When Barack Obama became the forty-fourth president of the United States in 2009, he appointed Norman Eisen, a “special counsel for ethics and government,” to ensure that he violated no prohibitions on conflicts of interest. Before he was replaced in 2011, Eisen, later an ambassador to the Czech Republic and a lawyer who specialized in cases involving fraud, addressed a wide range of questions, including such matters as whether President Obama, a basketball fan, could accept tickets to see the Washington Wizards or the Georgetown Hoyas play.
When Obama was awarded the Nobel Peace Prize, he sought a formal opinion from the Justice Department’s Office of Legal Counsel on whether he could accept the award without violating a constitutional prohibition on the president or any other federal officer accepting “emoluments,” essentially any payment or benefit, from a foreign state. (The office concluded that he could, only because the Nobel Prize Committee is a private entity with no foreign government involvement.) Like every president to precede him in the last four decades, President Obama placed all his investments in a blind trust, so that he would be unaware of his interests and therefore free of conflicts of interest with respect to the many decisions he might make that could affect his own personal wealth. President Obama, again following the precedents of his predecessors, also released his tax returns, both during his campaign for office and as president. Obama, in short, was punctilious about ethics, and his administration was almost entirely free of ethics scandals.
Donald J. Trump, who became the forty-fifth president on January 20, has taken a different approach. He comes to office having repeatedly refused to release his tax returns, even after a leak indicated that he may have paid no taxes for eighteen years. He has cited an ongoing IRS audit as his reason for not disclosing his returns, but the IRS itself has refuted that claim, saying that “nothing prevents individuals from sharing their own tax information.”
Two days after inauguration, his administration announced that Trump would not release the returns even if an audit were complete. Trump has somewhat gleefully asserted that the conflict-of-interest rules don’t apply to the president. He mixed together personal business and official diplomacy during several meetings and conversations with foreign officials during the transition. And despite his widespread private holdings in commercial real estate, condominiums, hotels, and golf courses here and around the world, he has refused to follow the lead of his predecessors by selling his assets and placing the proceeds in a blind trust. Instead, he has transferred management, but not ownership, of the Trump Organization. He retains his ownership in full. And he has assigned operational responsibility not to an independent arm’s-length trustee, but to his sons, Eric and Donald Jr.
As a result, President Trump almost certainly began violating the Constitution the moment he took the oath of office. It’s true that conflict-of-interest statutes don’t cover the president—not because we don’t care about compromised presidents, but because such statutes generally require officeholders to recuse themselves from decisions in which they have a personal financial stake, and in the president’s case, recusal is rarely a workable option, since there is no alternative decision-maker.
But the Constitution subjects the president to a conflict-of-interest law: the so-called “emoluments” clause. That clause provides that no federal officeholder may, absent express approval by Congress, accept “any present, Emolument,…of any kind whatever, from any King, Prince, or foreign State.” It is designed to ensure that federal officials, from the president on down, serve only the interest of the American public, and are not compromised by foreign influence. In 1787, Charles Pinckney of South Carolina proposed the provision at the Constitutional Convention, urging “the necessity of preserving foreign Ministers & other officers of the US independent of external influence.”1 At the Virginia convention to ratify the Constitution, Edmund Jennings Randolph explained that the clause was “provided to prevent corruption.”2
The emoluments clause is a categorical bar against a president receiving payments from foreign states. Recognizing that divided loyalties are difficult to discern, that self-interest is an extremely powerful motivator, and that foreign states may seek to buy influence, the Framers chose to ban all presents or “emoluments…of any kind whatever.”
The sole exception was where Congress expressly authorized a transaction, presumably on the theory that such a public and transparent accounting would reduce the risk of corruption and undue influence. According to the Justice Department’s Office of Legal Counsel in 1981, an “emolument” is any “profit or gain arising from station, office, or employment: reward, remuneration, salary.”3 As the reference to “salary” or “gain” suggests, the prohibition is not limited to outright gifts, but includes payments for services rendered or profit from ordinary business transactions.
What does this mean for Donald Trump? The extent of his business, the Trump Organization, is murky, since it is privately held and Trump has been extremely reluctant to divulge details. But public records establish that his organization is involved in deals and contracts around the globe. Many of those ventures stand to gain from the actions of foreign governments or their agents—including investments involving foreign state-owned companies, government contracts or permits, lease agreements, or even overnight stays or events held at Trump hotels, golf courses, or other properties.
The single largest tenant of Trump Tower is the Industrial and Commercial Bank of China, a wholly state-owned company. Trump’s major business partner in the Philippines was named by President Rodrigo Duterte as special envoy to the United States. Trump has ongoing business projects throughout the world, including in Argentina and the nation of Georgia. He receives millions of dollars in licensing revenue from a Trump hotel in Panama. And then, of course, there is Russia, where Trump has long had extensive business dealings, and where government officials were recently overheard by our intelligence agencies celebrating Trump’s election, after a campaign in which Russia hacked and then leaked confidential e-mails from the Democratic National Committee, among other Democratic organizations, in order to boost Trump’s chances.
In a comprehensive and persuasive report published in December by the Brookings Institution, Norman Eisen and Richard Painter, former ethics experts for Presidents Obama and George W. Bush, respectively, along with the Harvard constitutional scholar Laurence Tribe, warned that “never before in American history has a president-elect presented more conflict of interest questions and foreign entanglements than Donald Trump.”4 In their view, one shared by many constitutional law and ethics experts, the only way for Trump to avoid receiving benefits from foreign governments or their agents, given his far-flung business interests, would be to sell his business and create a blind trust for his assets—as Trump’s predecessors have done upon assuming office.
Trump initially dismissed the idea that there would be any problem with his running the United States and the Trump Organization simultaneously. But as criticism mounted, he promised that he would work out a remedy to the problem before taking office. In a January press conference, he laid out his “solution.” He said he would transfer management of the Trump Organization to his sons. The Trump Organization would engage in no new foreign deals. He would appoint an ethics officer to review any new domestic deals. And he would donate any proceeds from foreign dignitaries staying in his hotels to the American people.
These measures are embarrassingly inadequate to address the constitutional concerns. The emoluments clause prohibits the receipt of any gain from a foreign state or its agent. The clause is obviously not limited to hotel stays. It’s also not limited to new deals or foreign deals. The prohibition extends to any benefit obtained from any foreign agent or state official in any business transaction with a Trump Organization concern, abroad or at home. To ensure that no such payments were made by any foreign official would demand absolute transparency of the Trump Organization’s every lease, contract, guest bill, and golf course fee.
That’s why Eisen, Painter, and many other ethics experts have condemned the Trump plan as insufficient. Walter Shaub, head of the US Office of Government Ethics, pronounced the plan “meaningless.” As the arrangement now stands, Trump retains full ownership in his businesses, and therefore stands to profit from ongoing business with foreign agents seeking to curry favor. Trump knows full well where he has businesses. And he will now be in a position to use the power of the presidency to benefit his own corporate brand. The only thing that is “blind” about this scheme is the fact that virtually everyone outside the Trump family will continue to be in the dark about the details of Trump’s foreign business ties.
Trump’s longtime tax lawyer, Sheri Dillon, who appears to have little or no constitutional law experience, defended these partial measures at the January press conference by claiming that selling the assets would be difficult. Without Trump’s connection, she maintained, the businesses might be far less valuable and would therefore have to be sold at a discount. She claimed that even if Trump sold his business interests, he’d still have the right to receive royalties, although she did not explain why he couldn’t sell those as well. Others have noted that a liquidation of the Trump Organization would have substantial tax consequences. But the fact that Trump might sustain an economic loss or actually have to pay taxes is no justification for violating a constitutional constraint designed to forestall corruption and foreign influence. As we know all too well, foreign influence is not a speculative or abstract concern when it comes to this president.
So what now? Trump has taken the oath, and he is violating the Constitution. What remedies are available? The Framers considered this prohibition so important that they deemed its violation to be grounds for impeachment. But no one expects the Republican Congress to institute impeachment proceedings anytime soon. If the Constitution is to be enforced, it will have to come at the insistence of the people.
The day before the inauguration, the ACLU filed a series of Freedom of Information Act requests aimed at bringing to light Trump’s conflicts of interest. Secrecy—some might even say smoke and mirrors—has been Trump’s preferred mode when it comes to his business dealings. But as president, he is subject to transparency obligations that he did not face as a private citizen. And transparency is the first step on the road to accountability.
Trump is also likely to face multiple lawsuits. Already on January 23, Eisen, Painter, and Tribe filed suit on behalf of Citizens for Responsibility and Ethics, a nonprofit watchdog group, asserting that Trump is violating the emoluments clause. An issue may arise about whether this organization has suffered a sufficiently specific injury to give it legal “standing” to sue. But other suits are likely to follow. The federal courts have recognized that businesses have “standing” where official actions that are allegedly illegal put them at a competitive disadvantage with other businesses. A rival hotel company, real estate developer, or golf course owner could sue over the illegality of Trump’s ongoing arrangements. Whether a particular economic transaction between a foreign official or agent and a Trump business constitutes a constitutionally forbidden “emolument” is a legal—not a political—question, fully susceptible to resolution by the courts. If courts could order President Bush, in an ongoing armed conflict, to subject his detentions of “enemy combatants” to legal review, surely they can order President Trump to conform his business interests to the express demands of the Constitution.
The president of the United States is supposed to serve the American people, not himself, and certainly not the interests of foreign states. President Trump chose to seek this office, and this responsibility. He is trying to have it both ways, serving himself, his family, and his far-flung business interests while simultaneously making foreign and domestic policy decisions that will inevitably have direct effects on his personal holdings. That way lies scandal, corruption, and illegitimacy. Unfortunately, our forty-fifth president has deliberately chosen to undermine the interests of the people he represents in order to further the interests of the one person he cares about most.
—January 26, 2017
The Records of the Federal Convention of 1787, edited by Max Farrand (Yale University Press, 1966), Vol. 2, p. 389. ↩
The Records of the Federal Convention of 1787, edited by Max Farrand (Yale University Press, 1966), Vol. 3, p. 327. ↩
Opinions of the Office of Legal Counsel, Vol. 5, pp. 187, 188 (1981). ↩
Norman L. Eisen, Richard Painter, and Laurence H. Tribe, “The Emoluments Clause: Its Text, Meaning, and Application to Donald J. Trump,” Brookings Institution, December 16, 2016. ↩