negotiating rents with the US Government. The President-elect cannot sit on both sides of the table.

What’s more, conflict-of-interest rules are very vague about what a president can or cannot do. While past presidents have separated themselves from business, in the interests of objectivity and out of precedent, there is little legal obligation to do so.

Federal conflict-of-interest laws exempt the president. Indeed, a week before announcing his ‘total’ withdrawal from business to concentrate on the presidency, Trump came out hard on this point: stating in his interview with New York Times staff that: “the law’s totally on my side, the president can’t have a conflict of interest”.

What complicates the situation, though, is how huge and intricate his network of more than 500 different enterprises is. The Trump brand has fingers in a number of pies overseas, which include licensing and branding deals, instead of simply a real estate empire. Many of these assets are linked directly to his name and reputation, not foreign holdings which he can sell.

Not only does this make the efforts to diminish his conflicts of interests extremely difficult, but his international business network takes the President-elect into muddy waters with the Constitution.

The Emoluments Clause of the Constitution states that no person in holding Office “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”. Technically, corporations owned or controlled by a foreign government are presumptively foreign states. Trump has ventures in over 20 foreign countries, and does business with a number of entities tied to foreign governments: the state-owned Industrial and Commercial Bank of China Ltd (ICBC), is Trump Tower’s biggest commercial tenant.

How can people accept the decisions of a President when he has an indirect – yet often clear – financial stake in so many aspects of policy? How can he control the Oval Office while potentially breaking the Constitution?

The Presidency needs to stay far away from allegations of bribery and corruption, but given Trump’s situation, such charges are far from inconceivable. So what are his options?

The only way Trump could truly avoid accusations of conflicts of interests would be to liquidate his assets. As the Wall Street Journal stated in an editorial, “he promised to change Washington’s culture of self-dealing”, and as such he should “make a sacrifice and lead by example”.

Doing so would demonstrate that Trump wholeheartedly prioritises the presidency over his business, and the sacrifice would put the issue to bed. (This move has been seen before: when he took office in 2008, Barack Obama liquidated his assets to steer clear of undermining impartiality.)

Clearly, though, Trump’s situation is unprecedented. He will never choose to liquidate his assets, and to dismantle a business which he has built up over so many years. Notwithstanding the practical difficulties of such a move, it is very difficult to see a scenario in which Trump would go down the liquidation route.

Accusations of conflicts of interests, therefore, will never be laid to rest.

The next best option – not to eradicate but to minimise the issue – would be placing his assets into a “blind trust”. This would at least put some distance between the Oval Office and The Trump Organization. While it would not be a true blind trust (which entails the liquidation of his assets first) and its efficacy may be undermined by how high-profile the President-elect’s assets are, decisions about his business would be separated from the presidency.

Conflicts of interest are more about perception than anything – but in the biggest job in the world, how one’s decisions are perceived means a great deal. Removing Trump’s business decisions from his personal influence could help to silence his critics.

Unfortunately, though, Trump is very unlikely to accept this sensible compromise. Instead of anonymous, impartial trustees, his business will be run by his children.

Donald Jr, Ivanka and Eric – all currently Executive Vice Presidents of The Trump Organization – have been intimately involved with the campaign and the transition since his victory. They are close to the President-elect in both business and politics, and handing them the keys to his empire would not solve anything.

If we needed any confirmation of their political role, one only need look at the pictures from Trump’s meeting with Japanese Prime Minister Shinzo Abe. They were joined by Ivanka alongside her husband Jared Kushner, Trump’s close political advisor.

Having his family run the business while he runs the White House would be taking the American people for fools.

The Trump Organization is a family affair, and his children look to remain intimately involved in their father’s politics. Unless the President-elect can take stronger action, and show that he is genuinely impartial, accusations of conflicts of interest will persist throughout his presidency.

During his election, Trump promised to “drain the swamp”. Instead, he could drown in it.

Jack Graham is a political commentator who specialises in American politics.