Conflicts of Interest and the President: Reviewing the State of Law in the Face of a Trump Presidency

• Jurisdiction: United States,Federal
• Publication year: 2017
• Citation: Vol. 4 No. 0

Conflicts of Interest and the President: Reviewing the State of Law in the Face of a Trump Presidency

M. C. E.

CONFLICTS OF INTEREST AND THE PRESIDENT: REVIEWING THE STATE OF LAW IN THE FACE OF A TRUMP PRESIDENCY

M.C.E.^*

"No one can serve two masters. Either you will hate the one and love the other, or you will be devoted to the one and despise the other. You cannot serve both God and money."¹ It is not a novel concept that competing personal interests rob us of our ability to make impartial and objective decisions. For this reason, the need to avoid conflicts of interests comprises a main tenet of our system of due process. Recognition that we, as mere humans, unavoidably root our bias in decision-making is at the core of our process for governing the disqualification of judges and attorneys, and of course in selecting juries.

This avoidance of conflicts supports confidence in the implementation of our substantive rule of law. Our focus on process as a means to secure substantive law and compliant enforcement is what distinguishes Western, and in particular American, rule of law. It is by this process that we create trust in our legal system—we may not all agree with the substantive law or its implementation, but we can at least respect that it was derived from a process with integrity. At its core, minimizing conflicts of interests is a critical mechanism to ensure unbiased decision-making in the legal system in the same way a scientist would use a control mechanism in a lab experiment.

This concept does not stop with the legal system—most government officials are subject to some conflict of interest standard, whether via the Constitution, agency rules and regulation, statute, or contract. Two notable exceptions are the president and vice president. These exceptions are based on the policy rationale that any prohibition against conflicts of interests might impede their ability to carry out their Constitutional duties. However, on November 8, 2016, Donald John Trump was elected to be the 45th President of the United States of America, bringing with him an unprecedented level of potential conflicts of interest.

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This is not the first time a business magnate has ascended to an executive office. In 1974, President Gerald Ford nominated Nelson A. Rockefeller for the office of the Vice President. Following Rockefeller's nomination, there was a great deal of concern over "the public-policy implications of a nominee whose vast financial holdings touch many segments of the American economic system."² Rockefeller's business interests and finances were subjected to intense scrutiny, including two sets of Senate hearings in the fall of 1974 and an audit by the Joint Committee on Internal Revenue Taxation of his 19641973 federal income tax returns.

Rockefeller had only negligible ownership (a.k.a. less than 0.2%) in Standard Oil Co. of California or any other oil company; his family's holdings in the same company totaled only 2.06%, and this was also their largest holding in any single oil company. Rockefeller testified that his family had "no control of any kind over the management or policies" of Standard Oil of California or any other oil company."³ Moreover, Rockefeller testified that he was having a blind trust prepared in which he was prepared to put all of his personally-held securities should he be requested to do so by Congress—it was ultimately decided this would be useless as Rockefeller would still be aware of his personal and family interests. During the hearings, Senator Robert C. Byrd (D W.Va.) postulated if Rockefeller himself "may be conscious of the power that the two [great political power and extensive economic influence] when combined really add up to. . . . I wonder if you can separate the interest of big business and the national interest when they diverge." Ultimately, the Committee was persuaded by Rockefeller's candor and straightforwardness, determining that his public disclosure of his holdings would "permit a monitoring of those business interests by the public and the news media that would be adequate."⁴

Despite the face-value similarities, a closer look reveals stark differences in both the extent of Mr. Trump's potential conflicts, as well as his handling of any such conflicts. As of September 2016, Mr. Trump's total net worth was estimated to be a whopping $3.7 billion. He is currently the sole or principal owner of the approximately 500 business entities which compromise the

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Trump Organization, spread across at least 20 countries.⁵ Mr. Trump has filed the requisite financial disclosure report, but he has repeatedly refused to produce his tax returns despite repeated requests to do so, claiming he is currently being audited (despite his attorney having confirmed his pre-2009 taxes are no longer being audited).⁶ Similar to Rockefeller, Mr. Trump's placement of his assets into a blind trust would likely be ineffective given his intimate knowledge of his self-titled empire. However, unlike Rockefeller, Mr. Trump has never offered to place his holdings in a blind trust. Rather, he has announced he will be turning over control of his empire to his three children— Ivanka, Donald Jr., and Eric—all three of whom Mr. Trump is simultaneously relying upon to help curate the next government as members of the executive committee of his transition team.

This article will provide a brief sample of Mr. Trump's potential conflicts, both international and domestic; examine the current state of laws that could potentially limit a president's ability to engage in interested transactions; assess the effects of exempting such a powerful member of the government from conflict of interest standards; and discuss what, if any, limitations the office of the president should be subjected to avoid conflicts of interest.

Potential and Current "Conflicts"

Mr. Trump's extensive businesses spark an array of potential conflicts across the globe. However, despite Mr. Trump's frequent discussion of his business empire and unabashed promotion of his own brand during the campaign, there was relatively little pre-election interest in discussing exactly what Mr. Trump intended to do with his Trump empire if elected.⁷ During a Fox business debate, Mr. Trump said if he became president, he "couldn't care

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less about [his] company."⁸ Looking back, the fact that Trump was unaware of the definition of a "blind trust" probably should have been a red flag.⁹

Not surprisingly, since being elected, Mr. Trump has declined to liquidate his assets (which is arguably not even an economic or legally feasible option) and place them in a truly blind trust.¹⁰ Instead, as mentioned above, Mr. Trump has announced he will turn over management of his businesses to his children—Ivanka, Eric and Donald, Jr.¹¹ Mr. Trump previously scheduled a press conference for December 15, 2016 to discuss more in-depth the plan for handling his expansive conflicts of interests, but mere days before it was to take place the conference was postponed until January without further elaboration on Mr. Trump's exact plans.¹² Regardless of the ultimate details of the arrangement, any benefit from this arrangement in terms of reducing conflicts is undermined by Mr. Trump's simultaneous decision to also appoint these same three children to his transition team.

One example of Trump's international conflicts of interest is his investment dealings in the Philippines. In October, Mr. Trump's partner in a $150 million development project in the Philippines, Jose E. B. Antonio, was named a special envoy to the United States by President Rodrigo Duterte.¹³ Following the election, Mr. Antonio came to the United States on a "business," and not "political" trip, and met with Mr. Trump's children. Relations with the Philippines have recently been tense, and there is a fear that Mr. Trump's ties to the Philippines, both personal and financial, could compromise America's efforts to criticize the ongoing intermingling of state power and business entities of the Pilipino political elite.

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Another example is Mr. Trump's use of a direct appeal to a foreign politician to support personally beneficial regulatory change. Several days after the election, Nigel Farage of the U.K. Independence Party (UKIP) met with Mr. Trump in New York. During their conversation, Trump allegedly encouraged Farage to campaign against wind farms.¹⁴ Mr. Trump has previously campaigned himself against wind farms as he believes they will tarnish the view from his two Scottish golf courses.

As to Mr. Trump's children, in October, Donald Jr. met with diplomats, businessmen and politicians—including pro-Russian figures—in Paris to discuss formulating a plan to work with Russia to end the war in Syria.¹⁵ Donald Jr. was also seen hunting in Turkey shortly after his father's call with President Erdogan.

Mere days after the election, all three children attended a meeting between Mr. Trump and several Indian real-estate executives who are in the process of erecting a Trump-brand apartment complex in Mumbai. Mr. Trump decried accusations that the meeting undermined his recent assurances that he would be stepping away from control of Trump Organization, characterizing the meeting as merely an informal congratulations. However, according to one of the executive-attendees, during the meeting Donald Jr. expressed interest in expanding the pace of Trump Organization's India...