Donald Trump, as President of the United States, will have an unprecedented conflict of interest—many, actually—that realistically cannot be fixed and never could. He will be President, and he will own a global set of businesses worth billions of dollars that his policies and decisions will unavoidably affect for better or worse, usually to his long term benefit or disadvantage.
Almost nobody, including me, and it’s my business to do so, focused substantially on the problem during the campaign. Trump, as usually, airily dismissed the issue when it came up as if it was nothing, saying, “If I become president, I couldn’t care less about my company. It’s peanuts,” during one debate. “Run the company, kids. Have a good time.” Typical, stupid, and neither Clinton nor the moderator had the wit or information to follow up with the required, “Wait a minute, that doesn’t deal with the problem. Will you also not care about your kids, Mr. Trump? Your companies’ stockholders? Business partners? Employees?”
At least we know why Hillary was reluctant to pursue this issue, don’t we?
The Trump Organization’s executive vice president, Alan Garten, similarly brushed the problem away, saying in September, “His focus is going to be solely on improving the country. The business is not going to be a factor or an interest at that point.” That’s an incredible statement, naive at best, dishonest at worse. Of course it will be an interest. How could it not be? The question is whether it will be a factor. Human nature, and Trump’s nature, strongly suggest that it will be.
Who can tell with Trump? Maybe he really believes there’s no problem. After all, as I have written repeatedly and all evidence proves, the man doesn’t know ethics from ambergris. Whether he knows it or not, however, this is a massive and potentially crippling problem for him and his administration, not to mention his children and his businesses. It is especially a problem because the same journalists who dismissed Hillary’s family foundation’s influence peddling while she was Secretary of State and after as another overblown conservative attack (after all, why should venality and hidden conflicts of interest interfere with electing the First Woman President?) have the long knives out to eviscerate Trump on any hint of impropriety, real or not, they can find. This is real.
Think about it: on financial disclosure filings, Trump listed significant involvements in more than 500 companies, including business activities in countries where the U.S. has sensitive diplomatic or financial relationships, like Saudi Arabia, the United Arab Emirates, and China. The President-Elect’s business empire of hotels, golf courses and licensing deals in the U.S. and abroad benefit from U.S. tax breaks and government subsidies. Trump’s real-estate holdings and other companies owe hundreds of millions of dollars to domestic and foreign banks. The biggest single lender to Trump’s empire is Deutsche Bank, the German financial giant that is currently negotiating a settlement with the U.S. Department of Justice to settle claims related to the 2008 mortgage collapse. A Manhattan office tower co-owned by Trump is partially financed by the Bank of China, even as Trump has promised to challenge China’s financial and trade practices. We don’t even know full extent of Trump’s business relationships around the world, since he has refused to release his tax returns.
Obviously the way out of these looming conflicts would be for Trump to sell all the businesses. No law says he has to, however, and such a requirement would be unrealistic and punitive, harming investors and business partners. Trump could give everything to his kids, putting himself into the role of King Lear for the future, but that’s not really a cure for the conflict. His family would still be tied to the business and its success.
Many Presidents, including Reagan, Clinton and both Bushes, placed their assets in blind trusts, run by independent third-party managers had complete control over them.Those cases aren’t truly parallel, however. None of them were full-time business moguls; these were investments that they were turning over to third parties. The closest parallel we have was billionaire third party candidate Ross Perot (in 1992 and 1996), and I don’t recall a major issue being made about his business conflicts either. Perhaps this was because everyone knew he couldn’t win.
You know, like Trump.
Senators and Representative must recuse themselves from deciding legislation touching on their own financial interests, under the Ethics in Government Act of 1978 enacted after Watergate. Presidents, however, are not covered by that tough legislation. Trump doesn’t have to do anything.
In legal ethics, such conflicts are called personal conflicts. They won’t disqualify a lawyer in a representation on the grounds that he or she cannot be independent and objective if two conditions are met. The client must give informed consent, and the lawyer must reasonably believe that the conflict won’t affect how she handles the case. In this personal conflict of interest, the equivalent of which would require any lawyer to withdraw, no ifs, ands or buts, neither condition can be met. The “clients,” us, have already consented by electing Trump President, though it was hardly informed consent. ( Why didn’t the New York Times put this issue on the front page before the election as part of its announced effort to derail his candidacy?)
As far as Trump reasonably believing that decisions he makes, knowing that it will cost his businesses millions or undermine the financial security of his children, won’t be affected by such concerns, that’s fantasy or delusion. A court would find such a massive conflict to be unwaivable— unethical per se.
To be fair, the power of the Presidency is so sweeping and the implications of the Office’s activities so wide-ranging that no President could be said to be completely unconflicted. We trust that for our Presidents, the best interests of the nation will prevail over all other considerations. Still, no President has ever had a conflict this massive, and Trump enters the office as the least trusted (and, based on past conduct, the least trustworthy) POTUS in history. Trump’s enemies, including Democrats, journalists and activists, can be counted on to use the conflict to cast doubt on Trump’s positions and decisions whenever it is politically advantageous. Imagine what Republicans would have said if Obama’s family had personal energy interests that benefited from his killing the Keystone pipeline. Or forget hypotheticals: think about how Dick Cheney was constantly accused of pushing foreign policy decisions to benefit Halliburton, when he had no investments in his former employer at all.
In its story last week about Trump’s conflicts, the Washington Post quoted Ken Gross, a former elections enforcement official and lawyer who has advised presidential candidates from both parties, as pronouncing them “troubling.” Ya think? How about frightening?
I know why I missed this issue, though it is no excuse. For me, Trump’s character, temperament, ethical and cognitive deficiencies were more than plenty to disqualify him from being nominated, and clearly from being elected. I never got to the business conflict problem. I should have. I apologize.
The Republican Party and Trump’s team, however, were obligated to anticipate the problem, think it through and have a plan to address it. So far, there’s no evidence that they did so. The news media, meanwhile, was so busy trying to prove Trump was a racist and misogynist and minimizing for Clinton’s misconduct that it didn’t tell the public, and maybe Trump himself, what they needed to know.
Good job, everybody.
Ethics Alarms attempts to give proper attribution and credit to all sources of facts, analysis and other assistance that go into its blog posts, and seek written permission when appropriate. If you are aware of one I missed, or believe your own work or property was used in any way without proper attribution, credit or permission, please contact me, Jack Marshall, at firstname.lastname@example.org.