With the exception of the lawyers he hired to construct it, it’s hard to find any government ethics experts who believe President-elect Donald Trump’s plan to distance himself from the management of the Trump Organization while maintaining his ownership stake is enough to eliminate concerns about conflicts of interest.
Trump is signing over management responsibilities for his company to his two adult sons and a Trump Organization executive. He says he is setting up a structure that will allow him to receive only limited information about the performance of the company while serving as president.
The words from the Trump transition team is that the president “can’t have” a conflict of interest as a matter of law, and that Trump is taking extreme measures that he isn’t obligated to take out of a sense of propriety.
Both of those claims were shot down Wednesday afternoon by Walter Schaub, the director of the Office of Government Ethics, in a speech delivered at the Brookings Institution. The law that Trump relies on for the claim that presidents “can’t have” conflicts of interest was passed for a narrow purpose, Schaub explained.
While the law demands that executive branch nominees recuse themselves from dealing with matters that could affect them personally, “Congress understood that a president can’t recuse without depriving the American people of the services of their leader. That’s the reason why the law doesn’t apply to the president.”
Nevertheless, he said, “Common sense dictates that a president can, of course, have very real conflicts of interest.” And while Schaub admitted that divestiture would be expensive for Trump, he argued, “It’s important to understand that the president is now entering the world of public service. He’s going to be asking his own appointees to make sacrifices. He’s going to be asking our men and women in uniform to risk their lives in conflicts around the world. So, no, I don’t think divestiture is too high a price to pay to be the president of the United States of America.”
The potential pitfalls of Trump’s plan are numerous, but here are four of the most serious.
1. Allegations of pay-to-play policies.
Trump has promised to donate all of his profits from money spent by foreign governments at his properties to the U.S. Treasury for the duration of his presidency. Without addressing the bookkeeping nightmare of such a plan, it still doesn’t address concerns that foreign governments -- not to mention domestic and foreign businesses, special interests groups and pretty much anybody with business before the federal government -- will either feel compelled to patronize Trump’s properties or will do so willingly in an effort to curry favor with the Trump administration. It also doesn’t address the value of the prestige that would accrue to the Trump Organization in general if it becomes the brand of choice for international diplomats.
The end result could be decisions made by the Trump administration that favor Trump’s customers rather than American national interests.
2. Questions of regulatory favoritism.
The Trump Organization will continue to profit from multiple properties and licensing agreements in the United States, all of which fall under the oversight of elements of the executive branch to some degree. That means that any federal workers dealing with a Trump property -- from an Internal Revenue Agency auditor to a workplace safety inspector -- will know that the decision they make could ultimately affect the personal bottom line of their ultimate boss. The problem extends to state government as well. It’s not hard to imagine a governor angling for a large federal grant leaning on state regulatory agencies to go easy on the president’s businesses.
The end result could be decisions made by federal regulators that favor Trump’s businesses rather than American national interests.
3. Law enforcement favoritism.
The number of times Trump and his businesses have been sued by angry creditors, customers, employees and others is legendary. Some of those lawsuits, like the highly publicized Trump University suit, were heard in federal court. And in the distant past, the Department of Justice brought cases directly against Trump’s company. In an era where federal prosecutors all owe their jobs to the Trump White House, critics could justifiably wonder if any subsequent violations would be treated with the same level of seriousness and impartiality.
The end result could be decisions made by law enforcement and the courts that favor Trump’s businesses rather than American national interests.
4. Security costs.
As more than a few people have noticed, Trump tends to put his name on everything, and buildings in dozens of cities and multiple countries around the world currently boast the Trump name and logo. From Trump Tower on down, every one of these facilities could be seen as a potential target for terrorists looking to damage the United States in general and Trump in particular. It’s unclear what Trump’s status as president will mean for their security, but the U.S. taxpayer is already footing the bill for heightened security at Trump Tower in Manhattan. To the extent that this and some of his other commercial properties also require additional protection, critics will be able to ask whether the Trump Organization is receiving a federal benefit because of Trump’s status as president.
The end result could be higher security costs paid by American taxpayers to protect the Trump Organization’s business interests.
Ethics experts appear to be holding out vain hope that something will change in the coming weeks.
“[T]here’s still time to ... come up with something that will resolve his conflicts of interest,” Schaub said Wednesday. “In developing the current plan, the President-elect did not have the benefit of OGE’s guidance. So, to be clear, OGE’s primary recommendation is that he divest his conflicting financial interests. Nothing short of divestiture will resolve these conflicts.”
Former Republican White House ethics lawyer Richard Painter said, “The president-elect has nine days to fix this problem.”
But there is no evidence that the president-elect even views his situation as a problem, and much less that he’s interested in fixing it.