Government Ethics And Legal Experts Pan Trump's "Prohibited" And Conflict-Ridden Plan For The Trump Organization
Blog ››› ››› JOE STRUPP
Government ethics and legal experts say President-elect Donald Trump's plan to transfer oversight of his company to his sons does not go far enough to avoid serious conflicts of interest as president, and they urged journalists not to let him off the hook.
Trump announced today at a press conference that he would transfer control of The Trump Organization to a trust controlled by his eldest sons, Donald Jr. and Eric, and Trump Organization CFO Allen Weisselberg, but would still retain an ownership interest in the business and receive reports on the business' finances.
His attorney, Sheri Dillon of Morgan, Lewis & Bockius, told reporters the company would also appoint an in-house ethics consultant to review future actions and cancel pending foreign deals. Still, ethics experts say the plan falls short of a clear separation from the business side.
“It doesn’t do what everybody wanted it to do,” said Scott Amey, general counsel for the Project On Government Oversight. “In essence, keeping an ownership interest in the business is a wrong decision. He can’t just set up firewalls between himself and his sons who are running the business and think there isn’t a conflict of interest.”
He later added, “As the chief executive of the United States government, there will still be decisions made that can affect his business and the public needs to know that the decisions he is making are in the best interests of the public and not of his business.”
Amey said reporters “are going to have to stay on top of what the ethics agreement is going to look like and what enforcement mechanisms are in there to prevent conflicts of interest and what monitoring is being done on the government side and with this ethics official at The Trump Organization.”
Matthew Sanderson, a government ethics lawyer with law firm Caplin & Drysdale, called it a “mixed bag” at best.
“There are a few laudable measures,” he said. “The cancellation of any pending deals along with the appointment of an ethics advisor, freeze on foreign deals. Those are good things.”
“The problem is he remains conflicted,” Sanderson stressed. “He still holds an ownership interest in The Trump Organization, which means his net worth will increase with any favorable government decisions. The fact that he is now letting someone else do the work, the management, does not change the fact that he will still benefit. … He’s still in the position of being a conflicted president and open to the accusation that he is monetizing the presidency.”
Kathleen Clark, a Washington University School of Law professor and government ethics expert, said Trump needs to “remove not just his management activities, but remove himself from having a financial interest in the firm. He’s retaining a financial interest in the company -- that hasn’t changed.
“He’ll still be financially benefiting from them. I didn’t see any indication that he is giving up an ownership interest at all.”
She added: “There is the conflict of interest concern, an ethical concern even though the Congress has exempted the president from the conflict. But he will be in a position where he can use government office to enrich The Trump Organization and enrich himself.”
She also cited the Emoluments Clause of the U.S. Constitution that bars federal officeholders from profiting from foreign governments or their agents: “The problem is that The Trump Organization and Donald Trump will receive and he will receive money from foreign governments, that is what’s prohibited. He says he will donate the profits, the Emoluments Clause is concerned with payments, not just profits. Who gets to define what the profits are?”
Violating the Emoluments Clause is an impeachable offense. And according to legal experts, barring a full divestment from his business dealings with foreign governments, Trump will be in violation of this clause the moment he is inaugurated as president.
On Twitter, Laurence Tribe, Professor of Constitutional Law at Harvard University, argued that “Trump's workaround is a totally fraudulent runaround.” He added that the plan is “cleverly designed to dazzle and deceive, but it solves none of the serious ethical or legal issues.”