TOPICS > Politics

Is Trump’s plan for his company enough to avoid conflicts of interest?

January 11, 2017 at 6:45 PM EST
President-elect Trump says he’s going above and beyond in mitigating potential conflicts between his government office and his private interests. But is his plan for his sons to manage his company while he retains ownership sufficient? Steve Inskeep discusses with Norman Eisen, former special counsel to President Obama, and Richard Painter, former associate counsel to President George W. Bush.
LISTENSEE PODCASTS

STEVE INSKEEP: Now, during his press conference, the president-elect said something that no president-elect may have said before. He said he had just turned down a multibillion-dollar business deal.

DONALD TRUMP (R), President-Elect: Over the weekend, I was offered $2 billion to do a deal in Dubai with a very, very, very amazing man, a great, great developer from the Middle East, Hussain Damac, a friend of mine, great guy. And I was offered $2 billion to do a deal in Dubai, a number of deals. And I turned it down.

STEVE INSKEEP: Now, $2 billion, his friend Hussain Damac was apparently a man with a different last name, who runs a company called DAMAC Group.

But, nevertheless, the talk of a deal in a key Persian Gulf nation, days before he moves into the White House, suggests the clash between the president’s duties and his worldwide business. The president-elect says he has a plan to manage those conflicts, which we’re going to evaluate this evening.

That plan includes turning the business over to his two older sons, plus a business executive. His sons aren’t supposed to tell him what they’re doing. And the president-elect will step back from management, but remain the owner of Trump Organization, and the company will avoid new overseas business deals.

Mr. Trump said he’s doing this, even though the law would allow him to keep making deals as president.

DONALD TRUMP: I don’t like the way that looks, but I would be able to do that if I wanted to. I would be the only one that would be able to do that. You can’t do that in any other capacity. But, as a president, I could run the Trump Organization, great, great company, and I could run the company — the country. I would do a very good job, but I don’t want to do that.

STEVE INSKEEP: The president-elect is correct that a federal conflict of interest law excludes the president, but what about all the other issues?

We have brought in two lawyers who managed ethics issues for two presidents. Richard Painter did it for President George W. Bush. Norm Eisen did it for President Obama.

And, Mr. Eisen, let’s start with you.

The president-elect suggests he is going above and beyond. Is he?

NORMAN EISEN, Former Special Counsel to President Obama: No.

He’s going beneath and below the minimum floor that’s required by law, that’s required by our most fundamental law, the Constitution, that is established by what every president for four decades has done, that ethics require and that common sense requires, Steve.

This was a sad day. I wasn’t happy to see what happened here. But what the president has announced fails every aspect of the bipartisan consensus that has emerged on what he should do, and it’s going to lead to scandal and corruption and a constitutional crisis from the moment he’s sworn in.

STEVE INSKEEP: OK, you mentioned the law. You mentioned common sense. Let’s talk about common sense here a little bit here, Richard Painter. We will get to the law.

What is wrong with turning over management of the company to his sons, who it is said will act independently of him?

RICHARD PAINTER, Former Associate Counsel to President George W. Bush: Well, he will still own the company.

And the problem is the company, the Trump Organization, has business deals all over the world. And some may be getting turned down, although some might get accepted. There are already deals in place. There are deals with powerful politicians in Indonesia, with oligarchs in the Philippines, deals in Turkey.

I mean, these are parts of the world where there’s very important issues to be dealt with on behalf of the United States and strategic concerns. We can’t have the president have substantial economic exposure himself in these countries and business partners who may be in league with foreign governments.

This is an enormous conflict of interests. We also have the president of the president’s name being on buildings around the world in places where it’s questionable whether these other countries can protect those buildings. We don’t have the Obama Tower in downtown Paris or Nairobi or some place. And we couldn’t protect it.

And then we put the Trump name up. That’s going to be jeopardizing the lives of the people who live in those buildings and could drag the United States into a conflict. That’s only the beginnings of the problems.

We have potential mixing Trump business with United States government business. And that would trigger a bribery investigation. And then we, of course, have those payments coming in from foreign governments and companies controlled by foreign governments that violate the Constitution, unless they sweep all of those out of the Trump Organization as of January 20. And they don’t have the time to do it.

STEVE INSKEEP: You mentioned also the Constitution, and I definitely want to get to that, but let’s just refer to something else that Norm Eisen mentioned.

Norm Eisen said that this arrangement violates the bipartisan consensus about ethics for the president of the United States in recent decades. The president-elect, however, brought out a lawyer — Sheri Dillon is her name — at this press conference, and she dismissed some of the more conventional solutions.

Let’s watch.

SHERI DILLON, Attorney for Donald Trump: Some people have suggested a blind trust, but you cannot have a totally blind trust with operating businesses. President Trump can’t un-know he owns Trump Tower. And the press will make sure that any new developments at the Trump Organization are well publicized.

Further, it would be impossible to find an institutional trustee that would be competent to run the Trump Organization. The approach he is taking allows Don and Eric to preserve this great company and its iconic assets.

STEVE INSKEEP: Norm Eisen, I have actually heard this from a lot of people, who said, blind trust, how can that be possible, because his assets are so visible? His name is on buildings. The name itself is the asset. Is she right that a blind trust isn’t going to work?

NORMAN EISEN: No, she’s wrong on all three of those points.

On the first point, if it’s a problem that he would still know things in a blind trust, how much more of a problem is it now, where he has this completely unprecedented continuing ownership interest, and very weak protections that were outlined today for communications between and among his sons? Does anybody really believe that they’re not going to be talking about the business?

Then, number two, it actually would be simple to do this. All Trump needs to do — this is not complicated — find an independent professional trustee. There are plenty out there who have dealt with far more complications. This is — the Trump Organization is just a big international family business.

Trump signs it over. This is what we hoped in a bipartisan way and prayed would happen today. He signs it over to the trustee. The trustee figures out, what can I sell? How do I sell it? What can I borrow? Maybe I do a public equity, so if it’s not sold on the market, the executives buy it, package the less-indebted properties with the more-indebted properties.

Donald Trump has enough to worry about without thinking about that. And then, on the third point of destroying the business, the Donald Trump name is at an all-time high. This is the best time to make these moves. When the corruptions and the scandals start to flow, it’s going to be much harder.

But he is going to have to do it, because those negative consequences are sure to follow.

STEVE INSKEEP: OK, just very briefly here now, the law. You mentioned the law. You mentioned the Constitution.

You have said that the president would violate the Constitution if he continues on this course. The Emoluments Clause is what you’re talking about. It prohibits gifts from a foreign government. But the president-elect’s lawyer says nobody has defined a gift before for that purpose. And she says the president doing business is not a gift.

SHERI DILLON: No one would have thought, when the Constitution was written, that paying your hotel bill was an emolument. Instead, it would have been thought of as a value-for-value exchange, not a gift, not a title, and not an emolument.

But since president-elect Trump has been elected, some people want to define emoluments to cover routine business transactions like paying for hotel rooms. They suggest that the Constitution prohibits the businesses from even arm’s-length transactions that the president-elect has absolutely nothing to do with and isn’t even aware of.

These people are wrong. This is not what the Constitution says. Paying for a hotel room is not a gift or a present, and it has nothing to do with an office. It’s not an emolument.

STEVE INSKEEP: Richard Painter, what’s wrong with that logic? It’s routine business.

RICHARD PAINTER: This is a for-profit hotel. He is making profits over dealing with foreign governments. Same with the loans from foreign government-owned banks. Those are for a for-profit business. That is prohibited under the Emoluments Clause of the Constitution.

Now, she’s right on one point, that you can’t take the Trump Tower, put it in a trust, and pretend you don’t have it. Of course, the trustee will have to sell the Trump Tower. He needs to make a decision, does he wants to be president, or does he want to be a landlord and a hotel owner?

He has nine days to make that decision. I thought he’d already made it. But that’s what this is about. He just doesn’t want to give up the hotel. He doesn’t want to give Trump Tower to his son or sell it.

And it is not that difficult to sell a nice building like that on Fifth Avenue.

STEVE INSKEEP: Norm Eisen, very briefly, can the president-elect resolve some of these concerns just by being a lot more transparent about who is paying what for what?

NORMAN EISEN: Well, Professor Painter and I laid out yesterday a scorecard of five criteria.

And one of them was to have strong ethics provisions with strong transparency around them, an ethics firewall. But we made the point that alone is not enough. He is going to be — as Professor Painter says, emoluments covers all of the different benefits that he’s getting, loans, permits, trademarks, other things outside the hotel, selling apartments to foreign government agents and sovereigns.

He’s going to be in violation of the Constitution on day one, and no amount of transparency can cure that offense against our founding document.

STEVE INSKEEP: Could they solve some of this problem by releasing the president-elect’s tax return?

NORMAN EISEN: It’s critical that the tax returns come out, particularly today, when there’s been so much talk about Russia, Steve.

Professor Painter and I wrote during the campaign that there’s an enormous amount of information about foreign governments, gifts, payments, partnerships, even business expenses, possibly, in deductions taken.

Given the nature of the Russia allegations, we need to see that. And Richard and I said today that all Russia-related aspects of the tax returns should be released. And the Intelligence Committees should get the full tax returns to put these Russia allegations to bed.

STEVE INSKEEP: Norm Eisen was the top ethics lawyer for President Obama. Richard Painter was the top ethics lawyers for President George W. Bush.

Gentlemen, thanks to you both.

NORMAN EISEN: Thanks, Steve.

RICHARD PAINTER: Thank you.

SHARE VIA TEXT