The many ways Trump can profit as president

Politics, Money, News

[Note: If you are concerned about new Trump Administration policies regarding immigration—or any other legal topic—you can ask a question anonymously and have it answered, for free, by an attorney in our Q&A forum.]

Donald Trump is a president-elect like no other in many ways, not the least of which is the extent of his worldwide business and investment holdings.

Candidate Trump was asked about his plans for those businesses during the nomination debates. “I don’t know if it’s a blind trust if Ivanka, Don, and Eric run it,” he said, referring to his grown children, during the Republican Debate on January 14. “I don’t know. But I would probably have my children run it with my executives, and I wouldn’t ever be involved because I wouldn’t care about anything but our country, anything.”

With a Trump inauguration on the immediate horizon, the issue is no longer hypothetical.

What is a blind trust?

The arrangement that Trump spoke about is not actually how a blind trust works, despite the fact that he used that term. According to the Congressional Research Service, to establish a blind trust to avoid conflicts of interest a government official “transfers, without restriction, control and management of private assets to an independent trustee who may not communicate information about the identity of the holdings in the trust to the official.”

The key terms in that explanation are “independent trustee” and “may not communicate.”

That will be a challenge for Trump if his trust is in the hands of his children, as he has stated is his intention.

“It’s hard to see how you keep this wall between you and your children,” Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics told NBC News. “It’s hard to imagine that Trump wouldn’t know what was going on with these properties, with how they are performing, if money is coming in or not, and the decisions on buying new properties.”

Another complicating factor is that for a trust to be truly blind, often the assets have to be liquidated, Leslie Kiernan, a partner at law firm Akin Gump and a former Deputy White House Counsel under President Barack Obama, told Forbes. That would mean Trump would have to sell off his prized real estate holdings, something it seems unlikely he would do.

What is Trump required to do? What have other presidents done?

If Trump’s original “blind trust” concept from the debate is not, in fact, a blind trust, does that matter? Not necessarily, at least according to federal law. The main conflict-of-interest law, Section 202 of Chapter 11 of Title 18 of the U.S. Code, does not apply to the president.

Any other public official who “directly or indirectly demands, seeks, receives, accepts, or agrees to receive or accept anything of value personally for or because of any official act performed or to be performed by such official or person” would be committing a crime, but not so for the chief executive. The reasoning behind the exclusion is that the president is considered to be “above having to be concerned about those conflicts,” Kenneth Gross, a partner at Skadden, Arps, Slate, Meagher & Flom, told NBC News.

Despite being excluded from the letter of the law, other former presidents have acted as if the law applied to them. Ronald Reagan, both Bush presidents, and Bill Clinton all used blind trusts. The Obamas, according to Forbes, didn’t liquidate into a blind trust because their holdings were relatively small, including a college fund, and unlikely to pose potential conflicts of interest.

What about the Emoluments Clause?

The federal conflicts statutes are not the only relevant laws to the Trump business holdings discussion. It turns out that constitutional law could create some issues for the president-elect, because it mentions emoluments, defined as “a salary, fee, or profit from employment or office.” Article 1, Section 9 of the Constitution prohibits federal office holders, including the president, from receiving “any present, emolument, office, or title of any kind whatsoever from a foreign state.”

During the campaign, Trump and some of his surrogates, including former Speaker of the House Newt Gingrich, invoked the Emoluments Clause when discussing Hillary Clinton and donations from foreign entities to the Clinton Foundation. Gingrich claimed that both Hillary and Bill Clinton had violated the constitutional clause. That same clause could now cause problems for Trump, given his businesses’ worldwide footprint.

Conflicts causing controversy

Several examples of potential conflicts have hit the radar in the weeks since the election. The Washington Post reported on a reception that was held for diplomats at the Trump International Hotel in Washington, DC. “Believe me, all the delegations will go there,” one Middle Eastern diplomat told the Post. Arturo Sarukhan, a former Mexican ambassador to the United States, was quoted as saying, “The temptation and the inclination will certainly be there. Some might think it’s the right way to engage, to be able to tell the next president, ‘Oh, I stayed at your hotel.’”

And when he met with British politician Nigel Farage, a leader of the successful “Brexit” movement, the president-elect reportedly encouraged Farage to oppose offshore wind farms. Trump has, in the past, opposed the construction of a wind farm off the coast of Scotland, where it would detract from the view from one of his golf courses.

Other examples that are raising eyebrows include President-elect Trump’s decision to include his daughter Ivanka in a meeting with a Japanese delegation and his private meeting with some of his Indian business partners at Trump Tower. Following the meeting with the gentlemen from India, one of them shared a picture with Trump on Twitter with thumbs up all around.

Congressional action

One congresswomen from Massachusetts has decided to take definitive action to address Trump’s potential conflict-of-interest problems. On November 17, Representative Katherine Clark (D-MA) introduced the Presidential Accountability Act. Clark’s bill would remove the conflict-of-interest exemption for the president and vice president from the existing U.S. Code.

In her press release, Clark said, “Every recent president in modern history has taken steps to ensure his financial interests do not conflict with the needs of the American people. The American people need to be able to trust that the President’s decisions are based on the best interests of families at home, and not the President’s financial interests.”

But unless her bill passes and is signed into law by the president—a highly unlikely outcome—the question of the how the president-elect should handle his vast business holdings is very much an open issue.